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Slight distribution spec cleanup

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Aleksandr Bezobchuk 2018-11-11 15:51:27 -05:00
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docs/spec/distribution/overview.md
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## Overview
This _simple_ distribution mechanism describes a functional way to passively
distribute rewards between validator and delegators. Note that this mechanism does
not distribute funds in as precisely as active reward distribution and will therefore
be upgraded in the future.
This _simple_ distribution mechanism describes a functional way to passively
distribute rewards between validators and delegators. Note, that this mechanism does
not distribute funds in as precisely as active reward distribution mechanisms and
will therefore be upgraded in the future.
The mechanism operates as follows. Collected rewards are pooled globally and
divided out passively to validators and delegators. Each validator has the
opportunity to charge commission to the delegators on the rewards collected on
behalf of the delegators by the validators. Fees are paid directly into a
global reward pool, and validator proposer-reward pool. Due to the nature of
passive accounting, whenever changes to parameters which affect the rate of reward
distribution occurs, withdrawal of rewards must also occur.
behalf of the delegators. Fees are collected directly into a global reward pool
and validator proposer-reward pool. Due to the nature of passive accounting,
whenever changes to parameters which affect the rate of reward distribution
occurs, withdrawal of rewards must also occur.
- Whenever withdrawing, one must withdraw the maximum amount they are entitled
too, leaving nothing in the pool.
- Whenever bonding, unbonding, or re-delegating tokens to an existing account, a
- Whenever withdrawing, one must withdraw the maximum amount they are entitled
too, leaving nothing in the pool.
- Whenever bonding, unbonding, or re-delegating tokens to an existing account, a
full withdrawal of the rewards must occur (as the rules for lazy accounting
change).
- Whenever a validator chooses to change the commission on rewards, all accumulated
- Whenever a validator chooses to change the commission on rewards, all accumulated
commission rewards must be simultaneously withdrawn.
The above scenarios are covered in `hooks.md`.
The distribution mechanism outlines herein is used to lazily distribute the
The distribution mechanism outlines herein are used to lazily distribute the
following rewards between validators and associated delegators:
- multi-token fees to be socially distributed,
- proposer reward pool,
- inflated atom provisions, and
- validator commission on all rewards earned by their delegators stake
- multi-token fees to be socially distributed
- proposer reward pool
- inflated atom provisions
- validator commission on all rewards earned by their delegators stake
Fees are pooled within a global pool, as well as validator specific
proposer-reward pools. The mechanisms used allow for validators and delegators
to independently and lazily withdraw their rewards.
## Shortcomings
## Shortcomings
As a part of the lazy computations, each delegator holds an accumulation term
specific to each validator which is used to estimate what their approximate
fair portion of tokens held in the global fee pool is owed to them.
fair portion of tokens held in the global fee pool is owed to them.
```
entitlement = delegator-accumulation / all-delegators-accumulation
```
Under the circumstance that there were constant and equal flow of incoming
Under the circumstance that there were constant and equal flows of incoming
reward tokens every block, this distribution mechanism would be equal to the
active distribution (distribute individually to all delegators each block).
However this is unrealistic so deviations from the active distribution will
However, this is unrealistic so deviations from the active distribution will
occur based on fluctuations of incoming reward tokens as well as timing of
reward withdrawal by other delegators.
reward withdrawal by other delegators.
If you happen to know that incoming rewards are about significantly move up,
you are incentivized to not withdraw until after this event, increasing the