REP: Network rewards distribution adjustment

RSS3 Evolution Proposal
1

This is a proposal to revamp network rewards distribution.

The current 8:2 reward ratio (Staking: Operation) and the taxation of Operation Rewards for Operators’ income inadequately covers the operational costs of a Node, particularly when running multi-worker deployment.

Multiple Operators have approached us to express this concern.

To address this, it is necessary to revamp the way Operation Rewards are calculated and distributed:

  1. Calculation should be linked to more quantifiable metrics, such as the number of workers, the amount of storage used (as it’s the main cost), or something related to the Node’s coverage. Currently it’s linked to the number of requests, which in some cases, isn’t always fair. It is also vulnerable to manipulation since requests are not billed as of now.
  2. Distribution of Operation Rewards should go to Operation Pool. By separating Operation Rewards from the Staking Pool, Operators retain full control over their earnings, improving cost recovery for running Nodes and enhancing financial viability for multi-worker deployments (also incentivizes such a deployment)
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2

Is it possible to adjust the reward ratio from 8:2 to 9:1, with Operational Rewards making up 10% of the total reward? It seems that 20% is a little bit high for node rewards, which would mean users receive even less.

3

A method can be designed to calculate the potential contribution of Nodes in order to allocate Operation Rewards. This calculation method could include factors such as the total Node stake, whether it is a public good Node, uptime duration, the number of valid requests, and the number of networks and workers it supports. This would allow for a more comprehensive evaluation of the Node’s potential contribution to the network.

5

u sound like a GPT bot lol