Community Sentiment on Znode Collateral

Hi Zcoin Community!

It has been brought to our attention that some of you are in favor of increasing the Znode XZC requirements from 1,000 XZC to a higher number.

The argument is that too high a percentage of XZC is locked up (currently 69% of our circulating supply based on 6,100 Znodes) and that it affects the liquidity of the coin on exchanges. Another opinion expressed is that Znodes are too cheap right now, way below the equivalent amount of US Dollars we initially set in late 2017.

To gauge community sentiment on this matter, we are conducting a survey on whether to increase the collateral for Znodes.

A Znode collateral change is a fundamental change to Zcoin’s economics and, therefore, should not be taken lightly. To ensure your opinion is given weight, please do include your reasoning for your decision. For this reason, we have decided not to do a simple poll but will require everyone who wants to vote to post their argument.

With the upcoming upgrade of the masternode code underlying Znodes, everyone’s Znodes have to be reinstalled, and the queue reset. We could use this opportunity to introduce a change to the required collateral.

If enough of you think that, indeed, the Znode collateral requirement is too low, we can increase the collateral required to run a Znode with the upcoming fork. A more drastic option is to remove Znodes altogether, which would free liquidity up though it would mean that all masternode services such as ChainLocks (that provide 51% attack protection) and InstantSend would not be on the table anymore.

We have thought about possible options but to keep the discussion more focused we propose the following (though you are free to propose your own):

  • a moderate increase (to 1,500 XZC)
  • a doubling (to 2,000 XZC) and
  • a quadrupling (to 4,000 XZC) of the collateral

Of course, you can also vote to:

  • not increase the collateral at all or to
  • remove Znodes entirely!

We would appreciate it if you took the time to reply and tell us what you think!

Thank you very much,
The Zcoin Team

7 Likes

Zcoin节点抵押数投票

你好,Zcoin社区!

现在引起我们注意的是,社区中有些人提议将Zcoin节点的XZC数量要求从目前的1000 XZC提高到更多的数量。
目前有观点认为,Zcoin目前的节点被锁定程度(目前基于6100个节点的锁定量占所有流通量的69%),已经很大程度影响了Zcoin在交易所的流动性。另一种意见认为,节点成本目前太低了,远低于我们2017年末最初设定的等值美元。
为了衡量社区对此事的看法,我们正在调查是否应该增加节点的抵押数量。
Zcoin节点的抵押数变更是Zcoin经济学的根本变化,因此,我们不应轻视。为确保您的意见具有重要意义,请提供您做出决定的理由。因此,我们决定不进行简单的民意调查,而是要求所有想投票的人发表自己的观点。
随着即将到来的节点底层Masternode代码的升级,每个人的节点都必须重新安装,并重新设置队列。
我们可以利用这个机会对所需抵押数量进行更改。如果你们中的足够多人确实认为节点抵押数量要求太低,我们可以通过使用即将到来的硬分叉来提高节点所需的抵押数量。更进一步的选择是完全删除节点概念,这将完全释放流动性,但这同时意味着所有主节点服务(例如ChainLocks(提供51%的攻击防护)和即时发送功能将不再存在。
我们已经考虑了尽可能多的选择,但是为了使讨论更加集中,我们提出了以下建议(您可以自由提出自己的其他建议):
适度增加(至1,500 XZC)
加倍(至2,000 XZC)
抵押的四倍(至4,000 XZC)

当然,您也可以投票:
不改变抵押数量
完全删除节点概念!

如果您花时间回复并告诉我们您的想法,我们将不胜感激!

感谢,
Zcoin团队

4000XZC or 5000XZC
add 5000XZC ok?

more nodes means more privacy

but the znode reward cant afford the rent cost of vps in 2 years

so I think 2000 XZC will be great

1 Like

The current price of Zcoin should not be a parameter to determine the staking required to own a ZNode. The focus should rather be on increasing the value of the project which will lead to greater adoption. Spending time and energy on changing the economic incentives of a project that is struggling is not a proper use of human capital.

If any changes are made, they should not be done retroactively as it would significantly impact investors who have paid serious capital to obtain a znode, many of which who stuck with the plan and supported the project despite the market downfall. Changes to the staking model for these people would result in a devastating blow to them which could have a negative impact on the reputation of the project. I would avoid ANY changes to the requirements.

11 Likes

Znode, gives permanence to many currencies, avoids the vision to speculative trade, and encourages people to keep more and more coins to obtain the rewards, eliminating Znodes will not be a good idea.

