Author Topic: Tx fee, Account Registration fee, Voting  (Read 2113 times)

cube

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Tx fee, Account Registration fee, Voting
« on: November 02, 2014, 02:52:06 pm »
Learning from KeyID experience, we need to consider a suitable value for the fees.  The fees can be used to rewards delegates and/or developers running a delegate. We need to consider:

1) The account reg fee should not be too low which lead to squatting and abuse.  It should not be too high or it would discourage people from using it.  I think a figure of between USD0.30 to USD0.50 would be nice. 

2) Tx fee should be low.  But a 1 to 2 cents USD should be ok. Right?

3) Delegate account registration fee.  I think this should be much higher than currently.  Perhaps USD10 to USD20 per account.  A delegate registration must means that this person has real interest to pursue being a delegate and not registering it just for the fun of it.  A minimum fee should deter unwelcome delegates.

4) Voting - we have seen have BM has a big sway in the voting of btsx delegates.  I3 has a 13% stake in PTS.  It would be a repeat of the same voting behaviour.  While we want our key developers and contributors to be well rewarded.  But having a big control on all the delegates does not seems to be a good idea.
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pc

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Re: Tx fee, Account Registration fee, Voting
« Reply #1 on: November 02, 2014, 09:57:31 pm »
I see several problems there:

1. We don't know what the post nov-5 value of pts will be, therefore it is impossible  to specify fees in terms of USD.

2. Regarding fees we have conflicting goals:
a) we want to keep the barrier for entry low, i. e. low registration fees.
b) we don't want name squatters, i. e. high reg fees.
c) we want to make the coin attractive to users, i. e. low tx fees.
d) we want a sufficient number of delegates and possibly competition among those, i. e. low delegate reg fees + high other fees.
Judging from the participation in this forum, a) is critical. b) is IMO not much of a problem as long as names are not transferrable.
TX fees should be below 1 US cent IMO, but still higher than the actual TX cost for a delegate.

3. I don't think the high stake of I3 is a short term problem. For any large stakeholder, harming the coin is equivalent to throwing money out of the window. There's a good chance this problem will resolve itself in the long run when I3 liquidate their PTS holdings.
 
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pc

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Re: Tx fee, Account Registration fee, Voting
« Reply #2 on: November 02, 2014, 10:56:45 pm »
d) we want a sufficient number of delegates and possibly competition among those, i. e. low delegate reg fees + high other fees.

I'd like to propose that we create delegates with 0% pay rate in the genesis block, for anyone who promises to run it after launch. Well, maybe not literally anyone, but we should try to get as much decentralization as possible, and quickly. Even a handful of volunteers would be better than 101 init delegates run by one developer.
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AlphaBar

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Re: Tx fee, Account Registration fee, Voting
« Reply #3 on: November 03, 2014, 04:07:54 am »
I am pushing to get some commitment from I3 on the divestment strategy for the Angel fund. Otherwise I think we will have an uphill battle in arguing that we are truly decentralized. It is in their own best interest to commit to a reasonable divestment schedule as it will help to increase the value of their holdings. I think there is little doubt that we will have low participation both in terms of delegates and voting at least initially, which makes this even more important.

AlphaBar

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Re: Tx fee, Account Registration fee, Voting
« Reply #4 on: November 03, 2014, 04:11:17 am »
Cube - I think the amounts you proposed are reasonable. Fee amounts are an unresolved issue in crypto, which means they will always be somewhat "arbitrary" in the short term.

cube

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Re: Tx fee, Account Registration fee, Voting
« Reply #5 on: November 04, 2014, 07:41:27 am »
I see several problems there:

1. We don't know what the post nov-5 value of pts will be, therefore it is impossible  to specify fees in terms of USD.

2. Regarding fees we have conflicting goals:
a) we want to keep the barrier for entry low, i. e. low registration fees.
b) we don't want name squatters, i. e. high reg fees.
c) we want to make the coin attractive to users, i. e. low tx fees.
d) we want a sufficient number of delegates and possibly competition among those, i. e. low delegate reg fees + high other fees.
Judging from the participation in this forum, a) is critical. b) is IMO not much of a problem as long as names are not transferrable.
TX fees should be below 1 US cent IMO, but still higher than the actual TX cost for a delegate.

3. I don't think the high stake of I3 is a short term problem. For any large stakeholder, harming the coin is equivalent to throwing money out of the window. There's a good chance this problem will resolve itself in the long run when I3 liquidate their PTS holdings.

I have been thinking about the points raised. I like to share my thoughts.

Yes, we do not know the value of PTS post Nov5. But should we define fees based on what PTS would be viewed by the market or should we put up fees based on how we would envision PTS's future going to be and how we going to shape it towards that envisioned PTS?  Right now the market has very little information on PTS. They only know PTS holders would get 7% of the new superDAC BTS and that this 7% will be vested over 2 years.  Will other third-party DACs continue to upload the 10% share allocation?  Will PTS survive after I3 pulled the plug on mining PTS?  They heard of an external team that may create a PTS DPOS.  Is this team capable of developing and maintaining PTS DPOS?  Is this new team serious about the new PTS?  Are they well funded? Will they be able to sustain the new PTS operation with their funding/zero-funding?

