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<ol class="chapter"><li class="chapter-item expanded affix "><a href="../introduction.html">Introduction</a></li><li class="spacer"></li><li class="chapter-item expanded affix "><li class="part-title">Newly Proposed</li><li class="spacer"></li><li class="chapter-item expanded affix "><li class="part-title">Proposed</li><li class="chapter-item expanded "><a href="../proposed/0000-pre-elves_soft.html">RFC-0000: Pre-ELVES soft concensus</a></li><li class="chapter-item expanded "><a href="../proposed/0000-rewards.html">RFC-0000: Validator Rewards</a></li><li class="chapter-item expanded "><a href="../proposed/0017-coretime-market-redesign.html">RFC-0017: Coretime Market Redesign</a></li><li class="chapter-item expanded "><a href="../proposed/0117-unbrick-collective.html">RFC-0117: The Unbrick Collective</a></li><li class="chapter-item expanded "><a href="../proposed/0145-remove-unnecessary-allocator-usage.html">RFC-0145: Remove the host-side runtime memory allocator</a></li><li class="chapter-item expanded "><a href="../proposed/0146-deflationary-fee-proposal.html">RFC-0146: Deflationary Transaction Fee Model for the Relay Chain and its System Parachains</a></li><li class="chapter-item expanded "><a href="../proposed/0150-voting-while-delegating.html">RFC-150: Allow Voting While Delegating</a></li><li class="chapter-item expanded "><a href="../proposed/xxxx-improve-the-security-of-proof-of-possession.html">RFC-XXXX: Adding customized mandatory context to proof of possession statement</a></li><li class="spacer"></li><li class="chapter-item expanded affix "><li class="part-title">Approved</li><li class="chapter-item expanded "><a href="../approved/0001-agile-coretime.html">RFC-1: Agile Coretime</a></li><li class="chapter-item expanded "><a href="../approved/0005-coretime-interface.html">RFC-5: Coretime Interface</a></li><li class="chapter-item expanded "><a href="../approved/0007-system-collator-selection.html">RFC-0007: System Collator Selection</a></li><li class="chapter-item expanded "><a href="../approved/0008-parachain-bootnodes-dht.html">RFC-0008: Store parachain bootnodes in relay chain DHT</a></li><li class="chapter-item expanded "><a href="../approved/0009-improved-net-light-client-requests.html">RFC-0009: Improved light client requests networking protocol</a></li><li class="chapter-item expanded "><a href="../approved/0010-burn-coretime-revenue.html">RFC-0010: Burn Coretime Revenue</a></li><li class="chapter-item expanded "><a href="../approved/0012-process-for-adding-new-collectives.html">RFC-0012: Process for Adding New System Collectives</a></li><li class="chapter-item expanded "><a href="../approved/0013-prepare-blockbuilder-and-core-runtime-apis-for-mbms.html">RFC-0013: Prepare Core runtime API for MBMs</a></li><li class="chapter-item expanded "><a href="../approved/0014-improve-locking-mechanism-for-parachains.html">RFC-0014: Improve locking mechanism for parachains</a></li><li class="chapter-item expanded "><a href="../approved/0022-adopt-encointer-runtime.html">RFC-0022: Adopt Encointer Runtime</a></li><li class="chapter-item expanded "><a href="../approved/0026-sassafras-consensus.html">RFC-0026: Sassafras Consensus Protocol</a></li><li class="chapter-item expanded "><a href="../approved/0032-minimal-relay.html">RFC-0032: Minimal Relay</a></li><li class="chapter-item expanded "><a href="../approved/0042-extrinsics-state-version.html">RFC-0042: Add System version that replaces StateVersion on RuntimeVersion</a></li><li class="chapter-item expanded "><a href="../approved/0043-storage-proof-size-hostfunction.html">RFC-0043: Introduce storage_proof_size Host Function for Improved Parachain Block Utilization</a></li><li class="chapter-item expanded "><a href="../approved/0045-nft-deposits-asset-hub.html">RFC-0045: Lowering NFT Deposits on Asset Hub</a></li><li class="chapter-item expanded "><a href="../approved/0047-assignment-of-availability-chunks.html">RFC-0047: Assignment of availability chunks to validators</a></li><li