Complementary proposal addressing Liquidity, Value, and Reward Distribution in Massa Blockchain

Massa Improvement Proposals
1

In ddition to existing community forum threads such as APY reduction, we would like to propose an approach that could increase participation, add node runners and support smaller nodes while supporting Massa liquidity, value and demonstrate a clear use case of Massa’s ASCs.

The Massa blockchain currently faces several challenges that hinder its growth and overall network health:

  • Low Liquidity & Value: Insufficient liquidity is negatively impacting trade volumes, reducing the usability of the token, and contributing to price instability.
  • Reward Centralization: Large nodes are capturing a significant portion of staking rewards, increasingly marginalizing smaller nodes. This dynamic can discourage new node runners and weaken the overall decentralization of the network.

Strategy:

Develop 4 main strategies to address the Low Liquidity and Reward Centralization

Anti-Dump:

  • S.1.1 Buy Walls for Price Stability:
    • Use buy walls to stabilize prices in a controlled way to ensure long-term price stability.

Liquidity Strategies:

  • S2.1 Dynamic Buy-backs:
    • Use foundation buy-backs as a tool to manage liquidity while dynamically adjusting buy-back frequency for price stability.
  • S2.2 Strategic Marketing with Buy-backs + S3.2 Dynamic Buy-backs:
    • Market the dynamic buy-back mechanism as a way to attract investors and stabilize liquidity.

Price stability Strategies:

  • S3.1 Market-Cap-Based Token Burn:
    • Incentivize participation by burning tokens based on market cap, which aligns investor participation and mitigates manipulation risk.

Small Nodes Valuation Strategies:

  • S4.1 Support for Small Node Runners:
    • Incentivize small node participation through rewards aligned with long-term holding, preventing manipulation and immediate sell-offs.

Solution

Create a Robinhood Autonomous Smart Contract (ASC) to manage the strategies and demonstrate a powerful use case for ASCs.

Overview:

To address these issues, we propose the Robinhood Autonomous Smart Contract (ASC), a reward redistribution mechanism. This mechanism would be based on Massa Foundation buyback sent to a central wallet/node called Robinhood. An ASC called RobinhoodASC would then action daily 3 steps:

  • Burn tokens: The RobinhoodASC will burn a daily pre-defined ratio of $MAS based on strategies.
  • Stake tokens: The RobinhoodASC will stake a predefined ratio of $MAS based on strategies.
  • Redistribute Rewards: Daily staking rewards will be redistributed to smaller nodes based on specific criteria, including uptime, node age, role diversity, geographical distribution, and cooldown period.

This solution not only addresses the problem statement but also encourages the community and smaller node stakers to actively participate by prioritizing decentralization and fair reward distribution. It fosters the growth of new nodes, promotes geographical dispersion, and boosts liquidity, ultimately leading to increased token value and a more resilient, decentralized network, while ensuring smaller nodes feel valued and engaged.

Source of funding:

The funding of the Robinhood wallet and node would come from:

  • Buyback from the Massa Foundation;
  • Rewards from the Robinhood node;
  • Donation from node runners that voluntarily allow the Robinhood to receive $MAS from their wallet with a predefined limit and periodicity and receive recognition on the Robinhood-ASC website for their donation, a leaderboard.

Expected Outcomes:

  • Incentivize Small Nodes: By prioritizing smaller nodes that meet performance and decentralization criteria, this mechanism encourages the growth of new nodes and increases network participation.
  • Decentralize Node Rewards: It will encourage running more nodes and geographical dispersion.
  • Improved Liquidity: Increased participation from smaller nodes, combined with a fairer reward system, will boost token liquidity and price stability.
  • Increased Token Value: Enhanced network participation and decentralization are expected to positively influence the market value of Massa tokens (MAS).
  • Decentralization Incentives: A more decentralized reward system will reduce the dominance of top nodes, fostering a healthier, more resilient network.
  • Stronger Community Engagement: Smaller nodes will feel more valued, leading to a more diverse and robust network.

Benefits:

  • Showcase of Massa’s Autonomous Smart Contracts (ASCs): The Robinhood ASC is a powerful example of Massa’s self-triggering Autonomous Smart Contracts, highlighting the ability to automate complex, trustless processes without external triggers. It showcases transparency, fairness, and the unique capabilities of Massa’s ASC technology.
  • Encourages Node Participation and Installation: By offering rewards based on uptime, node age, and geographical diversity, the Robinhood ASC directly incentivizes people to install and maintain nodes.
  • Decentralization Incentive: The redistribution of rewards to smaller nodes based on clear, measurable criteria promotes decentralization and ensures fair participation across the network.
  • Geographical Diversity: By ensuring that rewards are distributed across different regions, the network fosters global participation and resilience.
  • Tiered Reward System: The tiered reward structure provides clear incentives for nodes to improve their performance in terms of uptime, age, and other factors, while still offering a meaningful reward for all selected nodes.
  • Cooldown Mechanism: The 7-day cooldown prevents repetitive reward distribution to the same nodes, ensuring more nodes benefit from the rewards over time.