On the collateral, there are good and bad benefits to change, duplicate or triple the amount of Znode, and some people would lose ownership of having had one, in addition the acquisition for some future investors will be limited when the Zcoin price increases. A benefit to increase collateral will be to give more firmness to the network, in the hands of the most responsible and encourage people to buy to reach the new collateral.
It’s just my opinion, I could be wrong.

2 Likes

5000 mortgages are the best,It is better to have a period of locking currency, and set different rewards according to different locking periods

I hope 3000xzc for one node!

Raising the collateral is a very bad idea in my opinion.

Firstly, those holders who have paid a lot to accumulate 1000 XZC and who are holding on despite the price, because they have hope for the price to recover and they can see their rewards coming in, those people, and I suspect there may be a lot, will be quite upset and they will sell.
At the moment we don’t really need more people selling their XZC.

Secondly, a decision like this gives the project a very bad image in terms of decisions being made from the top down, affecting the holders. It doesn’t look like a decentralized project if people are being surprised by such decisions and we can’t expect most holders to follow the social channels and even know about this until the decision has been made. It’s a bear market especially for alts, people have a life and other things to do, other things on their minds. At some stage they will find out and it won’t look good to them to see such a change.

Also, I don’t believe it will improve liquidity on the market to have fewer MNs, most people know by now that they should not leave coins on exchanges if they don’t trade.

10 Likes

Note this proposal didn’t originate from the team but enough community members asked us on this to make it deserve a debate and discussion.

There is no position held by the core team and views expressed here are their personal ones.

6 Likes

Decision to increase collateral may create distrust in people. One can think there is no guarantee if he will accumulate increased amount of collateral to have Znode. Maybe after few months somebody who has significant amount of Zcoin may want to increase again.

Now people who have 2000 XZC don’t mind have collateral 2000 as they would need to host only 1 Znode instead of 2. But on end it cuts off normal person who was not able to mine ten thousands of coins at the beginning.

4 Likes

Znode’s should be leveraged to help further secure the network and could be used in some very innovative ways!

1 Like

If any changes to the Znode structure were to be implemented they should be made after the halving of Zcoin block rewards in 2020. Like other coins that experience a periodical reduction of supply economics should dictate the Zcoin cost of production to rise.

With the Znode portion of the block reward being reduced we could see interesting game theoretics further unfold (i.e. holders with shorter time horizons opt NOT to run Znode)

a doubling (to 2,000 XZC) is my vote because the high percentage of locked up coins and the low liquidity stay against the interests of exchanges and with have the risk that they could break the zcoin trade on the exchange cause of low volume like they already did with different coins.
Kind regards from Germany.

my vote keeping the znodes as it is (1000 zcoin), changing can generate a lot of distrust

8 Likes

Please remove all collateral and just make it Proof of stake no that anyone can secure the network.

  1. It would allow more zcoin to be staked to secure the network.
  2. More importantly, it would not create an elite who can secure the network and get rewards and the rest of us who can not.

You can use the “but hosting nodes cost” because if someone only has like 2 zcoin and the monthly hosting fee is too high that they filter themselves out.

Making staking and staking rewards for everyone would be more attractive to the average user.

1 Like

I think it’s a very bad idea. the current price does not have to be a criterion to change collateral Zcoin for a masternode. the price goes down because we are in a bear market. the number of 1000 is perfect. if the zcoin goes back to $ 100 in a few months, the increase will limit creating segregation for those who would like to have a masternode. and I think we need to keep the masternode to counter attacks 51% and for the speed of future transactions. for me to change the number of Zcoin for the collateral would be a gross mistake …

Rowenta01

8 Likes

1000XZC is neither a magical number nor set in a stone that we cannot change.
We should be always willing and ready to change to adapt. However, the arguments for the change, the motivation for the change in this proposal is biased and flawed in my opinion.

  1. Increasing Znode collateral will not affect exchange trading book’s liquidity.
  2. Znode is too cheap in USD does not mean we should increase the collateral.

1) Increasing Znode’s collateral, will have the following effects
Less unique individual can run a Znode
This will increase the number of centralized services that offers shared Znode hosting.
People will give up and move away. Will increase one-time sell orders volume, will not increase liquidity
People will top up and maintain their znode. will increase one-time buy orders volume, will not increase liquidity

So you think less znode = fewer coins being locked, so more coins for trading thus increase the liquidity?
NO.

we can take a look on other coins, like NEM, which require 3 million XEM as collateral to run NEM supernode. They only have around 1000 nodes on the network. Do they have good liquidity? No

ZEN, which has only less than 40% coins locked, and they have very poor volume and liquidity compare to our Zcoin.
Because if we get to achieve less locked coins in total %, that will NOT mean we can increase the liquidity, because non-locked coins are NOT equal to coins being added to trading liquidity book.

