Stacking Protocol: Adjusting Reward Threshold Based on Participation

#1

Working through some examples from this section of the SIP along with with @trudko and @whoabuddy :

Each reward cycle may transfer miner funds to up to 5000 Bitcoin addresses. To ensure that this number of addresses is sufficient to cover the pool of participants (given 100% participation of liquid STX), the threshold for participation must be 0.02% (1/5000th) of the liquid supply of STX. However, if participation is lower than 100%, the reward pool could admit lower STX holders. The Stacking protocol specifies 2 operating levels :

  • 25% If fewer than 0.25 * STX_LIQUID_SUPPLY STX participate in a reward cycle, participant wallets controlling x STX may include floor(x / (0.00005*STX_LIQUID_SUPPLY)) addresses in the reward set. That is, the minimum participation threshold is 1/20,000th of the liquid supply.
  • 25%-100% If between 0.25 * STX_LIQUID_SUPPLY and 1.0 * STX_LIQUID_SUPPLY STX participate in a reward cycle, the reward threshold is optimized in order to maximize the number of slots that are filled. That is, the minimum threshold T for participation will be roughly 1/5,000th of the participating STX (adjusted in increments of 10,000 STX). Participant wallets controlling x STX may include floor(x / T) addresses in the reward set.

In the event that a Stacker signals and locks up enough STX to submit multiple reward addresses, but only submits one reward address, that reward address will be included in the reward set multiple times.

The threshold rounds to 10,000 STX, and it always rounds up.

Working examples

1:

  • 25% If fewer than 0.25 * STX_LIQUID_SUPPLY STX participate in a reward cycle, participant wallets controlling x STX may include floor(x / (0.00005*STX_LIQUID_SUPPLY)) addresses in the reward set. That is, the minimum participation threshold is 1/20,000th of the liquid supply.

Assuming STX liquid supply = 604520201 STXMinimum participation threshold = 30226 STX

If someone had 100,000 STX, the equation is floor(100,000 / 30226) so they can control 3 addresses in reward set And the bare minimum participation threshold in this example will not ever decrease from 30226 STX, but will increase over time as STX are mined. This has been confirmed as correct.

2:
If someone is stacking 500,000 STX at 40% participation level assuming 604520201 liquid STX ( where 40% of 604520201 is 241808, and 1/5000th of 241808 is 48361, and the 48361 is rounded to 50,000), the correct equation is to determine floor(500,000 / 50,000) = user can submit 10 stacking addresses. This has been confirmed as correct.

Last bit of confirmed information just as an FYI:

The act of sending a delegation or stacking transaction on the STX chain (which is the default behavior) will require a STX transaction fee. But, we can also Stacking transactions on the Bitcoin chain as a fallback

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