VRC-9: The Mufasa VRC

VRCs/vrc-9.md

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+| VRC | Title | Status | Type | Author | Created |
+|-----|--------|--------|------|---------|----------|
+| VRC-9 | The Mufasa VRC -  Introducing a Points-Based Reward System for Fair Distribution of DLP Rewards to stimulate the Circle of Life | Proposed | Technical  | Roger Ying ([email protected]), Patrick de la Garza ([email protected]) | 2025-01-13 |
+
+## Abstract
+
+This proposal introduces a points-based reward model for Data Liquidity Pools (DLPs) in the Vana ecosystem. It shifts away from relying solely on staking amounts and contributor numbers by incorporating a multi-metric framework. This system aims to prevent gaming by dominant pools, encourage healthy competition, and promote decentralization, innovation, and community-driven contributions.
+
+## Motivation
+
+The current reward mechanism risks fostering a “winner-takes-all” scenario where a few dominant pools monopolize rewards. This could discourage smaller DLPs, stifle innovation, and concentrate power within the ecosystem.
+A points-based reward system addresses these risks by:
+	1.	Ensuring fairer reward distribution.
+	2.	Incentivizing balanced growth across all DLPs.
+	3.	Preventing centralization of power and rewards.
+	4.	Strengthening the ecosystem’s resilience and decentralization.
+
+## Specification
+
+Proposed Metrics for Points-Based Rewards
+
+We propose these criteria, but for the purpose of this VRC, these criteria will be used as an example and we can propose subsequent VRC’s on each criteria. 
+
+1.	Stake Diversity (20% weight):
+Rewards pools with diverse contributors rather than simply large stakes. Diversity Score = Unique Contributors / Total Contrbutors
+
+2.	Data Contribution Quality (30% weight):
+Rewards high-quality, validated, and unique data contributions based on peer reviews or validator feedback.
+
+3.	Network Participation (20% weight):
+Rewards active involvement in governance, discussions, or protocol development.
+
+4.	Uptime and Performance (20% weight):
+Measures reliability, uptime, and timeliness of data contributions using automated monitoring.
+
+5.	Innovation and Impact (10% weight):
+Recognizes pools that propose and implement impactful features, tools, or initiatives.
+
+Reward Allocation Framework
+	•	Points are earned based on performance across the metrics.
+	•	Rewards are distributed proportionally to the total points accumulated by each DLP within an epoch.
+	•	Metric weights are adjustable based on community feedback.
+
+**Points Breakdown for Top 16 in Each Metric**
+
+To encourage consistent performance, rewards are allocated to the top 16 DLPs in each category based on the following points system:
+
+
+|Position | Points|
+|---|---|
+|1st | 25|
+|2nd | 20|
+|3rd | 18|
+|4th | 16|
+|5th | 14|
+|6th | 12|
+|7th | 10|
+|8th | 8|
+|9th | 6|
+|10th | 5|
+|11th | 4|
+|12th | 3|
+|13th | 2|
+|14th | 1.5|
+|15th | 1|
+|16th | 0.5|
+
+
+
+Integration Example
+If DLP-X ranks as follows:
+
+	•	Stake Diversity (20%): 2nd (20 points)
+
+	•	Data Quality (30%): 5th (14 points)
+
+	•	Network Participation (20%): 10th (5 points)
+
+	•	Uptime and Performance (20%): 1st (25 points)
+
+	•	Innovation and Impact (10%): 8th (8 points)
+
+
+**Total Points for DLP-X = (20 x 0.2) + (14 x 0.3) + (5 x 0.2) + (25 x 0.2) + (8 x 0.1) = 15**
+
+Rewards are then distributed proportionally based on the total points accumulated by all DLPs.
+
+**Advantages of the Proposed System**
+
+	1.	Incentivizes Broader Participation: Encourages all DLPs to compete across multiple metrics.
+
+	2.	Prevents Dominance: Reduces reliance on a single metric, promoting fair competition.
+
+	3.	Encourages Consistency: Rewards sustained performance across diverse areas.
+
+	4.	Flexibility: Allows for metric adjustments to adapt to ecosystem needs.
+
+
+## Rationale
+
+The points-based system supports Vana’s vision of a decentralized and inclusive data economy by rewarding DLPs across diverse performance metrics. This approach ensures:
+
+	•	Decentralized Participation: Smaller pools are encouraged to contribute without being overshadowed by larger ones.
+
+	•	Metric Diversity: Rewards are based on multiple aspects like data quality, timeliness, and participation.
+
+	•	Ecosystem Health: Reduces the likelihood of exploitation by single entities.
+
+At this early stage of Vana’s ecosystem, preventing a concentration of power is critical to avoid creating an “insider’s game.” All DLP’s benefit from the $VANA token increasing in utility and valuation. 
+
+
+
+## Implementation
+
+Phase 1: Design and Testing
+
+	•	Prototype the points-based system.
+
+	•	Simulate the model with current Epoch’s criteria.
+
+Phase 2: Community Feedback
+
+	•	Gather input from DLP operators and stakeholders.
+
+	•	Refine metrics and weights, categories can be rolled out at each new Epoch.
+
+
+Phase 3: Rollout
+
+	•	Deploy the system on next Epoch. 
+
+	•	Monitor and evaluate performance for one quarter.
+
+
+Phase 4: Iteration
+
+	•	Launch on the mainnet with governance approval.
+
+	•	Continuously refine based on feedback.
+
+
+**Impact Evaluation**
+
+	1.	Fairer Distribution: Reduces dominance by large DLPs, ensuring equity.
+
+	2.	Decentralization: Encourages participation from smaller pools.
+
+	3.	System Integrity: Mitigates risks of gaming or manipulation.
+
+ 	4.	Ecosystem Growth: Promotes innovation and high-quality contributions.
+
+
+**Conclusion**
+
+Adopting a points-based reward system will ensure a fairer, more resilient reward mechanism for DLPs in the Vana ecosystem. By incentivizing diverse contributions and decentralization, this approach guarantees long-term sustainability and equity while fostering innovation and competition.
+
+
+
+
+## VRC Type Terms
+
+- **Technical** - A VRC that proposes changes to Vana protocol specifications or implementations