Incentivized Mainnet Program

Proposals
1

Proposal

Summary

This proposal aims to create an incentivization layer to the running SSV mainnet with the goal of stimulating DVT adoption and SSV network’s growth, by rewarding participants who run on the SSV network throughout the upcoming year.

Motivation

Initiating incentives on mainnet will accelerate the widespread adoption of DVT within the Ethereum Staking ecosystem while positioning the ssv.network for substantial growth.

Adoption of new technologies, especially pioneering concepts like DVT, inherently presents challenges and risks. Infusing the ssv network with incentives increases the likelihood of attracting those who may be cautious about embracing a new protocol, one that has yet to establish a proven track record and is yet to be battle tested.

Furthermore, the impact of these incentives will grant competitive advantage to staking applications that choose to build upon SSV’s infrastructure. This advantage serves as a driving force for the incentivization of running a higher number of validators on the network compared to alternative solutions or competitors and solidifying SSV as the new standard for staking infrastructure.

Mechanics

  • The program will run for 1 through 12 monthly rounds starting retroactively from epoch 232538 (roughly Oct-01-2023 12:03 AM UTC) until epoch 314887 (roughly Sep-30-2024 11:57 PM UTC), unless the rewards of the Incentivized Mainnet Program are exhausted, in which case the program will end in the last round where the rewards will be prorated to validators.
  • During the program, each validator on mainnet will be rewarded with SSV tokens according to a tiered rewards system that is designed to increase incentivization in early days of the program and reduce SSV mint numbers as the program progresses.
    • To ensure the rewards are aligned with the suggested boosted APR throughout the program, the price of ETH and SSV will be recalculated before each round (1st of each month) by their price average, as indicated on Binance, during the previous round. Additionally, Ethereum’s APR will be determined in a similar fashion, considering its average sourced from ETHSTORE (https://beaconcha.in/ethstore).
    • If the price of SSV were to fall under 10 USD per SSV at the time of calculation, the calculated price will be set to 10 USD per SSV.
    • Program will be capped at 30K eligible validators. Any validator that joins beyond the cap will not be eligible.
  • The rewarded SSV tokens will be minted by the DAO:
    • The Incentivized Mainnet Program will require that upon the approval of the proposal the ssv.network DAO Multi-Sig Committee mint 200.000 SSV tokens to a new Multi-Sig wallet dedicated to the Incentivized Mainnet Program (hereinafter: “Dedicated Multi-Sig wallet”).
    • If the amount of remaining tokens on the Dedicated Multi-Sig wallet was to go below 100.000 SSV, the ssv.network DAO Multi-Sig will mint additional SSV tokens so that the Dedicated Multi-Sig wallet’s amount of SSV is 200.000 SSV. This process will be repeated until a total of 1.000.000 SSV tokens were minted to the Dedicated Mult-Sig wallet. No more than 1.000.000 SSV will be minted during the length of the Incentivized mainnet program.

1308×283 38.6 KB

Based on $1700 ETH, $15 SSV and 4.7% APR (Google Sheet Format)

Tier Advancement - Once a sufficient number of eligible validators participate in the Incentivized Mainnet Program so that they advance to the next tier of rewards, all validators will be subject to the rewards of the tier that the new validators have joined.

Eligibility Conditions

  • Any validator that has registered to the ssv.network after October 1st, 2023, until the end of the Incentivized Mainnet program or the exhaustion of SSV in the Dedicated Multi-Sig wallet.

  • Validator rewards are based on its performance (Beacon Chain attestations) throughout each round, which is defined by the number of days the validator has been active out of the total days in that round (a validator that was active for the entire duration of the round would be rewarded more than a validator that was active for just a portion of it).

    • An active day for a validator is a day where the validator has performed with at least 90% performance (successfully attesting at least 202/225 epochs within that day).
    • Validators must stay continuously registered on the network for the entire active day to remain eligible. Any duration where a validator deregisters and then re-registers will not be counted towards the active day.

  • Participant rewards (Ri ) are calculated by the following formula:

    image
    image859×164 6.09 KB

    • tierReward = the calculated SSV tokens reward per each validator according to the amount of eligible validators in the network within a specific round.

    • validatorActiveDays = the sum of the active days of all validators of a participant within a specific round.

    • daysInRound = the amount of days within a specific round.

  • Rewards are claimable to the address that registered the validator (“Reward Address”).

    • If the registering address is a contract, the address of its deployer will be set as its reward address.

  • Validators that have been slashed during the program duration due to misbehavior (double signing, etc.) would be permanently disqualified from participation and rewards.

