In the previous interpret article, we introduced the delegation mechanism of the galaxy consensus. The design and application of the entrustment mechanism is to give a small number of equity holders a chance to participate in the consensus. It is also hoped that nodes with good performance and excellent performance can represent more. The rights of the voice. We know that a blockchain system itself is also an ecosystem of node networks. The consensus is to drive the normal operation and development of the ecosystem, and what is the driving force for maintaining the normal operation of the consensus, that is, the economic incentive mechanism, this article The design principles, considerations and important functions of the Wanchain galaxy consensus economic incentive mechanism will be further introduced.
1. The significance of economic incentive mechanism
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The economic incentive mechanism is one of the core parts of the consensus agreement design. A reasonable economic incentive mechanism is the same as the consensus agreement for the entire blockchain ecosystem. It is an incentive for the consensus node to operate honestly. The economic operating system that suppresses malicious behavior is an economic driving force based on technology.
In a narrow sense, the economic incentive mechanism is the basic guarantee for maintaining node operation, ensuring chain security and chain activity.
We know that for the blockchain system, the consensus node is responsible for packaging transactions, generating blocks, and shouldering the heavy responsibility of chain development. It is the key to ensuring chain security and the main body of maintenance chain activity. Therefore, in the design process of consensus agreement A large number of technical means have been repeatedly studied and practiced. The core purpose is to establish a healthy and efficient consensus operation system. In the previous interpretation of the article, we start from the perspective of important module components, introduce the ideas and principles in the consensus design, and give a concrete explanation of the image in the technical, but we stand on the outer edge of the entire consensus design, we found that There is a crucial issue that we have not mentioned yet. That is why, in the design of such a protocol, why do nodes participate in it? What drives the node to maintain the blockchain system? This is the role that the economic incentive mechanism needs to play in the consensus design. It injects the benefit driver into the consensus node, and allows the node to obtain economic rewards in the process of running the consensus agreement. This part of the reward needs to cover the cost of maintaining and running the node, and needs to have The extra part is the benefit of the node, so that the node can be profitable in the participation consensus, and will have the will to maintain the development of the system. A good economic incentive mechanism design is the positive energy that encourages the consensus node to operate honestly. It will maximize the benefits of the honest node. Only the behavior that is loyal to the agreement will maximize the node's profit, and at the same time make the malicious behavior become the original sin of harming the node's interests. In this way, from the economic environment to create a good atmosphere for the agreement to operate health, let the consensus node take the initiative to assume the responsibility of chain security and chain activity, and ensure the healthy development of the entire system.
Broadly speaking, the economic incentive mechanism is the basic support for the ecological operation of the blockchain and the carrying value of the circulation.
The economic base determines the superstructure, and the economic incentive mechanism plays a supporting role in the entire consensus agreement system. At present, blockchain technology is promoting the transformation of information Internet to value Internet. In the case of bitcoin, his emergence has established a decentralized value system, which removes the definition of value from centralized control and converts it into consensus. Value exists. We know that value is important in circulation. Only the value that can be freely circulated has its own meaning. The economic incentive mechanism in Bitcoin is the source of output value. The node obtains value through bookkeeping work, and at the same time, it is working in accounting. The completion of the transfer and circulation of value, which makes the entire value system form a complete closed loop, with the continuation of iteration. It can be seen that the economic incentive mechanism is the driving force for the blockchain ecosystem. It stimulates the operation of the consensus. The consensus carries the circulation of value, while the circulation gives the meaning of value, and the meaningful value then counteracts the economic incentive mechanism. In this complete closed process, the economic incentive mechanism is both the starting point and the relay. It is the igniter and combustion improver of the whole value system and plays a fundamental supporting role.
2. Several basic issues to be considered in the economic incentive mechanism
Explain the importance of the economic incentive mechanism. We know that a good economic incentive mechanism is to encourage honesty and curb malicious behavior. What basic problems need to be considered in the design?
Which subjects need to be rewarded?
Obviously, since we design the economic incentive mechanism in the consensus agreement, it is natural to reward the consensus node. However, under different protocol designs, the scope and extension of the consensus node are not the same.
In systems where Bitcoin and Ethereum use the Proof of Work (PoW) Consensus Agreement, “mining” or “miners” is a familiar concept, and these nodes are called “miners” because they provide The calculation of the hash operation, in this consensus, only these nodes contribute to the consensus, so they can give themselves a certain amount of rewards in each of their own proposed blocks, of course, the development of the Ethereum consensus In order to reward those who proposed the legal block, but did not choose the block, the concept of "uncle block" was set and a small amount of reward was given to indicate the recognition of their work. For a detailed explanation, interested readers can refer to V God's article https://blog.ethereum.org/2014/07/11/toward-a-12-second-block-time/ .
In systems such as Ouroboros and Dfinity that use a Proof of Entitlement (PoS) consensus agreement, it is not just the nodes that propose the block, but we have repeatedly emphasized in the second and third articles. The introduction of entropy in the protocol must have a trusted random source, and the combination of some historical data can only be obtained from a pseudo-random source, so there needs to be a set of nodes dedicated to generating random numbers. The work of these nodes It is also an indispensable part of the consensus. Of course, they are one of the consensus subjects that need to be rewarded. That is to say, in this type of agreement, the rewarded subject has two types: block proponent and random number generator. node.
