Highlights
IISS 4 is a series of upcoming network proposals, originally introduced by Lydia Labs, intended to improve our network in the following ways:
- More Decentralization: Increasing the number of people who produce blocks. This makes our network stronger and less likely to fail or be attacked.
- Better Rewards: Ensuring validators (the people who help secure our network) and their supporters are rewarded only when they’re actively contributing to the network’s security.
- Stronger Penalties: Adding new penalties to discourage any harmful actions and to keep our network safe and secure.
Timeline
The most important event for validators and community members is the IISS4R0 network proposal. If this passes, validators will need to set their commission rates. Community members may want to change who they are delegating to based on the newly set commission rates.
For more information, see the up-to-date schedule here. Note that IISS4 changes are currently live on testnet and the schedule is subject to change if bugs are found during testing.
Background
With ICON Incentive Scoring System (IISS) 3.0 and 3.1, we set out to create a more collaborative environment that aligns the network’s interests with those of its participants. The introduction of bond requirements, slashing penalties, and the contribution proposal system were key steps toward achieving this goal.
Several months ago, Lydia Labs put out a temperature check on their proposal to change the ICON monetary policy to improve the decentralization and sustainability of the ICON network. This proposal was approved by all of the validators who voted, which was 20 out of 25 of them. Now, we are in the final stages of the development of the policy changes. For more information about when the changes will be rolled out, please see the timeline.
Decentralization
IISS 4.0 includes changes to the number of validators involved in block production. By adjusting the number of validators to distribute block production more evenly across the network, more entities will be given the opportunity to participate in block production while maintaining a fast block time.
These changes are a step towards a more decentralized and robust blockchain ecosystem, ensuring that no single entity has disproportionate control or influence over the network.
- Total number of validators per block to increase from 25 to 28.
- Number of fixed validators to decrease from 22 to 19.
- Number of rotating validators to increase from 3 to 9.
Rewards
IISS 4.0 includes changes to the financial incentives of validators to better align with their role in securing the network. Validators receive rewards from block production and can charge commissions to voters, while the remaining tokens are distributed back to voters.
However, jailed validators or those without the required bond receive no rewards, and neither do their voters (more on that in the Penalties section below).
These changes help motivate validators to maintain a secure and reliable network, while also giving voters a clear reason to support validators that actively contribute to network security.
Inflation Allocations (%)
| Parameter | IISS 3 | IISS 4 | Notes |
|---|---|---|---|
| ivoter | 77 | N/A | ivoter is merged to iprep in IISS 4 because prep sets commission and the rest of their allocation goes to their delegates |
| iprep | 13 | 85 | |
| iwage | N/A | 5 | iwage is newly added. For more information on iwage, see the Minimum Wage section below. |
| icps | 10 | 10 | |
| irelay | 0 | 0 |
Commissions
Previously, voters’ ICX reward came from the ivoter parameter of inflation allocation. With IISS 4.0, voters’ ICX reward comes from the iprep parameter. PReps set how much of the iprep allocation they take for themselves, or their commission, and give the rest to their delegates.
Minimum Wage
Eligible validators can receive a minimum wage to help ensure their operations are profitable or at least close to break-even.
- Eligibility: The top 100 validators that are not jailed with at least 10,000 ICX bonded are eligible for minimum wage. If there are fewer than 100 eligible validators, the minimum wage will be distributed among those eligible. Minimum bond is set by on-chain governance and part of the upcoming network proposals is to set it to 10,000 ICX.
Note that the total inflation rate, the percentage of inflation allocated for minimum wage, and the maximum number of eligible validators are variables that can be adjusted through on-chain governance processes.
Penalties
We’re introducing some new penalties to keep validators accountable. These include penalties for missing blocks, repeated validation failures, double signing, and ignoring network proposals. We want to maintain a healthy environment where everyone plays by the rules to uphold the network’s best interests.
- Penalized validators will be “jailed,” or removed from consensus until they signal readiness with an unjail transaction and validate a block on their next turn.
- Rewards that a jailed validator would have received are instead burned.
- A jailed validator’s position is replaced by a sub-validator with the highest power.
- Validators who are disqualified via the P-Rep Disqualification Proposal will have their bond slashed by 100%.
- Validators who sign two votes at the same block height and round will be jailed and have their bond slashed by 10%.
- Validators who do not vote on a network proposal will have their bond slashed by 0.01%.
- Validators who miss 660 consecutive blocks within a term will be jailed.
- Validators who miss 660 consecutive blocks 3 times over the span of 30 participating terms will have their bond slashed by 0.01%.
The proposal to activate these penalties will be proposed 3 months after the Revision is set to IISS4R1, which is tentatively May 15, 2024.