[Proposal Idea] Incentivized Testnet Proposal: Casper Network Testnet Rewards Program (Feb 03 - June 30, 2025)

Proposal Discussion Proposal Ideas
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Background

This is a follow-up proposal, meant to be an iterative improvement on top of the proposal [CVV001] Incentivized Testnet Proposal: Casper Network Testnet Rewards Program (Nov 11 - Dec 31, 2024)

Initial goals

  1. A Testnet that more closely resembles an aspirational version of Mainnet, with a healthy mix of TTL and Genesis nodes, validating and non-validating.
  2. No more “black box” performance tracking - the only performance metric that will be used is entirely on-chain, and verifiable
  3. Fair and predictable compensation
  4. No more Sybil’s
  5. Fair access to participation
  6. Better enable one of the primary use cases of Testnet: allowing mainnet validators to test their set-ups, get access to releases prior to mainnet activation and optimize their mainnet service in a “risk-free” environment

Constraints

  1. The budget is set.
  2. The quarterly cadence is set
  3. While the protocol is permissionless, the Testnet Program is not. This proposal provides for equal opportunity of access to anyone, but doesn’t guarantee access as an inalienable right to anyone. The number of quarterly participants will be capped at 100 validators and 10 backup validators (full nodes).

Improvement suggestions from the community

  1. Keep the payment schedule and budget quarterly, but make application and selection biannually for stability, to reduce overhead, and help node operators manage their dedicated server subscriptions more efficiently. If there are enough applicants to run a lottery, select additional 20 TTL validator candidates, to be called up in case of need to fill empty slots.
  2. Clarify the lottery/node-selection process further to avoid ambiguities and confusions. Further context: Telegram: Contact @CasperTestNet
  3. Try to clarify the conditions of failure for TTL validators further regarding the monthly average performance metric. If a node joins the network for the first time, they don’t have a history of 360 eras, so their visible performance on CSPR.live may drop too fast in case of issues. Further context: Telegram: Contact @CasperTestNet
  4. Clarify that in case of gaps between the current proposal and the next one, the Testnet management has a preapproval to extend the rewarding period up to 1 month to ensure continuous stability of the network.
  5. Further separate the validators and the archival nodes for stability of the network and the reliability of service. It has been observed that archival nodes are not able to keep up with the validator duties and the rpc service at the same time. So do not require archival nodes to have active bids.
  6. Lower the monthly average onchain performance criteria to 98%.

The Proposal

Overview:

The Casper Network had introduced a Testnet Rewards Program for the two-month period from November 11, 2024, to December 31, 2024. The program rewarded validators for their contributions to maintaining and improving the Testnet.

Now the Casper Network introduces a follow up period of Testnet Rewards Program for the 5-month period from February 03, 2025 to June 30, 2025.

Moreover, to ensure the continuous stability of the network, the last rewarded term has been extended for 1 month with the same rules, covering the time between January 01, 2025 and February 03, 2025.

Program Structure:

1. Application Process:

Application Deadline: January 26, 2025

Application Platform: Validators must apply via an online form, collecting the following:

  • Name and Surname
  • Email Address
  • Cryptographic Signature (used for email verification)
  • Up to 3 Public Keys for the validator
  • Type of Validator Preference:
    • TTL Node (Time to Live)
    • Full Archival Node
    • Any (if the applicant is open to either type)
  • Mainnet Validator Status:
    • Are you a mainnet validator? (Yes/No)
    • If yes, provide your Mainnet Validator Public Key.
  • Are you a Top-30 Mainnet Validator? (Yes/No)
    • If yes, would you like to opt into one of the 15 reserved slots for Top-30 Mainnet Validators?
    • If yes, do you want to receive up to EUR 50 per month, or do you prefer to participate without any incentives? (Yes/No)
  • Basic Questions testing knowledge of official validator documentation.
  • Telegram Username
  • Twitter Profile Link

Lottery Selection:

  • The lottery will take place on January 27-28, 2024, using an online tool or on-chain contract for transparency.
  • Up to a total of 100 validators and 10 full nodes will be selected (after filling up-to 15 slots with the top-30 Mainnet validators).
  • If the number of applications is insufficient, an additional lottery will be hold among the same applicants to fill the vacant slots.
  • If the number of the applicants are more than 100, 20 additional public keys will be selected through lottery, to fill the vacant spots in case of KYC failures during the onboarding of the originally selected TTL validators, or in case of need later on during the rewarded period. (Validator candidates are not required to start their nodes until they are called for duty, and they will not be rewarded while waiting in the candidates queue.)
  • If the number of applicants is low to allow placement of all of them into vacant slots, then there will be no lottery, but manual placement.
  • Both manual and lottery placement will give priority to choices in this order: 1st choice > 2nd choice > 3rd choice.
  • Each applicant has a chance to be placed with only 1, or 2 or all 3 of their choices based on the pool of the applicants.

