Developers Forum for XinFin XDC Network

Increasing the Security and Decreasing the Supply of XDC

duts on November 10, 2022

Introduction   I propose that we increase on-chain transaction (TX) fees.   I see two general reasons for doing this, which I’ll address first, in ...
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james_love_23979d134fec2b profile image
James Love

Absolutely YES !

I propose we simply make the transaction fee 0.01 XDC ... that is easy to remember as it's like a penny in relation to 1 USD ... so easy for old and new community members to pass along for clarity

0.01 xdc tx fee would be a 25x increase from the current 0.0004 and so even at a future price of 1 USD per XDC, the tx fee is still just 1 cent ($0.01 USD) per tx and would raise the DDoS attack cost to over $50k even at the low current xdc price with this rising to over $1M when each xdc is worth $1 or more

I think it is currently ridiculous that a layer 2 can mint hundreds of NFTs for less than 1 xdc ... there is an economy here and an exchange of value ... XDC Network provides way more value than we are currently charging and while we don't want to be anywhere near ETH levels, it's not healthy for any economy to give services away as eventually the network becomes poorer.

In any empire, when the money (xdc) deteriorates then the vibrancy of the community goes down which then leads to weakness and someone stronger taking its place.

Let's keep this a win-win for everyone with XDC HODLERS being rewarded for providing decentralization for a great price and super fast speed without putting ourselves in a position of weakness.

Thanks Dust!!

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Salomon Morales

I vote YES, with the following comments.

Part 1 A / B and Part 2:
Keeping the network secured should be paramount and I believe we should take any opportunity to keep the network secured. Increasing the tx fees is a good way to tackle the low hanging fruit. I'm leaning towards the higher side but with the capability of reducing the fees as price of XDC increasing. We don't want to become the next ETH in high transactions fees, while remaining competitive with other EVM and non-EVM chains that advertise low transactions fees. Having the ability to adjust the fees as price of XDC increasing will be appealing to anyone looking to build on XDC or use XDC as the choice of moving money for instant settlement. We also have to think about Dapps with deflationary systems that will add to the burn ratio of the total supply. We don't want to have an over-burn and cause a STRONGBLOCK issue where they burned too much of the supply and they had to reinvent another token to overcome their issues (extreme example of course but it can happen).

Part 3:
Absolutely yes. Part of decentralization is being able to utilize the smart contract feature of the network for the payouts of the nodes that support the same. Depending on an entity or person(s) for the rewards of the network brings SO many issues that can take the entire network down entirely. I believe addressing this issue should be done before addressing the tx fees increase or simultaneously if possible. The idea that Ronny proposed about NFT's to represent the nodes should be considered as this can address some of the requests that have been made in the past. The opportunity to be able to transfer a node from one party to another, whether a business or person. The NFT should represent the 10 million XDC locked on the node. I had a conversation with the CEO of a layer 2 recently that is doing something very interesting with NFT's and I think this idea should be adopted for the nodes. I can't share publicly as this is not yet public for the layer 2, but I believe it's an amazing idea and opportunity to adopt the same for the nodes supporting the network.

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duts profile image
duts Author

Thanks Sal - really great points.

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arura_mane_bdab97b8a1e6015d profile image
Arura Mane

Vote =YES

Please consider add Airdrops for holders from new projects

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Arnaldo Scapin Jr

Vote = SIM

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Jon McBee

VOTE = YES

This post has two proposals. 1. Increase tx fees, 2. Introduce burning mechanism to tx fees.

  1. Increase tx fees has two proposed benefits. A. Make DDoS attacks more expensive, B. Explore funding Masternodes with tx fees.

  2. Introduce burning mechanism has one proposed benefit. A. Increase deflationary pressure on tokenomics.

1.A. I think it is important to recognize this as an issue and to figure out a solution to the problem. I don't know if a static tx fee is the solution here or if we need a dynamic fee that responds to tx rate per block (similar to EIP-1559: github.com/ethereum/EIPs/blob/mast...). I think that it needs to be difficult to change the tx fee, so if tx fee becomes a variable that can be set with a protocol upgrade there needs to be a high bar for justification for changing it. We also need to be cognizant of other discussions around tx fees, for example there is an active proposal to upgrade the XDC Network EVM, and this proposal discusses adopting changes related to tx fees: xdc.dev/gary/proposal-on-evm-upgra...