In systems such as EOS and Cosmos that use the Byzantine Fault Tolerance (BFT) Consensus Protocol, the nodes participating in the consensus need to vote for the candidate blocks. Only the blocks that have obtained a certain percentage of votes will be validated, and the candidate blocks are also proposed. These consensus nodes are in turn responsible or probabilistically chosen, so relatively simple, in such consensus agreements, the subjects that need to be rewarded are the nodes responsible for voting.
The source of the reward, how to ensure the continuity of the reward?
There are two types of reward sources. One is similar to Bitcoin. The total amount of rewards is set at the beginning of the system operation, and then released in a phased and proportionally decreasing manner. Naturally, a fixed amount of reward is added in each block. The source of the mine's claim; the other often appears in the PoS consensus agreement, often a certain amount of initial funds are used by the foundation to reward the consensus, and the release of this part of the fund is also in a phased and proportionally decreasing manner. get on.
Obviously, what we discussed above is the source of rewards in the absence of additional issuance. We don't discuss the issue of bonuses, because unissued grants only dilute the value of rewards and harm the value system of the entire ecosystem. The above two methods are obviously no additional issuance. In this case, in the process of establishing a sound ecosystem, the value is invisibly improved, which also maintains the stability of the value system. However, we can see that this kind of reward is naturally reduced over time. It will not happen that the longer the running time, the worse the enthusiasm of the consensus node. This is how to ensure the continuity of the reward. This problem must be considered in the design. In addition to the method of adjusting the parameters such as the percentage of change and the period of change, the most important thing is that in addition to the above fixed sources, there are also transactions in each block that contain transactions. Fees, these transaction fees are paid by the transaction initiator for the consensus node bookkeeping work. With the improvement of the ecosystem, the increase of transactions, and the increase of value, this part of the compensation will gradually become the main body of reward and become a supportive consensus operation. Continuous power.
How to ensure the fairness of rewards?
When it comes to the fairness of rewards, this is a very broad concept. We mentioned the basic principles of economic incentives in the yellow book of the galaxy consensus. The first is that the more contributions and the more rewards , this is a natural and reasonable requirement. For example, if the node participates in the consensus, but does not do any work after the registration, neither when the package structure is parsed when the block is proposed, nor when the information submission is completed when the user participates in the random number generation, then This kind of lazy node obviously should not be rewarded. Otherwise, it is unfair to other consensus nodes that work hard to complete the work. Therefore, there must be a criterion for judging when rewarding, and there should be an assessment of the behavior of the node participating in the consensus. This is also the concept of the activity coefficient proposed by us in the galaxy consensus. According to the activity coefficient, we provide the rewards for the nodes that actively complete the work, and those nodes that are negatively completed will be deducted by some or even all of the rewards, thus creating A fair and reasonable benign competitive environment to ensure the healthy operation of the consensus agreement.
How to weigh the commission mechanism in economic incentives?
In the previous article, our image specifically introduced the delegation mechanism in the galaxy consensus, emphasizing that the complete entrustment mechanism reduces the threshold for participation in the PoS consensus, and is of great significance to the practicality and security of the entire consensus. So how do you design economic incentives in the commissioning mechanism? We start from the meaning of the entrustment mechanism to think about this problem. First of all, it is to lower the consensus participation threshold, that is, to give a small number of equity holders an opportunity to participate in the consensus, which is equivalent to finding an agent for their own rights and not running the node themselves. Then they should provide the agent with the processing fee of the agent, so we set the commission rate, and these clients need to take a part of the rewards obtained to the client, as the agent's compensation. At the same time, we must think about another problem. When the trustee accepts a large number of entrusted rights, at this time, although there are not many rights and interests held by him, his right to speak in the consensus is very large. For example, if one The client has only 100,000 rights, but accepts 1 million equity entrustment. Then he represents 1.1 million in the operation of the agreement, which brings a very intuitive question: the trustee may be willing At the cost of a small amount of self-inflicted damage to make malicious behavior in an attempt to obtain higher returns, this is obviously what we do not want to see, so we set the concept of "ceiling" in the incentive of the commission mechanism, intuitively Speaking is to set an upper limit for acceptable commissions. We do not directly stop the commissioning behavior that exceeds the upper limit, but we add the elements of control from the economic incentives. Simply put, if a trustee holds 100,000 of its own The equity, the amount of the entrusted amount we give him will also be 100,000. This is the "ceiling". In the case where the entrusted equity value is not more than 100,000, the reward is Often, if this amount is exceeded, the reward will be reduced until the value of more than 200,000 rewards is reduced to zero. We hope to regulate the operation of the commission mechanism through normal market behavior, which not only reflects the meaning of the commission. And control the risk of security, and make a trade-off between the commissioning mechanism in the design of economic incentive mechanism.
