The Node-Based Cumulative Lifetime Points System (Revised — DRAFT v2)

July 18, 2023

After a great deal of community feedback, here is the revised proposal that will soon be up for Founder’s Node governance vote.

As we venture into the frontier of blockchain technology, the community’s enthusiastic engagement has been pivotal in shaping the potential strategies for our ecosystem. The dialogue on the concept of ‘Node-Based Cumulative Lifetime Points’ has elicited extensive discussions on Discord, email exchanges, and even exhaustive exploration of the original bonus pool Reddit discussion.

With nine emails offering suggested changes, and thousands of messages exchanged, we appreciate the community’s collaborative spirit. The wealth of perspectives shared has highlighted the crucial elements of the original bonus pool discussion that could be integrated into our new system, as well as identified the elements that were impractical due to their lack of connection with actual node operations.

The Bonus Pool Concept

However, before we begin, we would like to address some concerns raised by members of the Founder’s Node community surrounding the previously discussed “bonus pool” and why that was left on the wayside as we have moved in this direction.

The whole point behind the bonus pool was to get more $GALA in the hands of the Founder’s Node operators. The original proposal was to have a 25/25/50 split between Gala Games, Base Point Operation, and the “Bonus Pool”. This was all in the interest of incentivizing node operation, and we know that one of the reasons people run nodes is to get tokens. Now, what would this math look like?

To oversimplify it, using the old halving tranche for 2023 (so post July 22nd), a node operator would be getting, on average 23,400 $GALA per year. The 25% “base distro” would be 7,812 $GALA per year (assuming 50,000 nodes), and then depending on user behavior, different points could be allocated and “bonuses” won. This is incredibly complex, and none of the ideas proposed by the community actually advanced decentralization.

Before we advanced THIS vote, we wanted to at least honor the idea behind the bonus point vote, which was to give the Founder’s Nodes a greater incentive. In comes the burn, which we said from the beginning was to align ourselves with the Founder’s Nodes and to give more rewards to the Founder’s Nodes over time. By kicking this burn off the original idea behind the bonus pool of giving the Founder’s Nodes a bonus was accomplished. It is not a small bonus, either. Because of that burn, Founder’s Nodes are currently making ~533% of what they would be making WITH the bonus pool.

So, why didn’t we have a discussion on that? Anyone with the slightest modicum of legal understanding of the space knows that to discuss a potential future burn is tantamount to token price manipulation. However, we assumed that if Founder’s Node Operator behavior and sentiment stayed the same as it was previously, the question of “would you like more or less rewards for the operation of your node” would be met with a predictable response.

Modifications to the Previous Discussion Draft

The dozens of hours of communication, emails, AMAs, and live streams have resulted in an incredible amount of creative output from the community. Your insights have led to four significant changes to the initial proposal:

1.) Dr. Wookie’s recommendation led us to revise the logarithmic function, changing the multiplier from 5.7 to 6.5. This adjustment makes the bonuses for those holding more than one node slightly higher.

2.) After spirited discussions, we have decided to propose decrementing points at a rate which aligns roughly with the rate of halving using the following schedule:

Tranche 1–1 point per 1000 GALA minted to GalaChain
Tranche 2–1 point per 500 GALA minted to GalaChain
Tranche 3–1 point per 250 GALA minted to GalaChain
Tranche 4–1 point per 125 GALA minted to GalaChain
Tranche 5–1 point per 62.5 GALA minted to GalaChain

3.) We have determined a trial period for this new structure. It will be implemented for 12 months from the date it is put into effect. To ensure continuous community involvement, a new discussion will start after 9 months to evaluate the system’s effectiveness and decide whether it should continue, be adjusted, or be reverted. A subsequent proposal will be put forth after 10 months, and the community will vote on the next course of action. Please note that any changes to the system will likely take at least 60 days to implement.

4.) Lastly, we’re introducing a daily “free mint” per node allowance. This will equate to 5% of the average daily emission per node for that day (totalDailyMint/50,000) that can be minted to GalaChain without any point deduction. However, this is a DAILY allowance and does not stack. This ensures that node operators taking advantage of this are actively engaged and not “set it and forget it” operators.

Below you will find the full text of the current draft of the proposal. You will find that some of it is repetitive of what has already been stated, but is included in the official proposal text for completeness’ sake. Conversation will take place around this draft for approximately the next week, at which time some of the additions from the community may be added before it goes to a final vote on July 24th, 2023.

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The Draft Governance Proposal (v2): Implementing a Node-Based Cumulative Lifetime Points Structure with New Logarithmic Function to Advance Decentralization

Introduction

This governance proposal presents an innovative bonus points structure based on the concept of “Node-Based Cumulative Lifetime Points.” This strategy focuses on the number of Nodes operated by a user, aiming to counteract platform centralization and foster decentralization within our ecosystem. With the proposed system, cumulative lifetime points accrue daily, directly correlating with your active participation in our community.