1.B. You are correct that the centralization (both funding and payment mechanism) of masternode reward payouts is an issue that needs to be addressed. One variable that we need to be aware of is that proposals for changes to masternode count and reward amounts are being actively proposed (xdc.dev/riteshkakkad/xdc-network-p...). I think that masternode count/type/rewards should be considered dynamic right now, and that considerations around how/if masternode rewards are subsidized has to wait until proposed changes to masternode count/type/rewards are settled.

2.A. I think that introducing a burning mechanism to tx fees is less important 1.A. and 1.B. Tokenomics is very complicated; increasing the burn will add deflationary pressure to the token supply, which may lower transaction count as existing holders are less incentivized to spend XDC whose price they expect to go up with increased burn, which may lower liquidity of XDC, which may decrease the perceived value of builders looking to select a network to build on. Or maybe not, it's almost impossible to predict (at least for me). There is also the possibility that dApps can elect to burn XDC by sending it to xdc0000000000000000000000000000000000000000, which is important because it shows that burn can't be controlled purely at the protocol level. All I'm saying is that Tokenomics is very complicated.

Given the above statements I would be in favor of moving any discussion around Burn to a different proposal. I know it is convenient to try to kill two birds with one stone, but I don't think it will be efficient.

Lastly, if this vote passes then it will require a group of people willing to champion this idea through the XIP process. I vote for two XIPs, one focused on tx fee increase mechanism and a second focused on introducing a burning mechanism to transactions.

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duts profile image
duts Author

Great, great points. Yes, the proposal was a bit unclear on this front. To be clearer, as I said in the conclusion (but not in the introduction, which I'll go ahead and edit slightly now), the current proposal and vote is ultimately only about this: do we want to increase TX fees, yes or no? How much to increase the TX fee, and how much or (even whether) to burn, depends on the yes votes winning here ... so we'll have separate proposals and votes on those issues sometime down the road, once this more fundamental question is settled by the community. Thank you Jon!

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sean_ profile image
Sean • Edited on

VOTE = YES !

At current value, I don't think anyone would be against the proposal because even after the 20x increase the fees in dollar value comes to around $0.00024 but what will happen when the value of XDC increases to a dollar or may be 50 cents.

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duts profile image
duts Author

Yes, great question - as I said above to Ronnie, I'd personally like to have an option to change the fee (by a vote) as market conditions change. But I'll game plan out the various scenarios in a subsequent, more technical proposal, if this one passes.

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sean_ profile image
Sean

Thanks @dust

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sloppysubie profile image
Jamiefili

Increasing the transaction cost to keep the network secure and minimize inflation would be a great thing.

However, i'd like to see an implantation of fees exactly like hedera. Having a fixed fee denominated in USD like 0.01$ usd or 0.001 usd would be great for enterprise and just overall user awareness.

I also believe the consensus should be strong enough to help with security such as the upgrade to XDPoS 2.0 with a BFT.

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duts profile image
duts Author

It's a good idea. We'll have a subsequent proposal/vote on exactly how to structure the higher TX fees. For now, the question on the table is just: do we want to increase the fees?

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Jonathan

Vote = YES

Dust,
There have been some great points brought on by Jon, Salomon, James and Ronald, so I don't need to hammer home the importance of network security, longevity, and decentralization. With that said, I strongly agree with Jon this should be separated into two proposals.

Moving forward with increasing tx fees will require evaluating the EVM migration with existing EIPs and propose the upgrades as an XIP. This will take a team and considerable work, but it's the right thing to do. I will volunteer my time to support you in this effort.

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Troy S. Wood

Vote = YES

Thank you Dust!

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desmond_seeger_3a8a1bc8aa profile image
Desmond Seeger • Edited on

Before I cast a vote on yes or no.

May I ask ask the below questions and get some answers.
How does Ripple or Stellar Lumens overcome the issues of DDOS attacks?
Also what is stopping XinFin using SaaS masternodes?
The good thing of SaaS is high availabilty of the services and you can span your network across various geographical locations, without having to rely on someone keeping a node up and running, whilst trying to ensure that the machine has the latest antivirus and ensuring high availability without major downtime.
You basically take control of what the requirement, the node must meet. You can also scale your network up and down accordingly.

