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CIP-COSD-MultiPoolStakeURIscheme.md

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CIP: ?
Title: Multi-Pool Stake URI Scheme
Author: Robert Phair <[email protected]>
Discussions-To:
Comments-Summary: No comments yet.
Comments-URI:
Status: Draft
Type: Standards
Created: 2020-09-22
License: CC-BY-4.0
Post-History: https://forum.cardano.org/t/40594
Post-History: https://cardano.ideascale.com/a/dtd/324335-48088

Summary

Support reading and writing weighted lists of stake pools through a URI scheme, facilitating automatic stake allocation in all Cardano wallets and other means of delegation.

Abstract

Cardano wallets and exchange delegation mechanisms currently have no means to receive an Internet friendly reference to one or more stake pools in a way that establishes their proportion for staking: in general terms, a portfolio.

A staking URI scheme will allow such portfolios to be easily developed and shared by the community itself, with a common standard for interpreting these on Cardano wallets and compliant exchanges.

Aside from portfolios, It will also meet the simple but vital use case of individual pool web sites providing a one-click reference directly into a user's delegation wallet.

Motivation

Centralised sources of information, particularly a Daedalus ranking mechanism currently biased to only take into account rewards from the top K (currently 150) largest stake pools, have led a growing amount of stake to be disproportionately assigned to pools pushed near & beyond the saturation point.

A growing Cardano blockchain, facing a likely sudden increase in load within the year from the introduction of Smart Contract applications, needs to more rigorously maintain its goal of decentralisation by distributing the balance of rewards, network/computing power, training, and operational knowledge among an increasingly larger group of operators. Otherwise that sudden increase may require an equally sudden rise in K to a much greater figure without having at least that number of high-quality pools.

There is also a subjective perception within and without the Cardano community that the Cardano foundational entities have allowed stake to become centralised for their own benefit. Supporting a means for small stake pools and staking peer groups to be individually recognised would reverse this trend both practically and subjectively.

Specification

Example, trivial case (a single pool): web+cardano://stake?COSD

Example, simple case (a non-weighted portfolio of 3 equal favourites: web+cardano://stake?IOG1&OCEAN&EMUR1

Example, more general case (a weighted portfolio, top 10 pools by 30-day ROA at time of writing): web+cardano://stake?CRAB=30.14&MYTH=20.84&NINJA=20.04&HYPE=17.80&MARLN=16.92&KINGS=16.81&COSD=15.62&RAID3=15.32&ZOE=15.20&XORN=14.93

The use of the web+cardano protocol must remain consistent and non-conflicting with CIP: Cardano URI Scheme (current draft, not yet merged).

Syntax explanation (see Wikipedia: Uniform Resource Identifier):

  • Stake pool URI links extend the protocol web+cardano beyond payment links by adding an "authority" (//stake) to differentiate the stake pool reference(s) from a payment request URIs or references to some other Cardano resource.
  • For security the hex pool ID should be usable here instead of each stake pool name, although with SMASH currently slated for Daedalus integration this may not be necessary to avoid ambiguity.

Syntax items, in order:

  • protocol: web+cardano:
  • authority: //stake
    • if authority is omitted, assumed to be a payment URI (see CIP: Cardano URI Scheme)
    • if authority is something else, it refers to a different Cardano subsystem than staking.
  • arguments (? before first argument, & before each additional argument
    • poolReference: either a poolTicker or poolHexID (mandatory)
    • =proportion (optional): integer or decimal, indicating relative size of stake allocation

Syntax errors:

  • if any PoolReference (assumed to be a poolTicker or poolHexID by its length) is improperly formatted, the wrong length, or contains illegal characters, the software should generate an error or warning.
  • any proportion with non-numeric characters (digits, with at most one decimal point) will also cause an error or warning.
  • Handling of errors and warnings is left to the wallet or exchange. Examples:
    • a non-numerical proportion might assume 1 (as if the figure had been left out entirely) while also displaying a warning message & asking the user if they would like to proceed according to that assumption or abort.
    • a non-existent stake pool might cause a warning, with an offer to proceed without that pool, to choose an alternative, or to abort.