class="chapter-item expanded "><a href="../approved/0048-session-keys-runtime-api.html">RFC-0048: Generate ownership proof for SessionKeys</a></li><li class="chapter-item expanded "><a href="../approved/0050-fellowship-salaries.html">RFC-0050: Fellowship Salaries</a></li><li class="chapter-item expanded "><a href="../approved/0056-one-transaction-per-notification.html">RFC-0056: Enforce only one transaction per notification</a></li><li class="chapter-item expanded "><a href="../approved/0059-nodes-capabilities-discovery.html">RFC-0059: Add a discovery mechanism for nodes based on their capabilities</a></li><li class="chapter-item expanded "><a href="../approved/0078-merkleized-metadata.html">RFC-0078: Merkleized Metadata</a></li><li class="chapter-item expanded "><a href="../approved/0084-general-transaction-extrinsic-format.html">RFC-0084: General transactions in extrinsic format</a></li><li class="chapter-item expanded "><a href="../approved/0091-dht-record-creation-time.html">RFC-0091: DHT Authority discovery record creation time</a></li><li class="chapter-item expanded "><a href="../approved/0097-unbonding_queue.html">RFC-0097: Unbonding Queue</a></li><li class="chapter-item expanded "><a href="../approved/0099-transaction-extension-version.html">RFC-0099: Introduce a transaction extension version</a></li><li class="chapter-item expanded "><a href="../approved/0100-xcm-multi-type-asset-transfer.html">RFC-0100: New XCM instruction: InitiateAssetsTransfer</a></li><li class="chapter-item expanded "><a href="../approved/0101-xcm-transact-remove-max-weight-param.html">RFC-0101: XCM Transact remove require_weight_at_most parameter</a></li><li class="chapter-item expanded "><a href="../approved/0103-introduce-core-index-commitment.html">RFC-0103: Introduce a CoreIndex commitment and a SessionIndex field in candidate receipts</a></li><li class="chapter-item expanded "><a href="../approved/0105-xcm-improved-fee-mechanism.html">RFC-0105: XCM improved fee mechanism</a></li><li class="chapter-item expanded "><a href="../approved/0107-xcm-execution-hints.html">RFC-0107: XCM Execution hints</a></li><li class="chapter-item expanded "><a href="../approved/0108-xcm-remove-testnet-ids.html">RFC-0108: Remove XCM testnet NetworkIds</a></li><li class="chapter-item expanded "><a href="../approved/0122-alias-origin-on-asset-transfers.html">RFC-0122: Asset transfers can alias XCM origin on destination to original origin</a></li><li class="chapter-item expanded "><a href="../approved/0123-pending-code-as-storage-location-for-runtime-upgrades.html">RFC-0123: Introduce :pending_code as intermediate storage key for the runtime code</a></li><li class="chapter-item expanded "><a href="../approved/0125-xcm-asset-metadata.html">RFC-0125: XCM Asset Metadata</a></li><li class="chapter-item expanded "><a href="../approved/0126-introduce-pvq.html">RFC-0126: Introduce PVQ (PolkaVM Query)</a></li><li class="chapter-item expanded "><a href="../approved/0135-compressed-blob-prefixes.html">RFC-0135: Compressed Blob Prefixes</a></li><li class="chapter-item expanded "><a href="../approved/0139-faster-erasure-coding.html">RFC-0139: Faster Erasure Coding</a></li><li class="chapter-item expanded "><a href="../approved/0149-rfc-1-renewal-adjustment.html" class="active">RFC-0149: Renewal Adjustment</a></li><li class="spacer"></li><li class="chapter-item expanded affix "><li class="part-title">Stale</li><li class="chapter-item expanded "><a href="../stale/0004-remove-unnecessary-allocator-usage.html">RFC-0004: Remove the host-side runtime memory allocator</a></li><li class="chapter-item expanded "><a href="../stale/0006-dynamic-pricing-for-bulk-coretime-sales.html">RFC-0006: Dynamic Pricing for Bulk Coretime Sales</a></li><li class="chapter-item expanded "><a href="../stale/0034-xcm-absolute-location-account-derivation.html">RFC-34: XCM Absolute Location Account Derivation</a></li><li class="chapter-item expanded "><a href="../stale/0035-conviction-voting-delegation-modifications.html"> RFC-0035: Conviction Voting Delegation