If you can mint more XDC to reward spun up masternodes, that also gives me the impression that more XDC can be minted and can be injected into the XDC token supply. Instead of minting more XDC, why not reward masternodes with a stable coin value, of what it costs to maintain the node, and offer a small bonus to ensure the person keeps on looking after the node?

I was under the impression that supply and demand drives prices and if you can keep on minting an unlimited amount of tokens, what will be the cost of per XDC token be in five to ten years from now?

In the future I wouldn't really want to transfer 33000 XDC tokens to settle a $1000 bill, I would prefer to see 1000 XDC to settle $1000 bill with very low transaction fees.

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duts profile image
duts Author

Good questions.

Re: XRP/XLM, the main thing is that while their TX fees are quite low, their absolute value relative to the dollar is quite high. So the cost of a DDoS/DoS attack is going to be much higher.

Re: SaaS, we've got that already - XDC nodes are spread all around the world, with many hosted by cloud computing companies.

Re: minting, please note, new XDC cannot be minted on-demand, that's impossible; a small amount of XDC is minted automatically to reward nodes every 2 seconds or so (this is typical in PoS networks for the reasons I discuss above), but nobody can flick a switch and mint XDC.

Re: rewards for nodes, the dangers of a reward program like the one you suggest are discussed in my post as well as Jon McBee's post above.

Finally, please note that the only question on the table now is whether to increase TX fees. All of these other questions are related to that question in various ways, which is why I brought them up, but we'll have further discussions and proposals and votes to hash out the specifics of any increase.

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desmond_seeger_3a8a1bc8aa profile image
Desmond Seeger

Hi Dust

Thank you for your response.

My vote is yes to increase the tx fees, only if increasing tx fees significantly reduces the amount DDOS attacks from happening on the Xinfin network.

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lance profile image
Lance Lilly • Edited on

I believe XRPL proof of consensus mechanism has network fees fluctuate with demand on the network, which is still minimal.

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lance profile image
Lance Lilly

Yes

We need to get the Masternode payment situation fixed. Raising transaction fees can fix this. Even with an increase, fees would be very minimal. I believe HBAR has a set amount for certain types of transactions, with a set USD equivalent paid in HBAR. I only mention this because our fees are currently still a lot less than HBAR, and even that amount is still accepted as very cheap. Raising our network fees in the amount we are exploring would keep us amongst the cheapest, and bring many benefits to the network.

This is a definite YES from me.

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ronald_mitchell_0de6c6219 profile image
Ronald Mitchell

Yes!
I would lean towards 20x increase however also have a function to increase or decrease later. Once price per XDC reaches $1-$2, the 20x May actually be more than institution/enterprises wish to pay at 100k tx per minute. Especially when we have pitched "Near Zero Gas Fees" for 3-4 years.

I also suggest when creating the decentralized payout for nodes, we utilize NFTs with a redeem feature. This allows the NFT to accept rewards, not the wallet, therefore it's not a taxable event until the owner redeems rewards.

He may choose 1x a month or 1x a year for organization on taxes. He may chose 1x every 4 years and try to time the bottom of market to avoid costly taxes. It's the choice of the NFT holder.

When this takes place I also suggest offering validator nodes and standbys a time period to change wallets and add more security to the network. (Maybe requires an additional proposal)

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duts profile image
duts Author

Great suggestions.
Also, yes - personally, I think the best way forward is probably to ensure that we can change the TX fees as needed. So, when the price of XDC is way up, we can lower the fees again if necessary. Adaptability.

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xxundertoesxx profile image
Under Toes

Whilst I support a marginal increase in tx fees for the above stated reasons, one important feature we could also consider leveraging from the xrp ledger to increase security and mitigate ddos risks is the fact that wallets require a certain amount of xrp tokens to be locked to active a wallet. This significantly increases the cost of an attack over and above the transaction fee itself and reduces some of the excess liquidity. Maybe we could find the right balance between tx fee increase and a reserve amount of xdc to activate/ maintain a wallet to help solve the above.

