Empowering Collaborative Stake Pools with Automated Reward Distribution

[GENERAL] Name and surname of main applicant

Dylan Crocker

[GENERAL] Email address of main applicant

viperstakepool@gmail.com

Additional applicants

Willie Marchetto

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

4

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

The tool will make use of 3rd-party Cardano API services such as blockfrost, koios, etc.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Project will be fully open source.

[METADATA] Category of proposal

SPOs

[IMPACT] Please describe your proposed solution.

Our proposed solution addresses the challenge of efficiently distributing stake pool rewards to multiple pledge/owner wallets while reducing errors. We will deliver a user-friendly Command-Line Interface (CLI) tool that simplifies this process, ensuring ease of use for stake pool operators. By automating reward distribution based on each pledge wallet's stake and other configurable parameters, our tool eliminates the need for manual calculations and transactions, saving significant time and effort.

Furthermore, our solution will provide comprehensive documentation to guide users through installation, configuration, and utilization. This documentation will serve as a valuable resource, further minimizing the risk of errors by providing clear instructions and troubleshooting tips. By streamlining operational processes and reducing the chance of mistakes, our CLI tool enhances the overall efficiency and accuracy of reward distribution among stake pool owners.

By saving time, effort, and reducing errors, our solution empowers stake pool operators to allocate rewards more efficiently and reliably. This not only promotes fair and transparent distribution but also encourages wider participation by reducing barriers to entry for community members with smaller pledge amounts. Our solution plays a pivotal role in fostering decentralization within the Cardano ecosystem while enhancing the overall user experience for stake pool operators.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

The CLI tool we propose offers numerous benefits, addressing the challenges faced by community members attempting to increase pledge through collaboration among a diverse range of participants. By enabling community members with smaller pledge amounts to join forces and create a pool with high overall pledge, our tool fosters inclusivity and democratization of the Cardano ecosystem. This approach ensures that stake pools are not solely controlled by wealthy individuals or corporations, promoting decentralization and preventing consolidation. The collaborative effort results in higher overall pledge, which in turn increases the pool rewards for all participants. By automating reward distribution based on each pledge wallet's stake, our tool ensures fairness and transparency in the allocation of rewards. It empowers community members, regardless of their individual resources, to actively participate in and benefit from the Cardano blockchain.

[IMPACT] How do you intend to measure the success of your project?

Technical success will be achieved when reward payouts for complex owner scenarios may be simply carried out with a CLI call. In addition, the CLI tool will be able to automatically run at each epoch rollover. The project success will be further measured by how many small pools are able to grow pledge through using our solution.

[IMPACT] Please describe your plans to share the outputs and results of your project?

We intend to share the tool and its capabilities through Twitter, Medium, YouTube, and Reddit. We plan to develop good documentation and examples (including video) so that users with less technical background will be able to get setup quickly.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

The Viper Science team has operated the high performance VIPER stake pools on the Cardano blockchain since 2019 (starting during the incentivized testnet). The team has extensive experience in software development and has successfully delivered on multiple Catalyst proposals.

The Viper Science team has been an active contributor to the Cardano community for over four years. In addition to operating stake pools since the Incentivized Testnet, we have developed several open source tools for Cardano developers and SPOs. Three of these projects have been successfully funded through Catalyst in the past:

• Cardano-Tools Python Library (https://projectcatalyst.io/funds/8/f8-open-source-development-ecosystem/cardano-tools-python-library) 
• Cardano development library in C++ (https://projectcatalyst.io/funds/8/f8-open-source-development-ecosystem/cardano-development-library-in-c)
• API for Multi-Delegation Portfolios (https://projectcatalyst.io/funds/6/f6-dapps-and-integrations/api-for-multi-delegation-portfolios) 

A complete list of our contributions can be found at https://viperscience.com/

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

The goal of this project is a simple and easy to use CLI tool for managing reward distribution among collaborative owners of a single stake pool. The approach is feasible since this is how many stake pools currently run (including VIPER stake pool). Many pools have custom tooling in place to manage the complex rewards distribution; however, the simplicity of our proposed design will make it easier for new/smaller operations to combine.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

We anticipate the timeline for delivery of this project to be 12 to 16 weeks. This estimated timeline accounts for part-time staff allocation and does not represent our estimated labor hours (see budget section for estimated labor).

