Idea: Provide incentive for long term MN holding by introducing a Premium Loyalty Program.

Nthelight

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May 15, 2014
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Premium Loyality Program:
- Similar to traditional banking saving products.
- Moving the collateral would result in losing the premium.
- No time locking of collateral, you are free to move (sell) your coins when you want to.
- When you sell your MN and buy back in lower again, you will set up your MN again at the standard (no premium) rate.
- Could reduce price volatility due to MN selling as some people would not want to lose their built up premium percentage?
- Not sure how that could actually work, but thinking of using some of the block reward (like 5%) exclusively for premium pay outs ("bonus").
- Some people may prefer a "small premium", other will want to align more with the markets and prefer the "high premium" option.

So, the angle here is obviously to benefit those investors that are loyal to Dash in the true sense of the word and discourage market playing MNOs who sell and rebuy their MN(s) and make the Dash price (and therefore the project) suffer for their personal gains.

No, I have no exact scheme in mind, it's just an idea (not even a concept yet). It's mostly for discussion purposes and to see if people think there's something valuable in this idea. So, without actually going into the detail of how that could or should work, do you like the idea?

Note: This is somewhat similar to time locking the collateral for a bonus, but I think actually locking the collateral (especially for a long time) would not be that desirable imo.
 

GrandMasterDash

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Nice idea but unfortunately this can also be painted in a negative light i.e. disincentivizing newcomers. And to be honest, I think I prefer fresh blood than give favor to people that are going to vote the same things all the time. In other words, this could work against us when we need a change of direction.

The immediate buying and selling of nodes is not such a bad thing, after all, a dash masternode is the true unit of account. One single dash is just a share of something bigger and tangible; a server in a data center.
 
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TaoOfSatoshi

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I think that Dash should maybe implement something similar to HEX where hodling longer is incentivized. Longer contracts pay better, and penalties result for breaking your contract. Penalties that will be divided amongst the other masternode owners that are honoring their contract. This appears to be working extremely well for HEX.
 

AgnewPickens

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I think that Dash should maybe implement something similar to HEX where hodling longer is incentivized. Longer contracts pay better, and penalties result for breaking your contract. Penalties that will be divided amongst the other masternode owners that are honoring their contract. This appears to be working extremely well for HEX.
I think Dash is just fine, it is focused on the payments sector, keep the message simple, quick, easy, private transactions. That's all we need to do, Everything else is just whipped cream topping. We already have merchant payments nailed down. Dash is so overlooked, I can understand why that Greg Mannarino guy is talking about Dash all the time, he sees it too.
 

TaoOfSatoshi

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I think Dash is just fine, it is focused on the payments sector, keep the message simple, quick, easy, private transactions. That's all we need to do, Everything else is just whipped cream topping. We already have merchant payments nailed down. Dash is so overlooked, I can understand why that Greg Mannarino guy is talking about Dash all the time, he sees it too.
Yeah, Dash's main message was always about being a digital cash, with all of the aspects of physical cash. But, in the future, if it is deemed beneficial to add some game theory to the masternode layer, the HEX model is a good place to start. We could have our cake (payments) and eat it too (incentives for the second tier to drive investment interest).
 

GrandMasterDash

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I've said it to Ryan and maybe worth saying here, dash must not compete for APR. The market is saturated with high yield investments, we can't compete, we'd get eaten alive. We don't need people running masternodes for huge profits, we need them to be loyal to the cause. Radical change isn't going to come to those married to the US dollar.

If we're going to pay people then at least make sure the network as a whole benefits. We can expand our employee base by creating a new node type for fast and local content delivery. A decentralized Netflix with a segregated DAO for artists and producers. I'll happily take a pay cut for that.
 
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Nthelight

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My proposed idea is not about offering high yield to the market, otherwise I would have proposed to raise the block reward share for MNs.

The idea is to make a difference between loyal MNOs and those who play the market (without any consequence). If it is balanced out well, it could provide more stability in number of masternodes and price.

Apologies if that's not clear.

Also pointing out that the timing would obviously only start when the system is implemented, it would not have any effect on current or new MNOs.
 
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xkcd

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I would have thrown this in the DASH ECONOMICS section of the forum since that is what we are trying to address here.

Note: This is somewhat similar to time locking the collateral for a bonus, but I think actually locking the collateral (especially for a long time) would not be that desirable imo.
Why though? Why are people so opposed to it? Without the commitment, the bonus means nothing. You made reference to your bank, guess what, the bank only gives you extra if you stake more, or stake longer and if you withdraw funds early, you get nothing, I like your idea, but I think it will reward people that just sorta fell into it, like, imagine the market is bullish for the next five years and no one really wants to sell, then without any commitment, they just get more DASH.

What I think is better is to verifably be able to show on the blockchain extactly how much collateral is locked and absolutely cannot be spent, this give confidence to new comers that they won't get dumped on and this will pump the price.

Anyway, when I discussed this idea with the devs the main issue was where does the bonus come? Do we just mint it from the blockchain? If so, then DASH's supply and inflation rate is no longer deterministic and could rise above the 6% it currently is, if we try to adhere to the current emission rate, then we would somehow have to calculate the amount of DASH to take from short term stakers to give to the long term stakers and I think that requires a computation each block of what the theoretical pay would be for each node in the network and then pay the current node the correct amount based on the current age of all the MNs. This has the drawbacks that it would be computationally expensive and require several blockchain lookups to determine the age of each node, even after all that, since the network is constantly changing from block to block, the algo will occasionally overpay a node and other times under pay it, ie, we still won't be exactly deterministic.
 

xkcd

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Feb 19, 2017
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Dash Address
XpoZXRfr2iFxWhfRSAK3j1jww9xd4tJVez
Also, just for kicks, I decided to compute the average age of a DASH Masternode, here is the code.
Code:
protx_list=$(dash-cli protx list valid 1)
height=$(dash-cli getblockcount)
jq '.[].state.registeredHeight'<<<"$protx_list"|
awk -v height="$height" '{sum+=height-$1}END{print sum/NR*2.625/60/24}'
Result is 537 Days, surprised?
 
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TaoOfSatoshi

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Anyway, when I discussed this idea with the devs the main issue was where does the bonus come? Do we just mint it from the blockchain? If so, then DASH's supply and inflation rate is no longer deterministic and could rise above the 6% it currently is, if we try to adhere to the current emission rate, then we would somehow have to calculate the amount of DASH to take from short term stakers to give to the long term stakers and I think that requires a computation each block of what the theoretical pay would be for each node in the network and then pay the current node the correct amount based on the current age of all the MNs. This has the drawbacks that it would be computationally expensive and require several blockchain lookups to determine the age of each node, even after all that, since the network is constantly changing from block to block, the algo will occasionally overpay a node and other times under pay it, ie, we still won't be exactly deterministic.
Yup, the idea, while likely a good idea as a concept, is not likely easy to implement in a system such as Dash's. Still good to talk about and spitball.

Also, just for kicks, I decided to compute the average age of a DASH Masternode, here is the code.
Code:
protx_list=$(dash-cli protx list valid 1)
height=$(dash-cli getblockcount)
jq '.[].state.registeredHeight'<<<"$protx_list"|
awk -v height="$height" '{sum+=height-$1}END{print sum/NR*2.625/60/24}'
Result is 537 Days, surprised?
Yes, very. I thought it would be much longer than that. Although I guess that probably includes some OGs that migrated to more powerful VPS instances.