| fip | title | status | type | author | created | updated |
|---|---|---|---|---|---|---|
23 |
Temporary adjustment of Block Producers Reserves |
Final |
Functionality |
Sukesh Kumar Tedla <[email protected]> |
2020-12-24 |
2021-03-05 |
As described in the FIO Knowledge Base, the genesis of the FIO chain included 10M FIO Tokens set aside for Block Producer Reserves, to be minted each day as needed if the normal fee distribution falls below 50k FIO Tokens. In December 2020, these reserves were exhausted and the current BP pay has dropped significantly. During the recent BP call, it was discussed that the pay from organic on-chain activities is about 10% of what it was with the BP reserves. The reduced pay has a direct impact on BPs operating efficiently, which is essential for the reliance of the FIO network. To address this issue, FIO Foundation and BPs have been discussing multiple proposals focused on short-term and long-term scenarios.
For more detailed discussion on this topic, please visit: https://fioprotocol.atlassian.net/wiki/spaces/FC/pages/49184971/The+Future+of+Block+Producer+Reserves
As part of this proposal a detailed analysis has been made to understand the FIO economics and using this analysis a decision has been made to increase the BP Reserves by 10 Million tokens to support ~6 Months of reasonable pay to the BPs.
Proposed new actions:
| Contract | Action | Description |
|---|---|---|
| fio.treasury | Updating BPMAXRESERVE | Need to update the BPMAXRESERVE value from 10000000000000000 (10M Tokens) to 20000000000000000 (20M Tokens) |
BPs/Validators are the essential part of the network. Today, FIO Chain is supported by 36 validators who are providing the infrastructure and participating in network governance activities. They ensure the security and reliability of the network. In order for a validator to support FIO Chain, there are numerous costs involved like infrastructure costs, payroll costs, network costs etc. Though the payroll costs vary in different countries and the way you source the infrastructure (cloud vs bare metal) will have an impact on total costs, on average for a validator to offer services it's expected to cost around $5,000/month ($4,000 - Salaries, $1,000 - Network & Infrastructure).
The current pay of active validators is around $300/month and for standbys it's around $150/month. So to have sustainable network we need to start compensating the validators fairly for their services.
Based on the majority agreement, BPs have agreed to target pay for Active BPs at $3,500 and Standby BPs at $2,100.
This is the code where the treasury mints the Block Producer Reserve tokens: https://github.com/fioprotocol/fio.contracts/blob/cd048d6d7b10dbd0e0d46fe8b5fd063f4bc4c8a4/contracts/fio.treasury/fio.treasury.cpp#L196
Update the BPMAXRESERVE value from 10000000000000000 (10M Tokens) to 20000000000000000 (20M Tokens) here: https://github.com/fioprotocol/fio.contracts/blob/cd048d6d7b10dbd0e0d46fe8b5fd063f4bc4c8a4/contracts/fio.treasury/fio.treasury.cpp#L13
A detailed analysis has been performed to understand the FIO Economics and after the analysis BPs have agreed on the following points:
Decisions Taken during BP Call (2021-02-01): Recording Link: (Passcode: 19b0G>) https://zoom.us/rec/share/-P-OU0lDQQ9Cts4RDk_iPY7SWmGr1uTJ-dn0JKFVc8c-yj2sx8hS_8Z8EdFvA1dS.1Rap-juvMv4paPTt
Targeted pay agreed for Active BPs is set at $3,500 and for Standby BPs is set at $2,100. Based on these values and FIO exchange rate at $0.07/FIO, 1.68 Million FIO Tokens per month are needed to compensate 42 BPs (21 Active and 21 Standby).
It is decided to fund the Block Producer Reserves for a period of ~6 months by increasing the Block Producer Reserves maximum limit from 10M to 20M. To ensure that the total supply does not exceed 1B, the Foundation has agreed to burn 10M FIO Tokens from 10 Address Giveaway Buckets as soon as ability to retire FIO Tokens (FIP-22) has been launched. These are the Address Giveaway Buckets which will be burned:
FIO67GKpzvW9ZYKkFK8vtbLwca3wNhYi3LktBXxAQwvEg42rcn2Pa,1000000 FIO6rP7oHA67cepHVktN1kzeJ9t3SVJHUXT3k7Y5Upihdvn7GYP4Z,1000000 FIO8Mi2s59sTVc54Pv9pwFBJMf2v1CS9swroFjtEUMc4Mi6NJ2Bzf,1000000 FIO7VQCKj8SjRUC3rX7q6NF212Asx9qchpaqadh97pkBv5XMNaoVa,1000000 FIO55DKPRozahucXdBEiasd9nJYzMHNaRu1vu1c6PTR3UUQMzRamG,1000000 FIO5cCX7hvHYyHYHKS2EBCpPhp3HLMXjpgb1G3dRrxJCwCDpvVi21,1000000 FIO6zKQsSEciLnFcuKsCxAHSWZnX5z7mMsxbvke1TkJm957qYgmry,1000000 FIO6nfAMLCMGGYRD2uKmSMkrioUrBM1FZhnAtsQxsc1JnVY72ogG8,1000000 FIO7aymPn21vqXZfg67toCbGCiYvYZM7QncQ5JMVoVgM5eK8GTDKT,1000000 FIO6XYdXfUvhozN2CSL9ZEUEUJExt3oMfLcgYu25d8mRBN88adf7Z,1000000
Statement from FIO Foundation: If the FIP is approved by the community and steering committee, we’ll burn these tokens when that functionality is available and update the knowledge base to reflect that change in token allocation.
During the 6 months time, BPs and the community shall evaluate different ideas and growth values of the chain to have more long-term solution.
Update the BPMAXRESERVE value from 10000000000000000 (10M Tokens) to 20000000000000000 (20M Tokens) here: https://github.com/fioprotocol/fio.contracts/blob/cd048d6d7b10dbd0e0d46fe8b5fd063f4bc4c8a4/contracts/fio.treasury/fio.treasury.cpp#L13
BPMAXRESERVE updated to 20M in fio.contracts v2.3.3
- Making the BPMAXRESERVE a variable which can be set by a BP multi-sig.
- Make BPMAXRESERVE based on a multiplier of FIO Address Reservation fee, to ensure stability if the FIO Token price fluctuates.