# Community Proposal for the Design of the Community Integrity Pool (CIP)

Ideas Bank
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Context & Positioning

The initial suggestion from OracleMaxi sparked excitement in the community about the benefits DeFi can gain from a staking mechanism that offers loss protection against data quality issues. As a long-time data publisher, we believe that data publishers should be rewarded for their contributions and share in the risk of slashing for data issues.
The design for such a mechanism should be community-led, empowering both publishers and consumers to impact the final design.

Abstract

After discussions with community members, my proposal for the CIP includes:

  • Publisher Staking: Each publisher must stake for each symbol they publish, making them eligible for rewards and subject to slashing.
  • Delegated Staking: Non-publishing $PYTH stakers can delegate their stake to one or many publishers.
  • Reward Cap: A cap on publisher rewards based on the number of symbols contributed, discouraging price feeds with few publishers.
  • Delegation Fee: Publishers can set a delegation fee, applied pro-rata to the reward amount attributed to the delegated stake.

Pool Design

Pyth stakers can delegate their unlocked, staked tokens to publishers, with each token being delegated to a single publisher. The total publisher stake is the sum of the stake from all delegators plus the publisher’s self-delegated stake. Staking to a publisher makes delegators (including the publisher themselves) eligible for rewards and subject to slashing.

Rewards

A publisher’s “stake cap” (as a soft cap) is calculated to avoid symbols with very few publishers increasing the cap too much. The total staking rewards of a publisher are given by a formula that considers the publisher stake yield rate, the total publisher stake, and the publisher’s stake cap.
Reward Split: Publishers get priority over the rewards. The reward split considers the self-delegated publisher stake and the delegation fee, which can be set by the publisher or determined by the DAO.

Incentive Properties

Publishers: Publishers benefit by increasing their symbols and attracting more delegators, thereby increasing their delegation fees.
Delegators: Delegators will delegate to publishers such that their stake reaches the publisher’s cap, ensuring that the rewards are efficiently spent, aligning with the market rate.

Total Rewards

Total rewards are bounded by the number of symbols and the target stake per symbol. Adding new symbols requires either an increase in total rewards or a decrease in individual rewards.

Slashing

The total slashable amount for a publisher is capped per slashable event, with conditions for slashing determined by the DAO. Misprints leading to slashing allow affected parties to file claims with the DAO. If claims exceed the total slashable amount, it is distributed proportionally.

Questions and Uncertainties

  • Bootstrap Contributions: It is unclear which parties would contribute to the pool to pay off rewards.
  • Delegation Fee: Fixing the delegation fee for all publishers could reduce launch complexities.
  • Multiple Claims: Further design work is needed to handle multiple claims within a single epoch.
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mmm interesting proposal, so basically every publisher is eligible to rewards up to a reward cap (that increases with each new symbol they start publishing), but if they don’t stake enough tokens, delegators can step in and get a share of the rewards instead? Am I getting this right?

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I have to say this proposal is looking great so far.

However I have one main issue with it and its the fact that in my opinion, stakers have no actual logical reason to delegate their tokens to publishers.
The reason for that would be the fact that in order to provide the highest quality of data out of the pyth network we must make sure that the most accurate publishers are the ones getting the highest weight and impact on whatever it is they provide data about. People delegating to publishers might cause data inaccuracy as theres no guarantee that the best quality data publishers will get the largest stake.
Moreover, even if there was some table or something showcasing who has been the most accurate publishers it will be useless for people to get involved in that as we already know who are the “best” publisher and therefore who deserves the largest stake.
I also can understand the fact people might feel everything is more “organized” and “familiar” with delegated staking models but for the reasons I mentioned above I dont believe this is right for the PYTH ecosystem specifically and essentially has no benefits for the stakers in this scenario despite it being a truly great model for the data publishers to participate in

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Correct delegators can come in and commit stake and get a share of rewards. Key is providing a way for non publishers to commit stake toward the network.

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One thing that’s important here is that you don’t want to end up in a scenario where you get stake all being committed to the “best” price provider that makes the network JUST that price and reduces the built in redundancy and security of multiple price feed providers that pyth has at its core.

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Price is at the eod a little nebulous is it not definable as “best” quite so simply. There are many competing models of what exactly the price for an asset is given on small time scales specifcially.