Interpretation of proportion:

  • If only one stake pool is specified, any proportion is meaningless and ignored.
  • If all stake pools have a numerical proportion, each component of the resulting stake distribution will have the same ratio as the provided proportion to the sum of all the propotions.
  • If none of the proportions are given, all proportions are assumed to be equal.
  • If some of the proportions are missing, any missing proportions are set to the average of all those specified explicitly.
  • If a stake pool is mentioned multiple times, those proportions as determined above are added together.
  • When exporting proportions, order is not considered important but for readability should be in descending order by proportion, with the first proportion normalised to 1 (to avoid privacy risk of using actual delegation amounts).

For this specification to be fully implemented by the wallet or exchange itself, it should be possible to do at least these two things, corresponding to both import and export of stake allocation:

  • upon receiving a staking URI, invoke a UI to allocate stake in the proportion indicated by the URI (from a single wallet, if supported)
  • upon request from the user, format that user's stake allocation as a compliant URI suitable for copying & sending.

Development Plan

Items from the Reference Implementation below have been incorporated into these project milestones:

Step 1 (DONE): Adapted Emurgo Improvment Proposal emip-002 as CIP: Cardano URI Scheme (see above for links).

Step 2 (no prerequisites): Progress CIP: Cardano URI Scheme which will clear the way in Daedalus for stake pool URI integration issues. Despite the urgent needs of Cardano SPOs for stake decentralisation, because of the broader market it is likely the demand for a payment URI will exceed the demand for URI (or JSON) stake pool-to-wallet linking.

Step 3 (dependent on Step 2) Implement single-pool delegation links in Daedalus. Forum discussion establishes there is an immediate need for these. The possible implementation choices for multi-pool delegation which @SebastienGllmt has outlined (mainly, protocol vs. wallet) do not have to be made before progressing this issue: only a commercially robust URI scheme implementation is needed. NOTE the completion of this step will immediately begin to address the Motivation above by facilitating a more heterogenous distribution of stake.

Step 4 (dependent on Step 3 + Protocol or Wallet UI support of multi-pool delegation): Implement multi-pool delegation links in Daedalus, in the full manner described above. According to the @SebastienGllmt comment on this CIP's implementation as a Project Catalyst idea (URIs for Stake Pools and Portfolios: requires Ideascale login) "multiple pool delegation is probably at least half a year away if not more" (comment date = 2020-10-02) which allows a broad window to implement the above three steps. As soon as the accepted strategy is available, it will be ready for implementation in the Daedalus wallet UI, since the URI processing & preliminary UI modifications will already have been handled in steps 2 & 3.

Step 5 (dependent on Step 4): Standards implementation in wallets and exchanges, to follow the established example in Daedalus.

Security Considerations

Both these correpond to the Security Considerations subsection of CIP: Cardano URI Scheme:

  1. Even when links are properly formatted and refer to a valid list of stake pools, the wallet software must first request confirmation from the user exactly as parameterised in the URI before prompting the user to choose a wallet for the suggested delegation.

  2. The wallet software should provide some confirmation to the user that they are in fact in their wallet and not some phishing web page, mocked up to look like a delegation confirmation page and prompting for personal & wallet information.

Rationale

Since specific plans for "Stake Pool Portfolios" have not been announced (to the author's knowledge), nor have SPOs or delegators been told they will be able to design their own portfolios (except in videos where this idea is discussed as a conjecture), without an alternative the community would have to wait for both software support and "official" portfolios to be curated and offered from a centralised source.

In the meantime, there would be little practical alternative to the current system of:

  • large pools maintaining delegation based on mainly on historical position at the top of lists ranked effectively by stake volume, or users following historically significant branding, even if a pool is saturated;
  • small pools struggling to be noticed by distinctiveness or popularity on centralised platforms like Twitter and YouTube, sometimes offering exotic or unsustainable incentives to attract delegation.