KYC Verification with Video-Based Liveness Check:

  • Selected validators will undergo KYC verification, including a video-based liveness check, from January 27 to February 02, 2025.
  • Incorporated parties may be offered the KYB option as well, based on the feasibility and availability of the operational tooling. Please indicate your status and wish to go through KYB immediately after the lottery, by sending an email to casper-testnet@make.services, no later than 24 hours after the announcement.
  • Node operators who passed KYC during the previous term will not need to go through KYC again if they register with the same primary (first choice) public key and the same email address as before.
  • Every applicant has 3 attempts with their invite links to pass KYC. There will not be additional invites for failed KYCs, and the applicant who fails KYC will be disqualified.

2. Incentives and Node Categories:

Nodes will be divided into the following categories:

  • 10 Full History Nodes (Archival Nodes): Node operators maintaining historical data are eligible for EUR 200 per month, provided they give proper responses to random checks through the RPC and or the SSE ports for existence and availability of historical data. These nodes will serve as data keepers of the network, and will not be in the active validator set. They will have their 7777, 8888, 9999 and 35000 ports open to public with LIMIT firewall rule.
  • 100 TTL (Time to Live) Validators: Validators maintaining standard nodes are eligible for EUR 100 per month with 98% or higher on-chain monthly performance.
  • 15 Slots for Top 30 Mainnet Validators:
    • Reserved for high-performing mainnet validators, eligible for up to EUR 50 per month, subject to the same criteria as the other TTL validators and the full history nodes. (Please note that the €50 incentive applies only to the 15 reserved slots and is not a bonus or cumulative with other rewards.)
    • Top-30 Mainnet validators list will be based on a snapshot of the Casper Mainnet, taken at the last day of the previous quarter, where only the validators with 99% and higher monthly average performance are included.
    • Optional Incentives: Top-30 Mainnet Validators can opt out of receiving rewards and participate purely for the Testnet experience, in order to test and improve their mainnet validator activities.
    • These 15 slots are not in addition to the 110 (100 TTL validators and 10 full nodes) slots above, but included in that. So the total number of participating nodes will not exceed 110 in any case.

Reward Distribution:

  • Rewards will be distributed quarterly. Node operators maintaining required performance throughout the quarter can earn up to EUR 600 (Full History Nodes), EUR 300 (TTL Validators), or EUR 150 (Top-30 Mainnet Validators).
  • Partial Rewards: Validators who lose eligibility due to low performance, or full archival node operators due to lacking data availability requirements, may still receive partial rewards at the end of the quarter, based on their time in the eligible set. (Examples: 1 month of participation will result in 100 EUR of rewards for a TTL validator, 2 months of participation will result in 200 EUR of rewards for a TTL validator, and so on…)
  • Nodes which lose eligibility due to low performance will be removed from that quarters active set, without losing their partial rewards, which will be paid at the end of the quarter.
  • There will be at least a 24-hour grace time for nodes which suffer from unexpected issues, provided that they ideally spot the issue on their own, actively work to fix the issue, keep the community informed, and share their experience with the other node operators transparently. Failures due to poor operation or lack of attention are not included in this case.
  • No Rewards for Disqualification: Validators disqualified for violating the Testnet Community Code of Conduct or engaging in malicious behavior will receive no partial rewards.
  • Every participant must monitor the health and performance of their nodes at all times, intervene in a timely manner when needed, report issues along with relevant logs to Casper Association by submitting support requests on Casper Community and Governance Forum, and follow the official announcements in the Casper Testnet Announcements channel. The participants are expected to be active and responsive in the Casper Testnet Participants group as well.

3. Validator Requirements:

  • Validators must meet specific technical standards, including open ports and servicing random historical blocks (for Full History Nodes). These requirements will be verified by various tools. Performance will be measured entirely on-chain, ensuring fairness and transparency.
  • TTL nodes assigned as validators must keep their gossip ports open, and others closed to the public (with an exception for the Casper monitoring tool). Archival nodes must keep all of their ports open in a limited fashion.
  • Archival node operators are required to submit their nodes’ IP addresses to the Testnet management, and inform the management immediately if they need to change their IP addresses. Their nodes’ liveness will be checked based on the submitted IP addresses.
  • The recommended hardware specifications can be found on the official documentation.
  • Node operators may be invited to a private Telegram group for instant communication and collaboration through the quarter, in case of need for tighter cooperation. All operators are required to join and be responsive in such groups, which will be deleted at the end of the term.

