I think search staking needs some adjustments imo - it would be a mistake to set it up in the way that was communicated so far. Here are my thoughts:
1) Thought: Don’t make laws that you can’t enforce!
Laws that can only be poorly enforced, because it is very hard to detect/proof any violations need draconic (and often disproportionate) penalties that work as deterrence for people - otherwise folks won’t take the law serious.
I don’t like such laws, because they’re highly arbitrary.
But this is exactly the route that search staking is going:
It’s very hard to proof violations - there is no definitive way to judge a searcher. It would still be hard enough, if we would track searches. But WE DON’T. There are only things like search patterns and IPs. This is good enough to sort most searchers into the correct category. But this can never judge an individual searcher with the high certainty that is needed when there’s so much at STAKE!
I’m a 100% legitimate searcher, but would only stake with a bad feeling because of the arbitrariness of the decision making. The system is not good enough to work out when there’s nothing at stake - it’s ridiculous to think it’ll work out better when there’s a lot at stake!
In the end Presearch will probably never enforce slashing to search abusers, because otherwise nobody will ever do search staking again. But search staking will add a significant incentive for fake searches to the game, because now the earning potential will be significant enough even for people in developed countries. We shouldn’t set an incentive to bad behavior, that’s absolutely counterproductive…
There’s on on real benefit to search staking, and while that benefit gets introduced together with the search staking it’s actually independent from it - that’s the reduction of general (non staked) searches to 1/10 of the former reward. That will be usefull, because it will help with bot farms.
2) Thought: Node staking and search staking have the same APY, but node staking APY should be a bit higher imo
According to my calculations the APY of Node Staking and Search Staking is essentially the same: Node reward consist of two parts - they earn for their active search work (minimum stake is required for this) and they earn for the amount of PRE that is actually staked on this node (you need a minimum stake of currently 4k PRE, but there is no upward limit for the maximum). Both parts of the rewards are indepent from one another. The higher your PRE stake, the higher your rewards will be in this part of the calculation - this is linear and the APY is fixed (but changes dynamically in accordance with the token price and the total reward pool) for all nodes. So with very big stakes your node rewards will be essential your staking rewards (because the search rewards part doesn’t increase with the stake, only the stake part of the calculation does - to increase the search part you’ll need to split your big stake into many small nodes).
If you stake 5500 PRE (current minimum for search staking) you’ll get the same APY on search staking and node staking according to my calculations. This calculation disregards the rewards for active search work and the expenses for the VPS, and it assumes that the searcher does 25 searches per day (which is currently the maximum amount of rewarded searches per day) - but realistically everyone with a significant stake will reach the daily maximimum, because there’s a significant incentive to it…
I think it is not known yet, whether the search staking rewards diminish in the same way that node rewards do, when the token price rises and increases above 7 cents. But I assume they do, because otherwise the search staking would quickly outperform nodes and that would kill the network.
Personally, I think node staking should get a little more than search staking, because it’s a bigger effort and commitment, and most node operators will naturally be searches as well. But I can live with rewards being even for both, it’s just my opinion and preference.
And if search staking reduces the number of nodes, the active search work might get more lucrative for the remaining nodes, which would naturally increase the node rewards and find a new balance (but it’s not known how exactly the node reward pools are set up, so not 100% sure this will work out in this way).
To reiterate, my main point is this: Don’t make rules that you can’t enforce, and that’ll put us in a space of arbitrariness!
I’m not against search staking in general, but I suggest a different approach:
Don’t reward searches, reward activity instead!
Measure how active an account is over different timeframes and reward natural activity. It’s our goal to make presearch the users habit, the users default search engine - without artifically boosting the users need for searches.
We must find and encourage the sweet spot that matches most of the average users.
If I search on a different device (or browser) where I’m currently not logged in, I don’t want to feel bad because I lose money (or go through the hassle of login in to not miss out on rewards).
I don’t want to feel any pressure of missing out, if I enjoy a day without much searching.
On the other hand there should be enough incentive to make Presearch a habit for those that have troubles to let go of their old googling habits.
The sweet spot would be, where this is accomplished for most average people.
I’m thinking of something like:
Measure the activity over 3 different timeframes and apply a weight to each branch:
- Daily Activity
- Weekly Activity
- Monthly Activity
- daily weight - 30%
- weekly weight - 40%
- monthly weight - 30%
→ total weight - 100%
“daily/weekly/monthly Activity”: Count number active days/weeks/months in the past 12 days/weeks/months and account a percentage to it:
- 10+ days/weeks/months - 100%
- 9 days/weeks/months - 90%
- 8 days/weeks/months - 80%
- 2 days/weeks/months - 20%
- 1 days/weeks/months - 10%
- 0 days/weeks/months - 0%
“Activity Score”: Measured in reached “Activity goals” during the daily/weekly/monthly timeframe:
- 80% of your active days have more than 5 searches - weight: 40%
- 50% of your active days have more than 10 searches - weight: 30%
- 20% of your active days have more than 20 searches - weight: 30%
For each reached “Activity Goal”, the assigned weight will be added to your “Activity Score” - so the Activity Score will have a value between 0 and 100%
daily score = (daily Activity * daily Activity Score) * daily weight
weekly score = (weekly Activity * weekly Activity Score) * weekly weight
monthly score = (monthly Activity * monthly Activity Score) * monthly weight
total score = daily score + weekly score + monthly score
→ the user specific total score will be between 0 and 100%
effective search staking APY = total score * maximum search staking APY
I suggest to start with a maxium search staking APY of 15% - that would be slightly lower than the node staking APY, but still very competitve. The APY will change in accordance with the same dynamics that change the node staking APY.
Please add some kind of info field that explains the dynamic nature of the APY, because our specific dynamics are rather uncommon in the crypto space (but important for sustainability).
Thank you for reading.