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Update 0069-reassertion-fee-reduction.md #523

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# Summary

The average daily mining reward per hotspot is currently equal to around 50,000 DC; and it costs 1,000,000 DC to reassert a hotspot's location.
The average daily mining reward per hotspot is currently equal to around 18,500 DC; and it costs 1,000,000 DC to reassert a hotspot's location.

As a result, it would take nearly a month for the average hotspot to earn enough to pay for one location reassertion.
As a result, it would take more than a month for the average hotspot to earn enough DC to pay for one location assertion.

Therefore, if we are trying to expand the network and want hotspots in saturated areas to move into less saturated areas, want to ease the burden on new people joining the network, and ease the burden on people making human errors, the current reassertion price is not viable and needs to be reduced.
Therefore, if we are trying to expand the network and want hotspots in saturated areas to move into less saturated areas, want to ease the burden on new people joining the network, and ease the burden on people making human errors, the current reassertion fee is not viable and needs to be reduced.

Please note that it is likely the hotspots which are earning below average income, are the ones that would want to change locations most, so the current assertion costs would be greater than 30 days average earnings for those hotspots.

# Stakeholders

In reality, since the amount of DC burned has an economic impact, this hip affects everyone. Directly, this hip affects everyone that is reasserting their hotspots. Additionally, since people will need to be able to see their reassertion fee amounts prior to submitting the reassertion fee DC burn transaction which is a function of the Vendor Apps, this HIP directly affects all owners of Vendor apps.
In reality, since the amount of DC burned has an economic impact, this hip (indirectly) affects everyone. Directly, this hip affects everyone that is reasserting their hotspots. Additionally, since maker apps are used to assert locations, this HIP directly affects all owners of maker apps.

# Detailed Explanation

The average daily mining reward per hotspot is currently equal to around 50,000 DC; and it costs 1,000,000 DC to reassert a hotspot's location.

As a result, it would take nearly a month for the average hotspot to earn enough to pay for one location reassertion.

Therefore, if we are trying to expand the network and want hotspots in saturated areas to move into less saturated areas (or moreover in lone wolf like areas), want to ease the burden on new people joining the network, and ease the burden on people making human errors, the current reassertion price is not viable and needs to be reduced.

In order to help expand the network and ease the burden on new people joining the network, I'm proposing that the reassertion price be reduced from 1,000,000 DC, to half which is 500,000 DC.

Please note that I specifically chose 500,000 DC and not less (say 10,000 DC), to help prevent people from taking advantage of reduced reassertion fees, and to lesson the economical effect on the Network.

If approved by community (HNT) vote, this HIP will reduce **all** assertion fees in half, for three months, beginning immediately upon the migration to Solana, and will revert back after three months.

No code is required, since this may be accomplished via chain vars.

**PLEASE NOTE THAT FROM THIS POINT ON IS NO LONGER RELEVANT, ALL OF THE BELOW WILL NOT BE VOTED ON, AND MUST BE REWRITTEN IN A NEW HIP.**

In addition, to prevent location spoofing as a result of reassertion fees deduction, any given individual hotspot may only have its reassertion fees reduced every 525k blocks (approximately once per year).

Furthermore, in order to help prevent abuse of the reassertion fee reduction, there will be a minimum distance of 10KM (between the original location to the reasserted location) requirement.

Finally, the reassertion fee reduction will only apply to those inserting their hotspots into Res8 hexes of < 3 (less than three) hotpots.

With the reassertion fees reduced to 500,000 DC, it would still require the average hotspot to spend approximately 10 days worth of mining for the reassertions.

Thus, the 500,000 DC fee in addition to the three aforementioned gaming prevention methods are still preventing excessive/unnecessary reassertions, while also making it easier for those that want to expand the network and actually move their hotspots locations to that end.

**To clarify all methods provided to help prevent location spoofing or gaming as a result of the reassertion fees deduction in summary:**

- This HIP only applies to **RE**assertions. Not the first assertion/onboarding. To clarify, the original/first location assertion price will not be changed, merely the reassertion prices (from the 2nd assertion and on.)
The average daily mining reward per hotspot is currently equal to around 18,500 DC; and it costs 1,000,000 DC to reassert a hotspot's location.

