Unstaking shouldn't be based on chance

Recently, I experienced long delays in node unstaking, and it has me worried about the unstaking mechanism in general.

Currently, a node that is set to unstake can only begin unstaking when it next earns. During times of bounty when a node earns every week, this wait time feels comfortable; however, when a node hits an unlucky streak and stops earning for a month or more, the unstaking mechanism feels like a trap. With my unstaking pnode, I felt like I was trapped. The pnode did not earn for 29 days (winning me The Badge that Must Not Be Named), and I fear the wait times are set to get longer.

With the current Dai sale on pnodes, I read that nodes are now back-ordered (or at least shipping is delayed), indicating a high volume of sales. Soon, those pnodes will go online, potentially reducing the chances of other nodes to earn and therefore unstake. This worries me greatly, as it could effectively imprison the money that validators have staked in the network. For nodes, the value of the 1750 stake is currently $1400. Validators can only get that back once they win the Incognito random selection lottery.

Earning based on chance is one thing. Unstaking based on chance is just unfortunate, especially when you need that 1750. And with the way validation currently works, not only will validators earn less as more nodes come online, but, worse, they will have less of a chance to transfer their money to wherever it can work the hardest for them. Fourteen hundred per node is a lot of money to sit idle.

Moving forward, I would ask the devs to please prioritize a change in the unstaking mechanism, so that users can divest when they need or want to. I feel that unstaking based on chance (and decreasing odds) will ultimately harm the platform’s user base and adoption of the product itself, whereas I think we all would rather see Incognito expand, excel, and succeed.

10 Likes

From what I understand, personally I wouldn’t be putting money into PRV that I would need in a few months, or even a few years.

The return is great, but the coin is inflationary, the liquidity pool needs to increase before it’s viable to cash out. Unstaking isn’t really good for the network, or at least mass unstaking. I see PRV as something you invest in, and then forget about for like 5-20 years, hope it succeeds. If everyone decided to do that, it would insure Incognitos success. Currently to survive, people need to keep their money locked up. Especially at these early stages, which is probably why it’s so hard to cash out.

1 Like

I am not saying things can’t be managed in a different way, but it is not uncommon to have stake locked for a certain amount of time.

What goes for money you invest on regular stock exchanges more so goes for investments in crypto projects. Don’t use money you can’t afford to lose.

3 Likes

Good points, and I do understand the basics of investing in both the stock market and cryptocurrencies.

This is true. For example, Crypto.com’s Earn product allows you to stake in three different time periods: flexible, 1 month, and 3 months; however, a fixed amount of time is different from a random amount of time. With Crypto.com, users know exactly when their funds will be freed up. With Incognito, they don’t. When it comes to comfort, there is an immeasurable difference between the known and the unknown.

I definitely see why you have this outlook, but we can’t expect every user to have the same goals. Flexibility, I think, is key in attracting new users and keeping those users long-term. Fear, risk, and uncertainty will drive people away. Let the users decide their own financial destiny. Give them free will, not fate mediated by a machine.

Let’s use my pnode as an example. I felt the pnode was underperforming, so I wanted to unstake my own PRV and return it to funded staking. This way, I’m still contributing to the network, but I can free up my own money to put it in pstake, where I know it will work for me. I couldn’t though, because of randomized earning/unstaking. My destiny was no longer in my hands, but in the whims of a lottery. It’s a terrible feeling.

Also, we shouldn’t overlook the biggest problem with the current mechanism: If unstaking stays random, the more validators that join, the less likely we are to be able to unstake. This means the longer the project goes on, if it grows, the less likely we’ll be able to cash out in 5 years when we want to. The better it gets, the worse it actually gets. This is why it’s such a big issue. Increasing validators means shrinking odds.

5 Likes

I must admit…Gold…I have been reading your posts on different topics and many of them have been insightful and educating in a way and the responses from the community have also been great…I look forward to reading further…thank you

3 Likes

This is true although next year when fixed core team slots begin to transition to community slots in the shard committees it will jump up from the 80 slots that are currently available. There are also plans to move from 8 shards to 64 shards which will also increase available node validation slots.

3 Likes

Fair enough, I understand why this could be a problem. However I feel like if we do modify the staking system, we should still have a guaranteed lock up period as a back bone for the network.

I do have some ideas,
Previously I mentioned about a lottery system: Here

There could be a giant pool of money to fund the voters lottery. Lottery winners only win the interest made from the pool. They don’t win the full pool just a large percentage of the interest.

However I would like to tweak it a bit, because it wasn’t using PRV. I feel like this system could add a much needed backbone to the network though, providing stability and engagement.

What if users were able to lock up their PRV for a specified amount of time in this lottery pool, lets say 6 months. The pool takes all this PRV and stakes it.
Every week the lottery would go off, and the winner would gain all of the PRV created from staking (or at least most of it) during that week. Since users are locked in, they are in every single lottery that goes off until their specified time is completed.

Users who put more in have a higher chance of winning. You could mess with the timing a bit, maybe the lottery goes off every 2 days, and maybe you only lock up for a month. But regardless it might help freezing up a lot of PRV.

Why would people choose this over staking themselves, well it’s a gamble with potential higher rewards. If I have a small amount of PRV I’m prob not going to gain a lot from staking it, but if I put it in the pool, I have a slight chance that I could win big.

1 Like

This is really good information, thank you! That will certainly help the odds of unstaking. I still think I would prefer to control when my nodes unstake, but at least the situation might not be as dire as I presumed. Thank you, @Kelsomatic!

3 Likes

@Revolve, interesting concept!

To add, I think diversifying, expanding the options, could be a good idea, similar to how Crypto.com has different staking options. So maybe there’s a hard staking period (i.e., 6mo), and that’s one option. But there’s also the pstake, which is flexible, but lower APY. That’s another option. And then something like the lottery could be a third selection. Let users have more choice of risk vs. reward vs. term.

I have no clue how this might affect the economics and programming of the overall platform, but it’s definitely engaging brainstorming!

3 Likes

Different staking options does sound like a good idea, I feel like once pEthereum and pContracts are fully polished we will see third party’s develop different ways of staking. I definitely believe that we should tweak the system in favor of lowering rewards for short term stakers, and increasing them for long term stakers as it would add some sort of sustainability to the network.

3 Likes

I agree, and that’s what I’m seeing other crypto companies doing. The longer the stake, the greater the APY (or in some cases APR).

3 Likes

Hey…the posts are really good…definite info to be aware of any member of the community…my problem for now is just hoping to get my first pnode soon…lol…being it’s back order I guess… :sunglasses:

2 Likes

Lately, I have been thinking again about the unstaking mechanism, especially as more and more new nodes come online, and our chances of earning (and therefore unstaking) decrease.

@hungngo pointed out that the team is redesigning the unstaking feature, which should be available when they launch the Dynamic committee size feature. So I was happy to see this item in the May Letter to PRV Holders.

3 Likes