The below has been taken from the latest ReddCore Dev update January 2021 which can be found in full here:
CryptoGnasher is working on a full data analysis of PoSVv2 characteristics, the multiplier and other aspects, especially graphic and visual trends, which will be published as soon as it is ready as a “Deep Dive”. One item that we are attempting to understand fully in order to provide clarity to the community is that of the PoSVv2 multiplier. For the sake of discussion, we’d like to establish the following facts about PoSVv2 and its evolution:
1) In preliminary calculations, PoSVv2 funding to the dev team was expected to be approximately 15–17M RDD/month. That was with the multiplier at its upper limit of 5, due to the observed 20% (or 1/5) or the network. As we have noted, however, that not only does overall production seem to be half, but the lower multiplier, due to regulation of the global interest rate at 5%, results in only a total production of 3–5M RDD a month, including proceeds of staking received RDD. This has obviously impacted our ability to deliver according to projected timeframes due to the much more limited funding available.
2) The multiplier itself, although explained to the community as a simple inverse function of the population actively staking has been restrained, and in fact controlled by a second calculation of the actual growth (and rate of growth) of the global growth or interest rate on the network. That is to say, the target is to keep the network growing at 5%. Presently we are approaching that growth exactly as desired. However, the distributed coins and rewards seem to indicate that there are other factors at play as well.
3) When the smoothing calculation was introduced, it was out of concern that large holders of RDD might be able to “game the system” and obtain more rewards by manipulating staking activity and timing to coincide with changes in difficulty, stakeweight and other details. This would be extremely problematic as, if not controlled for, could allow for excessive coin generation, radical swings of network difficulty and KGW calculation and other systemic and difficult-to-resolve issues. We coded mechanisms to control for this, allow for an extended timeframe of consideration, and other hard to manipulate aspects. It appears that in doing so, we may be calculating in a way that causes the multiplier to drop more quickly than we had expected, and with an extended timeframe for calculation means that such changes will remain excessively slow. This will provide a cap to network growth at or under 5% as desired, but in controlling spikes of activity, may in fact be normalizing at a lower rate than we had originally expected.
In short, we are doing more analysis and data study on this to understand fully why the multiplier has in fact remained so low consistently, despite maintaining around a 20% percentage of active stakers, give or take. While PoSVv2 does seem to have normalized our network growth, it seems to have varied from our projection in some interesting and significant ways, and we need to further understand how that came to be the case.
We plan to post and update a detailed analysis and status of PoSV on the reddcoin.com website when that piece is ready to publish shortly, so that the public may more easily understand status and trends on our blockchain and protocol.
Use of PoSVv2 funds to date
As part of our commitment to openness and transparency, we offer the following insights into how funds have been and are currently being used. A fuller and more detailed expenditure list will be posted as part of our public Funding page at https://redd.love/funding.html but in summary: Our monthly infrastructure and service costs are approximately $2500 US. That includes email, social media and collaborative services, SMTP relay, hosting/data center costs for production and testing machines (“droplets”), and other fixed cost items and services. We have spent funds on creative asset licenses for web and marketing content; we have contracted with platforms such Flipside Crypto, subsidized the research of the 2nd Redd History Book, supported web giveaways and Telegram rain, as well as contributed to the Redd Exchange Crowdfund. We’ve also restored RDD to users according to the terms of our Restitution Fund (see below). We’ve donated to support the BoxWallet product as it was crowdfunded, allocated funds and planning to charitable events, and in all ways attempted to use funds in good faith to advance the interests and prospects of Project Redd & ReddCoin. As part of our policy of transparency we will be publishing a more full financial disclosure during the course of this year.
At this time, due to reduced income from PoSVv2 (see above), our repayment has been equivalently slowed. We have, however, paid back more than 2M RDD to ReddHead donors, as well as engaged (see below) the ReddCoin Restitution Fund to provide some community members with restored funds. We are presently enhancing the website to show more financial information, but details of that status can be seen dynamically athttps://redd.love/funding
We anticipate continuing to pay in 1M RDD increments at least monthly to our donors until all donated funds have been honored and restored. As this represents a sizable portion of PoSVv2 funds, we feel this is a fair way to proceed.
Redd PoSVv2 — Current and Trend Analysis
There were a number of goals included in the ReddCoin community’s activation of PoSVv2 as our staking protocol. 1) To stabilize intended growth at or near 5% annually across the network. 2) To incentivize ReddHeads to stake actively by receiving enhanced rewards for doing so. 3) To allow part of those same enhanced rewards to be used to support development and ReddCoin infrastructure. Below we provide some raw data exported from the blockchain along with summary graphs and discussion to support the fact that these goals have in fact been met. While there appears to be some public confusion surrounding the multiplier, due in large part to our having offered a very simple explanation of the mechanism, the governing equations that were designed to prevent major and fast changes to network characteristics has shown to be doing exactly as desired, even in the face of major swings of active stake, or possible attempts to “game” the system. We expect that the multiplier will remain around 2–3 so long as the observed real network inflation rate continues to trend as it has, because it is those two numbers that should always multiply to give us our desired 5%. If our interest rate due to lack of participation should drop closer (observed over time) to 1% again, we will see a corresponding rise in the multiplier, no matter what the population of stakers is. This is slightly a different order of operations than was originally explained, and we can only attribute that to an attempt to oversimplify a complex concept. Attached to this post are a number of graphic charts along with the Google Sheet containing raw data (and those same graphs of course). This data is extracted from the blockchain itself and will be made available in a more graphical form as part of our website at reddcoin.com as well as amplified in an upcoming piece on our blog.