- This HIP only applies to those who are REasserting their hotspots to a distance equal to or greater than 10km (away from the original location point that is being changed). As a direct result, this HIP will not help those trying to increase their TS scales.
As a result, it would take more than a month for the average hotspot to earn enough to pay for one location reassertion.

- This HIP only applies to REassertions, equal to or greater than 10km away from the original location, and only to those who are reasserting their hotspots into Res8 hexes with less than 3 hotspots (equal to or less than 2 hotspots). This gaming prevention method will help enforce the core goal of this HIP, which is to ease the burden on those that are trying to expand the network.
Therefore, if we are trying to expand the network and want hotspots in saturated areas to move into less saturated areas (or moreover in lone wolf like areas), want to ease the burden on new people joining the network, and ease the burden on people making human errors, the current reassertion fee is not viable and needs to be reduced.

- The reassertion fee reduction will be limited to once per hotspot per year. Meaning, after a given hotspot's first reassertion fee reduction, said hotspot would need to wait 525k blocks (approximately one year) in order to be eligible for its second reassertion fee reduction. This gaming prevention method will ultimtately limit any potential abuse of the reassertion fee reduction to no more than once per hotspot per year.
Furthermore, in terms of the "this will help gamers/location spoofers," many gamers assert their hotspot’s locations inaccurately and will soon be caught by the new denylist algorithm (regardless of assertion fee cost). What do we need to identify the gamers/spoofers? Many more location assertions. How do we get more location assertions? By offering this (temporary) assertion fee discount.

- *All other location assertions, that do not meet the aforementioned requirements, will not have their assertions fee reduced.*
In order to help expand the network and accomplish obtaining (the aforementioned) location assertion data, I'm proposing that the reassertion price be reduced from 1,000,000 DC to half (which is 500,000 DC) for 3 (three) months post HIP 70's transition to Solana.

**This HIP will be implemented in two stages:**
Please note that I specifically chose 500,000 DC and not less (say 10,000 DC), to help prevent people from taking advantage of reduced reassertion fees, and to lessen the economic effect on the Network.

1) Upon community vote approval and upon the completion of HIP 70, the current 1,000,000 DC reassertion fee amount will immediately be reduced to 500,000 DC. Stage 2 will only be implemented if we see hotspots moving to a distance of 10km or greater, within Res8 hexes that contain less than 3 hotspots (post stage 1).

2) In order to dynamically meet the goals of this HIP regardless of the future oracle price, monthly rewards, and daily average DC earned per hotspot, the following mathematical equation/logic will be implemented.

- (((("monthly_reward"/100000000 *(dc_percent + poc_challengees_percent + poc_witnesses_percent)) / Active Hotspots) / 30 Days)* Oracle Price) * (8 / 0.00001) = Reassert Fee In DC.

Additionally, there will always be a minimum of 100,000 DC and maximum of 500,000 DC reassertion fee requirement that supersedes the above equation, using the following logic.

- IF "Reassert Fee In DC" > 500,000 THEN "Reassert Fee In DC" = 500,000

- IF "Reassert Fee In DC" < 100,000 THEN "Reassert Fee In DC" = 100,000

**To explain the mathematical equation/logic:**

(Average Daily Rewards Per Hotspots [HNT/day]) x OraclePrice[USD/HNT] x 8 [Days] x 100.000 [DC/USD] = Reassert Fee In DC.

In stage two, the reassertion fee will be dynamically calculated by what an average hotspot earns. These earnings change, depending on the monthly rewards target set by the HIP 20 halvings schedule, the number of active hotspots, and the price of HNT. This notwithstanding, the reassertion fee shall never be higher than 500,000 DC (5 USD) and never lower than 100,000 DC (1 USD).


