Should TFT collateral be required for 3Nodes?

I’m opening this topic to discuss a question raised by @rblode in another topic:

Indeed, requiring collateral for node operators can be an effective way to create additional demand for a project’s token. It can also act as a stake that’s liable to loss if the node operator misbehaves.

A collateral requirement in itself doesn’t stop farmers from selling their rewards. It may help to offset these sales by generating additional demand, assuming there are also farmers adding new nodes to the system simultaneously.

Locking tokens does prevent farmers from selling. This is part of the v3 farming spec which wasn’t implemented but has been discussed as perhaps a good idea recently. In a way, it’s also similar to collateral, just accumulated after the node spins up rather than after.

The downside of an upfront collateral requirement is that it limits the rate of growth of the network, and also places an additional barrier to entry. Perhaps the first point isn’t a big concern right now, since the overall utilization rate is low. The second point is important to me though. ThreeFold farming is one of the most accessible ways to participate in a decentralized network and earn income.

Perhaps you’d say that farming should be less accessible, given the low utilization rate and low token price. In my view though, it’s still best that farmers invest in hardware and infrastructure, rather than needing to buy tokens to get started. One of the big distinguishing points of the ThreeFold Grid is that only farmers running on bare metal get paid. That’s a big distinction from other networks where the providers can have nothing more than a bag of tokens and a VPS rental from a centralized cloud provider.

1 Like

How about a stake for workloads? I’ve had a few workloads go offline as people went offline or otherwise changed things up. Maybe the 3node owner can decide the rates their willing to pay to stake like siacoin does. That could also include contract durations too. Then if a 3node operator wants to plan a change they can put it out there so the user can expect the changes. Siacoin typically does 13 week contract renewals last I checked. The node runner can adjust that too. The higher the stake and contract duration should create a more dynamic market

1 Like

Forcing people to buy tokens in order to participate is like a job making you pay them for the opportunity to work for them.

Their is no place for a “you must have this much money to play” policy in a project that’s purpose is to improve the world. We should be working to minimize barriers to entry not creating them.

1 Like

Well, there has to be SOMETHING to prevent haphazard shutting down of nodes. Uptime, locking, collateral, or some combo. I think slashing of collateral makes a lot of sense.

Also tricky to implement since there is no much capacity already online. I’m sure some would gladly do it, but a large portion of the capacity would never even get the message, much less want to put up collateral. I guess grandfathered in uncollateralized nodes could be a thing, and these “OG” nodes would have a good track record if they stayed online through an epic bear market.

My opinion may not be super popular and I agree with Drew that barriers are bad. But requirements could be kept modest, say 10% of what a given speced machine would cost. Flux collateral requirements are way too high and hinders their growth. A modest one wouldn’t hinder but make the network more secure.

1 Like

It could all be optional and potential users would be more likely to use a collateralized 3node. I’m a little ignorant here but I assume we take a % cut of workload costs and we would benefit to have workloads?

I think partial or full locks, no rewards under 95%, things that affect ability to intake more funds are okay, it should be incentivized to be a long term host. But who gets to have the opportunity to prove they are that should remain unchanged basically.

very good remarks, maybe indeed we should do some,

“Well, there has to be SOMETHING to prevent haphazard shutting down of nodes” @FLnelson

Indeed. Well said.

It seems there are two general propositions, that could be combined:

  1. Having collateral before being able to farm TFT. like a “right” to farm TFT
  2. Having locked TFT of a portion of your farming rewards

Those two sums of TFT, “locked” from the farmer, can be used as a slashing method when they misbehave, for example, if they shut down a 3node during a workload, as @tackrack hinted.

One interesting thing to note, is that the option 1, collateral, demands that farmers buy TFT in order to have the right to farm TFT.

Considering that TFT is only created by being farmed. It gives a kind of “power” over the current farmers. New farmers need to buy the fruits of past farmers, instead of just being able to come in the Grid and farm their way into TFT.

I wonder then:
Could farmers decide to “lock” their upcoming farming rewards and have this sum as their collateral? For example, once they farmed enough TFT to have their collateral, the following farmed TFT would be unlocked.

This way, farmers would “loan” the farmed TFT to start farming. It would be a way to let anyone start farming, as @ParkerS said, we’d want the least barriers for anyone to get into the TF Grid.

Just throwing ideas. Not saying I agree with everything I wrote here. Just trying to explore the concepts and possibilities.

there are now many suggestions for improving farming for our v4.0
should we aggregate them somewhere?

Maybe in our home repo of github?

they can help us finish the specification, like have all ideas together in 1 doc.

another one we should think about it keeping price of TFT constant vs USD price, it might me a mistake maybe better to make it variable again but give more rewards at start.

1 Like

I’m new to this, but like to give my 0,00001 cent. Maybe it can spark an “Aha!” moment and help solve the big puzzle.

We have 2 groups of farmers in this world.
A. Those who have the resources to buy, provide and create infrastructure.
B. Those who are modest and doesn’t have the resources to barely put food on the table and pay utility expenses.

I believe in a world where balance needs to exist. (As I say, “Help your fellow brothers and sisters”.) This beautiful world needs to be in equilibrium.

To remove the red tape for group B. I propose the following:
Group A who choose to do so, can lock their tokens and thus provide collateral for a specified time span or an agreed upon amount of workload or reaching a certain amount of TFT.

Group A who choose to provide collateral can become like an insurance for someone who is in group B and say gets a very small % of TFT reward from group B as a “Thank You for supporting me”.

Our world today, utility expenses varies in different parts of the world. So what if one continent can provide collateral for another continent. Or one person or group can provide collateral for another farmer or groups of farmer.

Maybe it can be programmed that if something happens to a B farmers node, it will seek out the support of the A Farmer node who provided the collateral. Either by giving back TFT to the end user or take over the workload temporarily from B farmer, until the node is back online with a confirmed x amount of time that the node is stable to receive back the workload. When A farmer takes over the workload, B farmer gets a very small amount of % TFT for providing the workload (it’s like, hey I know a friend who can help you out since I can’t for the time being, and that friend who got the job, gives you a small tip for giving him the work.)

Maybe we can have a system with different layers of collateral. (Continent, Countries, Groups, Individual).
One can assign an x amount of TFT as collateral for each layer.

For me personally, I’m not cashing out any TFT. Thus I would rather help a fellow human being in a different part of the world who needs a helping hand.

The only thing I ask of B farmers, when they reach a certain x amount of TFT for them to become collateral for an x amount of time (to remove the greediness and keep the pay it forward mentality).

1 Like

Aren’t equipment and the electricity cost already a collateral? They want to be in the project that is why they have invested in this project.
The farmers are already spending a lot to be in this project. Adding more cost to that at this point would discourage many farmers. If you want real value for the coin then get more business. We can use “tricks” to increase the price but that won’t be a real or long term solution for the project. Such artificial solutions won’t last. Look at Sia Coin or SCP coin.
To solve the token problem for the long term we need to have more people/organizations use threefold. Concentrate on creating more demand. I think that is the only way out of this situation.