[Discussion] Who Runs the Nodes?

Hey @hairen ,

I don’t have all the specifics, but do be aware that NEAR Foundation is not simply giving NEAR away to facilitate nodes.

NEAR can be loaned from the NF in order to spin up a validator, this was particularly prominent when the NEAR requirement to launch a validator was particularly high (pre-phase 1 of Nightshade.

I don’t have specific details in regards to each validator, so I would defer to @Bowen or @janewang who I suspect would have more information on this.

Appreciate you pushing forward the goals of decentralisation.

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NEAR doesn’t have to be ‘given away’ part of the issue is that these nodes have 100% fees.

Simple maths - 10m NEAR ($35m current prices) x ~10% Staking Rewards x 100% Fee = 1m NEAR net profit for node operators. Who’s the special inner circle being gifted 0% loans with $3.5m returns per year?

Can I apply for a 10m NEAR loan? DM pls Sir

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I don’t have all the details for you.

Do note that there are ecosystem partners out there with significant loans of NEAR, including Sweatcoin, Coinbase, and more.

In fact, the recently launched Coinbase Learn and Earn programme is funded entirely through staking rewards.

I get that you’re looking for transparency and championing the cause of true decentralisation, and I think that’s awesome. However, let’s have a civil discussion about it and refrain from diving into sarcasm and comments of this nature.

Will defer to Bowen, Jane, and the wider team for comments on this.

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Thanks for taking the time to do such thorough research,

I’ve taken some time to look into some of the information shared here and I’m making sure that the relevant parties involved see it and get a chance to respond.

Until then, please remain calm. While we could defs use with more transparency and timely information, remember that we are all working with the best interest of the ecosystem at heart.

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Just been informed this would not be in the realm of Bowen or Jane, but will work to get a response from the NF ASAP :white_check_mark:

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ANOTHER 100% validator has been spun out and seeded with 1.5m NEAR directly from NF since my original post.

satori.poolv1.near - Satori is a great project, now led by the former NEAR CEO @erik.near

On behalf of the 200 peasants that participated in Stake Wars for three months to be eligible for 50,000 NEAR - Thank You. We really appreciate the kleptocracy that keeps pushing the Seat Price up.

@marieke.flament @illia

@LulucaL olha isso, mais denuncias vindo de outros lados…

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mais denuncias, mem respostas… :man_detective:

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Parece que as pessoas que deveriam nos ajudar não estão interessadas em desvendar os mistérios e resolver o problema.

Heya! Not at all. If I could get you an answer immediately, I would. The team has been notified.

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The main concern here is how is NF going to decentralize the network and make delegation fair.

RN is that 9 validators have 33% of total staking ~ 151.63M NEAR tokens.

Even after stakewars that will deliver 4.5M NEARs to chunk producers will be nothing compared to those 9 on the top.

What is the next step on this?

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Tirei meus stake tudo, não entendo direito dessas coisas mas é visível que tem algo errado. Não quero estar envolvida nesse rolê. E mais… Quem investe stake em que o único que ganha é o validator? Não faz sentido :person_shrugging:

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The silence from NEAR Foundation and Pagoda is disturbing.

This thing is clearly radioactive and while I know that this information is being shared widely across the ecosystem, it is also very telling that not many people want to engage with this publicly. No one knows just how deep the issue runs.

I myself went anon for fear of becoming a target. The power of those who can disburse seemingly unlimited amounts of money with no accountability should not be underestimated.

Will wait til early next week before unleashing the next phase. At this point, either we stop the bs and drain the swamp or the community will (continue) to die.

I choose to fight because I care more about NEAR than most of the people at the Foundation. Sadly, a lot of my OG community members are choosing to silently leave to Solana, Cosmos, Aptos…

[P.S - David is a champ. Mad respect for your work. You truly deserve your own validator seeded with a 10m loan]

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And now i get why some much fake accounts came across doing reveals info and questioning, never being so unconfurtable here than these last weeks, i am a target now, i guess, just because i can’t get my fingers quiet out If keyboard.

Should i stay or should i Go?

:heart:
L.

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I think you are missing a point about lockup accounts. Lockup accounts are usually funds that are not controlled by the NF anymore. Lockups are vesting/lockup contracts where the funds were transferred from NF for something. It can be for investments, employees vesting or I guess grants (but I’m not sure about this). The important point is the NF doesn’t control the funds once they were transferred to a lockup contracts.
The new owner of the lockup decides where to delegate the funds. The large new pools are likely the new investors from the last round.

