WEP 6: Lease expiry

Author Andrey Andreev <aandreev@wavesplatform.com >
Last update 2019-09-03

Abstract

We propose to limit the validity period of leases - every lease will be cancelled a certain number of blocks after the beginning of this lease.

Motivation and Purposes

Waves is PoS blockchain which implies that investors are actively involved into network governance. With leasing mechanism it means that leasers should control generator’s (pools) behavior. In case pools do something wrong (skip their blocks, do not maintain their nodes or vote against their declared decisions) leasers should cancel leasing and switch to another pool.

Generators should compete for leaser’s loyalty offering adequate level of rewards and service.

Responsible leasers actively monitor what happens and may switch to another leasing pool in case their current pool does something wrong. In general the more responsible leasers we have the safer and more community-driven our network becomes.

Leasing ability was introduced in Waves Platform more than two years ago. For such a long period of time in the lease could remain the funds of users who have lost access to their wallets. In such a situation, miners can do whatever they want with the funds received in leasing that will remain with them forever. This does not motivate the miners to be responsible and honest.

If a reward for block generation is introduced, the issue will become more acute. Miners’ income will increase, which will lead to increased competition for investors. Responsible investors will be able to allocate their funds more profitably.

We propose to improve our leasing mechanics by introducing leasing validity period. Once leasing is made it will stay valid for 1M blocks (~2 years) and than should be renewed by the leaser or it will be cancelled automatically otherwise.

Specification

The maximum lease term (T) shall be established.

Each block should be checked for age of not canceled lease transactions. If a transaction has been placed in the blockchain at H0 and the current height (H1) is higher by T (H1 - H0 >= T), then the leasing should be cancelled.

Cancelled leases shall not be taken into account in determining the generating balance of miners.

Designations used

Designation Value Description
T 1M blocks the maximum lease term
H0 The value is set for each lease transaction height of “Lease transaction” in blockchain
H1 The value is determined at the time of checking the lease term The current height of the blockchain

Rationale

At the moment, about 43.6M WAVES are leased.

Of these, more than 1M blocks were leased back to 6,949,004 WAVES, which is 15.94%.

However, more than 1M blocks ago, only 6,378,017 WAVES were leased to current miners, and the remaining 570,987 WAVES (1.31%) do not support the network.

The automatic cancellation of leases will reduce the influence of miners whose generating balance consists of leases older than 1M blocks, which motivates miners to create an enabling environment to attract new investors or retain current ones.

7 Likes

Finally the very necessary feature here!

One point you should add an ability for a user to renew H0 without delay of 1000 blocks of lease cancel + new lease procedure, new tx type maybe which is structured as lease cancel but lease renew with the same cost of 0.001 Waves as a fee.

2 Likes

Finally a useful functionality being proposed! This is certainly to decrease the problem of nodes dishonestones and nodes that cause the centralization of Waves

1 Like

This has been needed for a long time! Time to cancel sleeping lessors! :slight_smile:

1 Like

I don’t understand the motivation behind this proposal and it certainly is not in line with the proposed inflation & monetary policy. If the Team is so keen on new deflationary mechanisms (which leasing is, according to Sasha), why make it harder with proposals like this?

The basic assumption for this proposal is that automatic cancellation of leases leads to increased competition - which is plain wrong in my view and will lead to a negative user experience. Especially big holders of cryptocurrencies are aware of the risks and keep their funds in cold storage, this proposal makes it necessary to move their cold storage every leasing period.

miners can do whatever they want with the funds received

Almost all Pools distribute rewards to lessors, without discriminating if the lease is a day or 2 years old. How many Pools are dishonest and not responsible?

Why we are discussing this again? There was an automatic cancellation of leases in NXT and it didn’t work out. People simply didn’t renew their leases and forgot about it.

WEP6 is just a new fig leaf to cover up the big issue here - profitability. Make leasing Waves worth it and people will care about their leases and switch if needed.

