Validator DAO
Our Origin Story
Picture yourself running a business, where validator commissions plays a crucial part of it’s funding.
You’re busy taking care of business, and you receive a notice from your provider that in 15 days they will be terminating the agreement.
This occurred to several businesses in May this year, a devasting result, potentially forcing them to shutter their businesses, as well as affecting ~20% of the staked tokens on a network.
This is where Validator DAO was born.
Our aim is to make it easy for the less technically savvy to be able to run a validator node, and do it in such a way, that no single entity can shut them down (and potentially shutdown an entire chain).
Decentralization & Diversification?
Before we go too far into what we are building, I’d like to take a step back and opine a tiny bit.
Decentralization
Decentralization is a oft-thrown around word when people talk about networks.
To us it is not just about the number of nodes that participate in a network, it is more about reducing all the single points of failure (SPOF) that are present.
A SPOF can be:
A single node running validator software
Having multiple nodes running the software in a single location
Having your nodes running in different data centers, but by the same hosting provider
Having multiple hosting providers, but having them fall under the same legal jurisdiction
Having a single company run this.
People also focus on the amount of influence a entity can have over a network, things like Nakamoto coefficients of the validator list, usually forgetting about the whale who has split his tokens across 10 validators, giving them a potential conflict of interest, and magnifying the whales potential voting power.
If you want more opinions about this feel free to read this or this.
Diversification
One of the other challenges today in the validator network, is the lack of diversification in the people actually running validators. By necessity most are people operating validators come from a technical background, and have had lots of experience keeping machines up and running, which is a critical component of what a validator provides the network.
*BUT* the other component is governance. We now have a non-diverse set of people making decisions about where the blockchain network will do.
It is our belief we need people with more diverse backgrounds to help be good stewards of the future direction a blockchain, and it’s funds.
What is Validator DAO?
our core aim is to be as resilient and low-trust as possible.
What this means is that:
No one has access to your funds
We don’t need your seed words, and as such don’t have access to your commission or the ability to vote for you.
Run by independent operators
Each validator will be run by 3 independent operators on our network, with the ability to migrate to other operators in the case stops working. A single operator will not have the ability submit a block independently without the co-ordination of another operator.
Operators will be selected to diversify our jurisdictional, hosting, and regional footprint.
We envision node operators who already run nodes for themselves will be interested in running nodes for the supplemental income involved, as well as regular managed software operators.
Ease of migration
We were born from others with-holding services, and lacking the ability to migrate services.
Governed by token holders
Validator DAO will be a permissioned network. Entities wanting to run a validator or a operator will be decided by the token holders.
Tokenomics
Validators would be charged a monthly flat fee (in advance), and a component of their commission. (for example $1500 USDC + 2% commission)
Validators would pay either USDC or amount in network’s token. Each supported chain will have a ‘payment’ account that will accept native & USDC.
Incoming payments will be used to purchase the DAO’s governance token, and cover the USDC requirements for operators and development firm. The DAO would hold 2-months of forecasted USDC costs in reserve to ensure operators & development are paid
Operators will be paid in ‘DAO tokens’ and USDC for running nodes in the network. The aim of the USDC would be to cover the running costs of nodes
Commissions earned from validator rewards will also be used to purchase DAO.
DAO will pay development firm a regular amount for upkeep (in USDC)
Special purpose (eg legal/marketing fees) would paid in USDC from reserve, or DAO will commission rewards would be diverted.
Current Plan
June 2022
Onboarded several validators on preliminary infrastructure (alpha)
July 2022
Tokenomics design created for review/discussion
Website for validators to edit details/change commission (remove need for CLI)
August 2022
Website for validators ease of use (voting, & payments etc)
Alpha Operations site for operators. (see what they need to run, distribute keys etc)
September 2022
Operational site is live, token is live