  • Validators based or registered in the U.S.or otherwise prohibited by the relevant sanction authorities (e.g. OFAC, the European Commission), cannot participate in the Incentivized Mainnet.

Rewards Distribution

  • Rewards will be calculated and distributed per round basis, throughout 12 monthly distribution rounds.
  • Distribution will be claimable on the Ethereum mainnet using 1inch’s cumulative merkle distributor contract.
    • Rewards for each round would be distributed by the end of the 2nd week following the end of the previous round.
    • Distribution contract will be owned and controlled by the DAO multi-sig committee.
    • Unclaimed rewards will be carried over to the next round of distribution (i.e. If a participant received 10 SSV in the 1st round, and 7 SSV in the 2nd round, and didn’t collect his 1st round rewards, he would be able to claim 17 SSV after the 2nd round distribution).
  • Any unclaimed rewards will be returned to the DAO treasury 1 year after the program ends (October 1st, 2025).
  • Rewards are claimable on-chain by interacting with the distributor contract by submitting the root hash, participant address, claimable amount and cryptographic proof of their claim.
    • Above details for all program participants will be supplied as a JSON to the community after each round calculation. Example:

image
image1638×668 56.7 KB

Rounds duration

Round Epochs Timestamps
1 232538 - 239512 Oct-01-2023 12:03:35 AM - Oct-31-2023 11:57:11 PM
2 239513 - 246262 Nov-01-2023 12:03:35 AM - Nov-30-2023 11:57:11 PM
3 246263 - 253237 Dec-01-2023 12:03:35 AM - Dec-31-2023 11:57:11 PM
4 253238 - 260212 Jan-01-2024 12:03:35 AM - Jan-31-2024 11:57:11 PM
5 260213 - 266737 Feb-01-2024 12:03:35 AM - Feb-29-2024 11:57:11 PM
6 266738 - 273712 Mar-01-2024 12:03:35 AM - Mar-31-2024 11:57:11 PM
7 273713 - 280462 Apr-01-2024 12:03:35 AM - Apr-30-2024 11:57:11 PM
8 280463 - 287437 May-01-2024 12:03:35 AM - May-31-2024 11:57:11 PM
9 287438 - 294187 Jun-01-2024 12:03:35 AM - Jun-30-2024 11:57:11 PM
10 294188 - 301162 Jul-01-2024 12:03:35 AM - Jul-31-2024 11:57:11 PM
11 301163 - 308137 Aug-01-2024 12:03:35 AM - Aug-31-2024 11:57:11 PM
12 308138 - 314887 Sep-01-2024 12:03:35 AM - Sep-30-2024 11:57:11 PM

Mainnet Incentivization Administrator

The proposal suggests to delegate the continuous operation of the program and coordination of various DAO committees to @EridianAlpha (discord: eridianalpha) (hereinafter: “Administrator”). .

Responsibilities

  • Calculating and validating rewards for each round.
  • Creating the merkle root that represents the rewards allocation for each round.
  • Sharing the merkle root JSON with the community
  • Coordinating the distributor contract deployment with the DAO multi-sig committee.
  • Community communications around distribution timelines and execution.

Mainnet Incentivized Administrator Replacement

Requests for the Administrator to be changed can only be submitted to the ssv.network DAO Grants Committee or through a DAO proposal. The Grants Committee can itself decide to remove and appoint a new Administrator if the administrator were to cause damage to the ssv.network or the DAO, the determination of which shall be done at the sole discretion of the Grants Committee.

Any change of the Administrator by the Grants Committee shall be done in accordance with the Adding and Removing Members of the Grants Committee provisions of the [DIP-5] Grant Program and Committee.

Administrator Compensation

The Administrator shall receive $1000 per month denominated in SSV based on a 30-day trailing average, calculated on the 1st day of the following month using Binance as a price reference.

Abusive Behavior

  • Abusive behavior of the network will result in exclusion from the incentivization program, decided by the Grants Committee.

Resources

9 Likes
2

I think this is a great initiative to jump start SSV’s launch. The extra incentive will go a long way to mitigate the risk of being an early adopter of a new protocol, and it will give a competitive advantage to our partners that we want to see succeed. I fully support this proposal.

3 Likes
3

An FAQ/short summary of the above.
FAQ: Mainnet Incentivization Program

Q1: What is the main goal of the Mainnet Incentivization Program?

A1: The main goal of the Mainnet Incentivization Program is to stimulate the adoption of the Distributed Validator Technology(DVT) within the Ethereum Staking ecosystem and foster growth in the SSV network by rewarding participants who run validators on the SSV network.

