Protocol resource efficiency improvement proposals

Unrestricted Public Thread

  • Viewed Alex BI Foundation BI Foundation Bedrock Solutions Bedrock Solutions Blockrock Mining Blockrock Mining Canonical Ledgers Canonical Ledgers Consensus Networks Consensus Networks Cube3 Cube3 DBGrow DBGrow De Facto De Facto Factable Solutions Factable Solutions Factom Inc. Factom Inc. Factomatic Factomatic Factomize Factomize Factoshi Factoshi Federate This Federate This Go Immutable Guides HashQuark HashnStore HashnStore Kompendium Kompendium LUCIAP LUCIAP LayerTech LayerTech Matters Matters Multicoin Capital Multicoin Capital Prestige IT Prestige IT RewardChain RewardChain Stamp-IT Stamp-IT The Factoid Authority The Factoid Authority VBIF VBIF
  • Not Viewed Crypto Logic Crypto Logic

Which of these proposals should be pursued by the standing parties?

  • Make no changes.

    Votes: 0 0.0%
  • None of the above.

    Votes: 0 0.0%

Have not voted

Authority Nodes BlockVenture DBGrow DBGrow Factom Inc. Factom Inc.

  • Total voters
    28
  • Poll closed .

Alex

Factoshi
The sharp and ongoing decline in the price of FCT has severely limited the resources available to invest in the protocol. @David Chapman recently proposed that all ANOs be reduced to a single server in order to reduce expenses and increase funds available to the grant pool. Though that proposal failed, I believe that David was right to challenge us to make radical changes to how we deploy our resources.

This thread aims to find consensus on what issues we're facing and how we can restructure to address those issues. First, I would like to collect some ideas and proposals. As each proposal is fleshed out, I will add it to the list of poll options outlined below. Once discussion has run its course, I will create an informal poll in this thread to allow participants to express their preference for which proposal(s) (if any) they would prefer. From there, we should be able to confidently move forwards with any formal governance changes if necessary.

I would like the scope of this thread to broadly encompass all areas of protocol resources. Specifically, it may include both ANO efficiencies and the grant pool.

If you have something you would like to be added to the list, please tag me. Two further options will be added to the poll when it is made available to ANOs and Guides: Keep things as they are and None of the above. For now, those are omitted in order to maintain consistent numbering for ease of discussion.

Current poll options:
  1. Set a minimum efficiency in governance that can be lowered on an individual basis by the consent of the standing parties.
  2. Reduce the amount of ANOs from 28 to 25.
  3. Entities which have overdue grants are not allowed to submit new grant proposals.
  4. For forward looking grants, payment of grants is done upon successful completion of a grant by default.
  5. Only permit grant proposals that fall within predefined areas of interest set by the standing parties.
  6. Give guides focused responsibilities.
 
Last edited:

Anton Ilzheev

De Facto
Exchange Working Group
Core Committee
Website Committee
Why not to use Standing Parties Support system to force people increasing their efficiency, if you're not satisfied with the performance? I think it will work pretty good.
 

Alex

Factoshi
The first option I would like to discuss is that we set a minimum efficiency in our governance. Any ANO wishing to lower their efficiency beneath this minimum threshold will need to apply to the standing parties and a formal vote will be held. This will prevent ANOs from effectively self-awarding themselves FCT at the expense of the grant pool, whilst allowing some flexibility for highly performant and productive ANOs to access extra funding without the constraints of the grant pool.
 

David Chapman

Factomize
Set a minimum efficiency in governance that can be lowered on an individual basis by the consent of the standing parties.
I'm open to it. But you would also need to set duration it can be at that rate before having to go up for reaffirmation and how that option can be removed (if it can be). Setting a time period would likely be easiest.
 

Alex

Factoshi
@Alex considering current market and FCT price, I think such addition to governance will reduce flexibility of ANOs.
That is kind of the point.

Why not to use Standing Parties Support system to force people increasing their efficiency, if you're not satisfied with the performance? I think it will work pretty good.
I believe removing support from an ANO is a relatively drastic action. I might not do it for an ANO at 20% who I believe should be at 30%, but if we implemented proposal 1 I would still be able to vote against a lower efficiency.
 

Valentin Ganev

Factomatic
Alex, thanks for continuing this discussion. I'm trying to understand the scope of the proposals that should be submitted here. Is this thread only pertaining to changes of efficiency and the reward structure for operating Authority Nodes? In particular, does this thread concern itself with proposals for changes to the grant pool?
 

