[DIP-49] Network Fee Ratio Maximum

Summary

This proposal introduces a max limit to the ETH/SSV price ratio within the current formula of the Network Fee. The max limit for the said ratio ETHSSVmax shall be set at 700.

Motivation

This proposal sets a max limit to the ETH/SSV prices ratio within the formula that is used to determine the network fee, thus stabilizing fee economics by aligning the Network Fee relative to potential incentives. While the Incentivized Mainnet Program (IMP) applies an SSV floor price and inflation-cap limitations in its rewards logic to preserve sustainable network economics, the Network Fee has been fully subject to volatility of prices. This misalignment, almost random at times, leads to substantial uncertainties among stakers utilizing the SSV Network and undermines the very goals the IMP serves. With the goal of preserving market dominance at this stage of growth in mind, the DAO should focus its efforts and resources on retaining current users and acquiring new ones.

By way of example, the following graphs elucidate this mechanic:

Mechanics

Network Fee Formula Adjustment

If this proposal were to pass, the DAO Multi-Sig Committee (hereinafter: “MC”) will implement the ETHSSVmax of 700 and use it for all subsequent Deviation Checks when calculating the Network Fee. The formula below is for reference only, indicating how this adjusted formula should be:

The MC shall also recalculate and replace the December 2025 Deviation Check, by implementing the max limit ratio detailed in this proposal.

Operational Provisions

If this proposal were to pass the MC will execute the Network Fee update in its Second Scheduled Monthly batch starting December 2025, as defined by the DAO Contributor: Proposal for Engagement as the DAO’s Master of Coin DAO proposal.

Other than the abovementioned introduction of the max limit price of ETH/SSV ratio into the Network Fee formula, all previous variables, proposals, and mechanisms shall remain unchanged and shall continue to apply to the Network Fee formula and its setting process.