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Emission Retargeting Soft-Fork Proposal

  • Author: kushti
  • Status: Proposed
  • Created: 17-Dec-2021
  • Last edited: 18-Apr-2022
  • License: CC0
  • Forking: Soft Fork

Motivation

Long-term security of the Ergo protocol, including its crypto-economic security, is always of highest priority for the community and core developers. One of the hottest research topic in this field is possible (in)stability of cryptocurrency protocols without stable block rewards coming from emission (see e.g. [1] for details).

It was planned during the launch of the Ergo network that after the end of emission miners will be rewarded with transaction fees and also with storage rent (unique for Ergo source of mining income). However, it is hard to estimate yet how successfully will storage rent replace emission.

Thus it was proposed on the ErgoForum informally (in [2] and [3]) to prolong emission (with preserving total supply) via a soft-fork([4]). This EIP is concluding previous discussions and provides details on emission soft-fork design and implementation.

Updated Emission Schedule

Starting from block #777,217 (first block of 759th voting epoch), new emission rules applied on top of rules described in the Ergo Whitepaper.

Before the end of the current emission (block #2,080,800):

  • if block reward is not less than 15 ERG, send 12 ERG from it to the reemission contract
  • otherwise, block reward R is less than 15 ERG, send R - 3 ERG from it to the reemission contract

After end of the current emission (starting from block 2,080,800):

  • pay 3 ERG each block from the re-emission contract,

where the re-emission contract is working like emission one, but does not have emission curve encoded, only flat payout.

Updated Emission Details

With the updated emission schedule from above, re-emission (with 3 ERG re-emission reward per block) would be enough for 4,566,336 blocks (approx. 17.38 years).

General Design

Emission in Ergo is done via a contract, which is existing since before genesis block (pre-genesis state). Changing emission then in an elegant way is tricky.

This EIP is proposing to use existing contract in combination with checks done in the core protocol which are mandatory only for mining nodes. Non-updated nodes will successfully validate all transactions which are valid for the new nodes (both checking and not checking new rules), after activation of the new rules. Thus this change is soft-fork.

This EIP offers following procedure for that:

  • inject two new tokens into emission contract. First token is a singleton one issued to mark emission box (could be used for tracking emission box efficiently also). Second token is reemission token, it will go to mining reward boxes, and amount of reemission tokens in a mining rewards box shows how many ERG a miner should send to the re-emission contract when spending the box. Any miner can do the injection. The injection happens on activation height.

  • a new kind of contract, the re-emission contract is paying 3 ERG each block after end of emission

  • a new kind of contract, pay-to-reemission contract, which is a proxy contract before the re-emission contract. Miners enforced to pay to this proxy contract. The contract is similar to existing fee contract, but with no time-lock.

  • new consensus-level checks are verifying that a proper amount of re-emission token is going from the emission box to a miner rewards box, and also that during spending a box which is not emission box but contains re-emission tokens (miner rewards box), the tokens are being burnt and the same amount of nanoERG is locked by the reemission contract. The checks can be switched off via a soft-fork (via voting on disabling rule #123).

Contracts

Re-emission contract: this contract pays 3 ERG per block starting from block #2,080,800 . Also this contracts allows for merging with other boxes, merging transaction must have only two otuputs, first output is for re-emission contract, second one is to pay mining fee supposedly (its value can be 0.01 ERG at most)

    val reemissionRewardPerBlock = monetarySettings.oneEpochReduction // 3 ERG

    // output of the reemission contract
    val reemissionOut = ByIndex(Outputs, IntConstant(0))

    // output to pay miner
    val minerOut = ByIndex(Outputs, IntConstant(1))

    val rOutTokens = OptionGet(ExtractRegisterAs(reemissionOut, R2)(SCollection(STuple(SCollection(SByte), SLong))))

    val firstTokenId = SelectField(ByIndex(rOutTokens, IntConstant(0)), 0.toByte)

    val correctNftId = EQ(firstTokenId, ByteArrayConstant(reemissionNftId))
    
    // output of the reemission contract
    val reemissionOut = ByIndex(Outputs, IntConstant(0))
    
    // output to pay miner
    val minerOut = ByIndex(Outputs, IntConstant(1))
    
    // miner's output must have script which is time-locking reward for miner's pubkey
    // box height must be the same as block height
    val correctMinerOutput = AND(
      EQ(ExtractScriptBytes(minerOut), expectedMinerOutScriptBytesVal(monetarySettings.minerRewardDelay, MinerPubkey)),
      EQ(Height, boxCreationHeight(minerOut))
    )
    
    // reemission output's height must be the same as block height
    val heightCorrect = EQ(boxCreationHeight(reemissionOut), Height)
    
    // reemission output's height is greater than reemission input
    val heightIncreased = GT(Height, boxCreationHeight(Self))
    
    // check that height is greater than end of emission (>= 2,080,800 for the mainnet)
    val afterEmission = GE(Height, IntConstant(emissionPeriod))
    
    // reemission contract must be preserved
    val sameScriptRule = EQ(ExtractScriptBytes(Self), ExtractScriptBytes(reemissionOut))
    
    // miner's reward
    val correctCoinsIssued = EQ(reemissionRewardPerBlock, Minus(ExtractAmount(Self), ExtractAmount(reemissionOut)))
    
    // when reemission contract box got merged with other boxes
    val sponsored = AND(
        GT(ExtractAmount(reemissionOut), ExtractAmount(Self)),
        LE(ExtractAmount(ByIndex(Outputs, IntConstant(1))), LongConstant(10000000)), // 0.01 ERG
        EQ(SizeOf(Outputs), 2)
    )
    
