The Solana Foundation is implementing two updates to its auto-delegation strategy. First, we’ve implemented a change to the skip-rate threshold calculation (see Block Production Skip Rate below). Second, an infrastructure concentration threshold has been put in place (Infrastructure Concentration below) to try to reduce validator and stake concentration at individual data centers.
These changes will go into effect as of 3 March, however note that the infrastructure concentration feature will be rolled out in phases, as described below.
Block Production Skip Rate
Up until now, there has been a static threshold set on a validator’s block production skip rate, in order to receive a Foundation delegation. A validator’s block production is defined as the ratio of the number of blocks that a validator produces that are confirmed by the network to the number of slots that same validator was scheduled to be the leader/block producer. Skip rate is [1 - block production], so a validator that produced confirmed blocks in 90% of its scheduled leader slots has a skip rate of 10%. A validator whose skip rate exceeded the static threshold would have its Foundation delegation deactivated until the validator’s skip rate dropped back below the threshold.
This threshold calculation has now been updated in the following way:
- At the end of each epoch, the unweighted average of all block producer skip rates is calculated.
- A fixed threshold for maximum skip rate is added to the cluster average.
- Validators who have skip rates above the new threshold have their delegations removed for the subsequent epoch
As an example if, for epoch N, the average validator skip rate was 22%. The auto-delegation bot will add a flat 15% skip rate threshold to the average skip rate (i.e. 22%), resulting in a final skip rate threshold of 37%. So any validators who had a skip rate > 37% in epoch N, will have their Foundation delegations removed as of epoch N+1, until their skip rate falls below the threshold set by this algorithm in future epochs.
In an effort to encourage a reduction in validator infrastructure concentration, the foundation will be adding a data center location component to its staking strategy. Specifically, the Foundation auto-delegation bot will calculate the total amount of stake concentrated under all identifiable unique data center locations, if the stake associated with any single data center is above a predetermined threshold (e.g. 25%) all of the Foundation delegations to validators operating within that data center will be removed, until the stake falls below the threshold.
Data will come from the validators.app API and be sampled at stake bot run time, like all other criteria. Since this new obligation requires non-trivial action be taken by affected operators, its enforcement will be phased in as follows.
Phase 1: March 3rd - 17th
Starting on 3 March, the Mainnet-Beta stake-o-matic will begin issuing warnings to validators hosted in data centers with a combined stake over 25% that they are affected. These warnings will come in the form of messages in the #mb-stake Discord channel. Note that during this first phase only warning messages will be issued, NO STAKE WILL BE REMOVED.
Phase 2: March 17th - April 17th
On 17 March, validators which were affected by the Feb. 3, 2021 Hetzner Helsinki planned maintenance network outage will become eligible for destaking. A list of validators IDs that were impacted by the Hetzner incident, and therefore eligible for destaking via this infrastructure concentration threshold, will be published prior to this phase.
This initial limited phase is intended as both a trial of the destaking feature and as an opportunity for those operators affected by the outage to prove that they have taken appropriate measures in the wake of the mass outage incident.
Phase 3: April 17th+
Finally, all validators will become eligible for infrastructure concentration based destaking on 17 April. The threshold concentration will be determined during the preceding week, based on that of the worst case facility and announced in advance. The threshold concentration will then be reduced by 5% every 30 days until the target maximum concentration of 15% per data center is reached.