[Phase 2][Signalling] HIP 28: Update submissionBaseDeposit

HIP: 28
title: Update submissionBaseDeposit
authors: William George, @greenlucid
status: Phase 3
created: 2021-08-24
conflicts with: None
languages: EN

Simple Summary

This proposal would adjust the parameter that determines the part of submission deposits that is used to incentivize challengers.

Abstract

Update the submissionBaseDeposit, which is currently 0.1 ETH, to 0.055 ETH.

Motivation

Since the submissionBaseDeposit was set, there have been considerable fluctuations in ETH prices as well as in gas prices. These have had an effect on the incentivization of challengers. Also, as a result of the passage of HIP-17, challengers will only have to lock up enough ETH to cover the arbitration costs of one juror arbitration rather than three jurors reducing the risks that they have to be compensated to take on.

The value of 0.055 ETH was generated by this calculator, which was also used to generated these proposed updates to the Kleros court parameters 1 that are being considered by the Kleros governance process in parallel. Note that the Kleros court parameter updates would have an effect on the arbitration cost part of PoH submission deposits; and given that the gas situation has changed again, after the proposal gets updated to reflect August gas prices, if both proposals pass the new total deposit would be around 0.055 + 0.015 = 0.07 ETH.

With the current juror fees of 0.025 ETH, which will remain until Kleros passes said proposal, the total deposit will remain around 0.055 + 0.025 = 0.08 ETH.

You will note that the calculator attempts to make the submissionBaseDeposit satisfy two constraints:

1. There is a notion of the theoretical reward that is sufficient to adequately incentivize challengers in fiat terms. Then challengers should reliably receive this average reward after gas in a “normal” gas environment, which in this case the calculator conservatively takes to be up to 30 gwei. (Normally the theoretical reward would not signficantly change from one update to the next; however as a result of HIP-17 reducing the challenger deposit/ the risk the challenger must take on, I recalculated this. This essentially consisted of updating the value of J i.e. the total arbitration fees in the formulas in this blog post and solving for C i.e. the challenge reward that retains the original level of security.)
2. A successful challenge should receive a large enough reward to cover the gas of challenging even in fairly severe gas conditions, which in this case the calculator takes to be up to 80 gwei.

In this case, it is actually the second constraint that is sharp. Namely, the requirement that the challenger reward should exceed gas costs even in fairly pessimistic gas assumptions prevents one from taking a lower value.

Specification

This would be done by using the changeSubmissionBaseDeposit function in the Proof of Humanity contract. This would be submitted as a transaction from the PoH Governor.

Implementation

Have the PoH governor make the following call on the PoH contract:

changeSubmissionBaseDeposit(55000000000000000)