We offer this rationale how URI-based "crowdsourced" portfolios will provide better results, according to these linking scenarios:

  • Current wallet implementations allow wallets to link to pool web sites, but with a means for a browser or mobile app to follow a URI they will also be able to go in the other direction.
  • The pool web site itself is the richest source of information about a pool's offering, and a URI ensures that information can be easily transferred to a user's delegation preference.
  • Links sent between third parties will allow users and special interest groups to share suggested stake allocations with others by copy & pasting a link, through messaging & social networking.
  • Links generated from the wallet itself can promote staking strategies that anyone determines to be useful: practically, economically, or socially.

...with these benefits for each part of the Cardano staking ecosystem:

  • small pools : making it easier for potential delegators to find individual pools, while pool ranking sites may always favour the most heavily delegated pools (even when saturated, since many users simply follow brand recognition) and those with the greatest (now impassable) numbers of produced blocks
  • medium sized pools : supporting inclusion in third-party delegation lists, therefore helping users find delegation without the prejudice of ranking algorithms advantageous only to the K largest stake pools (see CIP: Non-Centralizing Rankings)
  • large pools : providing to superfluous delegators a simple & effective exit strategy when nearing or passing the saturation point (currently done mostly through the error-prone, easily subverted medium of social networking)
  • communities of pools : i.e. special interest, self-organising, union-formed, or democratically established peer groups, with any of these criteria and more:
    • merit-based (community or infrastructure contribution)
    • community-based (geographical, technological, or other affiliation)
    • need-based (to help the smallest pools achieve block eligibility / sustainability)
    • charity-based (with verified humanitarian distribution of rewards)
  • automation & integration : allowing portfolio links to be generated through novel means by a greater variety of new & third party web sites, scripts & software tools, and checking real and hypothetical portfolios for past results and anticipated performance
  • delegators : having an alternative to picking only the "top of the boards," often losing rewards due to inevitable pool saturation... eventually having a rich ecosystem of alternatives beyond whatever staking portfolios may be curated & integrated into the wallet by central authorities.

Alternate designs

JSON vs. URI

A developer suggested using a JSON file instead of a URI, which the author believes is not acceptable as a universal recommendation:

  • HTTP Content-Disposition: headers sent with any downloaded file, as well as file extensions & MIME types, often disrupt that file's interpretation by the system or application: in this case creating a dead end from the user experience that wallet or exchange web site developers would not be able to prevent.
  • The generally private nature of this data would lead to issues of confidentiality and censorship, for which the *.torrent file specification eventually developed the magnet: URI protocol as an alternative: hence the similar URI based solution in this case.
  • The simplest, most common use case of pool owners and supporters being able to easily construct a single pool reference, without access to specialised knowledge or resources to post a JSON file (e.g. as one can for a YouTube link from a video ID), would be defeated by only allowing JSON data.

JSON files would be a useful portfolio format in addition to the URI as long as developers and users remain aware of the limitations above. The portfolio specification rules above could also apply to standards for building & interpreting such a JSON file. Therefore I would leave it to the developer community whether JSON processing or syntax should be a part of this CIP or submitted as feature requests for the relevant wallet software.

Application routing vs. URI

The relevant non-protocol-based Solution of using a "routing backend," also briefly mentioned in the discussion threads as an implementation difficulty of stake pool links, is reviewed and ruled out as a suitable "multi-app standard" in the related CIP: Cardano URI Scheme.

Useful general references about linking schemes

See the Read More section at the end of related CIP: Cardano URI Scheme.

Backwards compatibility

This proposal does not break backwards compatibility because it is an offchain change.

Reference implementation

The URI syntax above has been chosen to follow the same general scheme as the Yoroi wallet payment link URI scheme discussed here: (implement uri scheme on yoroi frontend #511). The two types of URIs will easily coexist because only the stake URI links contain an extra //stake authority component.

A simpler format was also offered here (FR: Daedalus payment URLs #883 comment (2018-04)), suggesting the need for a staking URI scheme, but only as an aside to consideration of a payment URI syntax, and without the means to accommodate multiple staking addresses.

Copyright

© 2020 Robert Phair (22 September 2020). This CIP is licensed under the CC-BY-4.0 license.