The best option for decentralization is to discourage public and metapools from delegating to the top nodes.

As for satori pool, I think it might be a deal or a grant from NF. Looks like the amount is about 10% a year or 150K NEAR.

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Dear hairen

Thank you for raising this topic. Three very healthy questions have been raised based on this thread:

  • How decentralized is NEAR?
  • How does NEAR Foundation ensure fair funding allocation?
  • What delegations does NEAR Foundation do to validators?

These questions are essential to raise and address. Decentralization matters to ensure that the NEAR Protocol functions in a trustless manner. Moreover, NEAR Foundation has been entrusted large amounts of funding by its backers and was tasked to deploy the NEAR Token Treasury to the NEAR Ecosystem to support the adoption of the NEAR Protocol. A well-structured process of funding deployment is in the interest of all stakeholders of the NEAR Ecosystem. This post is going to address these questions.

Before we dig in, one request to keep things fair: You have emphasized certain individual transactions to kick off the debate. Given the public nature of the NEAR Protocol, this is easily possible. Of course, it is essential to look at specific properties of individual transactions to understand the state of decentralization and fairness. However, please raise your questions while avoiding putting up specific transactions for public debate to respect the beneficiaries and preserve their privacy.

So, let’s get into the questions:

How decentralized is NEAR?

NEAR has the edge over other protocols as it has excelled at balancing advantages and disadvantages concerning protocol design choices. There is a tradeoff between decentralization, scalability, and security (the “Blockchain Trilemma”). Therefore, maximizing decentralization means sacrifices in security and/or scalability. Compromises in security are hardly acceptable. Balancing between decentralization and scalability makes sense with the target that the decentralization remains sufficient to exclude collusion between actors with appropriate (very, very high) certainty. The target shouldn’t be maximizing decentralization, but optimizing it. For example, with Ethereum, several hundred thousand validators came online over the last two years. These validators didn’t validate a single ETH transaction before the Merge. That was an overly well-decentralized network while it had zero throughput. We’re glad the Merge went through successfully meanwhile to give use to the Ethereum Proof-of-Stake (PoS) network. Also, there is not just one area to look at for decentralization but many. For example, with Bitcoin, there are about 1 million miners (which looks decentralized), but more than 50% of the hash rate is controlled by 3 to 4 mining pools (which doesn’t look decentralized at all).

Let’s look at the notion of “optimal decentralization” vs. maximal decentralization. PoS networks typically require less decentralization than Proof-of-Work (PoW) networks to avoid attacks. This is because the PoS validators typically have more skin in the game than PoW miners. Validators need to control a third of the network to collude. They risk destroying their stake by trying to steal from the rest of the network. Even if an attack is successful, the rest of the network could fork and exclude the attacker and roll back unjustified transactions. This makes collusion impractical. Optimal decentralization is when collusion is so extremely unlikely that it is practically safe, while negative consequences of decentralization are in check.

NEAR has been increasing its validator decentralization with its adoption. When transactions became possible on the NEAR Network two years ago, 60 validators were online to validate the network. One year ago, this number increased to 100 validators with the NEAR Protocol upgrade Simple Nightshade, Phase 0 of the roadmap to a fully sharded network. This week, NEAR Protocol upgraded to Chunk-only Producers, Phase 1 of the roadmap to a fully sharded network, which opens the capacity for up to 300 validators.

On https://near-staking.com/ it can be observed that the top 9 validators could take over the NEAR network. This number has been gradually going up, which is excellent. Moreover, people familiar with the NEAR Protocol will know that this includes a good set of parties that are well aligned on the vision and mission of NEAR, and will under no circumstances collude but rather alarm the community if they stumble over any respective efforts.

Validator decentralization is also in the NEAR Community’s hands. Every NEAR Token holder can delegate their tokens to the validator of their choice. Four validators in the top 9 have received delegations from several thousand token holders. While this delegation concentrates power with these validators, it is the power that the NEAR Community entrusts with explicit dedication.

The very large portion of the initial NEAR Token supply given to the NEAR Foundation has been structured very diligently. Various measures have been put in place to ensure funds are used towards the adoption of the NEAR Protocol. Measures include an allocation plan, token lockup, a large part of tokens not being stakeable, and a robust and sound governance framework for long-term token allocation. Thus, NEAR Foundation has always kept an eye on improving decentralization when allocating NEAR Tokens.

Now, how does NEAR Foundation ensure fair funding allocation?

