A Cursory Look at the Incentivized Testnet

Hi Anyone!

The first two weeks of the Incentivized Testnet have already yielded fascinating insights, and reveal some actionable trends as we gear up for the next set of rewards.

Using a snapshot of the Smartweave Distribution Contract, which lays out the number of tokens distributed to each relay, against the full set of relay data from the bandwidth authorities, this analysis is able to extrapolate a daily emission rate for different relay types. Let’s see what they are.

Caveats: currently, the testnet is emitting rewards at 25% of the eventual distribution rate, so pre-relay distribution values are potentially lower than they will be on mainnet.

Looking at the total rewards per day for relays that are running, we see an average of 0.4 tokens a day, with 0.75 tokens a day for relays in the upper quartile.

A more interesting trend emerges when mapping observed bandwidth (ranging from 0 to 40Mb/s) against base rewards (excluding the hardware-only pool). We see that practically all relays follow the same relationship between rewards and observed bandwidth.

Dividing the relays into further subcategories shows that the very high-bandwidth relays scattered on the right side of the chart are more likely to be exit relays, while those concentrated at zero are those without the ‘Fast’ flag, which is counterintuitively granted to relays for showing a minimal amount of consistent bandwidth.

It’s clear that the biggest determinant for base rewards is the amount of observed bandwidth. This is affected both by the amount of traffic that goes through a relay (which is especially high for Exit node) and the raw throughput capacity of the relay as verified by Bandwidth Authority scans. This aligns incentives to our growing network’s largest need: capacity. Specific needs or bottlenecks, such as exit nodes, will also have their own dedicated incentive boosts.

However, as the network opens up to real-world usage and to users with varying privacy needs, creating incentives that encourage a diverse network will ensure the network can protect against malicious actors looking to de-anonymize users.

Geolocation

A globe view of the relays in our network was recently made public on the Anyone homepage. Relays are mapped onto H3 hexagons, with the height and color of each hexagon representing the number of relays running within it.

In addition to showing the impressive network growth over the past few months, and a wide number of countries with relays operating (hello, Hawaii!), the globe shows the presence of large ‘spikes’ of relays sharing a small area.

A deeper dive into consensus data shows that many of the relays in these large spikes, predictably, share the same provider. Geolocation classification has proven itself is an autonomous and hands-off way to loosely identify instances of duplicated server providers or ISPs. The geolocation multipliers planned will add mild penalties for relays to already-overcrowded IP ranges, and in doing so free up rewards for individual operators on more residential IPs.

It’s also interesting to consider much more broad geolocation multipliers for adding more sparsely-contributed regions. This may follow the introduction of more anonymized usage data so that incentives can help close potential imbalances between demand and supply.

Diversity

Another key goal of the incentives is to reduce huge spreads in tokens earned. One way to help this is the introduction of an uptime reward — which is currently being built into our upcoming AO distribution logic. Relays that are consistently up for most hours in a given day accrue a ‘day-count’ value that then corresponds to reward tiers. In doing so, bandwidth stops being the only main determinant for rewards, and the network encourages smaller, individual operators and best practices.

Conclusion

While showing some interesting insights, these snapshots also open up a number of questions on what type of network do we want to be. Ultimately, this is a question that needs to be answered organically through wider relay outreach, education and governance. It’s a journey for Anyone.