Eth 2.0 validator funding options

#1

A lot of debate is occurring around how to fund core development efforts. I’m personally not a fan of block reward funding (let’s leave that debate for a different topic) so have been thinking a lot of how we can get this done. Projects like Gitcoin Grants are great but I’m not sure they are covering the true cost we need to properly fund Eth 2.0 and its research for years to come.

I think Ethereum 2.0 teams should build in funding options for users natively into the user experience. How I envision this working is a user is presented with a screen that asks if they’d like to participate in funding certain teams. To start this could be simple and just list Eth 2.0 teams, the EF and some core Eth 2.0 researchers.

The huge benefits I see in this over core protocol block reward funding are as follows:

  • Not open to capture as users are directly pointing their own funds to certain teams and can turn off at any point
  • Could be set on by default and most users would just accept it
  • Allows for incremental build out of how to manage the funds over time with a simple solution being the first step (directly to team addresses)
  • Takes out all governance debate as again it’s up the the user
  • Validators are much more in line with devs and the future of the network than miners and I think we’d see a good response

Would love to know thoughts.

2 Likes
#2

IMO the longer these decisions can be delayed, the better. I say this because I think every one of us would be wrong if we described the uses and impact of Ethereum in 15-20 years. I feel that on-chain governance is short-sighted, because it sets boundaries on the nature of the protocol when the future uses of the protocol cannot be reasonably guessed at. IMO the best thing about Ethereum is that its nature is primarily defined by technological goals which many have agreed upon to be desirable simply for the frontiers they open. The longer that the protocol can develop without social bounds and goals, the more appropriately those influences can be applied to it in the future when desired, and the more the utility space can be freely explored before these social influences are clearly desirable. I believe that your model is far better than on-chain governance; it’s a light touch, and it might be the best course. However, IMO we should be careful not to solve problems defined by others with different goals.

What happens if we don’t do anything here for X time? Does EF need a funding mechanism now? Once you create a pot of money, you create vested interests, and the need of a governance for it.

My 2 gwei.

#3

Agreed, however my approach as proposed originally just allows validators to redirect funds to specific team addresses/multisig.

#4

Yeah, it is a light touch. But even by having a list of teams, you’ve created an inclusion/exclusion criteria with a bias for those included, the need for some to decide who is in/out, and an onus to justify the decisions.

#5

Ya but at a point you need to just pull the bandaid off. I think leaving that up to the Eth 2.0 teams who are producing the validator clients is fine.

Plus, you can just have a generic address input to redirect funds wherever you want.

#6

Plus, you can just have a generic address input to redirect funds wherever you want.

That would definitely improve on it, IMO. Maybe just have a generic input and that’s all. Teams could do their own work to advocate that their address be entered into it.

I have a feeling that most stakers aren’t going to be running their own nodes. I know some folks building validator markets, and part of the validator selection choice could be based on who they fund, and to what extent they do.

1 Like
#7

What do you mean by validator markets? I’m aware of validator pooling efforts (i.e. RocketPool), but not sure how ‘market’ is being used here.

#8

This proposal resonates with me most strongly. Opt-out is a great way to get a foot in the door but allows the option to easily rescind all funding (in the case of fund abuse / capture), much easier than Block rewards.

This is because funding allocations occur on the validator level, rather than on the protocol level.

3 Likes
#9

A place where you can select from multiple validator services. You can spread your staking out over multiple services, and track them in one place.

1 Like
#10

A place where you can select from multiple validator services. You can spread your staking out over multiple services, and track them in one place.

Isn’t this going to add fees on fees on fees? For each pool spread out, you’ll likely have some sort of service fee. The question will then be: are the fees less than my potential slashing from downtime? There is certainly going to be a period of “price” discovery.

#11

Perhaps the validator funding option should be for a term (and maybe decrease in size over the term)? If it had a sunset, then it would increase the chance that its continuation beyond that term reflected broad consensus.

If the intention is that L1 calcify in the long run, then it might be wise to give the decision of its long term inclusion to those that have a better historical perspective on Ethereum than any of us.