(This is report #1 because the first one was a pilot report)
For the past 12 months, Hypha has administered the Testnet Incentives Program, an AADAO-funded program designed to incentivize validator participation on the Hub’s provider testnet.
This marks the end of TIP’s second funding period, and is an opportunity to reflect on the events, education, and feedback that has taken place over the past six months.
Disbursement transparency
AADAO has shifted to funding grants in USDC and so have we. All payments are made to cosmos wallet addresses and our registration form has been updated to reflect that the provided address must receive USDC, not ATOM.
A total of $2k was paid to node operators on the multisig (Ghazni from Stakecito and Bosco from Silk Nodes) for their administrative service, and this was budgeted separately from the $75k awarded for the TIP grant. Any unused funding from the $75k grant will be returned to AADAO.
| Period | Events | Total validators | Validators paid | Percentage of qualifying validators | Funds disbursed |
|---|---|---|---|---|---|
| 6 | 5 | 49 | 31 | 63% | $14,700 |
| 7 | 3 | 50 | 34 | 68% | $16,400 |
| 8 | 5 | 34 | 14 | 41% | $6,600 |
| 9 | 3 | 51 | 32 | 63% | $15,000 |
Testnet events
While not every testnet event is a qualifying event for TIP, we run many upgrades, launches, and educational events which validators participate in regardless of incentive:
- Minor/patch upgrades: 5
- Major upgrades: 5
- Consumer upgrades: 3
- Consumer rehearsals: 1
- Demo/game days: 6
In the last six months, Gaia has onboarded both permissioned CosmWasm and permissionless ICS. Both of these features involved testnet demonstrations to teach validators about how these features are supposed to work on the Hub.
Some highlights from this funding period:
Permissionless ICS demonstration
Permissionless ICS is the next major development for Interchain Security – consumer chains can now launch without going through governance. This represents a major shift for both consumer chains and validators, who may have otherwise on governance for notifications about possible new chains.
While a front-end solution for tracking new chains is available now, it was not present at the time we ran this event and so we took validators through the full launch process and how they could query chains using the CLI (a process which had changed since the last upgrade).
In total, 45 validators launched their own permissionless chains and then had to opt-in to Hypha’s chain by querying for consumer IDs.
Crypto Dungeon launch rehearsal
Crypto Dungeon has become the first consumer chain to launch permissionlessly and be displayed on the Forge front-end. Before this, they went through a full launch rehearsal with testnet validators, where we incentivized validators to opt-in and run the chain. Crypto Dungeon launched on the testnet with full state, which is unusual for rehearsals. This took more resources than usual, and was a good experience for testnet validators to practice launching a chain like this.
Criteria and feedback
Our criteria set for this funding period:
- Criteria 1: Be an active mainnet validator. Submit proof via our Google form. If you are not able to use mainnet keys for proof, contact me @lexaMichaelides on Telegram or Discord, or email lexa@hypha.coop
- Criteria 2.1: Validate all available Top N consumer chains secured by the Cosmos Hub (Neutron and Stride)
- Criteria 2.2: Use assigned consumer keys for all Top N chains.
- Criteria 3: Remain unjailed on the provider chain for the entire period.
- Criteria 4: Participate in every Testnet Wednesday event according to event criteria (e.g. sign within five blocks of a major upgrade, sign by a designated block after an upgrade).
- Criteria 5: Run a testnet infrastructure setup that closely mimics mainnet.
The theme of all of our feedback is that the program needs to be forgiving to validators who are balancing commitments to many chains as well as their daily lives. As always, it’s hard to strike a balance between keeping the testnet a high performance, demanding environment, and rewarding validators who show up and try their best even when they make mistakes.
To address this, we introduced the concept of exceptions this period. Using exceptions, validators can take more liberties with their setup in the name of testing and experimentation with new features without fearing that they’ll get jailed and be ineligible for a period.
What’s next for TIP?
We’re currently re-applying for funding to continue the Testnet Incentives Program in a more flexible and versatile manner.
Currently, TIP has 6 strict criteria and if a validator fails to meet any of them, they do not earn an incentive payment for that period. This is incredibly discouraging for validators who miss a single event, or those who get jailed despite performing very well on all testnet events.
Going forward, TIP will operate on a points-based system similar to past incentivized testnets like Game of Chains and ISLE. Event criteria will be assigned a certain number of points which validators can earn by participating, and we expect to award bonus points to validators who remain unjailed or who complete all available events perfectly. At the end of the period, the value of a point will be calculated based on the period budget and total number of points earned.
Points-based incentive payments
To illustrate this, we can compare the performance and incentive payments of three anonymous validators using historical data.
Our existing flat-rate payments are indicated with a blue line, while the red line shows how the validator may have been paid if we had been using a points system with a budget of $15,000 per period for all participating validators.
For a high performing validator who completes all periods perfectly:
- Total payment using flat rate: $3500 with $0 standard deviation across 7 periods
- Total payment using points: $3236 with $119 standard deviation across 7 periods
For a medium performing validator who completes some periods perfectly:
- Total payment using flat rate: $1500 with $267 standard deviation across 7 periods
- Total payment using points: $1897 with $186 standard deviation across 7 periods
For a low performing validator who completes one period perfectly:
- Total payment using flat rate: $500 with $189 standard deviation across 7 periods
- Total payment using points: $908 with $105 standard deviation across 7 periods
Switching to the points-based program will benefit validators by making payments more achievable. It will also stabilize the program budget and make payment schedules more consistent, as we can commit to a particular budget ahead of the period and disburse payments based on number of events rather than length of time.
As always, all Hub validators are invited to participate in the testnet program and be eligible for incentive payments!
Join the Interchain Security testnet!
- Join the testnet as a validator: instructions
- Fill out our Google form to register for TIP
- Make sure you are part of the Interchain Discord and have been assigned the @Interchain Security role
- Follow the #testnet-announcements in Discord and our testnet schedule to know when events are coming up