    AND(
        correctNftId,
        sameScriptRule,
        OR(
          sponsored,
          AND(
            heightCorrect,
            correctMinerOutput,
            afterEmission,
            heightIncreased,
            correctCoinsIssued
          )
        )
    )

Pay-to-Reemission contract: ensures that a box protected with the contract can be spent to re-emission contract only.

    val reemissionOut = ByIndex(Outputs, IntConstant(0))

    val rOutTokens = OptionGet(ExtractRegisterAs(reemissionOut, R2)(SCollection(STuple(SCollection(SByte), SLong))))

    val firstTokenId = SelectField(ByIndex(rOutTokens, IntConstant(0)), 0.toByte)

    EQ(firstTokenId, ByteArrayConstant(reemissionNftId))

Voting for the Soft-Fork

To vote for the soft-fork on the mainnet (similar testnet voting already done), a solo miner or a pool needs to add following setting to the config

ergo {
  voting {
    8 = 1000
  }
}

When a voting epoch with at least 888 out of 1024 blocks support (blocks with a vote for increasing parameter #8, which holds transaction output cost) will take place before activation height, EIP-27 locks in and will be activated at activation height.

Activation Details

On emission height, emission NFT and reemission tokens to be injected into the emission contract by spending a box we are calling injection box.

The injection box is protected by the script

{
    INPUTS(0).value > 30000000L * 1000000000L &&
       SELF.id == INPUTS(1).id 
}

so spendable by anyone who can spend 30M ERG at least provided in the first input (presumable, only emission box can have so many ERGs).

API Methods Changed

  • /emission/at
  • /emission/scripts
  • /wallet/balances
  • /wallet/balances/withUnconfirmed

Wallet Support

To have wallet accounting re-emission tokens, e.g. doing payments correctly in the presence of re-emission tokens, the following flag must be set:

ergo {
  wallet {
    checkEIP27 = true
  }
}

This flag if off by default for the sake of performance.

Testnet Data

Emission contract NFT id: 00594148f3b4205ec8d33f9f664b1baae20252df3592c8dbff5e9bdc30c77c44

Re-emission token id: 004b1528123ef62ce2bbb7036ad2dd553e6a64252f86746a706729fa253b24cd

Reemission contract NFT id: 001b81ceed43f4328754e368fc6a34c367ab8e00d1272be33c565bf247ad5748

Activation height: 188001

Re-emission start height: 186400

Mainnet Data

Emission contract NFT id: 20fa2bf23962cdf51b07722d6237c0c7b8a44f78856c0f7ec308dc1ef1a92a51

(issued in tx # a1cbc9e14999cc7620c9d952cb06f5f6a70a2c39bb7d3c8ff5311f825eca244c , https://explorer.ergoplatform.com/en/transactions/a1cbc9e14999cc7620c9d952cb06f5f6a70a2c39bb7d3c8ff5311f825eca244c , block 738,624)

Re-emission token id: d9a2cc8a09abfaed87afacfbb7daee79a6b26f10c6613fc13d3f3953e5521d1a

(issued in tx # ff340e380559a5a1ba870f27367a50a1829a4a573e1a738ec764456ec47620e3, https://explorer.ergoplatform.com/en/transactions/ff340e380559a5a1ba870f27367a50a1829a4a573e1a738ec764456ec47620e3 , block 738,694)

Reemission contract NFT id: d3feeffa87f2df63a7a15b4905e618ae3ce4c69a7975f171bd314d0b877927b8

(issued in tx # f06762711a3f33d3a479962e730a742f640105c6c5bb4e0a3e5a9405de700b4c , https://explorer.ergoplatform.com/en/transactions/f06762711a3f33d3a479962e730a742f640105c6c5bb4e0a3e5a9405de700b4c , block 738,628)

Activation height: 777,217

( Injection box P2S address is 9puEV3pP1bNdFi17ScAWzHqGaZPAopM15fFz2FiotY1zdd1XBT9Kba , created in tx # fca71b8b95f6ad14ce600a126c8842334d40d35f8754176c4cda2c95219f19f7 , https://explorer.ergoplatform.com/en/transactions/fca71b8b95f6ad14ce600a126c8842334d40d35f8754176c4cda2c95219f19f7 , output # 997369af025fa60dab11d11f94bd5492dbb8731ea3a31154a0388e329f7edf4a ,

use utxo/byIdBinary/997369af025fa60dab11d11f94bd5492dbb8731ea3a31154a0388e329f7edf4a request in node API to get injection box bytes :

  "boxId": "997369af025fa60dab11d11f94bd5492dbb8731ea3a31154a0388e329f7edf4a",
  "bytes": "80a8d6b9071003040005808098f4e9b5ca6a0402d1ed91c1b2a4730000730193c5a7c5b2a47302008f9e2d0220fa2bf23962cdf51b07722d6237c0c7b8a44f78856c0f7ec308dc1ef1a92a5101d9a2cc8a09abfaed87afacfbb7daee79a6b26f10c6613fc13d3f3953e5521d1a808088fccdbcc32300fca71b8b95f6ad14ce600a126c8842334d40d35f8754176c4cda2c95219f19f700"
}```
)

References
----------

1. Carlsten, Miles, et al. "On the instability of bitcoin without the block reward." Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security. 2016.
2. Ergo Emission: details, retargeting via a soft-fork. https://www.ergoforum.org/t/ergo-emission-details-retargeting-via-a-soft-fork/2778
3. Emission Soft-Fork Proposal. https://www.ergoforum.org/t/emission-soft-fork-proposal/2996/27
4. Zindros, Dionysis. "Soft Power: Upgrading Chain Macroeconomic Policy Through Soft Forks." International Conference on Financial Cryptography and Data Security. 2021.