HP028 - Validator Mining Program

1

Initiate a Validator Mining Program (VMP)

This proposal seeks to:

  • Recruit BENQI, AvaLaunch, GoGoPool, Eden Network as Validation Partners.
  • Initiate a Validator Mining Program.
  • Assign 0.0415% of the total token supply to the VMP, vested over 24 months, starting TGE. Vest 10% at TGE.
  • Lock 600 AVAX worth of $GGP
  • Direct Cosmic Cactus LLC to sign a SLA agreement with Validation Partners.

Background

The Hubblenet is an appchain built as an Avalanche Subnet. This new blockchain will be specifically designed to run Hubble Exchange, a decentralised perpetual futures protocol that uses a Decentralised Limit Order Book (DLOB) design.

In order to make a DLOB like Hubble Exchange possible, the subnet runs a customised version of the Ethereum Virtual Machine (EVM). This means validators will have additional responsibilities alongside securing the network:

  1. Matching orders.
  2. Performing liquidations.

These responsibilities are fulfilled as part of the block-sealing process.

Motivation

The primary objective of this proposal is to bootstrap Hubblenet in a stable and secure manner. Retaining a set of reputable and reliable validators is essential to securing the subnet, especially at its genesis. This proposal seeks to onboard long-term validators as part of a 12 month commitment.

The Validation Mining Program has two objectives:

  1. Incentivize Validation Partners to promptly facilitate upgrades to Hubblenet.

Hubblenet is likely to be continuously upgraded as improvements are made. Upgrading the subnet will require coordination with validators and the allocation of their technical resources. It is important for validators to facilitate the upgrades in a timely manner. The Validation Mining Program intends to incentivise subnet partners through a Service Level Agreement and aligns their incentives through a commitment of Hubble Exchange’s future token.

  1. Garnering a minimum set of validators to commit to the subnet long-term, ensuring its stability.

Based on recommendations by Ava Labs, to ensure the stability of a subnet, a minimum of 6-8

nodes must validate a subnet at all times. The VLM intends to vest and secure a foundational set of validators - or as the NFT degens say: “a floor” - which are committed, so the number of validators does not fall below this threshold.

The minimum number of validators is chosen to bootstrap the subnet with the VMP, primarily so the subnet can be conveniently upgraded without additional overhead of coordination while fulfilling the requirements needed to achieve stability.

Validation Partners

In order to bootstrap the subnet, a set of Avalanche Ecosystem projects, referred to as ‘Validation Partners’, are proposed to validate Hubblenet at genesis.

Prospective Validation Partners were ranked for the purpose of this proposal, based on the following criteria:

  • Reputation and credibility within the Avalanche ecosystem.
  • Up-time and reliability of validators.
  • Track record of experience and competency in maintaining validators.
  • Potential for co-marketing opportunities.
  • Participation within the Hubble Exchange community.

The following Validation Partners are proposed:

  1. BENQI
  2. GoGoPool
  3. Eden Network
  4. Avalaunch

Validation Mining Program

A Validation Mining Program is proposed to incentivize Validation Partners. As part of a Service Level Agreement (SLA), genesis validators will be assigned the following number of validators and be eligible for the delineated compensation:

Name No. of Validators AVAX Comp. Hubble Exchange Tokens
BENQI 3 6,000 155,640
GoGoPool 3 6,000 155,640
Eden Network 1 2,000 51,880
Avalaunch 1 2,000 51,880

Hubble Exchange DAO compensates each validator partner 8% Annually of [No. of Validators Contributed * Market Price of 2000 AVAX) in Hubble Exchange Tokens. The Hubble Exchange tokens shall be priced at the seed round valuation. The price of AVAX for the purpose of this agreement is 12.97 USD, taken at 12:12 PM on Monday July 31st CST:

For the Hubble Exchange tokens, the following vesting schedule is proposed:

10% vests at TGE, then 1/24 vests every month for 2 years.

In exchange, validators will be expected to:

  • Maintain a minimum up-time of 99%.
  • Promptly facilitate upgrades to the Hubblenet when requested.
  • Are not allowed to alter the business logic of the validator node; performance optimizations are allowed and encouraged.

Although validators earn RealYield, accrued through transaction fees, the Validation Partners will be required to transfer the gas fees earned to the Hubble Exchange DAO. This is so that the DAO can reimburse gas costs to designated market maker/s.

Lock GGP

As part of this proposed agreement with GoGoPool, the Hubble Exchange DAO is requested to purchase 600 AVAX worth of $GGP and lock it for the duration GGP is retained as a validator.

Authorise Cosmic Cactus LLC to sign contractual agreement with any validator as needed.

Cosmic Cactus LLC was incorporated through HP022 for the purpose of entering into off-chain contracts on behalf of the DAO.

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2

I’m in support of this proposal and the 0.0415% token allocation to the VMP is actually a very good deal for hubbledao.

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3

Chiming in from the GoGoPool side –

We are extremely excited to get involved and are fully onboard with the primary objective of bootstrapping Hubblenet in a stable and secure manner!

Want to express our appreciation for considering GoGoPool as a valuable player within the Avalanche ecosystem. We are committed and all-in; focused on making sure our participation will be beneficial for the Hubble + Subnet community as a whole.

+1

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