The goal of this draft is to present the design of our next incentivized testnet - a deeper dive into the testnet mechanics will be shared in a separate proposal.
The previous incentivized testnet(Primus), which ended this month, allowed us to significantly scale our testnet - over 15K validators and 3K (!) operators, it helped us introduce major improvements to the protocol and prepare for the next phase.
The next testnet will be a brand new testnet, which will serve as a testing environment for protocol development and for teams building on top of ssv.network.
ssv.network is a decentralized infrastructure for ETH staking applications. Other than the R&D, the biggest challenge the network is facing is building a flourishing developer ecosystem. The ultimate goal is empowering developers to take full advantage of our technology and build next-gen staking services on top of the SSV protocol.
As such, the SSV community focus henceforth should be on tools, grants and a robust testing environment for projects and developers.
The core team is heavily invested in finding the right partners in the space, introducing a large-scale grant program and designing the next incentivized testnet.
With this in mind, we wanted to incorporate developer focus initiatives into our next incentivized testnet. by including in the testnet other communities/project which are highly correlated to the future success of the network.
Including other communities is a bottom-up approach for promoting awareness to the technology and the wide array of possibilities SSV opens for the Ethereum ecosystem. ssv.network will help unlock the next billion ETH stakers, the first step in that journey is harnessing existing stakers, communities, builders. Testnet V2 is our starting point. Buckle up!
- The program will run for a whole year, with monthly rewards distributions (12 rounds).
- Validators reward eligibility will require a participant(address) to holds at least X amount of SSV tokens or Partner Community tokens (for example: stETH (Lido), rETH (Rocket Pool), etc.)
- Partner Community tokens inclusion in the testnet will be determined by the DAO through a ‘listing’ process.
- Validator rewards will not be correlated to their “staked” balance - which basically means that any amount over the required amount will not contribute to your reward allocation(each round, all eligible validators will earn the same).
- Validators will be eligible only for the distribution period (round) they were created within - in contrast to the previous “set it and forget it” approach where received passive income, in V2 participants must stay active (by creating new validators) in order to continue earning rewards.
In addition to the above, while working on the design we wanted to apply learnings from the previous incentivized testnet by addressing the following lessons:
- Abuse - many GoETH faucets were abused. We took that to heart, V2 GoETH distribution will be carefully planned and executed.
- Reward distribution was too concentrated (predominantly ssv stakers allocation).
- Complexity - reward allocation and eligibility was too complex and many participants were confused and frustrated.
- To mitigate abuse, we suggest to:
- Utilize a “staked” balance requirement for validator eligibility (as outlined above). Now that participants must have some “skin” in the game in order to be rewarded.
- Reward allocation made simple:
- Validators and stakers reward allocation is one of the same. As stated above, only staking validators are eligible to receive rewards.
- Verified Operators and non-verified operators reward allocation will be similar. All operators share the same reward pool. The pool will be divided according to the number of validators manage by each operator. Verified Operators will have the added benefit of DAO recognition. That alone should be a major advantaged when competing for GoETH deposits and ultimately generating rewards.
- To mitigate the concentration of reward distributions, we suggest to:
- Utilize a tiered reward pool which will increase as more eligible validators participate in the testnet - this will (1) ensure that rewards are tied to engagement and (2) ensure spam does not dilute rewards of existing users.
Rewards Distribution Example
|Eligible Validators||Rewards||Max / Validator||Min / Validator|
|0 - 1,000||1,750 SSV||1,750||1.75|
|1,000 - 2,000||3,250 SSV||3.24||1.62|
|2,000 - 3,000||4,250 SSV||2.12||1.41|
|3,000 - 4,000||4,750 SSV||1.58||1.18|
|4,000 - 5,000||5,000 SSV||1.24||1|
*The DAO will distribute between 1,750 SSV to 5,000 SSV every month depending on the amount of new eligible validators joining during the month
This program will include a new allocation for another important network participant that is now relevant due to the incorporation of the SSV token as the payment layer of the network - liquidators: actors that work behind the scenes and keep the system solvent by signaling users that have insufficient balances to carry their expenses, and liquidate their account.
We would appreciate your feedback, comments and ideas. We will continue to share the detailed mechanics of the proposal.
- I support
- I’m against