Miners don't deserve this. Review the latest update

Hi, I would like to ask the NKN team to rethink the rate of 10 nkn for new nodes implanting, there are several problems in this decision.

ID generation cost more expensive than 1 month of server rental

Currently, this implantation fee for new nodes is more expensive than 1 month
cost of a server for mining.

10 x $ 0.56 = $ 5.60

The cost of a node in the digital ocean is $ 5.

It is inaccessible to some, and a difficult process for many

New miners will have to deposit money at the exchange, then transfer to the wallet, and finally pay the new ID generation fee of 10 NKN. This whole process does not encourage the adoption of new miners and, consequently, new nodes in the network.

The difficulty increases even more

Problem 2 gets even worse, because most exchanges do not support the MAINNET NKN network, so most miners would have to do the ERC-20 SWAP for the MAINNET network using the OFFICIAL NKN SWAP, and SWAP has predefined dates to happen.

Problems beyond token fluctuation?

NKN has depreciated in the last few days, from $ 1.50 to $ 0.57, a large variation, we miners have many things to worry about, now besides all the problems we will have to worry about exorbitant fees for new generations of ID.

And taking advantage of the subject, have you seen the transfer rate on the ERC-20 network?

Mining rewards are not guaranteed rewards

I have 250 active nodes, on a specific date I only got 33 NKN as a reward, while my sister who has 20 active nodes got 20 NKN on the same day. Do you see the difference? I have 12.5x more nodes than my sister, but that day I got just over 11 NKN more than her.

The problem of being lucky is a problem that we miners have become accustomed to. Now in addition to dealing with luck, will we have to have fixed costs to add new nodes? Does not make sense.

On behalf of all the miners

On behalf of all current miners, and future miners, I ask that you review this bad attitude, because it will not be well regarded by the community. This will not provide an incentive for new miners, and it will not provide an incentive for current miners to continue to implement new nodes.

Don’t forget that the NKN network has 100,000 nodes, because we miners make this happen.

A rate of 1% under monthly mining would even be acceptable, now a rate for new nodes more expensive than the monthly fee of 1 month of mining, this is unacceptable.

In the name of all the miners, I ask you to remove this rate of generation of new ID’S, given all the facts, you can see that this will hinder the growth of the network, the adoption of new miners, and the continuation of growth for the current ones. miners.


@zbruceli @yilun

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I believe that either a complete reset or a revision of the entire strategy was required

This is a very aggressive change and discourage new miners.

At least, they should enable swapping the tokens.


Well, yes, the exchanger is now needed for sure)

We thought long and hard about adjusting the fees for new mining nodes, so this is not a decision taken lightly. And the primary trigger this time is security concerns, to ward off certain types of attacks. Trust us, it is definitely in the interest of all miners who can mine a fair share of NKN!

In addition, we would like to emphasize a few points:

  1. This is not a surprise topic. We have the recent NKP020 detailing our thought process, pros and cons, and solicit community feedback over the last 2 months or so.
    [NKP0022] Minimum Staking Requirement for NKN mining

  2. All the fees for generate ID, are returned to Miners in the form of increased mining reward for every block. It does not benefit NKN team or NKN Foundation in any way. In fact, NKN Foundation is going to donating up to 1.5M NKN mainnet tokens for paying the generate ID fee for existing qualified nodes. In the future, if there are better solutions, we can always adjust down the generate ID fee.

  3. We promise to keep ERC-20 to mainnet swap tool open almost all the time so it will be easy to acquire NKN mainnet tokens.

On top of the above, we are discussing with NKNx team about how we can support small and independent new miners in the future (once the mainnet is successfully updated to v2.1.1)

@zbruceli Even if the mainnet swap tool is open, did you notice the value of the transfer on the ERC-20 network??

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Thanks for detailed thoughts!

We know it’s controversial, that’s why we have been discussing it for a long time. The feature was implemented two years ago before mainnet was launched, but we have never enabled it until absolute necessary for network security.

Although the generate ID fee is called fee, it’s essential not a fee. All the “fee” will be deposited into MBA address and increase long term block reward. Let’s see some examples:

  • Let’s assume there are 100k nodes in the network, each paid 10 NKN generate ID fee. So the MBA address pool has 1M NKN. If all nodes stay in the network forever, and no new node joins, then each node will eventually get back 10 NKN more mining reward on average.
  • In a more realistic case, let’s say some nodes left, some more come, but the network size is still 100k nodes, and the MBA address pool has 2M NKN. Then nodes who stay in the network will eventually get about 20 NKN on average. This encourages long term miners which is exactly what we want.

