Tokenomics Discussion: Improving Network Properties via Dynamic Network Fees

As we launch SSV’s Shifu V2 Testnet and move closer to a subsequent release candidate, the details of the network are beginning to solidify. But at this moment, before all of this is finalized in preparation for mainnet launch, we have an opportunity to augment the project’s tokenomics to improve the network’s properties, support the SSV community, and better serve the greater Ethereum ecosystem. To encourage discussion on the topic, I wrote an article (English, Chinese) to illustrate how we might seek to achieve such effects and present some example solutions for us to consider, including:

  • Encouraging decentralization by giving advantages to small operators
  • Increasing network and market stability by incentivizing users to hold more SSV
  • Creating a method to “stake” SSV and earn a return without needing the DAO to mint new tokens to pay for it
  • Increasing DAO governance participation by incentivizing regular voting

If you are interested, please give it a read and post your comments, opinions, and ideas. And please vote below if you would like to see research continue on any of the mechanisms presented. Thanks, and have a great weekend!

  • Give advantages to small operators
  • Incentivize users to hold more SSV
  • Create a method to “stake” SSV without minting new tokens
  • Incentivize DAO voting
  • I don’t think we should modify our tokenomics

0 voters

3 Likes

Added Chinese translation: 通过动态网络费用改善网络属性 - HackMD

I don’t speak Chinese and used translator software, so hopefully it makes sense :slight_smile:

Great work @fod.
there are my 2cents.
As for the section of “Objective: Increase decentralization by favoring many small operators over few large ones”, I think the penalties mechanism could facilitate decentralization.
The penalties (extra network fees) go to DAO directly. I propose to distribute a portion of the penalties to small validators who reach some metrics (good performance) as base revenue. It is hard for small validators to promote themselves compared with professional and verified ones. The base fees could help them to cover the time & cost and encourage them keep running at the early stage.
Also, from the performance’s side, NOs should be supposed to set up the upper limit of VAs they would like to host.

About the objective: Increase network and market stability by incentivizing users to hold more SSV, locking more SSV leads to fewer circulating supply. My concern is if it could cause bump&dump?

about the objective: Increase governance participation, I think the delegation suits SSV network while SSV network is a pretty tech-driven and to-business project while we need more tech-based professionals.

2 Likes

Thank you all for your feedback and ideas. In the coming weeks, I’ll refine the “give advantages to small operators” and the “incentivize users to hold more SSV” concepts, and I’ll present updated designs with expanded analysis.