With these uncertainties, it is not surprising that interest in PTS is low and would remain low post PTS DPOS conversion.  Now, what if we can shape this future?  What if the market can get an assuring answer that

1) PTS has a good vision for the future
2) PTS is going to have a reliable and capable team that can sustain operation for the long haul
3) PTS is well funded and continue to be well funded from the continued operation
4) PTS is strong going forward and third-party DAC would honour the 10% allocation

Will removing the uncertainty improve confidence in PTS?  When the market and public have high confidence in PTS DPOS, would they use the network? Would they mind paying a small fee for a good named account?  Would new delegates be attracted to be part of the network?

I think we could have a lower fees to begin with. We could raise them slightly and incrementally as the user base grows.  I think a reg fee of about 20 cents for a new account and tx fee of 1-cent should be fine to begin with.
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cube

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Re: Tx fee, Account Registration fee, Voting
« Reply #6 on: November 04, 2014, 08:06:37 am »
d) we want a sufficient number of delegates and possibly competition among those, i. e. low delegate reg fees + high other fees.

I'd like to propose that we create delegates with 0% pay rate in the genesis block, for anyone who promises to run it after launch. Well, maybe not literally anyone, but we should try to get as much decentralization as possible, and quickly. Even a handful of volunteers would be better than 101 init delegates run by one developer.

Delegate reg fee and delegate pay are issues that would impact the well being of the PTS network.  They are something new and even Bitshares is trying to figure out a good model.  Let's look at what they have discussed recently  - https://bitsharestalk.org/index.php?topic=9452.msg123029#msg123029

The interesting part is how Bitshares has a vision of getting self-sufficient to fund 10 years of growth.  This is done via a good working delegate pay model.  I think we can take a leaf from there. 

Decentralisation of a coin is really to secure the coin's network.  Bitcoin achieves security by having a network of miners.  These miners do not work for free.  They mine to get bitcoins - ie they are incentivised by the monetary rewards.  PTS DPOS is trying to achieve security via a different means - via a team of 101-delegates.  These 101 delegates  have to be independent and trust-worthy people so as to avoid collusion and incapable/inactive delegates.  From my experience with KeyID, 0% pay-rate delegates quickly 'disappeared' and replaced with paid delegates.  I doubt anyone would be willing to spend money and time to run a delegate node without pay.  Even if they do setup a node for free, I doubt it could sustain for long.  Instead, if we pay a delegate well, it attracts people to campaign for an active delegate seat.  We could then request these paid delegates to run additional 0-pay node.  A well-reward/incentive system is a way to attract good, capable delegates.
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cube

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Re: Tx fee, Account Registration fee, Voting
« Reply #7 on: November 04, 2014, 08:17:41 am »
I am pushing to get some commitment from I3 on the divestment strategy for the Angel fund. Otherwise I think we will have an uphill battle in arguing that we are truly decentralized. It is in their own best interest to commit to a reasonable divestment schedule as it will help to increase the value of their holdings. I think there is little doubt that we will have low participation both in terms of delegates and voting at least initially, which makes this even more important.

I am not sure I3 would think it is their best interest to divest PTS.  I3 views PTS as nothing but a 'vehicle' to gather funding.  Now that BTS (btsx+vote+dns) is fully funded, they see little use of PTS.  In fact, they wanted to stop maintaining the PTS POW infrastructure eg mining and seemingly willing to let PTS 'disappear' after being absorbed into the new BTS superDAC.  You have pointed out it is for their best interest to divest.  Hopefully they would see this perspective.

Participation of delegates could be addressed if we have a good incentive scheme to attract them.
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pc

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Re: Tx fee, Account Registration fee, Voting
« Reply #8 on: November 04, 2014, 09:15:22 am »
I'd like to propose that we create delegates with 0% pay rate in the genesis block, for anyone who promises to run it after launch. Well, maybe not literally anyone, but we should try to get as much decentralization as possible, and quickly. Even a handful of volunteers would be better than 101 init delegates run by one developer.

They are something new and even Bitshares is trying to figure out a good model.  Let's look at what they have discussed recently  - https://bitsharestalk.org/index.php?topic=9452.msg123029#msg123029

Yes - I'm not at all happy with the direction BTS has been taking during the last couple of week, which is in part my motivation for being here. :-/
I think it will be important to do things differently from BTS, otherwise we're not a (better) alternative but just a clone.

Anyway, my suggestion above is only aiming at quick decentralization. I don't want to require the desperately needed early delegates to pay for registration when there is little ROI to be expected in the early days. When TX volume picks up and running a delegate becomes profitable, finding delegates will be easy. Oh, and I'll happily run 0% delegates as long as even 100% delegates do not generate significant income as this will greatly simplify my tax statement.