Proposal Details

We propose the adoption of a new logarithmic function, P = 6.5*log10(N) (+1 if N=1), for the allocation of bonus points. Here, N signifies the number of Nodes a user operates, and P denotes the points awarded. Here are the points for various Node counts (N) using this function, rounded to two decimal places:

Operating 1 Node: 6.5*log10(1) + 1 = 1 point
Operating 2 Nodes: 6.5*log10(2) ≈ 1.95 points
Operating 5 Nodes: 6.5*log10(5) ≈ 4.54 points
Operating 10 Nodes: 6.5*log10(10) ≈ 6.50 points
Operating 25 Nodes: 6.5*log10(25) ≈ 9.08 points
Operating 50 Nodes: 6.5*log10(50) ≈ 11.04 points
Operating 100 Nodes: 6.5*log10(100) ≈ 13.00 points
Operating 250 Nodes: 6.5*log10(250) ≈ 15.58 points
Operating 500 Nodes: 6.5*log10(500) ≈ 17.54 points
Operating 1000 Nodes: 6.5*log10(1000) ≈ 19.50 points
Operating 7000 Nodes: 6.5*log10(7000) ≈ 24.99 points

Using this updated logarithmic function, Node operation decentralization is encouraged.

These points will accrue in addition to the “base distribution” point which a node operator receives for operating their nodes. This means that:

A user operating one node will have:

Day 1: 1 base point and 1 bonus point (2 points total)
Day 2: 1 base point and 1+1 bonus points (3 points total)
Day 3: 1 base point and 1+1+1 bonus points (4 points total)

…etc

A user operating five nodes will have:

Day 1: 5 base points and 4.54 bonus points (9.54 points total)
Day 2: 5 base points and 4.54+4.54 bonus points (14.08 points total)
Day 3: 5 base points and 4.54+4.54+4.54 bonus points (18.62 points total)

…etc

Please note, these values are approximate and may slightly differ due to rounding.

Cumulative lifetime points will be added to the distribution daily, rewarding consistent Node operators over time. However, these bonus points will be deducted when users mint their $GALA at a rate which aligns roughly with the rate of halving using the following schedule:

Tranche 1–1 point per 1000 GALA minted to GalaChain
Tranche 2–1 point per 500 GALA minted to GalaChain
Tranche 3–1 point per 250 GALA minted to GalaChain
Tranche 4–1 point per 125 GALA minted to GalaChain
Tranche 5–1 point per 62.5 GALA minted to GalaChain

This mint fee in the form of bonus points creates a dynamic ecosystem where node operators ascend and descend through the distribution ranking based on their own behavior.

There will also be a daily “free mint” allowance. This will equate to 5% of the average daily emission per node for that day (totalDailyFNMint/50,000) that can be minted to GalaChain without any point deduction. However, this is a DAILY allowance and does not stack. This ensures that node operators taking advantage of this are actively engaged and not “set it and forget it” operators.

Note: It is not possible to go below your daily base distribution point total.

This means:

A user with 25,000 unminted $GALA and 250 bonus points during a period in which emissions were in tranche 2 would incur a loss of 50 bonus points if they minted all of their $GALA, resulting in a final distribution point total of 200 points. The following day, points would be allocated according to the following function:

Point accrual = 6.5*log10(N) (+1 if N=1) (where N = number of operational nodes meeting minimum in the user’s account)

New Founder’s Nodes joining our ecosystem will begin with the lowest Node bonus point total from currently operational Nodes, providing a fair starting point and ensuring that they are not disadvantaged by having to catch up from zero. While this initially introduces an incentive to spread nodes around to “reset” bonus points following a mint, it will gradually trend downwards as more people mint and engage in the ecosystem. This is just to prevent it from becoming severely imbalanced.

Implementation Duration:

If passed, this distribution will be in implementation for 12 months from the date it is put into effect. To ensure continuous community involvement, a new discussion will start after 9 months to evaluate the system’s effectiveness and decide whether it should continue, be adjusted, or be reverted. A subsequent proposal will be put forth after 10 months, and the community will vote on the next course of action. Please note that any changes to the system will likely take at least 60 days to implement.

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The comprehensive feedback from the community has played an invaluable role in refining the ‘Node-Based Cumulative Lifetime Points’ system. As we progress with these amendments, we remain committed to fostering an inclusive, engaging, and vibrant community, constantly adapting to maximize decentralization.

As always, your feedback is invaluable. The next stages of this journey promise to be an exciting voyage towards a more decentralized, robust, and sustainable network. Let’s continue to shape the future of blockchain technology together.