Milestone 1 - Stake Pool Reward Distribution Calculations [5 weeks, 9130 ADA]

Implement functionality to accurately calculate the staking rewards for each pledge wallet. 

1. Access historical pledge wallet balances through multiple APIs. The app will allow users to configure which API service to use for data. [2 weeks]
2. Determine epoch roll overs and total pool rewards for each epoch. Separate staking rewards from pool fees. Split up staking rewards accurately per wallet. This may include techniques to avoid rounding errors. [2 weeks]
3. Further testing of calculations against historical data. [1 week]

Milestone 2 - CLI Application [5 weeks, 9130 ADA]

1. CLI user interface complete with help text. [3 weeks]
2. Configuration file format designed. Any parsing code completed. [2 weeks]

Milestone 3 - Application Testing and Documentation [6 weeks, 18260 ADA]

1. Test automated pool rewards payouts on both mainnet and testnet. [3 weeks]
2. Extensive documentation developed using a documentation generation tool, e.g., sphinx. Comprehensive walkthrough video. [3 weeks]

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

Milestone 1

• Deliverables: We will provide an open source project repository with all the code up to this point. The code will contain the functionality intended to be complete by milestone 1 but may be usable as a standalone tool.
• Outputs: Open source code pushed to the public repository including passing test cases.
• Intended outcomes: At this stage, the code for automating the stake pool reward calculations will be complete.

Milestone 2

• Deliverables: Functional command line tool buildable from the project repository.
• Outputs: Open source code pushed to the public repository that may be build and used as a standalone CLI tool.
• Intended outcomes: At this stage, the code for all intended functionality will be complete and in a simple to use form (a CLI tool). 

Milestone 3

• Deliverables: Thoroughly tested tool with comprehensive documentation.
• Outputs: Open source repository of the CLI tool. Tool documentation in both text and video format available.
• Intended outcomes: Display project success and provide the resources to the community.

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

The project team consists of engineers with advanced degrees, each with over ten years of professional experience developing and building complex systems in research & development environments. As a baseline labor rate, we are using a relatively conservative rate of $63.91, which is the mean hourly wage for software developers in the US according to the US Bureau of Labor Statistics. 

Budget breakdown:

• Labor ($10,225.60):
• Milestone 1: 40 hours
• Milestone 2: 40 hours
• Milestone 3: 80 hours
• Materials ($0): 
• Item: N/A

Assumed $/ada exchange rate: $0.28.

Total project cost: 36,520 ADA

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of implementing our proposed solution represents excellent value for money for the Cardano ecosystem. By investing in the development and deployment of the CLI tool, the ecosystem stands to gain significant benefits. The tool streamlines the process of distributing stake pool rewards to multiple pledge/owner wallets, reducing the manual effort required by stake pool operators. This automation not only saves time and effort but also minimizes the risk of errors in reward calculations and transactions. The resulting efficiency and accuracy enhance the overall operational processes of community-run stake pools.

Moreover, the tool fosters wider participation in the Cardano ecosystem by reducing barriers to entry for community members with smaller pledge amounts. It promotes inclusivity and prevents the consolidation of stake pool control into the hands of a few wealthy individuals or corporations. This aspect aligns with Cardano's vision of decentralization and community empowerment.

Considering the long-term benefits that the tool brings to the ecosystem, the cost incurred represents a worthwhile investment. The enhanced efficiency, fairness, and transparency in reward distribution contribute to the overall sustainability and growth of the Cardano ecosystem. The value derived from enabling wider participation, preventing consolidation, and promoting stake pool decentralization makes the cost of the project highly justified in terms of the long-term benefits it provides to the Cardano community and ecosystem as a whole.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept