Good day, Community!
Uses component: CP4
Author(s): @Imdior, @Rhano
Contributor(s):@WilliamFreude
Technical/non-technical proposal: Technical
Impacts/modifies: CP6,CP54
Date proposed: 2023-11-19
Short Summary
Proposal to update the current CP6: Block Rewards
High Level Objective
This proposal, if passes, will improve and adjust the calculation of Block Rewards
Description of Activity
Since the approval of CP6: Block Rewards can be found here the Total Supply changed. Due to this change, the calculation of Block Rewards is lower, than it should be because it is based on a static amount at a fixed point of time.
We propose:
- Instead of committing to a fixed amount of treasury rewards based on the total issuance at a fixed point in time, use a relative amount of 3%
- Mint treasury rewards at every session change (6h) in lieu of epoch change (12h)
- Reason: The collator rotation is session-based such that collator block rewards are session-based as well. The duration of a session must not be changed for a running chain. Treasury minting should be coupled with collator rewards.
Updated calculations look like:
Calculation
Annual Inflation - 3%
Total Supply - 519.9M CFG ( Dynamic )
Block production ≈ 12 sec/block,1800 blocks/6 hours, 3600 blocks/12 hours, 7200 blocks/day, 2628000 blocks/year.
Calculation of block rewards:
The rewards will be minted every session (6 hours).
- Block rewards = Annual Inflation/Total blocks produced in 1 year = ( Annual Inflation CFG/year)/(2628000 blocks/year)
- 1 epoch rewards = ( Block Rewards x 3600 blocks/12 hours )
- 1 session rewards = ( Rewards per epoch / 2 sessions per epoch )
- Collator rewards = 16.65 CFG per collator per epoch / 2 sessions per epoch = 8.325 CFG = 8325 * MILLI_CFG per collator
In this regard, and in connection with the foregoing, I propose:
Change or improvement
-
Rewards minting each session
-
Change the fixed Total Supply used in the calculation from static to dynamic (always 3% of the total issuance)
Alignment to the mission of Centrifuge DAO
The Treasury should be funded to unlock new partnerships and new development, and improvement of the protocol. With a funded Treasury, any individual or group following the CP Framework could offer to provide service to the protocol and be paid.
In turn, сontinuous improvement of the protocol and new partnerships unlocks economic opportunity by connecting people to borrow and lend money transparently and cost-effectively.
The RFC will be open for a minimum of 7 days.
Looking forward to any feedback and any concerns that you might have with this proposal.
Next steps
If there is support for this proposal, the next step will be to submit it to the Proposal Repository on GitHub. This proposal will be part of the next Runtime Upgrade on Centrifuge Chain.
Update 14.03.2024:
This proposal was included in CP92 and was uploaded on Github: cps/cps/CP92.md at main · centrifuge/cps · GitHub
The proposal was submitted on-chain. All CFG token holders can vote on this proposal from Mar 14, 17:24 PM.