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ZenIP-42206

ZenIP: 42206
Title: EON Forger Subsidy Fund
Owners: Horizen Community Council, Gustavo Fialho gustavo.fialho@protonmail.com
Status: Draft
Type: Process 
Created: 08-11-2023
License: MIT

Context

The Horizen blockchain currently has a block reward that’s split across 4 different entities:

  • Horizen Treasury (20%)
  • Super nodes (10%)
  • Secure nodes (10%)
  • Miners (60%)

This distribution was conceived of prior to Zendoo’s completion and implementation. Zendoo has increased the requirements of mainchain nodes so that the stated Secure Node minimum requirements are not sufficient anymore to provide a benefit to the chain, but subpar performance of Secure Nodes is a burden to the chain. There is, in addition, a need for forger nodes in sidechains for reasons that include: increasing the security of the network, and decentralization. Secure node operators are well equipped to provide this type of support. Therefore, we propose that the block subsidy currently being distributed to secure nodes be redirected to an address on EON, with the distribution going to block forgers after the general public has the ability to begin forging blocks.

Abstract

This ZenIP is to redirect the portion of the block reward currently paid to secure nodes to an EON Forger Subsidy Fund.

The following changes will be included:

  1. There will be a DAO-controlled address called “EON Forger Subsidies” set up on both EON and the Horizen blockchain
  2. The 10% of the block reward paid to secure nodes will be redirected to the “EON Forger Subsidies” address on the mainchain, and held there until both of the following are true:
    • Forging on EON becomes open to the public
    • A mechanism to automatically forward transfer 10% of the block reward to the EON sidechain “EON Forger Subsidies” address has been added to the mainchain
  3. After the automated forward transfer is set up, there will be an automated distribution of funds based on block forging, with an equal amount of ZEN paid out for each sidechain block forged.
  4. All block subsidies will be distributed at the end of each Sidechain Consensus Epoch.
  5. The secure node tracking service will be deprecated
  6. Secure nodes operators will no longer be eligible to receive block reward allocations, but may choose to migrate to EON to be eligible for forging subsidies

Rationale

  • There is an increased need for security and decentralization in the EON sidechain
  • There is increased burden on the mainchain resulting from many secure node holders having subpar hardware
  • Secure nodes operators will have the possibility to receive part of the block reward and EON gas fees by participating in the EON sidechain