A good system can lead the country in the long run, and a good token design can lead a blockchain project to go healthier and longer.
Although the PoS consensus is considered by many people to be the next consensus trend, there are still some problems. For example, the initial token distribution of the project has been criticized as being less decentralized than PoW. It is just being verified by the market, and at the same time, it is constantly self-correcting. The following are some future challenges about PoS economy and governance.
The future downward trend of PoS node revenue
1. The chain design itself
PoS economic growth momentum is maintained by the issuance of tokens, which is very similar to the national currency system. Generally speaking, the initial issuance of PoS projects will be relatively high. As the project matures and stabilizes, the issuance rate will be lowered by the community agreement. Compared with the actual situation, Developing countries with high growth rates will have higher interest rates, while developed countries with low growth rates will naturally have lower interest rates. The interest rate represents the average rate of return of a country's assets, and the project party uses the issuance rate to motivate nodes to maintain the network and encourage community members to make contributions.
The current blockchain project is still in a very early stage, so there is a 20%-150% increase rate with a high and implied risk premium. Such early high-yield attractive nodes and currency holders participate, but it can be seen that it is mature Stable projects such as Ethereum, when preparing for the transition to PoS, the proposed issuance rate is less than 5%.
2. Under the idea of decentralization, the project side will check and balance the big players
The phenomenon of centralized mining pools and big households getting richer and richer is a bit like a mouse crossing the street. We have seen that Cosmos mentioned in his speech that in the future, a mechanism for balancing the income of large nodes may be introduced to promote decentralization. Centralization, the income after exceeding a certain staking threshold will decrease with the curve. The DAG project Dexon also has a similar mechanism to balance the income of large nodes. In addition, Polkadot proposes that if the monitored nodes are maintained by the same organization such as a large mining pool, Then when the node operation error is punished by Slash, the punishment will be much higher than that of the individual maintenance node.
3. The threshold for node participation will be lowered, and the advantages of large nodes such as mining pool services will be diluted
The cost of running a PoS node (except for DPoS super nodes) is not expensive. You only need to rent a cloud server. In order to achieve a more decentralized idea, the project party makes the operation of the node easier. Both Polkadot and Chian X mentioned the future Everyone can maintain a node by downloading and running a computer client; Tezos mentioned that it is as simple as an app to get rewards for running a node in the future.
It can be foreseen that when the number of nodes increases, the income of the mining pool will be diluted and relatively decreased in the future, but this will not happen in a short period of time because the current PoS consensus has more nodes, and the interaction of data transmission is a square-level increase. It will slow down stability and efficiency, so it can be seen that most projects start with about 100 initial nodes. In the future, various underlying optimizations (such as consensus mechanism data compression, etc.) and 5G technology will bring changes in communication. The basis of multi-node The environment will form.
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The Foundation's Governance and Community Contribution Relationship
The traditional corporate form is a top-down task model, while the blockchain project is a bottom-up spontaneous model. The foundations of many projects have encountered a problem: how to efficiently use the funds raised, what should I do? Mobilize spontaneous contributions from community members. In the PoS economy, the influence center of the community is one node after another. These nodes will continue to output influential articles and tools in order to fight for the proxy of Staking. As mentioned above, the community interests of the PoS consensus project are shared Coins are consistent, more node contributions can increase influence and obtain Staking, and token holders and foundations make the project's popularity and progress faster due to the contribution of nodes.
From this point of view, how to let nodes give full play to their influence and their own technical capabilities is a direction that the foundation needs to work hard to explore. In the current model, the foundation will have a reward plan, and different teams can apply for it. According to our experience, the foundations of new projects are not operating very well. Some foundations did not give clear goals, which led to the direction of the applicant's efforts in a different direction from the direction the foundation wanted, and the application process was not transparent. Long, so that the applicant is in a state of confusion most of the time.
But we can also see the good performance of some foundations. For example, the Polkadot team has written clearly the areas they hope to apply for rewards, and the application process is also quite clear, which will accelerate the promotion of the community; A Game of Stake competition was held, and nodes were invited to participate in the testnet attack network to find and fix vulnerabilities for the official. After the competition, the Cosmos official will distribute rewards according to the performance of the nodes. At the same time, the foundation will entrust the tokens it holds to Contribute a lot of nodes and recommend future reliable and excellent nodes to the community, so the nodes can get more benefits from Staking.
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Voting Governance Brings Out the Future of Node Roles
Voting is a new right born in PoS. Every token holder has the power to decide the development of the community, but effective governance has always been a difficult problem in the blockchain
1. Low engagement
2. Insufficient public awareness leads to moderate voting results
How to drive token holders to participate in voting and discussion is a complicated and cumbersome process. From the perspective of design philosophy, Tezos mentioned the concept of Futarchy, and Cardano proposed liquidity democracy. They are all social experiments. From the perspective of participating roles, the PoS consensus Nodes are like parliamentarians or representatives of public opinion in real society, because nodes themselves have certain influence, and at the same time are distributed across regions and languages. These influential nodes may become small central groups in the blockchain world, making the community More efficient, for example, many nodes on EOS will sort out the latest information and publicize referendum matters to token holders.
In the real society, representatives of public opinion have a certain basic income, so they can invest for a long time to make better contributions to the local or country. At present, the node model with basic income in the blockchain society has not yet formed, but there have been foundations that will use tokens The mode of delegating to excellent nodes enables nodes to have a certain basic income.
Under the idea of decentralization, the original intention of the token issuance mechanism is not to allow token holders to obtain huge profits, but to allow nodes to maintain the most basic income under an adjustable situation.
If the node only has basic income, can the role of the node be realized through its own influence? Decentralization is a process. In the process, large centers are broken and small centers are formed. These small centers are self-formed circles. After the development of the Internet, we discovered the long-tail effect. After the development of the blockchain, are these self-contained circles The small circle formed can also realize the traffic of the circle through influence.
Referring to the model of some Internet celebrity live broadcasters and Pinduoduo, there was no monetization model in the small circle before, but now it is gradually monetized because of the high stickiness of the circle. In the future, it is very likely that such an economic model will be born in the blockchain, with nodes as the core radiating out a circle economy with different characteristics. In addition to the staking profits brought about by the influence of the simplest model, exchanges, brokerages, and Dapps in the future will The project party or the media may cooperate with the circle size and stickiness of the nodes. These third-party cooperations focus on active traffic and influence, which allows nodes with only basic income to have more opportunities to explore and exert influence space.
The challenges brought by the PoS economy still need a longer period of verification and development in the market. It is actually very exciting to see whether there will be a bottom-up decentralized economy that exists for a long time. Welcome everyone to discuss with me.