Annexes

Criteria for Redistribution:

Nodes will be evaluated based on five criteria, and the top 5 will be ranked to determine the share of the daily reward pool. The criteria are as follows:

1. Uptime Percentage (Weight: 25%):

  • Nodes with higher uptime during the past day will have a higher chance of ranking higher. This criterion encourages node reliability and sustained network participation.

2. Node Age (Weight: 20%):

  • Older nodes, those that have been operational for longer periods, will be given a higher ranking. This incentivizes long-term commitment and rewards established nodes for their stability.

3. Number of Roles (Weight: 15%):

  • Nodes with fewer roles (e.g., nodes with lower delegation or resource use) will receive higher ranking priority. This ensures that smaller, less powerful nodes are given a fair opportunity to benefit.

4. Geographical Distribution (Weight: 20%):

  • The top 5 selected nodes must be from different countries or regions to ensure global decentralization. No two nodes from the same region will be eligible for the same reward distribution, fostering diversity across the network.

5. Previous Wins Cooldown (Weight: 20%):

  • Nodes that have won rewards within the past 7 days will be excluded from receiving rewards. This ensures that rewards are distributed across a broader group of nodes, preventing a single node from winning multiple times within a short period.

Possible future criteria:

We can think about future criteria that would increase someone’s chances and promote other projects such as:

  • Poseding a Massa related NFT
  • Providing liquidity on DUSA
  • Is using Massa related DApp
  • Is providing free storage from their nodes
  • etc…

Reward Distribution Structure and burning process:

The top 6 nodes will be ranked based on their performance in the five criteria, and rewards will be distributed according to their rank. The distribution will follow this tiered structure:

  • 1st Ranked Node: 20% of the daily reward pool.
  • 2nd Ranked Node: 15% of the daily reward pool.
  • 3rd Ranked Node: 10% of the daily reward pool.
  • 4th Ranked Node: 5% of the daily reward pool.
  • 5th-Ranked Node: 5% of the daily reward pool.
  • 6th-Ranked Node: 5% of the daily reward pool.

This structure provides a strong incentive for nodes to perform well across all criteria, while still ensuring that all selected nodes receive a meaningful reward.

Workflow of the Robinhood ASC:

1. Reward Accumulation:

  • The Robinhood wallet accumulates daily $MAS rewards from the source of funding forming a daily reward pool.

2. Node Selection Process:

  • The Robinhood ASC will collect data from all nodes, be scored and ranked based on the criteria resulting in a list of winners.

3. Daily Reward Redistribution:

  • The daily reward pool will be distributed to them based on the structure outlined above.
  • Winners will be automatically excluded for the cooling period defined above, ensuring rewards are spread across different participants.

4. Daily burn:

  • The Robinhood ASC will burn on a daily basis tokens based on the strategies and algorytm to maintain $MAS value.

5. Transparency and Reporting:

  • The entire process will be on-chain and transparent.
  • A daily report will be generated, showing the winners, their scores, and the amounts they received from the reward pool and the daily reward pool amount.
  • This report will be made available through an on-chain website at Robinhood-ASC.massa.
4 Likes
2

These are really great suggestions, and I agree with all of them. :white_check_mark:

If I could give some feedback;

Criteria for Redistribution:

I think we can prioritize nodes with high node age and low number of rolls, to prevent BIG nodes from splitting themselves into smaller nodes and misusing the system. If someone has been running a node for a long time and has a low number of rolls, it could be a higher priority.

2 Likes
3

Yes, it makes total sense.

4

I like the Robinhood ASC idea; on the other hand, buy walls and buybacks seem like market manipulation to me

The foundation tokens aren’t staked.
Which amount would you put in the Robinhood ASC ?

5

I don’t believe this idea constitutes price manipulation; rather, I think it should be implemented for a set period of time.

For example, if you make a $20,000 purchase on any CEX, you’ll likely see a significant price pump. This creates an unfavorable atmosphere for investors. To support this idea, you can refer to an article explaining buyback and burn mechanisms in crypto here.

Upon review, it’s clear that the foundation is not staking, and this needs to be updated to reflect Massa Labs nodes.

As of September 20, 2024, the top 12 node runners own 50.87% of the total staked rolls.

Specifically, Massa Labs nodes have:

  • AU12L4gaQ8j8j5yBt2jSmcsmu51yZW2gLjnZr5rAWnjKJDNacR3jp with 42,263 rolls.
  • AU128Rexxftc1jYhyouTesxjPqeezEHh5LUAzNaAfqDo1dWRgPH8m with 10,000 rolls.

The main goal here should be to incentivize new nodes and stabilize liquidity for new investors.

