Thoughts regarding "search staking" - and a proposal to set it up differently

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:

  1. Daily Activity
  2. Weekly Activity
  3. Monthly Activity

“Weight”:

  • 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%

Formula:
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.

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Hi just to clarify for now we are in a beta version and we are looking at some aspects of the rewards. Let’s prepare an article explaining all the details before the official launch. Rest assured there will be some changes. Thanks for the suggestion

Interesting thoughts… but I will disagree with your point that the search and node staking have the same apy. I will compare using apr, since that is easier :slight_smile:

Returns are at a minimum 3 points higher for node staking, this of course depends on the amount staked but 3 is the minimum. Nodes return 21.4% at 100,000 pre staked (this includes accounting for the vps cost), while the return at a 4000 pre stake is 30.5%. Search staking is constant at 18.25% regardless of the amount over 5500 staked.

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You’re right! I only did a quick calculation in my head and it was close enough for me to believe that they would be the same (didn’t thought they would be so close by coincidence :smiley: )
I did a full calculation now and you’re right (it said 21,6% for my biggest node).

The APY wasn’t a big concern anyway - I’m much more concerned about incentivizing search abuse, I did read ‘slashing the stake’ a few times in telegram and that just sounds terrible. You can’t do that based on search patterns and IPs. But just letting abuse grow and threat with a big finger pointing at slashing your stake would also be really bad. I just hate senseless laws, that could potentially cause trouble. In my country you can get fined with 50k € if you kill a wasp - no idea if anyone ever needed to pay such a fine. Nobody controls this law and nobody cares about it when a wasp disturbs your dinner you will take care of it with a fly swatter. But what if your neighbour doesn’t like you and makes a photo of you killing the wasp and files a criminal report. Most people don’t even know about this law. There’s way to many laws and unfortunalely many of them are completely useless or even damaging, because they can create arbitrariness and inequality. (I think it’s important to protect our nature, and while wasps can be quite annoying they do also play an important role in ecosystems. I’m not a legal expert, but believe laws like these completely fail their intended purpose.)

Maybe the team calculates with paying the 18,25% to all search stakers and doesn’t care about abusive searches - I mean the abuse is limited in it’s scale, because it is directly tied to the stake, so the threat is of a different kind compared to bot farms. But these things (like my wasp example) do really bother me.
Hence my suggestion to reward activity that implies a natural search habit, and will encourage a natural search habit. You could still abuse it, but it would probably be a bigger effort than just searching naturally. My suggestion does encourage habit building and good long term usage, becaues it will take at least 10 month to reach the maximum APY.
Thinking about this, that could lead to account trading where APY seekers try to reach the maximum faster by buying an account. The suggested timeframes could be adjusted though and in the end there’s probably no perfect way. But I definetely believe this is a better approach than rewarding per search.

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Perhaps a team member can clarify. As I understand it Node rewards are maxed at a dollar amount to pay for the cost of an average Node, plus. I remember it being between $8 and $12. You will not get the same amount of tokens per month if the price goes to $1.00. These are the things we need clear communication on. Some of my nodes are $.99 a month and some are $10.00. My average over 56 nodes is currently $3,01 per month. I do not go for just the cheapest but use up to 12 vendors for locations such as Taiwan, Malaysia etc as this helps Presearch. Some may put all nodes in NY on a provider and pay $.65 because all they care about is return. One of my US nodes is $9.99 a month. It also has the highest consistent score of 94 avg. Ohio based. It also has 2GB of RAM and more storage. I have a few nodes at 512MB ram and even one running on 384 MB. It would be nice if Node rewards were also weighted on available resources and perhaps even location some remote countries can be quite expensive (I pay up to $12 /mo).

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Agree with Fabio. There is no perfect solution to address search rewards abuse, we already mentioned this in another thread here New User Incentives - #3 by XRPRE and New User Incentives - #20 by XRPRE we talked about this issue and tried to categorize it as a question of should the project reduce/replace search rewards with other equally beneficial actions?

