Following a recent proposal by the team behind the PACcoin project, a vote will be held to determine whether not the community will agree on increasing the required masternode collateral from 500,000 $PAC to 2 million. This will help reduce the bloat in the network as currently there are too many masternodes, being limited by the block size.
How Would the $PAC Proposal Work?
In networks that run masternodes, governance is maintained by the masternode operators. They each have the right to submit proposals and vote on them. To enforce the changes, consensus must be achieved.
In the case of PACcoin the developers have provided their blockchain followers with the following 3 options:
- Vote with “Yes” – the masternode operator agrees to increase the collateral to 2,000,000 $PAC
- Vote with “Abstain” – the masternode operator agrees to increase the collateral to 1,000,000 $PAC
- Vote with “No” – the masternode is against this proposal and wants to keep the collateral at its current state (500,000 $PAC)
Details on the proposal itself can be found by following the official link but in essence, this change is required as the number of masternodes is too high and there just isn’t enough transactions for everyone to process. Masternode operators are wasting time and money (and a lot of it, $40,000 per month based on estimates of all masternode hosts), as the block size and time is limiting the throughput and not the lack of transaction validators (masternodes). For the proposal to pass, there needs to be 10% more “Yes” votes than “No”.
Origins of the Problem
The issue stems from the fact that there’s no other major application for PACcoin masternodes currently. The coin’s value is too low to support the planned implementations. Initially, the collateral was lowered as an incentive for operators to support and secure the network, but overall, it was always calculated to be 2,000,000 $PAC.
Nowadays we have the shared masternode system PACnode which allows for easier adoption and thus the low collateral is no longer needed. It’s gotten to the stage where it actually makes things worse and that’s why the proposal exists. To understand the issue better, you can check out my article on SmartCash which faced a similar dilemma recently and had to forcefully push the change to their network. In PACcoin’s case, we have something that can be considered a pre-emptive strike, as you’re probably aware, governance is a tricky mechanism to use.