Speaking of this - I don't want to run any of the initial delegates with pay rate >0%. OTOH, running 101 init delegates at 0% would make it difficult to achieve decentralization because nobody would vote for others. We need volunteers! Maybe we should lower the number of delegates? How about http://en.wikipedia.org/wiki/73_(number)#In_mathematics ? :-)
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cube

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Re: Tx fee, Account Registration fee, Voting
« Reply #9 on: November 04, 2014, 09:48:01 am »
I'd like to propose that we create delegates with 0% pay rate in the genesis block, for anyone who promises to run it after launch. Well, maybe not literally anyone, but we should try to get as much decentralization as possible, and quickly. Even a handful of volunteers would be better than 101 init delegates run by one developer.

They are something new and even Bitshares is trying to figure out a good model.  Let's look at what they have discussed recently  - https://bitsharestalk.org/index.php?topic=9452.msg123029#msg123029

Yes - I'm not at all happy with the direction BTS has been taking during the last couple of week, which is in part my motivation for being here. :-/
I think it will be important to do things differently from BTS, otherwise we're not a (better) alternative but just a clone.

Anyway, my suggestion above is only aiming at quick decentralization. I don't want to require the desperately needed early delegates to pay for registration when there is little ROI to be expected in the early days. When TX volume picks up and running a delegate becomes profitable, finding delegates will be easy. Oh, and I'll happily run 0% delegates as long as even 100% delegates do not generate significant income as this will greatly simplify my tax statement.

Speaking of this - I don't want to run any of the initial delegates with pay rate >0%. OTOH, running 101 init delegates at 0% would make it difficult to achieve decentralization because nobody would vote for others. We need volunteers! Maybe we should lower the number of delegates? How about http://en.wikipedia.org/wiki/73_(number)#In_mathematics ? :-)

Welcome on board the PTS ship!

I do not suggest PTS becomes a clone of bitshares.  No. That would not benefit PTS at all.  I am suggesting that if we see some good points from bitshares/keyid experiences, and if they could benefit PTS, we can use them here.

Yes, ROI is a concern for delegates. I agree we start with a low reg fee to attract delegates.  And as tx fees grow, the delegate reg fee can increase proportionately.  Unlike BTS, PTS delegates would be earning less due to less number of transactions.   We need to build an incentive-aware fee structure to attract delegate participation.

I am not sure about the impact on the PTS network security if we are to lower the 101 delegate count.  My view is not to change it unless we know how it would impact the security.

Edit: I have some reservation on the idea of 0% dilution.  Since inception, PTS POW has a target of 1% dilution.  Should we keep it or do away with that altogether? Will it tie-up our hands and forgo this option to get future funding if we change to 0% dilution?  BTC has a dilution and it is doing fine.  We are still keeping the social contract if we do not change the 1% dilution attribute.
« Last Edit: November 04, 2014, 11:02:01 am by cube »
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pc

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Re: Tx fee, Account Registration fee, Voting
« Reply #10 on: November 04, 2014, 02:18:48 pm »

Yes, ROI is a concern for delegates. I agree we start with a low reg fee to attract delegates.  And as tx fees grow, the delegate reg fee can increase proportionately.  Unlike BTS, PTS delegates would be earning less due to less number of transactions.   We need to build an incentive-aware fee structure to attract delegate participation.

+1


I am not sure about the impact on the PTS network security if we are to lower the 101 delegate count.  My view is not to change it unless we know how it would impact the security.

Yes, it was probably a stupid idea. Lowering the number doesn't help us at all, it only makes a 51% attack easier.

For a successful 51% attack, the attacker must control more than 50% of the delegates. So for a 51% you need to control only 37 out of 73 delegates, as opposed to 51 out of 101. In reality this will only start playing a role when we have more than 73 different people running a delegate each. This is unlikely to happen soon, so in the short term my idea wouldn't impact security in any way, but in the long run it would make things worse.

Edit: I have some reservation on the idea of 0% dilution.  Since inception, PTS POW has a target of 1% dilution.  Should we keep it or do away with that altogether? Will it tie-up our hands and forgo this option to get future funding if we change to 0% dilution?  BTC has a dilution and it is doing fine.  We are still keeping the social contract if we do not change the 1% dilution attribute.
We should move that part of the discussion to a different thread, for example here: http://pts.cubeconnex.com/index.php?topic=5.0 .
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freetrade

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Re: Tx fee, Account Registration fee, Voting
« Reply #11 on: November 08, 2014, 08:08:03 am »
I am not sure about the impact on the PTS network security if we are to lower the 101 delegate count.  My view is not to change it unless we know how it would impact the security.

Is there any rationale behind the 101 number? It sounds a lot to me like a round number plus one. I would be inclined to go for a much lower number so far as reasonable security could be maintained. 31 maybe.