In the end I think Presearch might unfortunately need to jettison all search rewards because it is just very hard to prevent fraud on this. Remains to be seen what the new construct will exactly look like or is being tested as. What amount of continued losses are worth it especially as the project gains more adoption there will likely be more scammers skewing searches and trying to farm tokens. I foresee people staking and trying to scam and getting slashed or not getting slashed and just causing more headaches for the project. I know some like the current search rewards and it is a nice selling point if it wasn’t costing the project too much. I am just trying to be real it is a difficult problem and can be costly.

Apparently instead of communicating with the community they may do a press release announcing the details of staking rewards that may or may not be any good?

Instead I would rather them be in here communicating information to the community about how or why they think some of these ideas can or cannot work. or provide a loose framework of what they are currently thinking and let the community potentially make it a better solution. They don’t have to agree with everything just like we won’t agree with all the teams decisions but there needs to be a better way to get things on the roadmap and have our community voices heard.

I will reiterate that actions speak louder than words. The actions of the new management team shows some promise at getting things accomplished but my main gripe is THE COMMUNITY HAS NO VOICE! And the actions so far are more aligned with VC investor values than community values. Do both build the future of search by building the platform that gives its community the most level playing field out there. Lots of utility and lots of opportunities.

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I fully agree with the mentioned disadvantages of the new Search staking. I have warned about these for months (in Alexandr’s chat group and inside this Community). Just to recap…

A) Rewarding searches will always lead to misuse by people who will try to trick the system and perform “fake” searches and “farm” PRE tokens.

B) Trying to get rid of farmers by forcing users to stake PRE as in the current beta version will “move” the problem… and it will stimulate “investors” to do “fake” searches to increase their APY.

C) As the PRE rewards per search are (lineair) based on the number of PRE staked (with no maximum), the “relevance” of doing extra searches increases. You know… it really counts if the user gets only 0.1 PRE per search (in the old system) vs a “staker” who stakes 500K PRE and gets 10 PRE per search. Also, it really does matter if you do 5 searches a day (3.65% APY) or 25 searches (18.25% APY).

D) Warning “farmers” that all their PRE tokens may be revoked if TOS are violated is not “sufficient” as stakers will try to find the “grey area” as it’s hard to distinguish “real” searches from “fake”. So, still “anti-farming” checks and (manual withdrawal) reviews are needed. Let alone that any revoke will lead to “complaints” and (legal) user actions to fight back the revoke.

E) Treating hundreds of thousands regular users who use the platform “normally” as if they are “token farmers” and cutting down the search rewards with 90% (from 0.1 PRE to 0.01 PRE) won’t be “appreciated”… You know, these users had the “dream” to achieve at some day the withdrawal threshold and get finally rewarded for their (regular) usages. Don’t forget these users were early adapters and used a search platform (a MVP with less features and benefits in comparison to other search engines).

F) Search staking will lead (sooner or later) to a form of “cannibalism” of node staking. Smart “investors” will just opt for the highest possible APY (of course also looking at time and costs involved either by searching or running nodes).

To make this last point more clear… you have to look at the difference in staking models.

The search staking is linear with a fixed reward per search based upon staked number of PRE. The price of PRE is irrelevant.

The node staking PRE rewards are based on a daily dollar amount “the team” assigns for all node stakers. This dollar amount is divided by the PRE price to calculate the number of PRE that can be distributed that day to all node stakers (where a minimum PRE price of $0.07 is used).

The actual PRE that the staker receives depends on the number of staked PRE, number of assigned searches, and “quality” of node.

It’s important to understand that the number of staked PRE is the main “factor”,

So, as long as the PRE price is below 7 cents, the staker will get the same daily number of PRE rewards (ceteris paribus). But if for example the PRE price increases to 14 cents… the user will get “only” 50% of his current number of PRE rewards.

Now, let’s look at the current APYs for both staking options to understand when “cannibalism” will happen…

Let’s assume that the team has a daily budget of $17.5K (my best guess) to pay out node operators.

