Can a DPoS Super Rep Offer Rewards & Still Be Trusted?

There has been a lot of discussion lately about what is a responsible budget for a Super Representative, and whether offering a vote based reward will devolve into a trustless system. As the founder of the Community Node Super Representative group, I believe I am in a good position to comment.

A Tron Super Representative has many responsibilities. The primary, mission critical responsibility is to run a well protected Witness node. Second, they must provide resources for the TVM. Third, they should provide benefits to the community. As part of these responsibilities, they have a fiduciary duty to remain solvent, and finally, they should have an endgame — their plan can’t simply be to suck at the teat until the program ends; they have to have a plan for capital investment.

How an SR accomplishes these responsibilities is up to their discretion. Tron says “do at least this much” and then it’s up to creativity, ingenuity, and talent to do better with less.

The same goes for the rewards plan. If an SR group can meet all of its responsibilities and still offer a voter reward, is that really such a bad thing?

A typical argument is that when SR’s start offering rewards, competition will force the percentage paid out to increase until it reaches 100% and then the SR can no longer be trusted. This is the race to the bottom argument.

In a competing marketplace of SR rewards, with voters making decisions not only on who will likely offer the highest payout the next day, but also the calculated risk of whether that SR will lose the election and not offer block rewards, reliability of the payout becomes as important of a factor as the potential payout.

A well performing SR who reliably sits on the producer list can lower the payout percentage, and instead of the race to the bottom going in the direction of entropy, it becomes a race to maximum efficiency where the SR will trim the payout to compete with other markets. If they can truly mitigate the risk, then the effective yield will reach equilibrium very close to where it is for traditional investments.

The only reason why this has not yet occurred is because no one has yet applied sufficient creativity to tackle the problem. One must solve the stability challenge by creating a reliable payout that does not fluctuate.

Every rewards plan that I have seen is a *rewards* plan. It says, ‘vote for me today, and if I win I will split tomorrow’s earnings with you.’ What the market needs in order to find equilibrium is a plan that says ‘I will pay you this much for your vote.’

Until now, there have been too many unknown factors for any SR to be able to say this. But as I noted above, that is merely the product of a defeatist attitude and a lack of creativity.

What if, instead of paying a strict percentage of the daily reward, an SR deposited that payout into a fund and then disbursed 2% of the fund per day? That way the payout would start out small and then cap when the fund holds 50 days of earnings, and the payout is equal to the deposit. If an SR did that, then they could reward votes regardless of whether they win or lose the election. If they keep losing, the payout dwindles by two percent per day.

And if they based the reward using an average of votes then they could accurately predict the next day’s payout.

This is the Community Node rewards plan in a nutshell.

By reliably issuing a daily reward, Community Node hopes to solve the problem of trust by becoming a credit rated financial instrument.