We’re excited to announce that our latest governance proposal is now open for voting.
The goal of this proposal is to enforce on the Aventus Network (AvN) a change in the protocol, allowing for the minting of additional AVT proportional in percentage to the amount of AVT earned by stakers after a staking period.
Motivation
The Aventus Network believes in an interoperable and user-friendly Aventus Network ecosystem – one in which value can seamlessly transfer everywhere easily, between institutional, enterprise and retail users across all blockchains. We see blockchain rolling out like the internet did, where various siloed intranets need to be connected into the internet of blockchains.
At this point in time, we believe that the best possible step to achieve this vision is to become a layer 1 (i.e. parachain) on Polkadot. In order to become a parachain, the Aventus Network will need to participate in a Polkadot parachain auction within the next few weeks.
The goal of this proposal is to enforce on the Aventus Network (AvN) a change in the protocol, allowing for the minting of additional AVT proportional in percentage to the amount of AVT earned by stakers after a staking period. For example, in the first year of our staking program, 2.5 million AVT was staked on 10 validator nodes. These validator nodes processing transactions earned in return, for the stakers, 150,000 AVT from transaction fees – a whopping 6% of the total amount staked. Hence, if this proposal to change the protocol is approved, 6% of the current total AVT supply (10,000,000 AVT) i.e. 600,000 will be minted correspondingly.
This protocol will be used to ensure the continuity of the AvN operation and finance future parachain slot auction winning.
While non-stakers would see their AVT diluted, staked AVT would maintain its value, because the total supply of AVT would only be increased by the percentage equal to the percentage of the staker fees earned. Also, with regards to governance, the automatic cyclic dilution of AVT will result in lower voting power for non-stakers. This incentivises AVT holders’ participation in the governance of the network, increasing its security and ensuring continuity.
If this proposal is approved, this first dilution mint based on the 6% earned staker fees of last year’s staking period will be minted manually, but going forward the protocol change will see this happen automatically on the Aventus Network.
This represents the next phase in the vision for the Aventus Network. Since all on-chain accounts (exchange accounts are excluded) will be able to vote in this governance proposal, we invite all AVT holders to read this proposal carefully.
Why a Polkadot Parachain?
Aventus Network was built using the Substrate Framework. Substrate is an open-source and future-proof framework developed by Parity, the development team behind Polkadot.
Using the Substrate Framework meant that Aventus Network developers could focus on building required functionality, without needing to reinvent the wheel implementing and testing consensus algorithms or other core blockchain building blocks. It also means that Aventus Network is already designed to seamlessly connect to the Polkadot ecosystem. However, since we launched before Polkadot, this has only more recently become an option.
Polkadot is designed to be a multi-chain network, allowing parachains to interoperate with each other. On top of this, Polkadot Bridges allow interoperability with blockchains outside of the Polkadot ecosystem.
To become a Polkadot parachain, networks must compete and bid for a parachain slot in an auction. To win the auction, DOT must be contributed by the community through a crowdloan bid. The current amount of DOT required to win a parachain slot is the lowest it has ever been. Therefore, taking part in a parachain auction right now is a good opportunity to become a Polkadot parachain and will allow us to give the best staking returns in terms of AVT per DOT staked.
Benefits to the Aventus Community & Network
Interoperability: Polkadot was created with the vision of a multi-chain future.
Every blockchain that connects via a parachain slot can seamlessly transfer value with Aventus. Also, Polkadot bridges provide a compatible way to interoperate securely on both sides for non-parachain blockchains.
Alongside the existing Aventus Gateway API, the Aventus Network will be interoperable with Polkadot parachains, Ethereum-based blockchains and traditional databases. The combined ecosystems will lead to network effects.
Lowest carbon emissions: Polkadot has the lowest total carbon emissions per year in terms of layer 1s with 33.36 tCO2e per year and consumes 17.42 Wh per transaction. This is aligned with the Aventus Network, which consumes 1 Wh per transaction. The Aventus Network is achieving carbon neutrality through carbon offsetting.
Scalability: Polkadot allows transactions to be parallelised on different parachains. The Aventus Network can scale to 2000+ transactions per second at an average cost of $0.01 per transaction. If we were to register for multiple parachains we could horizontally scale to a maximum of 200,000+ transactions per second.
Adaptability: Polkadot’s on-chain governance and Substrate Framework means the Aventus Network can upgrade itself and adapt to changes easily. Upgrades to the network are coordinated autonomously, ensuring the development reflects the values of the community and avoids stagnation.
Community value: To maintain a Polkadot parachain slot, parachains must compete for a slot. This means Aventus must continually look to maintain a competitive advantage and deliver value to the community in order to maintain a Polkadot parachain slot.
Benefits to the Polkadot Ecosystem
The Aventus Network works with enterprise-scale users and has the infrastructure that can benefit the ecosystem as a whole. As such, the Aventus Network will be one of the few networks introducing enterprise users to the Polkadot ecosystem.
What are we proposing?
