As many know, supernode elections are in full swing. This is the first taste of what Elastos on-chain governance will look like, and it is going very well. Close to 2.5m ELA has been locked up for the DPoS election, and this number is constantly growing. Elastonians are still grappling with the difficult process of choosing which supernodes to vote for, however. Unlike traditional elections, DPoS elections are dynamic, constantly shifting and changing based on the actions of supernode candidates and the will of the community.

For many community members and holders who feel as if they do not have relevant skills, this presents an opportunity to influence the ecosystem and be rewarded in the process. For community members who wish to see the long-term success and growth of Elastos, what are some of the important factors they should consider when pledging ELA to candidate nodes? 

Many fall into the trap of thinking that the only metric to account for when voting is the percentage of rewards given to voters. While this certainly is an important factor, it is not necessarily in the community member’s best interest to vote solely based on rewards (including for those only here for sick gainzz). Here are a few important things to consider when voting for a node.


This one is important. If a node is not transparent about distribution split percentage, how it will distribute rewards, and what value they bring to the ecosystem, then it is hard to make an informed decision. 

Take, for example, nodes that use ELABank to distribute rewards. ELABank makes all voter payout scripts fully transparent so voters can be sure they are being paid what the node claims. If a node claims to payout 90% of rewards to voters, but their method of distribution is a black-box, it is much harder for voters to know if they are being paid less than promised. Whether it is ELABank or by some other means, it is important to know how rewards are being distributed.

Also, while it is not required for supernodes to have a website, it can be difficult to be transparent without one. This is especially true for those who are not well-known in the community.

Does The Supernode Contribute To The Ecosystem?

At the end of the day, the value of ELA depends on the value that Elastos can bring to the world. There are many contributors who have undoubtedly brought value to this ecosystem in a variety of ways, and they will continue to do so. Take Hyper as an example. The team behind Hyper made Hyper Messenger on their own time, in addition to contributing to the development of the  Elastos Carrier. Now they are building Hyper connect which could bring huge value to the Elastos ecosystem by creating an open-source IoT framework using the Elastos Carrier that any business can utilize. 

Hyper is running a supernode, and their reward distribution gives 50% to voters, 20% to Hyper contributors, and 30% to market Hyper apps. While a node that gives 90% to voters may seem like it is better for voters, this is not always the case. The 50% that goes to Hyper contributors and marketing for Hyper apps could bring a lot of value to the Elastos ecosystem in the long run. Remember, increasing the amount of ELA in your wallet only really helps if there is value in ELA, which largely depends on the support of contributors and apps like Hyper.

Another great example is DMA. The DMA team work tirelessly to not only develop middleware that all Elastos DApps can use, but also create their own apps to showcase the value of Elastos. As we all know, DMA is vital to the future success of Elastos.  The project was, in large part, self-funded. The DMA team is running a supernode, with 75% of rewards going to voters, and 25% going to the team. Keeping talented teams like DMA working on Elastos is in our best interests as holders, and talent cannot be retained forever without support and resources.

Avoiding A Race To The Bottom

While in some cases nodes that give out a very large percentage (even 100%) of rewards makes sense, this can cause some issues. If voters only care about the percentage of rewards given out, then nodes who plan to use a portion of their ELA rewards to contribute and grow the ecosystem are put at a disadvantage. For those who think that this is simply healthy competition that only acts to benefit the holder, this is not always the case.

Remember that rewards come from inflating the supply. If all of these rewards are going solely into the hands of token holders, and to pay for node operating costs, then this will cause real inflation. On the other hand, if a good portion is going to contributors who are marketing, building, or providing value to the Elastos ecosystem in other ways, the effects of inflation can be mitigated. Of course, voters should still monitor and be critical of nodes who plan to use ELA to contribute to the ecosystem.

What Is Your Personal Goal?  

As you cast your vote, you should ask yourself what your goals are. If you are in it for the short term, you may want to look to nodes who are giving the highest payout. On the other hand, if you plan to hold on to your ELA for a while, then you may give more weight to nodes who are using some of their rewards to grow and increase the value of the ecosystem. The best approach is probably to take both of these factors into consideration.

Can We Make DPoS Work?

Many in the cryptocurrency community have doubts that DPoS can work in a fair manner. What they are saying is that a community cannot be proactive and diligent enough to make informed votes. Several DPoS systems have already been partially taken over by cartels, which ends up creating a situation where all the top nodes are run by whales who contribute little to the ecosystem. This devalues the platform, and can even compromise security. Thankfully, matters of security are not really a concern for Elastos via AuxPoW, but there could be a rare circumstances if all the top nodes are controlled by one entity. Outsiders looking in will value Elastos less if too many supernodes are controlled by one entity.

It is up to us to prove how a community can organize and form a functional democracy. If we can show the crypto community that our supernodes are diverse and deserving, it will add credence to Elastos’ decentralization, which in turn makes the platform more valuable and benefits us all.


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