[RFC] Proof of Creations (updated ver.)

Summary

A proposal for the proof of creations.

Component Summary

  • A proposal for a high-risk high-return staking scheme.
  • In this scheme, stakers get more rewards from active OSS projects.
  • We evaluate the activeness of the project by measuring the proof of creations.
  • If a project continues to be active, stakers get the higher return from the project.
  • If a project becomes inactive, stakers could lose their DEVs.

Motivation

  • By rewarding active projects more, DEV Protocol can enhance the creativity of the community.
  • The new scheme generates the circulation of the DEVs (burning DEVs and minting more DEVs in the future), which leads the growth of the DEV economy.

Details

We would like to install a high-risk high-return staking scheme aside from the present staking one. In this new scheme, we measure the activeness of OSS projects. The activeness is measured by, for example, the number of commits of the project. We use the following criteria to judge if a project is active;

  • Number of commits per month >= 10, then Project is active.
  • Number of commits per month < 10, then Project is inactive.

*Note: The parameters in this section (10 commits or 240% APY) is just an example. When implementing this schcme, these parameters need to be chosen carefully, and we need the consensus in the community about the actual values.

Here we set the higher APY 240% to active projects. 240% is much higher than the current average APY, which is roughly 50%. In the new scheme, stakers burn DEVs when they stake. If the project continues to be active for the whole period, stakers get back 100% of DEVs they burned at the beginning and get the extra rewards 140%

Here assuming that Alice stakes 100 DEVs at a project. When she stakes, she burns her staking amount 100 DEVs. If the project is active for a month, the monthly reward is 240 /12 = 20 DEVs. After 1 year, she gets -100 DEVs + 240 DEVs = 140 DEVs totally. The actual APY is 140%. This is much higher than the current average 50%.

Month Active Reward
1 1 20
2 1 20
3 1 20
4 1 20
5 1 20
6 1 20
7 1 20
8 1 20
9 1 20
10 1 20
11 1 20
12 1 20

Here assuming the project becomes inactive after 6 months. In this case, Alice gets -100 DEVs + 120 DEVs = 20 DEVs totally. The actual APY is 20%. This is inferior than the current average 50%. This shows that if the project becomes inactive, stakers could get the loss. This is the risk of the new scheme.

Month Active Reward
1 1 20
2 1 20
3 1 20
4 1 20
5 1 20
6 1 20
7 0 0
8 0 0
9 0 0
10 0 0
11 0 0
12 0 0

The proof of creations archives the followings;

  • Rewarding active projects more, which enhances the creativity of the community.
  • Generating the circulation of the DEVs (burn and mint of DEVs), which leads the growth of DEV economy.

Agreed Collaborators

Missing Roles

References

6 Likes

I have the following question.

・Is the number of video submissions the index for YoutubeMarket?
・Can I cancel my subscription before the end of the 1 year staking period?

2 Likes

Thank you for your comment.

  • Youtube
    Yes, I think the number of video submissions is the most reasonable idex for YouTubeMarket.
    We need to decide the actual number of the index carefully; 5 videos per month enough for the activeness? or need more? 10 videos per month?

  • Cancelling
    Yes, you can unstake anytime, but you may lose your original capital. The most special feature of this scheme is burning the initial capital first. In the example of Details section, Alice burns 100 DEVs first. So she has to stake for at least 5 months to get back her initial capital.

2 Likes

I think for youtube. 5 videos is enough in a month maybe even 4 videos. Because its dependent on the content, ı would say 1 video a week is enough while 5 videos is 1 video a week +1 more.

10 videos is good for active youtubers, but not all the youtubers have the same content. For example if a youtuber like bravewilderness, a video in 2 week time is even okay. But for a basic vlogger. 2 video a week is ideal.

1 Like

Also 1 more thing i can suggest is, for example right now there are only few projects moved to l2. I think its a good metric for showing which are active on stakes.social. I always support the APY on Ethereum and Arbitrum should be the same. But that doesn’t mean the projects should only stay on L1. Especially projects which made over 2k on DEV rewards should had already moved to Arbitrum. Because from my understanding. In future if stakes.social move to optimism or zksync or starknet. The projects can directly bridge through arbitrum with 3-5$ fees.

There can be a penalty for projects which doesn’t move to Arbitrum after 6 months for example. Their rewards can get limited etc…

1 Like

First of all, thank you for your contribution!

I agree with the points that you have made, there are many projects that aren’t contributing and are still claiming rewards. What is a healthy amount of commits per month? We have to consider this because if 10 is too low, zombie projects could make minor changes just to reach the commit requirements and still act in the same way (of claiming without offering).

2 Likes

Thanks for this proposal!

I would like to add some introduction:

  1. This is the first step of burning mechanism of DEV implemented to achive the ecosystem where the more active, the higher the value.