Modifications</a></li><li class="chapter-item expanded "><a href="../stale/0044-rent-based-registration.html">RFC-0044: Rent based registration model</a></li><li class="chapter-item expanded "><a href="../stale/0054-remove-heap-pages.html">RFC-0054: Remove the concept of "heap pages" from the client</a></li><li class="chapter-item expanded "><a href="../stale/0070-x-track-kusamanetwork.html">RFC-0070: X Track for @kusamanetwork</a></li><li class="chapter-item expanded "><a href="../stale/0073-referedum-deposit-track.html">RFC-0073: Decision Deposit Referendum Track</a></li><li class="chapter-item expanded "><a href="../stale/0074-stateful-multisig-pallet.html">RFC-0074: Stateful Multisig Pallet</a></li><li class="chapter-item expanded "><a href="../stale/0077-increase-max-length-of-identity-pgp-fingerprint-value.html">RFC-0077: Increase maximum length of identity PGP fingerprint values from 20 bytes</a></li><li class="chapter-item expanded "><a href="../stale/0088-broker-pallet-slashable-deposit-purchaser-reputation-reserved-cores.html">RFC-0088: Add slashable locked deposit, purchaser reputation, and reserved cores for on-chain identities to broker pallet</a></li><li class="chapter-item expanded "><a href="../stale/00xx-secondary-marketplace-for-regions.html">RFC-0001: Secondary Market for Regions</a></li><li class="chapter-item expanded "><a href="../stale/00xx-smart-contracts-coretime-chain.html">RFC-0002: Smart Contracts on the Coretime Chain</a></li><li class="chapter-item expanded "><a href="../stale/0102-offchain-parachain-runtime-upgrades.html">RFC-0000: Feature Name Here</a></li><li class="chapter-item expanded "><a href="../stale/0106-xcm-remove-fees-mode.html">RFC-0106: Remove XCM fees mode</a></li><li class="chapter-item expanded "><a href="../stale/0111-pure-proxy-replication.html">RFC-0111: Pure Proxy Replication</a></li><li class="chapter-item expanded "><a href="../stale/0112-compress-state-response-message-in-state-sync.html">RFC-0112: Compress the State Response Message in State Sync</a></li><li class="chapter-item expanded "><a href="../stale/0114-secp256r1-hostfunction.html">RFC-0114: Introduce secp256r1_ecdsa_verify_prehashed Host Function to verify NIST-P256 elliptic curve signatures</a></li><li class="chapter-item expanded "><a href="../stale/0120-referenda-confirmation-by-candle-mechanism.html">RFC-0120: Referenda Confirmation by Candle Mechanism</a></li><li class="chapter-item expanded "><a href="../stale/0124-extrinsic-version-5.html">RFC-0124: Extrinsic version 5</a></li><li class="chapter-item expanded "><a href="../stale/0138-invulnerable-collator-election.html">RFC-0138: Election mechanism for invulnerable collators on system chains</a></li><li class="chapter-item expanded "><a href="../stale/RFC-114 Adjust Tipper Track Confirmation Periods.html">RFC-114: Adjust Tipper Track Confirmation Periods</a></li><li class="chapter-item expanded "><a href="../stale/TODO-stale-nomination-reward-curve.html">RFC-TODO: Stale Nomination Reward Curve</a></li></ol>
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<p><a href="https://github.com/polkadot-fellows/RFCs/blob/main/text/0149-rfc-1-renewal-adjustment.md">(source)</a></p>
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<p><strong>Table of Contents</strong></p>
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<ul>
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<li><a href="#rfc-0149-renewal-adjustment">RFC-0149: Renewal Adjustment</a>
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<ul>
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<li><a href="#summary">Summary</a></li>
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<li><a href="#motivation">Motivation</a></li>
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<li><a href="#stakeholders">Stakeholders</a></li>
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<li><a href="#explanation">Explanation</a></li>
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<li><a href="#drawbacks">Drawbacks</a></li>
