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, Loki Foundation: Service Node Policy

Loki Foundation: Service Node Policy

At the latest board meeting of the Loki Foundation’s directors, I put forward a motion to increase the number of Service Nodes that the Foundation operates. Currently, the Foundation runs 15 Service Nodes, which accounts for ~3.3% of the total nodes on the network.

I have been doing some calculations regarding the long term viability of the Foundation’s current funding model, and by extension, the Loki Project. In my estimation, it’s possible the Loki Project could survive beyond its current funding based on the rewards it receives from the 5% block reward. However, in order for that to occur, the market conditions would have to be extremely favourable.

To reduce our dependence on extreme market performance, I believe the Foundation needs to have a larger pool of Loki that can be utilised in the long term. Our current $Loki assets are not very significant compared to the overall supply, and it gives myself and the board uncertainty over the viability of the current model. In order to address this, the Foundation needs to increase the amount of $Loki it earns over time.

Instead of simply increasing the Governance reward, I instead recommended to the board that we implement a policy of running Service Nodes. This way, the Foundation also provides the network with additional nodes to increase the overall capacity of the network, and is actually working to earn these rewards just as everyone else would. However, there are transparency issues around this approach, so to avoid misleading the community the board has decided that we will be changing our documentation to reflect the actual overall proportion of the block reward that the Foundation collects.

The Board has unanimously approved a policy to run up to 10% of the Service Node network on a 30 day average basis. For example, if there are 450 nodes on the network on average over the last 30 days, the Foundation will run no more than 45 nodes. This limit effectively means that the Foundation will be collecting 10% of the block reward, between its 10% share of the Service Node network, and the standard 5% governance reward. We will alter our existing documentation to reflect this policy update so that new Loki users are accurately informed on how much $Loki the Foundation collects.

If you have any ideas or concerns about this policy change, you can email the foundation directly at [email protected] or join us on the #governance channel on Discord.


Simon Harman

Project Lead, Foundation Director