  2. We consider the ”Proof of Creation” to be a great way to consolidate and solve the topics that we have been discussed so far. Also there might be some hints on the solutions.

Related topics:

Thank you.

As you said, the proper number of videos depends on the type of the channel.
We need the parameter carefully to make a fair rule for all types of channels.
We need more discussions about the actual values before the implementation.

1 Like

I agree with you.

The activeness and the expected return should be displayed in stakes.social.

Yes, the followings are good for the usability, I suppose.

  • the APY should be the same on L1 and L2.
  • The penalty for not moving to L2
1 Like

in my opinion, this is very dangerous and can easily be exploited. Once dev becomes understood, then making 10 empty commits a month could just be done and automated very easily.

also the number of commits does not justify activity.

on top of that, when gas fees are high, some people can’t afford to unstake, are you going to punish those people too?

this is a horrible idea

1 Like

Thank you!

Yes, it is difficult to make a fair rule for all projects.

Definitely the number of commits is not equivalent to the activeness.

We cannot measure the quality of commits mechanically.
This could be a drawback of this scheme.

I think its not about the stakers but about the creators.

For example ıts been nearly 1 month and maybe 5-6 creators moved to L2 (I dont count official devolopers).

Some creators made over 10k$ through staking. They can easily afford to migrate to L2 when gas is low. And we are talking about some time frame 4-6 months. For example this weekend gwei was as low as 50s. Its affordable for many creators imo who make good revenue.

Also other thing can be for example.

If a creator made over 1k in DEV tokens through staking, they have 4 months to move to L2 before limiting.

If a creator have made less than 1k in Dev tokens they don’t have to.

It would be the healthiest. And i do agree about a limit for stakers wouldn’t be logical

1 Like

Thank you for providing the additional information.

1 Like

most inactive projects are being staked on by very few people. maybe creating a dynamic mechanism, where the more wallets are staking on a project, the higher the apy.

this can help reduce self staking, and will encourage projects to deliver to increase the number of wallets staking.

still a very experimental idea

I have to think on more situations where this can be problematic, I will comment when I have more things to add, but first.

The long term staking (burning DEV for higher APY) is already a risk that the staker is taking, there is information asymmetry between the staker and the creator.

The staker can’t predict what the Creator will do in a long period (12 months), so penalizing the Staker is not ideal. Unless he can move his staking position to other active Creators, with low friction (low gas fees).

Of course, like @cestfini mentioned there can be many ways to dribble this system and exploit it for a higher APY.

When I thought of the long term staking, the Creators themselves would have an APY% equal to the the short-term staking APY%. Their APY shouldn’t change, only the staker (who is taking all the risk) should be rewarded with the higher APY%).

Does this also remove the limit of DIP 55? As we know, the more we create rules and distort a free market, even if we have all the good intentions in mind, we might find the distortions harming the market in the future.

1 Like

I understand your point.

At first we have to consider if it is really possible to measure the activeness mechanically without being cheated.

1 Like

The aim of this proposal is essentially to favour active projects by discouraging inactive ones. We use a negative indicator, the inactive number because the active number vector is difficult to evaluate. Therefore, it is necessary to define what conditions are inactive, which I think is a major issue in this proposal.

As Mayumi already wrote, in previous RFC it was desirable to have a robust measurement by combining indicators that are difficult to spoof. That is the community metrics. That is, the measurement of dependencies, mentions, etc. by a larger number of third parties.

By using community metrics, we can support projects that are already stable in their development but have a large number of users.

1 Like

Fyi: I think what we discussed in the previous topic is useful.

Since the creator’s production period is different for each person and market, it needs to be measured not only by the activity which only creators can control but also by the community activity which everyone can see
whether or not it is actually used. If the stakers are a real fan of the project, they can improve the community activity as part of community members.

2 Likes

The long term staking (burning DEV for higher APY) is already a risk that the staker is taking, there is information asymmetry between the staker and the creator.
The staker can’t predict what the Creator will do in a long period (12 months), so penalizing the Staker is not ideal. Unless he can move his staking position to other active Creators, with low friction (low gas fees).

By adding community metrics to the measurements, I believe that the asymmetry can be greatly reduced. For example, the number of downloads, the number of mentions on blogs, etc., are metrics that show that the project is having a real impact.

I also think it would be a good idea to use a combination of community reporting punishments when malicious index manipulation is discovered.

When I thought of the long term staking, the Creators themselves would have an APY% equal to the the short-term staking APY%. Their APY shouldn’t change, only the staker (who is taking all the risk) should be rewarded with the higher APY%).

I agree with this, and I think it should be reflected in the proposal.

Does this also remove the limit of DIP 55? As we know, the more we create rules and distort a free market, even if we have all the good intentions in mind, we might find the distortions harming the market in the future.

Yes, the proposal could repeal or significantly relax DIP-55. In my opinion, DIP-55 can be abolished.

2 Likes

I agree with all points here.

1 Like