- Author(s): @therealjohnmac50
- Start Date: 2022-07-24
- Category: Economy
- Original HIP PR: #453
- Tracking Issue: #458
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 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 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.
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.
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 more than 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 fee is not viable and needs to be reduced.
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.
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.
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.
If approved by community (HNT) vote, this HIP will reduce all location assertion fees in half, for three months, beginning immediately upon the migration to Solana, and will revert back after three months.
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 ($10) location/onboarding assertion costs will be reduced by 50%.
Please note that this HIP does not impact 5G CBRS gateways & radios.
Location spoofers may benefit from reduced reassertion fees. Nevertheless, it will provide the necessary data for the new algorithm to catch dishonest location assertions.
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.
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.) Thus, the question remains, will this HIP impact the Network's economics negatively or positively?
Success may be measured, once we see more location assertions occurring than there were prior to the implementation of this HIP.