3. Common economic incentives
Explain the importance of economic incentives and several basic issues that need to be considered. Let us talk about the common ways of economic incentives. In general, there are two ways to stimulate economic incentives, positive and negative.
Positive encouragement and encouragement is the sincerity of loyalty to the agreement. This method is relatively intuitive and understandable. Simply put, for those behaviors that strictly complete their work according to the requirements of the agreement, we will support them by issuing rewards. For example, in the galaxy consensus, participate in and complete each round of random numbers. The generated RNP node, we give corresponding rewards, participate in and complete the EL node shared by the secret information sequence (SMA), we give corresponding rewards, package the transaction in the slot responsible for it and propose the EL node of the legal block, we give corresponding The reward, this is the positive encouragement, is the driving force to stimulate the benign operation of the agreement.
Reverse suppression, which suppresses the malicious behavior of bad intentions. This approach is based on the consideration of security, and hopes to eliminate the evil motives from the perspective of profit-driven. There are two ways to suppress, one is the common slash, that is, the punishment. This method often requires a supervised system to cooperate, and the evidence of malicious behavior needs to be submitted, and then the malicious behavior of the node is sanctioned based on the evidence. Generally, it is realized by deducting the node quality deposit, and how to identify a malicious behavior is a difficult point here. At present, there are double-signed and long-range attacks. Another way to suppress is to reduce the profit of malicious behavior nodes, that is, we have only mentioned the loyalty of the agreement to maximize the benefits. For example, in the galaxy consensus, if the nodes participating in the random number generation try Disrupting this process and submitting inconsistent information at different stages, then the information will be sorted out and unable to be chained. When the rewards are distributed, these nodes will not be rewarded, thus suppressing this malicious behavior. The emergence of this suppression method is difficult to design and reflect the malicious behavior in the reward and liquidation, which will be a problem that needs to be studied in depth.
4. Galaxy economic incentive mechanism model principle
Introducing so much around the economic incentive mechanism, and finally returning to our theme, the economic incentive mechanism of the Wanchain galaxy consensus, after many considerations and research, the economic incentive mechanism of the final galaxy consensus has achieved a complete closed loop, we believe will create a A good consensus operating environment.
The source of the Galaxy Consensus is 10% of the total WAN issuance provided by the Wanchain Foundation, which is 2.1 million WAN. This part of the funds will also be decremented in stages and equal by epoch in the same stage. Of course, each epoch All transaction costs will also be included in the award. It is not distributed by block, but each epoch is settled once. The transaction fee is included in the total amount of the award distributed between the RNP and the EL node. This is based on the transaction fee. Be considered as a reward subject to ensure the benefits of all participating consensus nodes. We believe that the role and contribution of RNP and EL nodes are equally important in the consensus operation, so in each epoch settlement, the reward will be evenly distributed between RNP and EL nodes, that is, if each node runs honestly, complete itself Work, then the benefits are the same. Below we will introduce the two main bodies of RNP and EL, and explain the delegation mechanism as a separate part.
4.1. Economic incentives for RNP nodes
Earlier we repeatedly emphasized the important role of random numbers in consensus agreements, and also stated that RNP nodes must be one of the subjects that need rewards. For the RNP node, the working logic is relatively clear. How to identify the honest completion of the work is relatively easy. First, let's look at the work that the RNP node needs to do to participate in the random number generation: submit the commitment in the DKG1 phase; submit the encrypted data in the DKG2 phase and Proof; 提交 Submit signature fragments in the SIGN phase. And these three are a complete process, only the correct participation is completed to complete the work of random number generation, so for the RNP node, only the correct completion of the above three tasks can be rewarded, missing or wrong Not any rewards.
4.2. Economic incentives for EL nodes
Analogous to the RNP node, we first sort out the work that the EL node needs to accomplish: submit the commitment in the SMA1 phase; submit the encrypted data and proof in the SMA2 phase, complete the secret information sequence sharing; and propose the block in the slot package transaction that it is responsible for. Obviously, it can be divided into two parts according to the work content. The first two items are shared by the secret information sequence, and the latter item is the generated block. Therefore, the overall reward of the EL node will be split into two parts, and one part is used to reward the secret information sequence generation. Another part is used to reward block generation. Similar to random number generation, the two stages of secret information sequence generation are a complete process, and only complete participation is completed. Therefore, the EL node can only get this part of the reward if it is correctly completed. I can't get this part of the reward. For the reward of generating blocks, we added the activity coefficient to adjust, and all EL nodes as a whole, according to the proportion of the final block number and the number of slots in the epoch, this part is rewarded. The higher the group activity, the more work is completed. Well, the more rewards you get, the better the quality of the chain.
4.3. Delegation mechanism
As mentioned above, in the entrustment mechanism, the principal needs to take part of the reward according to the proportion of the entrusted rate to the entrusted person as compensation, and the remaining part as the principal to participate in the consensus gain, and the rewards of both are subject to If the client accepts the entrusted value and accepts the entrusted cap, the rewards of both will be reduced until the final value is zero.