Alex

Factoshi
Alex, thanks for continuing this discussion. I'm trying to understand the scope of the proposals that should be submitted here. Is this thread only pertaining to changes to efficiency and the reward structure for operating Authority Nodes? In particular, does this thread concern itself with proposals for changes to the grant pool?
Yes, it should take in the grant pool too. The title is poor. I will come up with something better and add a note on scope to the opening post. Thanks for bringing this up.
 

Anton Ilzheev

De Facto
Exchange Working Group
Core Committee
Website Committee
@Alex
1. It sounds good, but I am for the system to be self-balancing.
Governance limitation = artificial limitation + additional bureaucracy with votings.
Standing Parties system = self-balancing system
2. If Standing Parties allowed (=voted) ANO to operate at 10%, what happens if ANO underperforming after some time?
Recurring votes for confirming low efficiency? Or vote for cancelling the decision?
Both are too complicated, as for me.
 

Matt Osborne

Go Immutable
Exchange Working Group
Legal Working Group
@Alex I'd like to add, "Reduce the amount of ANOs from 28 to 25." While I'd personally like to see a larger reduction, I think 3 is probably more palatable to the community at this point. Plus, we can always do a "round 2."

Mechanics of how to implement this would need to be figured out, obviously.
 

Anton Ilzheev

De Facto
Exchange Working Group
Core Committee
Website Committee
I believe removing support from an ANO is a relatively drastic action. I might not do it for an ANO at 20% who I believe should be at 30%, but if we implemented proposal 1 I would still be able to vote against lowering them lowering their efficiency.
Well. If someone operates at 20%, but you feel it operating as 50%, why not to tell this party about your disappointment via removing support?
There should be no offences. If a single party thinks you're underperfoming and removing support, you feel OK. But if many ANOs remove support with comment "underperforming", then you probably raise efficiency.

TL;DR; Standing Parties Support system would fix efficiencies issue.
No need for additional artificial limits and votings.
 

David Chapman

Factomize
@David Chapman as a developer of Standing Parties system, what do you think about my considerations above?
It can probably be handled via the Standing Parties System (I like that name better than ANO Promotion / Demotion System so I'm stealing it). We're implementing "Questions" functionality into the system so if I think Factoshi is low, rather than just reduce Standing, I can submit a question with, "Factoshi, I think your efficiency is a little low based upon the amount of work you. Can you please take a few minutes to justify it?" I can then base my decision to remove or support based upon that.
 

Miguel Proulx

Stamp-IT
I also feel based on the last discussion and votes that people want to see if we'll able to tweak ANO efficiency using the Standing parties system. At this point, we might as well wait. I am definitively not against but I too think the system might actually work without adding to the governance.

@Matt Osborne Isn't it possible that a few ANOs are dropped using the Standing parties system without touching the governance? I thought, it was one of the perks of this system. If you lose standing for over X days, you are out and not necessarily remplaced.
 

Valentin Ganev

Factomatic
Yes, it should take in the grant pool too. The title is poor. I will come up with something better and add a note on scope to the opening post. Thanks for bringing this up.
Thanks for the clarification, @Alex!

With this in mind, I would like to see the following 3 changes to our grant system as part of the proposals:
  • Entities, which have overdue grants, are not allowed to submit new grant proposals.
  • For forward looking grants, payment of grants is done upon successful completion of a grant by default. Successful completion is determined by the success determination poll. Grant applicants that want to receive payment in advance, can indicate this as part of their application and Standing Parties should take this into consideration as part of the overall application and grant performance history of the applicant.
  • Every X number of months, Standing Parties submit areas of interest for grant applications. This is followed by a vote from Standing Parties and the top Y options (or all options with above Z% of approval) become the "focus areas" of grant applications for the next X months. Only grant applications in these areas can be submitted throughout this period. X, Y, Z to be determined.
 

Valentin Ganev

Factomatic
I also feel based on the last discussion and votes that people want to see if we'll able to tweak ANO efficiency using the Standing parties system. At this point, we might as well wait. I am definitively not against but I too think the system might actually work without adding to the governance.

@Matt Osborne Isn't it possible that a few ANOs are dropped using the Standing parties system without touching the governance? I thought, it was one of the perks of this system. If you lose standing for over X days, you are out and not necessarily remplaced.
Depending on the timeline for the system to go live, and on the period that we will need to wait in order for the removal of the first ANOs, who have lost support, I would be inclined to say that it makes sense to have a more expedite procedure for removing a small number of ANOs. However, this decision would have to come with a very large support from Standing Parties IMO.

@David Chapman -- what's the timeline for the Standing parties system to go live? And what was the continuous period of time that an ANO should have no support in order to trigger a removal process?
 