You have thought a lot about miner’s convenience, but probably not from network security’s perspective. It a blockchain is not secure enough (i.e. attackers can gain unfair mining advantage by ID sybil attack), mining is meaningless for honest miners. As we have seen recent attempt to attack the network, this mechanism needs to be enabled ASAP before some attacker can successfully perform the attack and get most (if not all) mining rewards.

IMO this is an inevitable trend in public blockchain. PoW and PoS are the only two batte-tested category that can make a public blockchain safe, and many PoW chain are moving towards PoS (Ethereum for example) for better security, better performance and less resource consumption. Although NKN is using PoW-like relay for reward, such relay is not intended to saturate all your network or any other kind of resources, so it’s not enough for security alone. That’s why some kind of staking, fee, etc is necessary for network security. After all, security is the top priority for any blockchain.

Among all the similar proposals, the current generate ID mechanism has the lowest entrance barrier. Staking (NKP-0022), for example, requires a significant higher amount of NKN (usually 10x or 100x) in order to reach the same security level.

I know currently it’s not very convenient to purchase mainnet NKN for most people, but for the long terms things will be better:

  • Many Ethereum scaling solution are working hard to lower Ethereum txn cost
  • The ERC20->NKN swap system will basically be open almost all the time
  • More exchange might support NKN mainnet token in the future

Eventually generate ID it will become as simple as nknx fast deploy, and it pays back in mining reward over the long term.

The decision will not work because of large miners will continue to mine much (as you said you will pay for existing nodes to get new ID), their large reward will be used for new nodes to spam or whatever you think. But new miners will have to invest from exchange buying coins. And who knows when the will recover their investment. And large miners will continue to start new nodes from reward.
So this situation will fix nothing in security, you would better to think how to fix it in code and not with miners.

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It has to be done both in the code and in economic model. And we already did the code change not only in v2.1.1, but also previous release. If the attacks can be defended with only code, we would have done that.

All major blockchains, that are secure, makes the attack more costly than it is worth it. And they use a combination of code (PoW) and economics (staking).

When the mining is fair, large or small miners should get same amount of mining reward per node. So the return on investment should be the same for every miner, big or small. It is indeed more inconvenient for smaller miners to acquire the necessary NKN mainnet token in the short term, but we are working on several solutions to mitigate this.

  • Many Ethereum scaling solution are working hard to lower Ethereum txn cost
  • The ERC20->NKN swap system will basically be open almost all the time
  • More exchange might support NKN mainnet token in the future
  • We will work with nknx.org for potential ways to help smaller independent miners

All in all when you open NKN to ERC20 swap huge dump will come.
May be then its better to buy ERC20 token at that dump than to mine native token and wait 2 month untill you open swap, or just forget about it and find better project.
So at the end large miners will stay, dumping market at every swap open :slight_smile:

From our historical data, there is no correlation between swap open and NKN price change.

@zbruceli I continue with the same opinion, this initial fee will drastically hinder the new miners. Today 5 new miners spoke to me using the discord, and the 5 will not implement new nodes, and will leave NKN.

In my view, the NKN network will be centralized in the hands of the miners who entered before this update, this update does not harm me, I have enough NKN to build new IDS, my main concern is with the new ones.

I would like each person to have at least one node, that the adoption of new miners and users would happen, NKN has provided this until today, but I do not see that in the future with the new rules.

The security problem must be solved in a way that does not create another problem.

NKN has a foundation that is not needed in such volumes, personally I believe that the conditions are not bad if there is so-called “Communism”, where each miner will make a profit according to the 1 to 1 system, and not inverse proportion.

Now I agree that with the current turnover of things and the number of nodes, I will not invest and develop the network, I will wait for a recession and only then will I test the new system.

There is no guarantee that I will be able to recoup the cost of the nodes.


But if it is something that involves security, and there is no other way but this. So it will inevitably have to be implemented, however, I do not think it is correct to correct a problem causing new problems.

The side effects of this “update” will lead to several other new problems.


Well, in any case, I will work for the time being with what I have, when the network falls, then I will decide something