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duts profile image
duts Author

Good suggestion. In future proposals, we'll carefully consider all available options, including this ones.

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xxundertoesxx profile image
Under Toes

Yes but, even a marginal increase in tx fee is not significant to deter a ddos attack that could lead to millions + in damages or theft. If this proposal is partially about security, why not include it in this proposal? If we are not addressing security properly in this proposal, it becomes less about security and more focused on increasing rewards for masternode holders...

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duts profile image
duts Author

There are a number of decisions we'll have to make going forward. For now, I've only proposed increasing the TX fees. There are a number of possibilities that open up after we increase the TX fees, like establishing a burn and changing the way in which MNs are rewarded, but those are big decisions, which require additional proposals and votes. For now, you're simply voting on whether to increase TX fees (security being the main reason for that). Later, if this vote passes, we'll vote on how much to increase the fees by, the burn, and the MN rewards.

Thread Thread
xxundertoesxx profile image
Under Toes

I agree we need to address security 100% and i thank you for your time and effort you have put into this proposal, but this feels like we are approaching it from the bottom up and figuring it out as we go along as opposed to a top down approach where we have a more complete vision in mind and are executing on individual proposals that work towards that more complete vision.

I vote against this proposal for now, though assume I'll be out voted, however in the future regardless of outcome, I would be happy to work with you to frame subsequent proposals in a different way that present a more complete vision.

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ravikumar_j_5016c023f6919 profile image
Ravikumar J

Absolutely YES

Though XDC Network can continue with this negligible TX fee, but if it's at cost of network Security and spam then increasing TX fees to an optimum level is a must but with flexibility to change in future keeping XDC Value in future.

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s4njk4n profile image
s4njk4n

Vote = Yes

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xxxxx_xdc profile image
xxxxx.xdc

vote = yes

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inv4fee2020

Vote == Yes

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poetclbrown profile image
Author & Poet C.L. Brown

Vote == YES

I won't comment much because I read other comments and other made some excellent points which I won't simply echo. However, I'd like to point out 1 comment which suggested a fix price transaction fee in USD such as $0.01 or $0.001. I told think this will facilitate institutional adoption because the fees to transact are predictable. I also think it would be a great idea to implement a mechanism where by the fee can be increased or decreased by community vote should the price of XDC increases or decreases significantly from it's current price. Deflation is a great thing and security is a necessary thing. Let's get this done!

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XsinMyFuture

VOTE = yes

I agree that a TX fee increase will not only contribute to the added security of the xdc network but even if we 25x it (lets say to 0.01 xdc) we're still going to remain competitive within the ecosystem.

Especially compared to cryptos such as ethereum whilst adding the extra security which is needed.

On that point, I agree with other people that we need to be careful on the burn mechanism because we don't want to burn the entire supply and like someone mentioned (have a strongblock situation where we're screwed) don't forget our huge supply is warranted due to the large market in which we're placed.

Overall, I vote YES.

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felix__2c0c6bbc65c605ba1 profile image
Felix Golden Hand

VOTE Yes

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mogithehurt

VOTE = YES
increase TX fees 10x

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mapartha profile image
Parthasarathy M A • Edited on

YES.
But there should also be a mechanism to regularly adjust the transaction fees based on the market price of XDC, when the price increases substantially.

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joshtb3

Vote= YES

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Darren Scholes

Yes

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Supersnips

YES.

We should also look into dynamic price mechanism - with this there should not be a need to change the fees again in future when the XDC Price increases.

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Sauce Kempsey

YES

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Marko Daniell

Vote == Yes

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Clayton K

Yes

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Frederico Macedo

Yes

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andre_casterman_d0f667c4f profile image
Andre Casterman

Vote = YES

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cryptoinvestidor profile image
Crypto Investidor

I VOTE YES!

But is important create a mechanism to ajust the fees price when the price of xdc goes up or this can be a problem in a future where xdc would cost 5 or 10usd per xdc.

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Sdslash

Vote = Yes

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ederson_acclaudiano_981 profile image
Ederson A C Claudiano

yes, for sure it will be great for XDC

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Matthias Büxenstein

Absolutely YES…

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s_xdc profile image
S.

I agree there is a need to distinguish between a standard tx fee increase and burn. Doing so makes it easier to weigh in. Regarding the former, My VOTE: YES.