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Sir my comment isnt about giving the “best” publisher the entire stake but giving their pricing/data on a certain asset a higher weight and impact than those of a less accurate price publisher and to update these percentages every once in a while, lets say every epoch for instance.
I think that measuring the how close a publisher was to the actual published price (by pyth of course) and for how long during that certain period of time and scoring their performance based on these will be able to create the best possible prices that will eventually be published to the users of pyth. Also liquidity and volume of an asset on certain platforms from which publishers get their info from could be added to the statistics and make some sort of impact on the size of their stake.
Overall, I still believe that stakers might cause inaccurate pricing to this very good model that you proposed here and will likely demage this model more than they will actuallt benefit it and vice versa. This model isn’t gonna benefit them as much as they won’t truly benefit it in my honest opinion

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Fair enough :handshake: seems like were on the same page.

Let me chew a bit on your thoughts. Stakes actions are likely the most erratic and need to be thought about the most I agree.

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I’m prima facie a proponent of this idea insofar as it marries some of most popular ideas in this forum so far, and aligns the interest of all stakeholders towards making Pyth Price Feeds more robust and stable.

I wonder if stake-weights can be brought to this discussion too, for example, more delegation increases a publisher’s weight in the aggregate price output for each price feed.

The claims process will also need discussion of a community-agreed reference benchmark…

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This is by far the most complete proposal so far and I am in favour of digging deeper here. This covers many fronts - protocol security, delegation of stake, publisher buyin etc.
Can someone work on the maths on what it would look like specifically? :smiley:

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Most complete proposal so far and it seems to me like the right direction to align the different stakeholders and network participants.

Like @abwrld said, curious to have the math wizard share more about numbers!

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Not sure I follow your point as I don’t see anywhere where it is said that more weight is given to the publishers who get more delegated tokens. Their weight on the aggregate Pyth price is the same so this has no impact on the “Pyth” price.

Also, as there are caps on the delegation, not every delegator will be able to delegate to that number one publisher

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I’m super excited to see the utility of the $PYTH token finally securing the safety and quality of the “Data Ecosystem” called the Pyth Network. It’s a system I’ve personally been waiting for a long time, and I fully support this proposal. I especially look forward to the specific schedule and detailed parameters being revealed.

The Pyth Network’s institutional-grade data ecosystem, which removes the intermediary layer and provides First-Party Data to data consumers in the freshest and fastest way possible, ultimately requires a system where Data Publishers can strive to provide higher-quality data, as quick as possible. And that motivation ultimately comes from economic incentives - better publishers receive more delegations, while worse publishers not only don’t receive delegations but can also be slashed and naturally eliminated from the system.

We can liken this to the systems that incentivize proper bookkeeping validation that we often see in blockchain networks. Therefore, this proposal suggests that Pyth Network is being reborn as a “Data Layer” that can be self-sustaining with decentralized participants (Publishers, Consumers, Delegators).

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Interesting proposal and it looks like it’s the most aligned with all stakeholders.

I’m going to echo what a few have already said in that I’m curious as to how it looks in practice. Let’s get some gigabrains to run some numbers so we can see what different scenarios look like.

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If there is no difference between the weight of the publishers’ stakes then what’s the point or or rather benefits that come from stskers delegating their tokens to the publishers?
If stakers have no real impact on the pricing and the weights of the different datas then what is the actual benefit in here? If they have no impact they simply exposed to the risk of slashing for contributing essentially nothing to the ecosystem and the publishers will be functioning just as fine and basically the exact same without them as they would with them.

Then again, if the stakers would have impact on a publisher’s weight on the aggregate price we go back to my initial argument of inaccurate pricing…

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A publisher might want stakers to delegate with them to publish more symbols and increase their potential rewards which then can be shared with their delegators.

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@abwrld @Pepito Some of the formulas referenced in the original post.

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Stakers that don’t delegate get diluted. Stakers therefore have an economic benefit to delegating to publishers that don’t get slashed to maintain their network ownership.

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From my initial read, this looks very good and easy to understand, explain and implement.

Also this would imply a decreasing return for delegates as stake size goes beyond a certain limit which would naturally incentivise a broader distributed stake. Will look at how others respond but I am personally onboard here.

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I understand what you are trying to say here and yet that doesn’t answer my question.
What actual value does the fact stakers delegate their tokens to a publisher add to the network?
How will the fact X,Y,Z delegated their tokens to a certain publisher will benefit this publisher? How will it benefit the price feeds? How would this make their stake more valuable? How can this actually make PYTH even more reliable? How does it actually improve pyth’s performance?
Stakers can get rewarded for simply staking on their own so the “delegating to publishers” part is not actually necessary to earn them rewards and we could easily just reward them seperately for the part they are already taking in the network.

1 Like