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We propose that 1) all BPs deposit a certain amount of EOS as collateral to demand them accountability and 2) the BP voter system automatically pays a fixed amount of interest to all voters.
2. Existing voting system responsible for the health of the BP structure
One of the most important principles in the consensus algorithms in cryptocurrencies is accountability. This maintains the health of the network by imposing economic penalties on BP's inappropriate behavior.
First, in EOS, BPs produce blocks without depositing any collateral which is unlike Cosmos coin. Thus, the responsibilities of BPs are fully dependent on votes. The vote buying is prohibited by the Constitution due to the importance of the voting.
In other words, inappropriate behavior of a particular BP will result in his economic disadvantage as it degrades his reputation and leads to lowering his votes. The EOS consensus algorithms, DPOS (Delegated Proof-of-Stake) and BFT (Byzantine Fault Tolerance), are a kind of reputation system using BP voting. By the way, profits of BPs are determined only by their voting results.
Secondly, such a voting system can only function properly if it meets the following two conditions: The entire EOS community should 1) make sure that holders can get access to enough information about the numerous BPs and 2) constantly monitor the BPs. The premise of this is that EOS holders have to invest a lot of time for that.
Despite this fact, the disadvantage of the current voting system is that BP voters do not get any direct economic benefit. In other words, while EOS holders need constant efforts to make the right BPs elected, they do not receive any compensation for it.
This can reduce the motivation for voters to participate, especially if they have relatively fewer coins. Therefore, whales, EOS holders with a lot of coins, could have chance to abuse this voting system, in which case the results of BP voting can be wholly determined by them.
The fact that whales could unilaterally determine the voting result means that reputation system of EOS based on voting may not work normally. Then BPs would only need to consider whales’ votes, and, in that case, they may be less likely to provide the additional computing resources needed in the network. This is because the profits of BPs are mainly determined by whale voting and providing additional computing resources will generate additional expenses. Hence, it is possible that these factors would prevent EOS from functioning properly as a distributed application(dApp) platform.
Therefore, the current system seems to entrust the network heath entirely to benevolence of BPs who basically pursue economic interests. Eventually demanding the collateral of BPs for accountability and incentivizing holders to vote can make the EOS network healthier.
3. Collateral for integrity and incentives for votes by system.
In order to solve the above problem, we propose that 1) BPs may regproducer*, register as a BP, after depositing the collateral and 2) the voters are rewarded by voting system.
1) BP's collateral deposit and punishment using it
2) How to systematically pay interest to BP voters
Separately, holders can benefit by lending coins to CPU / Net bandwidths. Then, our approach assures that holders can receive rewards both from lending(staking) their own coins and voting, additionally.
Please note that this is just one example, so we hope there will be a lot of discussion in the community.
We propose that 1) all BPs should deposit a certain amount of EOS as collateral to secure the responsibility of block producers, and 2) voters receive interest for voting itself by voting system.
A method of securing accountability through such collateral provides a way for the EOS community to penalize BPs that have committed improper conduct, such as buying votes and etc. Compensation for voters can also increase the turnout rate for voting.
In Cosmos coin, validators, who produce blocks, should deposit collateral and voters receive interest by the system regardless of who they vote for. This proposal is based on the ideas of Cosmos coin.
* regproducer is a cleos command that is used for register as a BP.