At the (minimum calculation) price of 7 cents… this equals to 250K PRE to be distributed among 80K node operators who stake 280M PRE.

So, let’s make it easy and assume that for each 1K PRE staked, 1 PRE is paid out to node operators. (In practice, the “grandfathered” 1K node operator will get a little above 1 PRE, where the 1M PRE staker gets less than 1 PRE per 1K staked… due to their relatively higher part off node “activity” rewards in comparison to the staking part).

Now, suppose the PRE price increases to 14 cents…

Then the number of PRE to be distributed is just half of the current 250K PRE. Hence, 125K PRE.

But this also means that the APY is now 50% lower!

So, the gross APY (without taking server costs into account) is currently between 20% (for the 2M+ node) and 50% (for the optimal 1K node).

And with a 14 cents PRE… it’s between 10% - 25%…

and some (large) node stakers will opt for search staking instead.

And the higher the PRE price, the more cannibalism.

So, as the 2 staking models do work differently, the team should be aware of possible negative cannibalism… and it’s better to set up a system upfront that “avoids” this.

G) There is no need for additional staking. You know, 280M (56% of all PRE tokens) is already staked by node operators, and 40M (another 8%) by keyword stakers. Hence 64% of the maximum of available PRE tokens is already staked (this percentage is reaching 80% if you look at PRE tokens into circulation).

And now, maybe some of you would argue… the higher the staking percentage the better… but the staking rewards should be paid somehow (and preferably from income and not from newly minted tokens).

So, suppose “we” give 80% of token holders staking rewards, and we can give them 20% APY.

(Give 400M PRE staked 80M rewards)

But we can also choose to give only 20% (100M PRE staked) a 80% reward (the same 80M)…

What do you think will be better for the theoretical PRE token price?

Well, the latter would have a 4x as high token price!

This is called leverage…

And if the team wants to improve tokenomics… they should take “advantage” of this leverage effect.

So, above the main reasons why the new Search Staking model probably won’t work as supposed to be.

All just logical reasons… but the team has to listen and discuss these kind of new “ideas” first inside this community, instead of rushing and building and implementing a new (beta) staking model.

Let alone that we already experienced some annoying bugs, and that within 2 hours after informing the community in the last AMA where Tim spoke about a 1K minimum stake number, the minimum had to be increased to 5.5K as otherwise stakers would get a lower reward in comparison to existing regular users (as their rewards are not yet cut down with the aimed 90% cut).

BTW, I have some ideas how to avoid token farming (for example, just as Fabio, reward active users not the number of searches as mentioned in the “rewards” proposal)… but just as XPRE… I will stop with posting in this Community as long as we are not being taken seriously.

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I personally don’t understand why it’s deemed necessary to give such a high APY of 18.25% for getting great results while searching. Seems ridiculous.10% perhaps and even then …why? Other than getting people to steadily hodl rather than trade which I understand if the project had more tokens not staked to begin with.

Rapid changes being made and I don’t mind. Nothing has that has recently been done has been labeled as permanent… search staking and its structure, ad placements etc …

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The APY of node stake and search staking are only the same at relatively high levels of PRE staked at a node level. For anything lower than 10,000 PRE node staking is going to be 1.5-2x better return (30-40% APY). There is an extremely easy fix, rendering all of the discussion above moot and will lead to a situation where we never need to worry about abuse due to opportunity cost / economics. I will not discuss here for obvious reasons but happy to discuss with the Tim/team over DM.

Trying to understand what the obvious reasons are for not discussing your ideas with the community in this forum. Other than the fact that the team does nothing with our community comments on here. Is there another reason?

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FYI APR is 18.25%, APY is more like 20% - assuming you can do daily compounding. Daily compounding should be possible given there should no longer be a waiting period of any consequence to withdraw earned PRE given that we have search staking. If this happens remains to be seen.

Yes there is, I can’t assume everyone reading these messages are good actors. Exercise for the reader I guess.

Worse (more) than I thought. Time locked stakes you will maybe get 14 max legitimately