David Chapman

Factomize
@David Chapman -- what's the timeline for the Standing parties system to go live? And what was the continuous period of time that an ANO should have no support in order to trigger a removal process?
Our grant says it'll be done by the end of February. Whether we're a little earlier than that depends on the usual development factors.

From there, up to 30 days can transpire where ANOs and Guides have time to input their first votes. Demotion countdowns don't start until that point. If all votes are in within X days where X is less than 30, it can start earlier.

From there, if an ANO is below 40 Standing, then they have 90 days to increase their Standing before they're demoted.

I personally would be very opposed to an expedited removal of any ANOs unless they're Removed for Cause. ANOs deserve an opportunity to improve in my opinion.
 

Valentin Ganev

Factomatic
Our grant says it'll be done by the end of February. Whether we're a little earlier than that depends on the usual development factors.

From there, up to 30 days can transpire where ANOs and Guides have time to input their first votes. Demotion countdowns don't start until that point. If all votes are in within X days where X is less than 30, it can start earlier.

From there, if an ANO is below 40 Standing, then they have 90 days to increase their Standing before they're demoted.

I personally would be very opposed to an expedited removal of any ANOs unless they're Removed for Cause. ANOs deserve an opportunity to improve in my opinion.
Thank you for the clarification. So, we are looking at circa mid-June for any potential removals resulting from the Standing Parties system.

At this point, I'm inclined to agree with you that it makes sense to allow ANOs to improve. However, given the long waiting time and quite some history of underperformance, if this expedited vote requires say 75%+ of approval, I might reconsider.
 
I'm open to it. But you would also need to set duration it can be at that rate
Is this going to be historical or simply going forward? The numerous people who have claimed to have been "doing something unnamed" then providing absolutely nothing whatsover for the community seems to be rife.

I think it should be based on your historical rate rather than the current rate. Average income over time and the numerous promises which turned out to be nothing whatsoever should be highlighted in the community.

Let the sun shine in.
 
* Reduce the amount of ANOs from 28 to 25.

Why can't current under-performing ANOs be removed through the existing governance removal procedure? That seems like it would be faster than waiting for the Standing Party system to shake things out by June or going through the involved process of ratifying new governance.
 

Tor Paulsen

The Factoid Authority
* Reduce the amount of ANOs from 28 to 25.

Why can't current under-performing ANOs be removed through the existing governance removal procedure? That seems like it would be faster than waiting for the Standing Party system to shake things out by June or going through the involved process of ratifying new governance.
Underperformance is not a valid cause for removal.

The "ANO removal for cause"-document was specifically created to enable the standing parties to remove ANOs for specific causes, and not as a tool to weed out the under-performers. It even states something akin to this in the introduction to the document:

Doc_101_-_Removal_of_ANO_from_the_Authority_Set_for_Cause_-_Google_Docs.png


Here are the 5 relevant causes that may lead to removal under Doc 101:
Doc_101_-_Removal_of_ANO_from_the_Authority_Set_for_Cause_-_Google_Docs.png



---

I'd just also like to mention that we can hold a general vote to assess if we should move in some new direction, but to amend specific items covered under governance this has to be executed by amending the relevant governance document via the document amendment process that requires 4/5 Guide approval and 3/5 ANO approval.


As an example, if a poll is created here asking to implement this:
"Entities which have overdue grants are not allowed to submit new grant proposals."
... Then this will not take effect until the grant process document is updated with this clause after a governance vote in accordance with Doc 002.
 

WB

Factoshi
Exchange Working Group
Governance Working Group
Underperformance is not a valid cause for removal.

The "ANO removal for cause"-document was specifically created to enable the standing parties to remove ANOs for specific causes, and not as a tool to weed out the under-performers. It even states something akin to this in the introduction to the document:

View attachment 2386

Here are the 5 relevant causes that may lead to removal under Doc 101:
View attachment 2387
You can definitely remove ANOs for underperformance under 1.3 clause IV. It speaks of ANOs sufficiently adhering to the requirements set out in Doc 003. When has someone 'sufficiently adhered'? That's enough room for subjective interpretation and thus a vote to determine consensus.

Doc 003 states core requirements along with suggestions, and these suggestions are meant to: "Suggestions are expectations sourced from the community; and while not formal requirements, an ANO's repeated, prolonged, or accumulated failure may result in the ANO's removal from the Authority Set in accordance with Doc 101 - Removal of ANO from the Authority set for cause.

Some of these suggestions pertain to underperformance in terms of governance participation, marketing, value add relative to efficiency and information provision.

You can make a very strong case against the ANOs we all have in mind that they have repeated, prolonged or accumulated failure to comply as regards these requirements.