To become a Polkadot parachain, Aventus Network must compete and outbid other networks in a parachain auction. The winner of the auction will win a parachain slot lease for up to a maximum of 96 weeks.
To ensure the Treasury funds will be sufficient to finance the next bid, we are proposing a change in the protocol that will see new AVT being minted automatically to a degree proportional in percentage to the amount of staking rewards earned. As stated earlier, the first mint will be of 600,000 AVT, which is 6% of the total supply of AVT. A significant portion of these AVT will be awarded to the treasury and the same pattern will be automatically repeated for all future mints of AVT, according to the dilution model described earlier.
To ensure we outbid other networks, a crowdloan campaign will also be started. This crowdloan will allow the community to bid on behalf of the Aventus Network. The bids will be denominated in DOT and this DOT will be returned to the participant at the end of the slot lease via a smart contract.
For participating and contributing DOT for the duration of the slot lease, participants will be rewarded with AVT. The specific reward rates will be released at a later date. This AVT reward will come from the newly minted AVT, which currently will be minted by the AVT smart contract on Ethereum thereby increasing the total supply of AVT. The passing of this proposal will be the first step towards auctioning for slot 26.
More details on reward rates, the auction and participation in the auction will be released at a later date.
What does this mean for you?
The Aventus Network always aims to cultivate an inclusive and transparent community.
By periodic minting of AVT, the total supply of AVT will be inflated proportionately to the amount of staking rewards earnt. This inflation of the AVT supply means that your AVT will be diluted and the purchasing power of your AVT will decrease. This can however be offset by staking your AVT which in turn will yield you more AVT and will increase the weight of your vote as you participate in the governance of the network.
Currently, stakers earn 75% of the transaction fees, but with this new model, stakers will earn 100% of the transaction fees, ensuring that no value is lost as a result of the dilution. They will also be able to participate in voting and have proportional voting power (e.g. 1 AVT staked = 1 vote).
Validators will gain value since they provide a service to the network and have hard infrastructure costs to offset. The newly minted AVT is split 25% to validators and 75% into Foundation treasury. The positive treasury balance will ensure the continuity of operation of the Aventus Network by providing funds to secure future parachain slots and other essentials.
To sum it up, every staking period we will calculate what the return on stake in terms of fees are. 100% of those fees goes to stakers. There will be an inflation of the total AVT to the percentage of the return on the total stake.
By taking part in the upcoming parachain auction, you will be able to receive these newly minted AVT as rewards. More details on reward rates, the auction and participation in the auction will be released at a later date.
How much will the value of my AVT decrease by?
The newly minted AVT will not be immediately released into the market. They will be used as rewards which will be paid out to participants on a linear vesting basis over the full duration of the parachain slot lease, and to pay validators. More details will be made available at a later date.
What happens after this vote?
If the community votes to approve this proposal to enforce this change in the protocol, the community can expect the minting and therefore the dilution of AVT at the end of every staking period, but only to a percentage proportional to that of the staking rewards earned in the previous period. As for the last staking period, 600,000 AVT will be minted on the AVT smart contract on Ethereum and lifted to the Aventus Network.
What happens to the current Aventus Network as a layer 2?
One of the core functionalities of the current Aventus Network is its interoperability with Ethereum. This functionality currently exists for operations such as the lifting and lowering (migration) of blockchain assets between chains. Fortunately, the process of becoming a parachain does not remove this interoperability, rather it enhances. After Aventus wins the parachain slot bid and becomes a parachain, not only will we be interoperable with Ethereum, we also will be able to communicate and transfer assets natively with the other parachains and transfer value.
How do I make my vote on this proposal?
There are two ways to vote on this proposal. You can either vote on our Ethereum-compatible governance platform or vote on an Aventus-compatible governance platform. The platform you vote on depends on where your AVT currently is.
In order to vote on a proposal, you must have been holding or staking at least 1 AVT token at the time that the proposal was published. This means that if you attempt to vote on a proposal where the block number configured is in the past, and you were not holding or staking the required token back then, your vote will not be counted.
Please note that if you have staked all of your AVT on the Aventus Mainnet, you can still vote by using the Aventus-compatible governance platform.
To vote (on Snapshot):
Go to https://gov.aventus.io/#/
Click on the “Connect wallet” button in the top right corner. You can vote using any of the five compatible wallets supported by the platform.
Connect with the wallet provider that you used to stake your AVT or where you hold your AVT.
Click on this proposal to vote on it.
Either approve or disapprove this proposal.
Sign the message via your wallet.
Vote weight:
1 vote per non-staked AVT
To vote (on the Aventus-compatible platform):
Go to https://voting.aventus.io/ on a computer.
Ensure you have the PolkadotJS browser extension installed on your browser.
Click on “Connect Your Polkadot Wallet”
Once your wallet is connected, click on the proposal you want to vote on.
Either approve or disapprove the proposal.
Sign the voting message.
Vote weight:
1 vote per non-staked AVT
2 votes per staked AVT