6

I agree about the centralization not being good for the moment.
That being said, revenue generated by the stake of the foundation are supposed to fund projects and pay developers - which seems to be tricky.
Are you suggesting suppressing those sources of income?

7

Can’t Geographical Distribution be tricked by the use of VPN?
If so, is it a good criterion?

8

I don’t see buy walls and buybacks as a market manipulation, as long as it is done in a transparent way I think its an healthy mechanism.

In view of the current on chain low liquidity I think it could definetely have a huge impact on the $Mas price. But it needs to be done at the right timing with the marketing agenda to ensure the funds are utilize in the most efficient way as possible.

3 Likes
9

I think the node part have some issues.
It cost the same to run 1000 node with 1 roll than 1 node with 1000 roll so people would split their node
It works like that on every other chain too, every node are equal and get rewards based on the number of rolls their stacked.

And you mentioned prioritizing nodes with high node age and low number of rolls, but this would discourage people from starting new nodes & also penalized smaller node that can often get some issue/disconnect

I agree with Liquidity Strategies part though, it will consolidate the price

10

Buy more rolls and end of story. The average rolls per node are 980(around $2.5k), so it makes sense for all node runners to chase this number if they are below(1 roll node is nonsense with such a low price, simply electricity burning). Especially when the MASSA price is so low. That will improve the decentralization and finally, it can push APY down to some adequate numbers.

Also, as far as I understood whitepaper. There is a scheduled decentralization program for 1 roll node runners, so it will make sense to run those nodes only after this program starts.

1 Like
11

Maybe a dumb question: wouldn’t a real world application for the MAS, something like ğchange solve most of the problems this proposition is trying to mitigate?

(think that with this free (like in free beer) crypto, you can buy beers!)

12

It is not a dumb question, it is a wonderful example of what Massa can do. Imagine this website on chain (DeWeb) where people can post their things for sell for a fee and when they sell or cancel the ads, they get back the majority of the initial cost! This is the power of decentralization, putting back the power into people hands! Not feeding greedy CEOs :smiley:

13

I’m glad you like the idea.
I’d say that initially, this site doesn’t need to be on the channel (but that’s obviously a big plus).
It’s the concrete uses that seem important to me: they would enable MAS to take root over the long term.
I hope a community team will work on such projects.

14

Thanks for the proposal!

This is not really my jurisdiction (it’s up to the foundation), but here are my opinions.

Use buy walls to stabilize prices in a controlled way to ensure long-term price stability.

Use foundation buy-backs as a tool to manage liquidity while dynamically adjusting buy-back frequency for price stability.

Incentivize participation by burning tokens

Those three and the Robinhood approach are all basically saying the same thing: use Foundation funds (and maybe the funds of a few donators but that wouldn’t be much) to artificially prop the price. First, this would cost a lot if we want to make it have a noticeable and sustainable impact in time, and not just temporary and/or negligible. Second, given the Sell walls in the market depth, we can see that the price going up might cause large dumps (profit-taking) unless it is supported by organic growth. This means that we would put the foundation at risk of consuming a lot of its reserves to just create an exit opportunity for dumps. Instead, I believe that investing into organic growth makes more sense because people taking profit would simply be matched with newcomer buyers that will hold and use instead of being replaced by the foundation at a loss.

Incentivize small node participation through rewards aligned with long-term holding, preventing manipulation and immediate sell-offs.

I agree that rewarding small node runners with proportionally more inflation is something I would like, but it is extremely hard to achieve in practice.
First, all criteria on which we base rewards must be deterministic and computed on-chain. This means that stuff like IP address diversity does not apply.

What remains is :

  • uptime rate: in practice this is already in a factor because every block/endorsement miss causes a loss of reward opportunity. Currently, if you have 2x less uptime, you will get 2x less rewards.
  • node age: not doable, but Staker age is doable:
    • if the staker age is defined as the number of milliseconds since the first time an address had rolls, we will advantage people who were there at the beginning and disvantage newcomers
    • if the staker age is defined as for how long they had rolls in the current streak (latest uptime) then we advantage more stable node runners. Note that bigger holders tend to have more expensive and more stable nodes. So this would mainly advantage big holders.

Cheating the cooldown: simply put 1 roll per staker address. For security reasons, staking addresses are not linked to node addresses in Massa, so no way of telling.

Overall, while I agree that investing a lot into this kind of strategy might artificially pump the price temporarily, I am afraid it would cause more harm than good in the long run, on top of using precious funds.

4 Likes
15

I really appreciate your feedback and you taking the time to read through it. It makes a lot of sense and support what you said.

1 Like
16

Hey everyone !

I just wanted to highlight Seb’s recent proposal regarding our new governance system. If you’re interested in the proposals being discussed, make sure to check it out here :

This system will allow everyone to vote on the proposals, making our community even more engaged and impactful.

Looking forward to hearing your thoughts !