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<li><a href="#testing-security-and-privacy">Testing, Security, and Privacy</a></li>
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<li><a href="#performance-ergonomics-and-compatibility">Performance, Ergonomics, and Compatibility</a></li>
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<li><a href="#prior-art-and-references">Prior Art and References</a></li>
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<li><a href="#future-directions-and-related-material">Future Directions and Related Material</a></li>
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</ul>
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</ul>
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<h1 id="rfc-0149-renewal-adjustment"><a class="header" href="#rfc-0149-renewal-adjustment">RFC-0149: Renewal Adjustment</a></h1>
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<div class="table-wrapper"><table><thead><tr><th></th><th></th></tr></thead><tbody>
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<tr><td><strong>Start Date</strong></td><td>30th of May 2025</td></tr>
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<tr><td><strong>Description</strong></td><td>Amendmend to RFC-1 Agile Coretime</td></tr>
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<tr><td><strong>Authors</strong></td><td>eskimor</td></tr>
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</tbody></table>
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</div>
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<h2 id="summary"><a class="header" href="#summary">Summary</a></h2>
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<p>This RFC proposes an amendment to RFC-1 Agile Coretime: Renewal prices will no
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longer only be adjusted based on a configurable renewal bump, but also to the
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lower end of the current sale - if that turns out higher. </p>
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<p>An implementation can be found <a href="https://github.com/paritytech/polkadot-sdk/pull/8630">here</a>.</p>
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<h2 id="motivation"><a class="header" href="#motivation">Motivation</a></h2>
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<p>In RFC-1, we strived for perfect predictability on renewal prices, but what we
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expected unfortunately got proven in practice: Perfect predictability allows
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for core hoarding and cheap market manipulation, with the effect that both on
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Kusama and Polkadot there is no free market for cores anymore. Some actor is
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hoarding a lot of cores cheaply, driving up prices without getting affected
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himself.</p>
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<p>This is causing issues for teams wanting to join, existing teams wanting to
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extend to elastic scaling and in practice, even existing teams wanting to keep
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their core, because they forgot to renew in the interlude.</p>
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<p>In a nutshell the current situation is severely hindering teams from deploying
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on Polkadot: We are essentially in a Denial of Service situation.</p>
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<h2 id="stakeholders"><a class="header" href="#stakeholders">Stakeholders</a></h2>
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<p>Stakeholders should be existing teams already having a core and new teams wanting to join the ecosystem.</p>
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<h2 id="explanation"><a class="header" href="#explanation">Explanation</a></h2>
