21 Feb Symbol blockchain news update – 21/02/22
I wasn’t going to write anything today but Hatchet has been on another Twitter rampage and posted two very important threads. Hatchet please get over your hatred for WordPress and publish these on the blog! It would save me rewriting and summarising (and probably getting things wrong along the way!) 😁
NEM supernodes and tokenomics
OK, to start I’ll try to extract information from this thread on NEM supernode rewards and how to replace these going forward – please read the full thread, I will just pick out a few take-home messages!
It is no secret that the core devs are not big fans of some of the opinions and the sense of entitlement of some of the supernode group members.
The rich got richer whilst your regular harvesters made next to nothing in fees as the transaction costs were minuscule and the network was not being utilised.
Easy money
To be fair, the supernode owners have done pretty well in terms of profiting from holding large amounts of XEM and have seen an annual income of around $30,000 even at current prices, this would have been a lot higher in the heady days of 2017 into 2018. Of course, they would tell you that they have secured the network and are taking a risk in terms of holding XEM which has always been extremely volatile in terms of price fluctuations, the latter being a fair point.
The coffers are now empty
The supernode fund could not last forever and apparently ran out some time ago. We had burned through over 200,000,000 XEM set aside for this purpose and it was later supported through additional funding from the treasury.
Out with the old and in with the new
So I think that we have now established that the previous supernode model was not sustainable. A small number of wealthy holders ran nodes and when the money dried up ~25% of them gave up and didn’t even bother to upgrade their nodes to the latest release at the fork. There was no direct monetary incentive to do so.
So, we have a broken system that excludes regular XEM holders from profiting from running a node or through delegated harvesting. What can be done to redress this balance of power?
Well it seems that the longer-term goal is to introduce block rewards (as we see currently with Symbol) but this will take some time to implement.
So in the meantime, there is a need to do something and it looks like this will be to continue to run the supernode program but in a vastly different format that benefits users for running a node and not for holding large quantities of XEM. In fact, holding 10,000 XYM and running a node would be enough for you to qualify as a supernode under the proposals being considered.
That’s an attractive option for me. I recently set up a NEM node on the same server that I run a Symbol testnet node on. I don’t hold any XEM currently but this would definitely tempt me into buying some so that I could receive a small daily payout which would contribute to the cost of running a supernode under the new system (and get me back into being a NEMber after a short break).
But won’t all the supernodes sell up and move on?
I’m sure that not all will but yes, there’s definitely a chance that a significant number will dump their coins and move into whatever else they see as profitable. Short term pain for XEM holders looking at the price charts? Maybe, but I am sure that there will be many (like me) that will snap up a small proportion to set up their own supernodes and with block rewards in the pipeline owning enough XEM to set up delegated harvesting will become a lot more attractive (even for the supernode owners who will profit more due to the higher importance of their accounts).
Have your say!
Whether you are a regular Joe, super whale or someone that is thinking of running a NEM node it’s now time to speak up and have your voice heard. It isn’t about who has the most skin in the game anymore it’s about listening to the majority so your opinion counts!
Block rewards for the greater good
I like the idea of some of the planned block rewards going back to support development and quadratic funding – you would have my vote on this one. Also I am wholeheartedly in favour of the overall proposal. It seems to make sense in terms of being good for the NEM ecosystem rather than benefiting the few. The success of the chain should in turn reward all NEM holders big and small in the longer-term.
Have your say on the subject here, I will be monitoring for voting irregularities though! 😁
SubChain harvesting
OK, one down, one to go. Here’s the second epic thread and it is again to do with harvesting. This time Hatchet’s thoughts on how this will work in our future tangled web of subChains and specialised nodes 🤯
By the way Hatchet, I think that there must be something in the air as I have had a rough couple of weeks, take some comfort in the fact that you have a few thousand people that are on your side and care about how you feel 😊
OK, so here we go. Luckily Hatchet has dumbed this thread down for people like me 😁
Rewards for allocating resources to a subChain
So if you are running a node you will have a finite amount of resources. Some nodes will be smaller, cheaper and have fewer resources than your top of the line, super expensive machine will all of the relevant bells and whistles.
Node owners can decide to pick and choose which subChains they want to run on their nodes and give up a certain proportion of their resources to run them – simple.
Tracking who does what
With many nodes all giving up time and resources to many subChains how will we track everything?
It seems that this might be more simple than you might think. Each machine running any type of node on Symbol 2.0 will have a unique machine identifier which will allow resources to be tracked.
Running a node is like a game of chess
This is where things get interesting (or at least complicated). Users can create subChain strategies to try to maximise profit. I guess the more well utilised a subChain is the higher the rewards will be, both due to token price and through network fees.
This sounds like a lot of work right? 😬 Well if you are lazy like me and don’t jump around with node configurations on a daily basis then those nodes that are loyal to a particular subChain (i.e. don’t switch configurations and the subChains they support) will be rewarded with increased benefits from their subChain(s) of choice.
I see this turning into a very complex (and potentially very fun) game and I am sure that many different tools and sites will spring up around this calculating the most profitable configurations for node owners to implement.
Node specialisation
One machine is unlikely to be good at everything and different subChains will need different resources. This means that your choice of server specs will suit different tasks.
For instance, if you have a ton of storage you might be more suited for on-chain NFTs, compute, memory or GPU might be better suited to other subChains. It seems that when you set your node up the configuration manager will look at your specs and suggest the best use of these resources across all subChains – clever!
This all sounds super cool and I am very excited about the concept of subChains and what this will mean for Symbol (and NEM) in the future. Just a pre-warning though, this is all in the very early stages of planning and won’t be coming any time soon. I don’t think that there is even a suggestion of an ETA but if/when it does materialise it will be revolutionary and we won’t be the chain that nobody has ever heard of, this will be huge!
Thanks!
Thanks for reading and thanks Hatchet for giving me something to write about today (I am genuinely not sure if I mean that sarcastically or not) 😂 I will be back again soon with another update and I really should get back to work as I have a mountain of things to do – that’s my evening gone again 😬
If you are a regular reader then please consider delegating to my node xymharvesting.net – it would be massively appreciated! 😊
I’m a Symbol and NEM enthusiast and run this blog to try to grow awareness of the platform in the English-speaking world. If you have any Symbol news you would like me to report on or you have an article that you would like to publish then please let me know!
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