3.3 KiB
Distribution
Overview
This simple distribution mechanism describes a functional way to passively distribute rewards between validator and delegators. Note that this mechanism does not distribute funds in as precisely as active reward distribution and will therefor be upgraded in the future.
The mechanism operates as follows. Collected rewards are pooled globally and divided out passively to validators and delegators. Each validator has the opportunity to charge commission to the delegators on the rewards collected on behalf of the delegators by the validators. Fees are paid directly into a global reward pool, and validator proposer-reward pool. Due to the nature of passive accounting whenever changes to parameters which affect the rate of reward distribution occurs, withdrawal of rewards must also occur when:
- withdrawing one must withdrawal the maximum amount they are entitled too, leaving nothing in the pool,
- bonding, unbonding, or re-delegating tokens to an existing account a full withdrawal of the rewards must occur (as the rules for lazy accounting change),
- a validator chooses to change the commission on rewards, all accumulated commission rewards must be simultaneously withdrawn.
The above scenarios are covered in triggers.md.
The distribution mechanism outlines herein is used to lazily distribute the following rewards between validators and associated delegators:
- multi-token fees to be socially distributed,
- proposer reward pool,
- inflated atom provisions, and
- validator commission on all rewards earned by their delegators stake
Fees are pooled within a global pool, as well as validator specific proposer-reward pools. The mechanisms used allow for validators and delegators to independently and lazily withdrawn their rewards.
Within this spec
As a part of the lazy computations, each validator and delegator holds an accumulation term which is used to estimate what their approximate fair portion of tokens held in the global pool is owed to them. This approximation of owed rewards would be equivalent to the active distribution under the situation that there was a constant flow of incoming reward tokens every block. Because this is not the case, the approximation of owed rewards will deviate from the active distribution based on fluctuations of incoming reward tokens as well as timing of reward withdrawal by other delegators and validators from the reward pool.
Affect on Staking
Charging commission on Atom provisions while also allowing for Atom-provisions to be auto-bonded (distributed directly to the validators bonded stake) is problematic within DPoS. Fundamentally these two mechnisms are mutually exclusive. If there are atoms commissions and auto-bonding Atoms, the portion of Atoms the reward distribution calculation would become very large as the Atom portion for each delegator would change each block making a withdrawal of rewards for a delegator require a calculation for every single block since the last withdrawal. In conclusion we can only have atom commission and unbonded atoms provisions, or bonded atom provisions with no Atom commission, and we elect to implement the former. Stakeholders wishing to rebond their provisions may elect to set up a script to periodically withdraw and rebond rewards.