**This HIP will be voted on as follows:**

1) Stage/phase 1 will be an HNT vote to cut the assertion fees in half for the first three months post HIP 70 to correct their hotspots locations, without any antigaming code. Since everyone will be warned that, if they do not correct their hotspots to their actual location, then they will be caught for spoofing/cheating and blacklisted. (This HIP will NOT blacklist hotspots.) The Foundation/Nova will also use the data derived from this for future antigaming/antispoofing proofing. After three months, the assertion fee will be reverted. If the vote is approved by the community, then this stage will be implemented via a simple chain variable. Therefore, no code is necessary for this stage.
If approved by community (HNT) vote, this HIP will reduce **all** assertion fees in half, for three months, beginning immediately upon the migration to Solana, and will revert back after three months.

2) Stage/phase 2 will be a veIOT vote, to determine whether or not there should be a permanent or ongoing dynamic level mathematical equation, determining the ongoing reassertion fees. (Allowed, based on whatever proper antigaming eligibility/criteria methods the Foundation determines appropriate at that time.) This stage requires a veIOT voting system, as well as antigaming and the dynamic level mathematical code. Additionally, it will help test the new veIOT voting system, and helps keep IOT in the treasury, which is beneficial for every IOT hotspot owner.
No new (blockchain) code is required, since this may be accomplished via chain variables. However, maker apps will have to update their apps to request the lower (500,000 DC) amount (at the start of the 3 month period,) and they will need to update their apps to request the original (1,000,000 DC) amount at the end of the three month period. That being said, makers are in essence being paid to make these changes, since the end result is that their 1st location/onboarding assertion costs will be reduced by 50%.

*Please note that this HIP does **not** impact 5G CBRS gateways & radios.*


# Drawbacks

Although the aforementioned gaming prevention methods will drastically reduce the possibilities of gaming as a result of the reassertion fee reduction, location spoofers may benefit from reduced reassertion fees. Nevertheless, it will be impossible for any given hotspot to benefit from the reassertion fee reduction more than once every 525k blocks (approximately once per year).
Location spoofers may benefit from reduced reassertion fees. Nevertheless, it will provide the necessary data for the new algorithm to catch dishonest location assertions.


# Rationale

Not doing this can possibly result in people who may have moved from an over saturated areas to much less saturated areas, but may not do so on the notion that the reassertion fee in and of itself would cost many months (if not longer) worth of mining. Additionally, without this HIP, the reassertion fee burden will not be lighter for those joining the network (for example people who purchase a second hand hotspot and need to reassert their location), and those who made human errors (such as "fat finger" mistakes of placing their hotspots into the wrong location accidentally).
Not doing this can possibly result in people who may have moved from an over saturated areas to much less saturated areas, but may not do so on the notion that the reassertion fee in and of itself would cost many months (if not longer) worth of mining. Additionally, without this HIP, the reassertion fee burden will not be lighter for those joining the network (for example people who purchase a second hand hotspot and need to reassert their location), and those who made human errors (such as "fat finger" mistakes of placing their hotspots into the wrong location accidentally). Furthermore, without this HIP, there may be many dishonest location assertions that will not be caught- due to the potential lack of (additional) location assertion data.

# Unresolved Questions

On the economic effect, burning less HNT as a result of reduced reassertion fees, has a negative economic impact. However, there may end up being more DC burned from more location assertions (than there were prior to the reassertion fee reduction.) Therefore, will this HIP impact the Network's economics negatively or positively?
# Unresolved Questions

On the UX side, the non-scoped factors are the work that is needed in various maker apps, ensuring that all hotspots can use the variable rate (depending on the aforementioned equation/logic). Additionally, if a maker decides not to respect the reassertion fee reduction amount, the chain may accept the higher fee amount (which cannot be undone).
Regarding the economic effect, burning less HNT as a result of reduced reassertion fees, has a negative economic impact. However, there may end up being more DC burned from more location assertions (than there were prior to the reassertion fee reduction.) Therefore, will this HIP impact the Network's economics negatively or positively?

As far as resourcing, who will build/write the code?

# Success Metrics

Success may be measured, once we see MORE hotspots moving to a distance of 10km or greater, within Res8 hexes that contain less than 3 hotspots.
Success may be measured, once we see more location assertions occurring than there were prior to the implementation of this HIP.