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<p>This RFC proposes to fix this situation, by limiting renewal price
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predictability to reasonable levels, by introducing a weak coupling to the
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current market price: We ensure that the price for renewals is at least as high
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as the end price of the current sale.</p>
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<p>The existing price cap for renewals will be changed from:</p>
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<pre><pre class="playground"><code class="language-rust"><span class="boring">#![allow(unused)]
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</span><span class="boring">fn main() {
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</span> let price_cap = record.price + config.renewal_bump * record.price;
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<span class="boring">}</span></code></pre></pre>
|
|
<p>to </p>
|
|
<pre><pre class="playground"><code class="language-rust"><span class="boring">#![allow(unused)]
|
|
</span><span class="boring">fn main() {
|
|
</span> let price_cap = cmp::max(record.price + config.renewal_bump * record.price, end_price);
|
|
<span class="boring">}</span></code></pre></pre>
|
|
<p>What does this mean in the context of the currently deployed implementation?</p>
|
|
<p>The Dutch auction of a sale, has an end price, a target price in the middle and
|
|
a starting price. The target price is ten times the end price and the start
|
|
price is ten times the target price (or 100 times the end price).</p>
|
|
<p>The target price is the expected market price of a core. To be more precise,
|
|
what happens is that, for a sale X+1 the end price is set to the clearing price
|
|
of sale X divided by 10. This results in a maximum adjustment of the price
|
|
curve (and the end price) by a factor of 10 each sale.</p>
|
|
<p>To illustrate this with actual numbers: Let's consider an end price of 10 DOT,
|
|
then if someone bought all the available cores at 1000 DOT (starting price),
|
|
then the end price in the next sale would become 100 DOT.</p>
|
|
<p>Prior to this RFC, all of this hardly mattered for existing tenants, which
|
|
keeps being the case, except for extreme market changes - or if you happened to
|
|
be lucky to buy below the target price. In particular, in the above example,
|
|
all cores were sold at 1000 DOT, then tenants who were lucky holding a core at
|
|
10 DOT, would now get bumped to 100 DOT. Tenants who bought at the current
|
|
target price or above would still not be affected.</p>
|
|
<p>In other words, we limit price predictability: If the market experiences a bump
|
|
of 100 times the current price, renewals will be affected by a factor of 10.
|
|
Even in that extreme situation, renewal prices would still be 10x more stable than
|
|
the market: Therefore it is fair to say that this RFC is maintaining
|
|
predictability within reasonable bounds.</p>
|
|
<p>So, while predictability is mostly maintained, this RFC ensures that renewals
|
|
don't get detached too much from the current market, with the following
|
|
effects:</p>
|
|
<ol>
|
|
<li>Attacking the system is becoming very expensive. Let's assume 10 cores are
|
|
for sale at an end price of 10 DOT, then an attacker would need to invest
|
|
10_000 DOT to drive up renewal prices to 100 DOT. Not only is this expensive in
|
|
itself with limited effect, the attacker would also have driven up the price
|
|
for his own renewals: Core hoarding for price manipulation is no longer
|
|
profitable. An attacker would be at least as much affected as the honest
|
|
parties he is targeting. In practice likely more, as core hoarding hardly means
|
|
holding only one or two cores.</li>
|
|
<li>In the honest scenario, where we are just experiencing great adoption: Once
|
|
cores become scarce, prices would go up and renewals would be affected too.