Motivation

Q2: Why is it important to introduce incentives on the SSV mainnet?

A2: Introducing incentives on the SSV mainnet accelerates the adoption of DVT in the Ethereum Staking ecosystem and attracts users who might be cautious about adopting a new and unproven protocol.

Q3: How does the program create a competitive advantage for staking applications?

A3: The program offers competitive advantages to staking applications built on SSV’s infrastructure by encouraging a higher number of validators to run on the network compared to alternative solutions, solidifying SSV as the new standard for staking infrastructure.

Mechanics

Q4: How long will the Mainnet Incentivization Program run?

A4: The program will run for 12 monthly rounds starting retroactively from epoch 232538 (around Oct 1, 2023) until epoch 314887 (around Sep 30, 2024).

Q5: How are rewards calculated for validators?

A5: Validator rewards are calculated based on performance, specifically Beacon Chain attestations, throughout each round. The rewards depend on the number of active days within a specific round and the total days in that round. Participants have to remain registered for the entire period instead of just registering and deregistering.

Q6: What happens if the price of SSV falls below $10 during calculations?

A6: If the price of SSV falls below $10 per SSV during calculations, it will be set at $10 per SSV for reward calculations.

Eligibility

Q7: Who is eligible to participate in the Incentivized Mainnet Program?

A7: Any validator that registered to the ssv.network after October 1st, 2023, until the end of the Incentivized Mainnet program or the exhaustion of SSV in the Dedicated Multi-Sig wallet is eligible.

Q8: What happens if a validator deregisters and re-registers during a round?

A8: Any duration where a validator deregisters and then re-registers will not be counted towards the active day for that validator in that round.

Rewards Distribution

Q9: How and when will rewards be distributed?

A9: Rewards will be calculated and distributed on a per-round basis throughout 12 monthly distribution rounds. They can be claimed on the Ethereum mainnet using 1inch’s cumulative Merkle distributor contract, and rewards for each round will be distributed by the end of the 2nd week following the end of the previous round.

Q10: What happens to unclaimed rewards?

A10: Unclaimed rewards will be carried over to the next round of distribution. However, any unclaimed rewards will be returned to the DAO treasury one year after the program ends, on October 1st, 2025.

Q11: How does the tiered APR Boost work?

A11: See the Google Sheet containing an example. As the amount of validators increases per application, so does their tier level. The mechanism ensures that moving up a tear reduces the APR boost received. All validators will be subject to the rewards of the tier that the new validators have joined.

Administrator

Q12: Who is responsible for managing the Mainnet Incentivization Program?

A12: Eridian (discord: eridianalpha) is designated as the Mainnet Incentivization Administrator and is responsible for calculating rewards, coordinating distribution, and communicating with the community.

Q13: How can the Administrator be replaced?

A13: Requests for the Administrator to be changed can be submitted to the ssv.network DAO Grants Committee or through a DAO proposal. The Grants Committee can decide to appoint a new Administrator if necessary.

Q14: What compensation does the Administrator receive?

A14: The Administrator receives compensation of $1000 per month denominated in SSV based on a 30-day trailing average, calculated on the 1st day of the following month using Binance as a price reference.

Abusive Behavior

Q15: What happens if a participant engages in abusive behavior on the network?

A15: Abusive behavior on the network can result in exclusion from the incentivization program, with the decision made by the Grants Committee.

7 Likes
4

Thanks for posting this proposal @BenAffleck and for your summary @RobertD. I’m happy to support this initiative and to be considered for the Administrator role.

4 Likes
5

Support for exiting the incentive program as soon as possible. Currently, the growth of TVL is very slow, with the TVL now only at 20M. When will the voting begin?

1 Like
6

The original post has been modified to clarify the calculation of Ethereum’s APR during the program’s lifespan.

Additionally, Ethereum’s APR will be determined in a similar fashion, considering its average sourced from ETHSTORE (https://beaconcha.in/ethstore).

2 Likes
7

Please exiting the incentive program as soon as possible. Now the biggest problem is that who supply the ETH liquidity for validators, not how many validators use DVT.

1 Like
8

Why does the incentive program mint new tokens when there are tokens in the treasury?

10

The proposal is now open for voting.:vertical_traffic_light:

Incentivized Mainnet Program

1 Like
11

Thank you for sharing this proposal.
Who will have control over the distribution contract, and how will decisions regarding the contract be made within the DAO?

12

@EridianAlpha could you please answer this question?

13

After talking to some folks, collecting the answer to your question takes a bit more time as it is part of the execution plan when the proposal passes. We’ll update the community in the next couple of weeks.

Thanks a lot.

1 Like