NEAR Foundation’s governance framework includes a NEAR Foundation Council, an Executive Management, a Leadership Team, a Grants Team, a Legal Function, and a Finance Team. The composition of these bodies has been stable since their inception. All Board Members and most of the team members that have joined and contributed to building up the Foundation structure and the process of funding allocation since inception are still around. This has contributed to consistency, good governance, and diligence. All funding allocations have to undergo an approval process. Depending on the size of the allocations, there is a path to approval. Depending on the size and type of allocation, various procedures up to approval apply, including preparation of a deal memo, a grants review, technical review, legal assessment, contracts review, NEAR Foundation Council approval, and sign-off by the Executive Management. The Finance Team checks if procedures have been followed before the implementation of any transfer. Finally, NEAR Foundation undergoes an annual internal controls and financial reporting audit.

What delegations does NEAR Foundation do to validators?

Since the inception of the NEAR Protocol, NEAR Foundation has restricted itself from delegating NEAR Tokens to validators for several reasons. A target is to avoid redirecting staking rewards from delegators and validators to NEAR Foundation. Moreover, it is a measure to remove NEAR Foundation’s power over the network and to ensure that NEAR Foundation is not becoming a centralized party to control it. NEAR Foundation currently delegates 100K NEAR Tokens each to 28 validators that have qualified based on a structured application process and best met a set of criteria in the areas of transparency, sustainability, and stability as part of the last year’s protocol upgrade. These delegations are planned to be removed while implementing the new Stake Wars delegation of 4.5M NEAR via three token pools. Beyond that, NEAR Foundation has implemented a handful of temporary delegations to strategic partnerships that have passed the above-described rigorous funding allocation and approval process instead of making direct token payments to the respective partners. Each delegation passed the assessment to ensure that it was aligned with the mission of driving the adoption of NEAR Protocol to achieve 1 bn users within five years. Certain large token transfers to validators appear to come from NEAR Foundation that don’t seem to fit the above descriptions. Over time, token claims collected by financial backers fall into this category and are made from accounts associated with the Genesis Block.

Thank you again for raising the topic. We believe that transparency concerning the decentralization of the NEAR Protocol and the funding allocation by the NEAR Foundation is essential. This report is a stab at providing more insights. Fostering the research to optimize the NEAR Protocol’s decentralization further is on our minds. Moreover, the recent NEAR Community initiative to build the NEAR Digital Collective will help refine the funding allocation structure within the NEAR Ecosystem.

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Eugene the dream! What an honor to have you chime into this conversation, your wisdom is much appreciated.

Even if we acknowledge that Lockup accounts are outside of the domain of the Foundation, we still have several nodes funded directly from the Foundation (‘nfeco#’, nfendowment#, etc.)

It also seems like a lame excuse to say that ‘the Foundation has no control of what happens to NEAR once it is transferred to Lockup accounts’. I think the Foundation has a lot to explain as to why they transferred the NEAR directly fro Foundation into the Lockup hours before the Lockup accounts seeded the Nodes

Another one funded directly from a NF endowment within the last couple of months:

Leaving aside nodes funded by proper lockups a long time ago, does the community deserve to know why, how, and to whom were tens of millions of NEAR, amounting to millions of dollars in earnings, gifted to?

Trust, but verify.

@illia @marieke.flament @erik.near @Naboto @stalking @Dacha

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Stake Wars 2, cost of onboarding 28 validators = 2.8m NEAR
Stake Wars 3, cost of onboarding up to 200 validators = 4.5m NEAR
Questions that remain to be answered = a handful of validators receiving over 56m NEAR

Do you see the problem here?

What is the point of having such thorough decision making process if the entire thing is hidden in secrecy? These are COMMUNITY FUNDS. The community is asking what kind of deals a secret group of people entered into… still no answers?

This report is a joke. It simply says we allocated/ distributed X million to a CATEGORY. Zero details on what or whom within that category, what was the criteria, what was the outcome, etc.

I apologise if I sound angry or come across as agressive BUT - for months I’ve seen the community be decimated. So many developers and builders are demoralised and even leaving to other ecosystems ‘Marieke brought on a bunch of bankers who do not know anything about crypto, now funding has completely stopped’ - impossible to get grants, Education slashed, community funding ‘paused’ - yet SOMEONE GOT 56M NEAR? They must be AMAZING and should be made public or they must be incredibly corrupt and Marieke must step down immediately.

Trust, but verify.

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It was a great initiative before some ex-NF employees with “relevant” reputations stepped up to work with NDC.

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Amazing how a one sentence post contains more truths than the 17 page manuscript you are responding too :clap:

Spot on Watsica, although that is an entirely different post #drainTheSwamp