|
|
They are still favored over new entrants (they pay 10x less), but as prices
|
|
keep increasing, eventually the least profitable projects will give up their
|
|
cores, freeing up resources for new entrants. </li>
|
|
</ol>
|
|
<p>Recommendations for deployment:</p>
|
|
<ol>
|
|
<li>Deploy with a price curve enforcing a minimum end price, we suggest 10 DOT
|
|
and 1 KSM. This is to ensure prompt recovery to sound market conditions.</li>
|
|
<li>Together with a minimum price, it should be safe to add more cores. We
|
|
recommend adding at least 10 additional cores, 20 would be better. This
|
|
results in immediate availability for cores for teams waiting and secondly
|
|
ensures that any additional attack will be expensive: 10 cores, results in
|
|
1000x the attack cost, compared to the caused damage on individual projects.</li>
|
|
<li>While adding more cores should be safe, we would still recommend to not go
|
|
to 100% capacity to have some leeway for governance in case of unforeseen
|
|
attacks/weaknesses. </li>
|
|
</ol>
|
|
<h2 id="drawbacks"><a class="header" href="#drawbacks">Drawbacks</a></h2>
|
|
<p>We are dropping almost perfect predictability on renewal prices, in favor of
|
|
predictability within reasonable bounds. The introduction of a minimum price,
|
|
will also result in huge relative price adjustments for existing tenants,
|
|
because prices were so unreasonably low on Kusama. In practice this should not
|
|
be an issue for any real project.</p>
|
|
<h2 id="testing-security-and-privacy"><a class="header" href="#testing-security-and-privacy">Testing, Security, and Privacy</a></h2>
|
|
<p>This RFC is proposing a single line of code change. A <a href="https://github.com/paritytech/polkadot-sdk/pull/8630/files#diff-5c1aa49e85b8916278350cef73f121ceda192adbbf3b16d35e52626a96243fc9R500">test has been
|
|
added</a>
|
|
to make sure it is working as expected.</p>
|
|
<p>Security of the system will be improved, as attacks now become expensive. It is
|
|
worth mentioning though that while this RFC ensures that attacks are very
|
|
costly, it makes attacking existing tenants possible, which was not the case
|
|
before. This seems to be a sound trade-off though for the following reasons:</p>
|
|
<ol>
|
|
<li>Any attack costs orders of magnitudes more than the harm it is imposing on
|
|
existing projects. Sustaining an attack quickly goes into the hundred
|
|
thousands of DOT, each month.</li>
|
|
<li>Renewals costs are always pre-determined a month ahead. Together with market
|
|
only adjusting by a maximum of 10 times each month, this gives plenty of
|
|
time to react via Governance/treasury help out to projects, which are seen
|
|
valuable by the DAO, but can not afford the price jumps. Keeping some spare
|
|
cores on the side for such situations seems sensible too.</li>
|
|
<li>Existing tenants are not automatically more valuable than new tenants. Open
|
|
market participants are still 10 times more exposed to attacks than existing
|
|
tenants. Having them exposed at least with this 10x reduction seems a sensible
|
|
valuation.</li>
|
|
</ol>
|
|
<p>There are no privacy concerns.</p>
|
|
<h2 id="performance-ergonomics-and-compatibility"><a class="header" href="#performance-ergonomics-and-compatibility">Performance, Ergonomics, and Compatibility</a></h2>
|
|
<p>The proposed changes are backwards compatible. No interfaces are changed.
|
|
Performance is not affected. Ergonomics should be greatly improved especially
|
|
for new entrants, as cores will be available for sale again. A configured
|
|
minimum price also ensures that the starting price of the Dutch auction stays
|
|
reasonably high, deterring sniping all the cores at the beginning of a sale.</p>
|
|
<h2 id="prior-art-and-references"><a class="header" href="#prior-art-and-references">Prior Art and References</a></h2>
|
|
<p>This RFC is altering RFC-1 and taking ideas from RFC-17, mainly the introduction of a minimum price.</p>
|
|
<h2 id="future-directions-and-related-material"><a class="header" href="#future-directions-and-related-material">Future Directions and Related Material</a></h2>
|
|
<p>This RFC should solve the immediate problems we are seeing in production right
|
|
now. Longer term, improvements to the market in terms of price discovery
|
|
(RFC-17) should be considered, especially once demand grows.</p>
|
|
<p>There is an edge case remaining for situations like the following:</p>
|
|
<ol>
|
|
<li>Not enough demand.</li>
|
|
<li>Prices drop to the end price.</li>
|
|
<li>Someone buys all the cores relatively cheaply & renews.</li>
|
|
<li>Market deprived of cores, but price only goes up by renewal bumps (all cores are renewed).</li>
|
|
<li>Market would only recover very slowly or when someone gives up on their renewal.</li>
|
|
</ol>
|
|
<p>Mitigation for this edge case is relatively simple: Bump renewals more
|
|
aggressively the less cores are available on the free market. For now, leaving
|
|
a few cores not for sale should be enough to mitigate such a situation.</p>
|
|
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