Pooled THORNodes
How to manage a pooled THORNode with separate Operator and Providers.
Summary
Skilled Node Operators who don't individually have enough $RUNE to run a node themselves can use the Bond Provider feature to collect bond from other $RUNE holders.
Node Operators can define up to 100 THOR addresses as Bond Providers. These addresses will be able to bond and unbond to the node, earning rewards proportional to the amount of bond they contribute. Node Operators define an operator fee in basis points, which defaults to zero and must be set explicitly when bond providers are added. The Node Operator fee is taken from rewards and paid directly to the Node Operator address after each churn.
Rationale
The minimum $RUNE needed to churn in as a THORNode is currently set at 300K - but with bond competition, this number could be much higher.
Not many people in the world have both the technical skills to run a validator AND at least 300K $RUNE, which limits the supply of Node Operators who secure THORChain.
Pooled THORNodes provide a way for a skilled Operator to enter a trusted agreement with known Bond Providers to bootstrap enough capital for running a THORNode. The Network's security increases, and more RUNE holders have access to yield-bearing bond-space.
Economic Security
At first glance it might seem Pooled Validators contradict the economic security model of THORChain (i.e. that Node Operators put up twice the value in slash-able bond as the assets they secure). With Pooled Validators it is possible for the Node Operator to individually put up less bond than the value of the assets that the node secures. However this nuance only exists within the relationship between the Node Operator and the Bond Providers. The Network only considers the THORNode as single entity thus the economic model is intact.
It would be disastrous to THORChain if operators could collect unlimited bond quantities from anon/retail providers. Malicious Operators could start marketing campaigns collecting RUNE and then rug-pull their users, or worse, access economies of scale and take over the network. This is why Pooled THORNodes are invite-only and limited to 100 per node to moderate this.
Managing a Pooled THORNode
Node Operator
Adding a Bond Provider
Add a bond provider using a BOND transaction with a modified memo from a wallet you control (ledger, desktop, thorcli):
BOND:<NodeAddress>:<BondProviderAddress>:<NodeOperatorFee>
Example: BOND:thor1agftrgu74z84hef6dt6ykhe7cmjf3f8dcpkfun:thor1tfm4q8u57qzsznpvh02s8j483aga63cl02k6jt:2000
NodeAddress - THORNode address (prefixed by
thor)BondProviderAddress - Bond Provider address to whitelist (prefixed by
thor)NodeOperatorFee - fee in basis points to be taken from rewards and paid directly to Node Operator's address after each churn.
RUNE TX Value - 1.02 minimum (anything over 1.02 is added to the Operator's Bond).
A Node Operator is the first on-chain bonding transaction to a new node. You cannot change the operator address after the fact.
The Operator is also added as a Bond Provider.
Removing a Bond Provider
While the node is churned out and the vault has successfully migrated, a Node Operator can remove a Bond Provider using an UNBOND transaction with a modified memo:
UNBOND:<NodeAddress>:<AmountToUnbond>:<BondProviderAddress>
NodeAddress - THORNode address (prefixed by
thor)AmountToUnbond - Amount of Bond Provider's bond to refund
BondProviderAddress - Bond Provider address to refund/remove (prefixed by
thor)Amount - Most UIs will require an 'amount' for the transaction, this must be 0 (A gas fee of 0.02 RUNE will still need to be paid for the transaction but the UI will handle this)
This command will refund the Bond Provider their bond and remove them from the Bond Provider list only if Amount constitutes all of the bond the Bond Provider is owed. 0 (ZERO) will work to remove the BP from the Whitelist Addresseses if they have already unbonded all their bond.
Node Operator Fee
Node operators can set a fee that is paid to them from the earnings each churn.
To set a Node Operator fee, send a deposit transaction with the following memo:
BOND:<node address>:<bond wallet address>:<operator fee in basis pts>
Example: BOND:thor1agftrgu74z84hef6dt6ykhe7cmjf3f8dcpkfun:thor1tfm4q8u57qzsznpvh02s8j483aga63cl02k6jt:2000
To adjust the fee, the no operators can send:
BOND:<NodeAddress>::<OperatorFeeInBasisPts>
Example: BOND:thor1agftrgu74z84hef6dt6ykhe7cmjf3f8dcpkfun::4000 to see the fee to 40%.
Fees can range from 0 to 10000 basis pts. Setting 10000 causes all rewards to be to the node operator each churn. Setting it to 0 causes rewards to accrue to the bond.
See here for more details.
Bond Provider
Adding/Removing Bond
Once whitelisted, a Bond Provider can Bond and Unbond from the node as normal.
Adding Bond:
BOND:<NodeAddress>
NodeAddress - THORNode address (prefixed by
thor)RUNE Tx Value - Amount of RUNE to bond
Removing Bond:
UNBOND:<NodeAddress>:<AmountToUnbond>
NodeAddress - THORNode address (prefixed by
thor)AmountToUnbond - Amount of Bond Provider's bond to refund
Amount - Most UIs will require an 'amount' for the transaction, this must be 0 (A gas fee of 0.02 RUNE will still need to be paid for the transaction but the UI will handle this)
Reward Shares
Operators and Providers all have a bond amount registered to the node. Operators can start at 0.00 bonded. This on-chain bond amount is summed to the total bond, and thus everyone has a fair share in the THORNode's principle + rewards.
The Operator Fee is distributed to the Node Operator address from all RUNE rewards earned by a node after each churn. Bond Provider rewards are added to their Bond and auto-compounded.
If an Operator LEAVES, all the bond is fairly distributed.
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