Moderately increasing tx fee requires less consideration & brings clear advantages to the network.

Regarding burn, I am open to this as well but feel it needs further discussion. I acknowledge my response comes after the deadline (it escaped me), but I hope my vote is still considered.

Either way, seems I share the opinion of the majority. TX fees up!

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madhusudan_6ceb620806e67f profile image
madhusudan

Vote - Yes

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Erlam Castanho

Absolutely YES.

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Marlon Souza

Vote YES

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jared_hughes_76d004ebf2e2 profile image
Jared Hughes

I vote yes to each proposal

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Elton Ventreschi

I vote yes!

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Mike Cotter

I vote YES

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everton_miller_a8b8b097ca profile image
Everton Miller

vote = yes

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Timothy Burns

Vote = yes

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marshall_evans_14d57d5444 profile image
Marshall Evans

Yes

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Global Citizen

Vote =YES

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pb profile image
Peter Brooke

Vote = YES.

As mentioned here "near zero gas fees" is one of the attributes that makes this a compelling platform on which to transact, so this statement needs to remain demonstrable as the price of XDC increases.

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Joel Ibison

I vote Yes

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John Rhodel Bartolome

YES

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pancudaniel7 profile image
Daniel

VOTE = YES

I believe that the security aspect is far more important in this context for most applications using XDC Network.
Without a doubt, we need this, for me is a 'YES'!

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AnilChinchawale

Vote : Yes....

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junior_a22e581635cdc93810 profile image
Junior

Sim!!!!!

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duts profile image
duts Author

Sorry ... Is that a yes, or a no?

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junior_a22e581635cdc93810 profile image
Junior

Yes!

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Mr.Danbo01

It's a good idea
I vote = Yes

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Raynaldo Martine

After Passage, how soon for the votes on other proposals?

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duts profile image
duts Author

I couldn't give a certain timeline at this stage - lots of moving parts and work to do. Couple weeks is my best guestimate.

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Raynaldo Martine

YES!

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jeremy_dinn_e13acebe38141 profile image
Jeremy Dinn • Edited on

Vote=Yes

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jeremy_dinn_e13acebe38141 profile image
Jeremy Dinn

Vote=yes.

Please disregard if you see me again in here. Obviously one vote for yes. Just didn't see mine post

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Michel

yes

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ShangleSlanger

YES!! For sure!!
I don't think the fee should go crazy but I basically agree with James Love's comments below and believe we should increase the TX fee on XD between 5-25x

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Donizete Waterkemper

Vote =YES

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Adam Turski

VOTE = YES

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Gabriel Lourenço

I vote YES

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立野雄一郎

YES

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Nikos Chondromatidis

Vote =YES

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JackBTCx

Vote - Yes
20x affirmative TX increase.

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Boris XDC

VOTE = YES

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Douglas Felipe

I vote yes to the proposal presented!

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BilboBaggins

Yes

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Marcin Mikolajczyk

Vote = YES

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Robison Reis

I vote yes

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Alex See

Vote = YES

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Warriors Golden State

I vote YES cause future proofing and security the network is very important.

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XRP CULT589

Yes

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steven_mesiano_f8b5254d31 profile image
Steven Mesiano

I vote YES. Maybe at a slightly higher than a 20x. If we want to avoid these attacks then let's do so.

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inlit

VOTE = YES

In reference to discussions, I prefer the fee to remain in native currency, or at the very least an agnostic currency.

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TigerWhitehead

Vote = YES

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Malachi Hall

Vote = YES

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Andrea Frosinini

My Vote = YES

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leandro_ebdeac3286c0a4591 profile image
Leandro

Yes

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Eddie Cullen

Absolute YES!

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Wilmar Jr

YES

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Maciej Ajewski

100% support this proposal
YES

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Chris Wanek

Yes.

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Dannis Latiolais

Vote = Yes

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Crypto Ready

My Vote = Yes 1000%

Please subscribe to my YT channel for the latest daily updates on #XDC:

youtube.com/channel/UCO-jCUSvh3yos...

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Jenny Tremblay

Vote = YES

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MalossiMHR

Vote = YES

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A C

Vote =YES

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