Let's not complicate things. This clause alone allows you to initiate removal procedures.
 
Last edited:

Tor Paulsen

The Factoid Authority
@WB

I referenced the "core requirements" , but you are right that the document states that an ANO may be removed if it doesn't meet the suggestions/expectations in section 3 of Doc 101 "repeatedly, prolonged or accumulated (failure).

3.1 (participation in governance)
This one is pretty much objective and I am sure that a case could be made that some ANOs haven't appropriately contributed.

3.2 - ANO value "commensurate with node efficiency"
Considering the extremely low FCT-price I believe most ANOs can make a case that their efficiency is "commensurate with node efficiency".

3.3 - Announce changes to efficiency
IIRC everyone has done this.

3.4 - Engage community if pledge requires modification or update
I reckon this one might be utilized to build a case to remove someone for cause, as you can look at a teams' pledges and see if they have delivered on them or not. But then again if a team has updated their pledges based on the fct-price dropping and this limiting their ability to deliver on the pledges, then they have done what is expected of them as well (reporting and updating pledges).

3.5 - Attend ANO meetings
There have not been any ANO meetings the past year or so.

3.6 - Attend Factom retreats yearly
Current price point of FCT doesn't allow this to happen.

3.7 - Provide info about ANO to factomprotocol "Major Contributors"-section
I don't believe there are many teams that doesn't have information listed.

3.8 - Support marketing efforts
This one is a bit difficult to assess. What does it entail? For our (TFA's part) we have retweeted other teams announcements, participated in AMAs and sent members to speak at conferences. What is the minimum effort? I don't even know if we are in compliance or not (but I believe we are).

Looking at the above list of "suggestions" I don't think a removal motion could be built on many of them, except for 3.1 and possibly 3.4...

As I've said before, I believe most standing parties are waiting for the new ANO standing system coming online, as that is what we have designed to account for teams underperforming.
 

WB

Factoshi
Exchange Working Group
Governance Working Group
@WB
Looking at the above list of "suggestions" I don't think a removal motion could be built on many of them, except for 3.1 and possibly 3.4...

As I've said before, I believe most standing parties are waiting for the new ANO standing system coming online, as that is what we have designed to account for teams underperforming.
The point is that according to Doc 003, there's nothing preventing an ANO removal procedure from being started for underperformance. It takes just one suggestion that's repeatedly not being performed. Whether that allows one to build up a strong enough case to reach consensus is an entirely different matter altogether.

This is one of those cases where we need to view governance documents as a tool and make some agile decisions where it allows us. Does it allow us to do x or y? Does it prevent us from doing x or y? That's all it's there for.

As for most standing parties waiting for the ANO standing system, I don't know if they are. That's the point of this topic, to pool together some proposals and have them vote on it. As far as I see it, reducing the ANO set by culling some of the useless ones is a fine proposal to add to the list because governance allows for it.

3.8 - Support marketing efforts
This one is a bit difficult to assess. What does it entail? For our (TFA's part) we have retweeted other teams announcements, participated in AMAs and sent members to speak at conferences. What is the minimum effort? I don't even know if we are in compliance or not (but I believe we are).
This one's actually one of the easier ones. If you're an ANO elected in part due to your outreach and marketing potential but have done less than bare minimum to help exposure to team announcements, then in my opinion that's a big, big failure to comply.
 
If I was an ANO and if I could unilaterally design the system from the ground up, here's how I would do it. I'm not sure if any of it is worth adding to the list of options, but take it as food for thought.

1. There's a single global efficiency level, applicable for all ANOs. There's a voting process to determine the level, but the intent is to be enough to cover hosting costs and possibly allow for profit. ANOs can use these funds however they see fit with no reporting requirements or expectations that these funds are used to further the protocol.

2. The rest of the FCT issuance goes to a designated grant pool address - with a private key and all. This address is managed by the "Grant Facilitator Team" or whatever you want to call it, with the role of dispersing grants based on standing party instructions. As a result no more forks are needed since FCT can be sent from this address through regular transactions, and grants can easily be distributed at any timeframe. The biggest flaw here is ensuring against theft, rogue actors, or other issues - so you'd probably want a small group of people (guides maybe) with overlapping shards of the private key, or some system like that.

3. Standing parties vote on grants similar to the current system except that grant proposals can be submitted and voted on anytime. There are three types of grant proposals:

(A) - Generalized recurring grants. This is equivalent of a higher efficiency level for high performing ANOs. So for example Factomize could be granted 1,500 FCT per month for general betterment of the protocol. They'd have to account for the funds used, but would save on having to submit many grant applications all the time. Unlike current efficiency levels, the standing parties could determine whether to raise or lower the amount - ANO's can unilaterally change it.