4. Program Budget:

The total budget for each quarter is EUR ~34,000, designed to support high-quality participation while managing costs.

Public Key Submission Limits:

Validators must meet the following requirements for public key submission:

  • Minimum 3 non-transfer deploys on the Mainnet.
  • At least CSPR 1,000 total balance (staked or liquid) on the Mainnet.

Anti-DoS Measures:

To prevent abuse of the application process, the following anti-DoS measures will be in place:

  1. Cryptographic Signature: Validators will provide a cryptographic signature for email verification to ensure authenticity.
  2. One submission per email on the form with a sign-in requirement.
  3. Knowledge-Based Filtering: Applicants will answer basic questions from the official validator documentation and the Testnet Installation Instructions, along with basic Linux commands, to ensure they have the necessary knowledge to operate a node.
  4. KYC and Liveness Check: All selected validators will undergo KYC verification with a video-based liveness check to confirm their identity. Applicants who fail the KYC process will lose eligibility, and will be removed from the program.

Program Feedback Period

At the end of every quarter, there will be a feedback period of at least 1 week where the participants of that ending quarter can share their opinions and make improvement suggestions about the program. This may include polls, and open discussion topics on the Casper governance and community forum. The feedback collected through this period will be input to the next proposal of Testnet incentives.

Timeline:

  • Application Deadline: January 26, 2025
  • Lottery Selection and Announcement: January 27 to January 28, 2025
  • KYC Verification (with liveness check): January 28 to February 02, 2025
  • Incentivised Testnet Operation Period: January 03 to June 30, 2025
  • Reward Distribution: Rewards will be distributed quarterly, starting in April 2025.
1 Like
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The proposal has now in the pre-voting stage, scheduled to get into voting phase at the end of tomorrow (2025-01-17).

2 Likes
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Keep up the good work! Maybe in the future we should work on how to make this process even more simplier.

We currently have a testnet program on the Casper blockchain that requires participants to submit on-chain proposals and vote on them. However, the process involves extensive documentation, KYC verification, and various operational challenges that make participation cumbersome.

The Idea: A Fully Automated Testnet Faucet Program

Instead of manually managing proposals and votes, why not develop a smart faucet program that automates the entire process? Here’s how it would work:

  • The top 100 validators receive rewards based on their era performance.
  • Every three months, the faucet randomly selects validators from a pool of bidders and stakes on them automatically.
  • If a validator fails to meet performance criteria, the faucet removes its stake and reallocates it to another randomly selected bidder.
  • Payments are automated via a script that evaluates validator performance per era.
    • If performance exceeds 98%, the validator gets paid for that era.
  • KYC remains a requirement, ensuring compliance while allowing the system to run in a trustless manner.

Becoming a Selected Validator: Pros & Cons

To be selected, you must already be running a validator. This has both advantages and disadvantages:

:white_check_mark: Advantages:

  • Ensures that only serious participants—those willing to invest in running a validator—are eligible.
  • Guarantees that the testnet always has active validators, preventing inactive participants from benefiting.

:x: Disadvantages:

  • You have to take the risk of running a validator just to become eligible, without a guarantee of selection.
  • If you plan to replace a rule-breaking validator, you may need to run an active bid for the selection period, which could be costly.
  • The testnet may end up with more validators than necessary, leading to increased competition.

Possible Solutions to Address the Disadvantages:

  • Increase the reward amount per validator, making it more financially viable to take the risk.
  • Extend the selection period so that validators don’t have to frequently restart bids or risk being left out.

Long-Term Governance: External Voting Mechanism

If the program continues running for an extended period (e.g., every 5 months), we can introduce a separate governance mechanism outside of the faucet program where stakeholders can vote on whether to continue, adjust, or terminate the system. This ensures the program remains aligned with the network’s needs while maintaining decentralization.

Why This Works?

By automating staking, reward distribution, and performance evaluation, this approach removes the need for complex governance votes and manual interventions, making the testnet program self-sustaining. The faucet effectively manages the validator selection process, ensuring high-performance nodes receive incentives without requiring constant human oversight.

Additionally, the external voting mechanism provides a structured way to review and evolve the program, ensuring that the community retains decision-making power over its long-term operation.

Final Note: Just an Idea Open for Discussion

This is just an initial concept and is open for discussion and improvements. The community can explore different parameters and refine the idea to make it more effective, fair, and beneficial for the network.

3 Likes
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It’s great to see the DP evolving and covering more aspects. However, simplifying the process through the implementation of EraGuardian’s idea would be even better. Automating the selection process would significantly reduce operational friction while ensuring that high-performance validators are incentivized. Additionally, introducing an external governance mechanism adds a much-needed layer of flexibility.

2 Likes