[LIPS] Change to one vote per account

cc001 cc001.bct at gmail.com
Tue Feb 5 16:39:39 EST 2019

In my opinion the only purpose (or at least the most important one) of 
the voting system is to guarantee a secure and an efficient 
network/blockchain. If the voting system can not guarantee the security 
and efficiency of the blockchain, it is not suitable for Lisk, no matter 
if it has all desired properties listed in the proposed LIP.

I will explain in the following why in my opinion the "one vote per 
account" system will lead to an inefficient and maybe even an insecure 
blockchain/network and why it is therefore not suitable for Lisk. This 
is not because of technical aspects, but because of economical and 
game-theory aspects.

TLDR: The "one vote per account" system will lead to 101 delegates not 
caring about the integrity, efficiency and security of the network 
because they will have not enough financial incentive to do so. They 
will use the cheapest possible nodes, they won't update their nodes in a 
timely manner when critical security fixes should be applied, they won't 
care about missed blocks, they won't use their time to promote and 
support Lisk in any way and they will be bribeable for very low cost.

Let me explain why:
The following will happen in the long run: Well, I think it could happen 
pretty quickly, because the voters and delegates already know the drill 
from other DPOS systems like ARK, Oxy, etc...
But let's assume we play the game from the beginning, in little steps:

1. delegates will offer very little rewards, let's say 0-5%.
2. people will vote for those who offer 5%, and 101 delegates offering 
5% will be forging.
3. clever standby delegate on rank 102 will offer 10% to give voters 
more incentive to vote him instead of one of the top 101, to join the 
forging position.
4. voters will vote for the 10%-delegate on rank 102 (because they will 
get more rewards by doing this), who will finally replace the 
5%-delegate on rank 101.
5. delegates on rank 102 - 150 will offer the same, 10%, maybe also 
delegates on rank 1 - 101 will increase their rewards.
6. this will lead to a situation where all forging delegates on rank 1 - 
101 will offer 10%, until rank 102 begins to offer 20% and step 4 - 6 
will repeat with 20%.
7. This cycle will continue with increasing sharing rewards.
Delegates will continue to share more and more, until everybody shares 
around 95-99%. Actually, an equilibrium will happen, at the point when 
delegates share so much, that their income (maybe 1-5%) barely covers 
their costs. To reduce their costs, they will use the cheapest possible 
$3/month VPS nodes, they will spend as little time as possible for Lisk, 
and they won't care about their nodes, because they earn almost nothing 
anyways, it doesn't matter for them if they miss blocks or if they 
become unvoted. If people think this is no problem because they can 
unvote those sloppy delegates and simply vote for better delegates, they 
are wrong. There won't be better delegates, because every delegate will 
HAVE TO give 95-99%+ rewards to have a chance to join 101 and for an 
income of like $100 per month, there won't be many offering a good 
delegate job.

The end result will be, that those 101 forging delegates have extremely 
little financial incentive to run their nodes in a secure and reliable 
manner. They won't care about the network or the ecosystem. Even worse, 
they could earn more by accepting bribe money. The LIP explains the 
situation about bribing, it is not too easy to bribe 51 delegates to do 
real harm to the network. But still, it would be very cheap for a 
competitor blockchain to bribe a fair amount of delegates (which don't 
even have to be coordinated) to disturb the Lisk blockchain severely.

For voters those 95% sharing rewards might sound like heaven. BUT: the 
high LSK rewards will be worth nothing when the blockchain is insecure, 
is inefficient, is not upgraded in a timely manner when crucial security 
fixes should be applied, because this will lead to falling LSK prices on 
the market. You could even lose your LSK if the blockchain is not 
secured properly by financially incentivised, serious delegates.

Another reason why I don't like the "one vote per account" system is 
that I want to vote for multiple delegates, because there are many great 
people in our community! I can't and don't want to reduce my vote to 
only one single delegate. I know at least 50 delegates who definitely 
would earn my vote. I would definitely prefer a system where I can vote 
multiple people and everyone gets (account balance)/(# of votes) voting 
weight from me. Of course I could split into 30 accounts, but it's too 
much of a hurdle to do that and it would need quite some LSK for paying 
the fees.

Because in my opinion the "one vote account" would lead to an 
inefficient, abandoned and insecure blockchain I refuse this proposal 

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