Lets look at this WEP without the Inflation proposal.

We have smart accounts now, so there is no need to move funds, you can change public key/multisig regularly without lease canceling.

Time has changed and more network activity is needed. Old leases look like unmovable artifacts. This is bad and annoying for new users.

1 Like

Time has changed and more network activity is needed. Old leases look like unmovable artifacts. This is bad and annoying for new users.

If the keys are lost, like described in the proposal, the WAVES will not be leased again anyway.
If the users have the keys, they can decide what happens to their lease at any time anyway. With this proposal all you are doing is annoying people leasing their waves.

Lets look at this WEP without the Inflation proposal.

that’s handy, isn’t it ? :wink:

Make one additional action in ~2 years, is it really annoying?

1 Like

If the other option is no action at all - yes.
In which way should it be “bad and annoying for new users.” if leases don’t get cancelled automatically?

  1. New leasers cannot understand why nodes with worse conditions have bigger generation stake, to realize that they should knew the all wavesplatform history and nuances, it is a very frustrating way for new users.
  2. New node owners (not matter how good their services are) cannot reach the top, because old leases hang like heavy unmovable weights, so there is no way to break this status quo.
1 Like

New leasers cannot understand why nodes with worse conditions have bigger generation stake, to realize that they should knew the all wavesplatform history and nuances, it is a very frustrating way for new users.

What are you even talking about? What worse conditions? All the old nodes are reliable. Lessors are customers, if the customers are unhappy they change, i.e. buy the service from somebody else. What’s so hard about this?

New node owners (not matter how good their services are) cannot reach the top, because old leases hang like heavy unmovable weights, so there is no way to break this status quo.

Blackturtle started the node rather late and is #2 now, same with Tradisys #5
All you are doing is making up arguments.

You’re right, enough words, this is how the top 50 would look if WEP 6 were applied today:

It’s a much better distribution for me.

What’s the big difference there? Top 10 still got around 70%, Top 5 slightly lower but still approx. 50%? Only real change is WavesGo not #1 anymore, which might change again anyway if the lessor just re-leases his stake.

We like the idea and do not think it is annoying doing so every 1m blocks.

Other idea we had over here for better ditribution was a leasing limit (maybe optional) for addresses or nodes? Dont know the technical side…

I like the proposal however I think the >100% reward policy that some nodes follows should be addressed first. I liked the proposal for example that a node lease cap is tied to node owner own stack.

2 Likes

I think this is a good way to get rid of all the ‘dead’ leases from lost private keys. Since a lease is also a vote and gives power to a node I think active lessors should be rewarded more then inactive ones for the good of the network and decisionmaking.

A re-lease every few years is not much to ask/

3 Likes

Exactly, I agree with Hoshingen.

The assumption that every old lease is a “dead” lease is weird. Most of the big holders have their Waves in cold storage and just don’t move them for security reasons.

I have introduced pretty similar proposal years ago when we had not fair LPOS and most of MRT were sent to main nodes, while small ones were essential for decentralization and nobody cared about their rewarding schemas. That proposal didn’t fly that time - reasons u can think your self.

Right now we have fairPos distribution meaning that average amount of blocks generated is fairly distributed and the only difference now is the amount of transactions per block received by particular node. Now there is no need to implement a mechanic behind lessors regular activity and lessors should decide it them selves. We have a voting threshold of 80% to pass a vote, before it was at 90% and so called “dead leases” might have had effect on voting, but right now it doesn’t seems like it.

In case there will be issues on not possible to make voting decision then yea, we just should count on voting “recent” leases and that’s it. We don’t have to cancel all leases.

But that’s my point of veiw. Unfortunately been very lazy (being very busy on other projects) for past 5 months and wasn’t paying attention to all waves developments/problems :smiley:

I understand your point of view but I still think a re-lease every few years (or accept you’ re not leasing at all) is not too much to ask in order to make the voting more fair to active and engaged users.

1 Like