Hence Znode’s collateral has no correlation with trading book’s liquidity

2) Znode is too cheap
Since the cryptocurrency price in USD is very volatile, we should not change the znode’s collateral according to its price in USD. Or else we will need to keep changing. Running a znode is about USD5, and up USD10 only. Even with a price of USD1000 per znode, the operator can still make a decent return on $5 VPS.

The proposal is suggesting that we need to increase the Znode’s collateral to solve liquidity issue, If our motivation is to increase liquidity, then I can say that with confidence, it would NOT solve the liquidity issue. To solve the liquidity issue, we have no short cut.

  1. Deploy liquidity providers (market makers) - immediate effect but require more money up-front.
    But Zcoin has made good progress here by engaging with Hummingbot. Hummingbot campaign make regular traders to become liquidity provider for Harmony.

  2. Zcoin needs to able to reach out to more people, including entrepreneur, developers and eventually getting more ecosystem players into zcoin. Then we can have more users. Eventually, more people involved in trading zcoins, making attractive for people to run market making bots because they can make money. This is a long process, and Zcoin marketing and business development have been on-going all the while. We can continuously look for ways to improve it.

*Note I do have multiple Znode, which I can consolidate my Znode if the collateral requirement is to be increased. So it is not going to affect me personally, but I don’t see we have a correct logical argument here in this proposal to increase the collateral. If there are other arguments, I’m more than willing to listen.

11 Likes

Hello to everyone.

I find the argument highly irrational.
Are we really suffering from low liquidity? Are there not enough coins for sale?? Then why the price keeps going down instead of up?

This is clearly an attempt from whales that already own thousands of Zcoins in order to be fewer people that produce them. It kicks out the small guys and gives more power to them.
If there is a liquidity problem it is clearly created by the ones that are pushing for this change. The whales that already hold tons of Zcoins!

Also the argument that the price of a Znode is cheap and that this change would help doesn’t make any sense. Change the economics and you will see many unhappy people dumping and leaving the project. If the price halves then it doesn’t matter that the requirement doubled , does it?!
It also seems unethical to change the rules that made someone invest in a Znode and kick him out because someone else prefers it otherwise and has a benefit from the change.
I also believe that it is better for the security of the project, for adoption and for the price , to have more people able to run Znodes instead of fewer.

This proposal would be a drastic change to Zcoin’s economics and that the outcome would be beneficial is highly uncertain.
On the other hand, it is certain that we will have many unhappy people that are already involved in the project.

It is a huge NO from me.
Thanks for reading.

8 Likes

I wonder what sort of consortium of whales is pushing for this change, maybe they look ahead for the halving and as it stands after the halving a znode will barely make the server costs, so i guess the plan is to eliminate the small players so that the whales can reap extra rewards.

The price should not dictate such major economic changes, it only creates distrust and uncertainty for the future, what will be next, whales wanting an increased supply because they don’t make enough in fees ? maybe we should up the block reward because “liquidity” ? maybe postpone the halving altogether ??
ofcourse those ideas are ridiculous and borderline stupid with the worst one being to go full POS, thats a guaranteed failure and a path to total centralization.

I don’t think Zcoin lacks liquidity, excluding the fake volumne exchanges, on binance theres only 10-20 btc daily that accounts to around 10-20k zcoin traded, thats a really small amount considering there almost 3 mil unlocked coins.
What zcoin needs is interest from buyers and this will not magically happen if the znode collateral doubles or tripples, it will only have a negative impact as sell presure and uncertainty about the future pushes even more people to sell.

Any change like this would be a huge fuck you to the average joe that accumulated a node last year with high prices and held through all this bear market until today, that would be the quilavment of holding a shitcoin on an exchange, whatching it go to 1 satoshi and then eventually exchange gets hacked and lose it all.
Having more nodes run by more people on the network is far better for security and decentralization than having less people running less nodes let alone all the other factors mentioned above and by others that make valid points in this thread.
Please think about this very carefully because a change like this will shape the future of zcoin forever, a rather bleak future.

8 Likes