Actually, Brandon (founder and council member) raised the original suggestion to correct a problem that was mistakenly introduced to the network in the nature of the token lock contracts that most Indexers operate on.
https://forum.thegraph.com/t/indexing-rewards-should-be-withdrawable-to-a-separate-address/
Quote from that post:
"I would love to hear from Indexers whom this is impacting to get a sense for the scope and the severity of the issue. Thank you!"
In my opinion, this was not Brandon suggesting the change be instituted from his own belief but rather he asked the community for feedback due to suggestions from indexers. The communities concerns here are not being understood nor taken into any consideration from the indexing community which is concerning.
To stay on topic of this thread. Do you support @graphgod1 s proposal to institute a token burn and or do you have a solution to address the communities (outside of indexers) concern?
Yeah, but the concern was raised by small indexers to him. In any case, It is a valid concern and I am all for it.
I think that most delegators involved in this discussion are for having some sort of a control system over this functionality. That is all.
I don’t make business decisions for the indexer I’m running, I’m just a dev with the required knowledge to run and maintain the infrastructure (and that’s why I try to help as much as possible in the forums, helping ease doubts and educate whenever needed).
But what I can tell you for sure is that it’s not a good decision to withdraw more than necessary.
Anyways, summing up my own point of view on this matter, since I don’t want to sound like a broken record, I don’t think a tax on withdrawals would alleviate the main criticism that the GIP-0002 is experiencing. (which is the choice difference between indexers and delegators).
I also don’t think that the “supply dump” worry that is mainly being discussed here can be attributed to 0002, since even if 0002 would be ideally implemented, indexing rewards sooner or later would hit the market, and the protocol itself has been design with that in mind (as I stated in many comments here, with how supply and demand of the token, which is an utility token, would, or should, work)
Perhaps the worry might be rooted in that GRT might be wrongly thought as a speculative token, rather than an utility token, but this is just me guessing at this point.
Also keep in mind that @davekaj is working on a proposal/implementation to level the playing field, as stated in the following comment:
And I think most of the community can agree that this is most likely the best solution to this “conflict”. (But as you can probably imagine, the delegator solution isn’t ready yet, or else we’d be discussing @davekaj’s proposal)
Delegator here - Local Union President on the side.
I am no expert on any of this, however I do have some thoughts after reading what everyone has said thus far.
I can see the benefit, for indexers, of gaining the flexibility of withdrawing GRT on an unplanned basis. However, I feel like a similar provision should then be put in place for Delegators. Without a cap on the Indexers maximum withdrawal amount/percentage, Delegators may find their GRT locked to an indexer who chooses to completely liquidate their rewards while their own funds are locked (I know this sounds extreme, but anything is possible).
In my mind, which is nothing more than average, here is what something like this would look like:
*Indexers who choose to opt-in to this withdrawal proposal must agree to the following conditions (or something similar). A mandatory cooldown period of 180 days will lock all aspects of the Indexer’s delegation parameters. As mentioned above, the Indexer’s withdrawal option is openly indicated here as well. Additionally, an Indexer withdrawal will be only be approved when 1) The Indexer’s total Delegator supplied stake (DSS) is at least 95% allocated & 2) The indexer’s personally supplied stake (PSS) is 100% allocated AND accounts for at least 2% of the TOTAL allocation amount. This methodology will promote smaller delegation pools and/or larger personal stakes from the Indexers. It will also require Indexers to more promptly/frequently allocate their Delegator’s funds. If these conditions are met & maintained for a minimum of 30 consecutive days, the Indexers will be able to request a rewards withdrawal ONCE during each of the (5) 30-day periods of the total 180-day cool-down. The reasoning behind 5 withdrawals is to keep Indexers from attempting a withdrawal too close to the end of the 180-day cool-down period. The withdrawal amount will be capped at 50% of the rewards accrued during each 30 day period, however it will “taxed”. Assuming a 50% withdrawal, an additional 1% (of the withdrawal amount) will be burned PLUS a 1% (also of the withdrawal amount) Delegator Reassurance Reward (DRR) which will be transferred from the Indexer Rewards pool to the Delegator Rewards pool. This could possibly be done by placing a hold on the Indexer’s PSS to be distributed to Delegators who were were fully staked for that respective 30-day accrual period. These DRRs could/would be paid at the time of the Indexer’s withdrawal OR at the end of the total 180-day period (open for suggestions here). Meanwhile, the Indexer rewards would not have to go through a thawing period & can be withdrawn to an “arbitrary beneficiary address”. Each time an Indexer chooses to make this kind of withdrawal, it may be something of interest to give the Delegators a similar option for withdrawing ONLY these Delegator Reassurance Rewards to a wallet of their choosing? Just a thought.
To summarize, this plan limits the financial benefit of withdrawing large amounts of rewards funds, which may or may not have market implications. It forces Indexers to commit to their Delegators, just as Delegators choose to commit to them. It also further incentivizes Delegators to seek trustworthy, hard-working Indexers & guarantees consistent ROI regardless of the Indexer’s withdrawals. I see this as a comfortable middle-ground, but I do not claim to be any kind of expert in this field. Thank you all for reading, I look forward to more engaging discussions going forward with The Graph!
Need more voice power to real working curators.
If a mechanism like this were in place, as a hopeful future Indexer (currently a Delegator like thousands of others), I would simply avoid The Graph altogether and look elsewhere for an opportunity.
Personally I’m in favour of a small burn on indexer rewards withdrawn to a separate wallet, probably at 0.5%. Almost every other action on the protocol has a token burn applied to it, there’s no reason this shouldn’t either.
Having said that, this would have to be a new GIP. GIP-0002 has to be voted on as-is.
Hey @KingSuper, thanks for joining the forum!
It would be great if you search on the forum if this topic exists and if not, create a new thread for it. This thread is for a proposal about a token burn on indexer rewards and has nothing to do with delegators using a vesting contract. Thanks for understanding and helping keep the conversation related to the topic 