(B) - Standard Grants. The default for a grant (as suggested in a post above) would only pay after deemed a "success" after determination voting. Even better would be if the system could support splitting a grant into smaller milestones with a simple voting process after each.

(C) - Prepay Grants. Finally, on rare occasions grants could be prepaid when funding is needed ahead of time.
 

Mike Buckingham

Cube3
Website Committee
Governance Working Group
Alex,

Thank you for building on David’s initiative by bringing the threads of ANO efficiency and Grants together into a debate about getting appropriate value for the protocol.

We need to be as objective as possible in defining what “value” is and getting some objective measures of it so that we can actually take action.

The Factom protocol’s community and governance are mutually intertwined. The community needs to derive the maximum benefit from our governance framework but we need a rain-check on whether we need more governance which may be restrictive, as Anton has suggested, or just enforce the governance we have. Tor has done a great job of explaining the scope for action in some aspects of our governance.

The, newly titled Standing Parties System has great scope for establishing standing and removing standing so that those not adding value can improve, step down or be removed. In tandem with the ANO removal for cause Doc 101 this gives us considerable scope for ensuring ANOs add value and continue to do so.

Grants need to be focused on the things the protocol needs. We need a strategic direction for such development, probably from the Core Committee. This should make grant evaluation and award so much easier to manage.

Post-effort grants, which provide something tangible for the protocol to evaluate and potentially use, pose a risk for the applicant which is reduced by them aligning their efforts to the strategic direction. The option of applicants gaining prior approval just leaves the question of how valuable the work is once completed. In other words it is no guarantee and still creates an incentive for the applicant.

Any pre-effort grants, should probably meet a higher hurdle than now by clearly defining for example:
  • their track record of delivering project value (by reference to previous work)
  • what they will deliver, for what cost and in what timescale
  • a business case
  • the risks of not achieving the objective
TLDR:

Efficiency informed by standing
ANO reduction informed by standing, implemented by ANO removal for cause
Overdue grantees submitting new proposals - restricted by higher entry hurdles
Forward looking grants subject to stricter criteria
Only grant proposals that fall within predefined areas of interest set by the standing parties should progress
 

WB

Factoshi
Exchange Working Group
Governance Working Group
Since we have a lot of suggestions to streamline the grant system, this will require more active oversight than we currently have. The amount of success determinations is staggeringly low.

My proposals would be:

1. Give guides focused responsibilities. I've mentioned this before and Niels recently repeated it. You can pair this with new, longer overdue guide elections. I can imagine that the currently active guides don't really know what to work on first. Let's tell them. That'll improve the flow of grant tracking, determinations et al, so we'll have a better and substantiated idea of who's actually delivering or not.

2. Not every grant round penny needs to be spent. Build up a reserve over time so we can capitalize on opportunities when they arise. The university partnership was a great example of not having the funds available during a limited time window. This will mix in well with the focused grant round proposal. Grants rounds have a predefined focus (quarterly or annually) and that focus can include keeping 20% of available FCT in reserve.
 

Alex

Factoshi
Thanks for the suggestions, @WB. I'll add the first to the list of proposals.

As for the second, there has been a lot of discussion recently about how we can better spend funds in the grant pool. We agreed to change the voting form so that grants are not approved by default. Ideally, this will force people to find reasons to approve a grant rather than to find reasons to not approve a grant. Given that the dollar value of the pool is currently so low, I'm not sure how this will play out in the coming grant round. However, I do believe that it would have successfully limited excessive spending in previous rounds had it been implemented. In addition to that change, there is a broad chorus of voices saying that we need to severely limit excessive spending.

Given the above, how do you feel about your second suggestion? Do you still want me to add a proposal to the poll? If so, how should I word it?
 

WB

Factoshi
Exchange Working Group
Governance Working Group
Thanks for the suggestions, @WB. I'll add the first to the list of proposals.

As for the second, there has been a lot of discussion recently about how we can better spend funds in the grant pool. We agreed to change the voting form so that grants are not approved by default. Ideally, this will force people to find reasons to approve a grant rather than to find reasons to not approve a grant. Given that the dollar value of the pool is currently so low, I'm not sure how this will play out in the coming grant round. However, I do believe that it would have successfully limited excessive spending in previous rounds had it been implemented. In addition to that change, there is a broad chorus of voices saying that we need to severely limit excessive spending.

Given the above, how do you feel about your second suggestion? Do you still want me to add a proposal to the poll? If so, how should I word it?
I'm fine with waiting how the next grant round works out with the default approval removed. Thanks for adding the first suggestion!
 
Top