Addressing Concerns and Confusion About the Recent Hardfork

The Hardfork

There were two parts primarily for the most recent hardfork

  • New Block Reward Distribution

  • Reduced block times

Reduced Block Time

To be clear, there has been NO halving! There has been absolutely NO change to emissions whatsoever. Reduction in block times has nothing to do with either of those. With the block time reduction, the same amount of rewards are being produced, but at half the time, so you are getting twice the amount of payouts with a smaller amount in each one.

New Block Reward Distribution

This is where the majority of confusion and concerns seem to be. The new block reward distribution is the result of a community decision to change the tokenomics. You can read our blog post here that provides more detail. This started off as a community proposal to introduce the community fund, reduce sell pressure, and slightly increase masternode reward because they have become the primary source of security while PoW has become secondary.

You can read the original proposal and discussion here Nonetheless, this received enough traction from the community to warrant a community vote which can be found here and this led to another vote to further narrow down the values, which can be found here

  • Initial Proposal February 17th-March 29th

  • First Vote/Poll March 29th-April 29th

  • Second Vote/Poll April 21st-May 5th

As you can see, this was not a brief process and this topic was brought up across our platforms numerous times throughout the entire process to get people involved. We went out of our way extensively to reach out to miners to get them to participate including being on YouTube miners’ channels. Now that we have covered what led to this point, let’s cover what this means. By the final voting process the end result was as follows:

50% Masternodes (Previously 35%)

25% Miners (Previously 50%)

15% Dev Fund (NO CHANGE)

10% Community Fund (Previously 0%)

What is the Community Fund?

This is explained in more detail in both the proposal thread and the blog post, but simply put it is a community-controlled fund to aid the community in choosing and funding what they deem to be important to the project. At this early point, there will be a committee of elected individuals (called the Community Fund Committee, or CFC) to determine what the funding will do. The election for these members are still ongoing and can be found here

The committee’s term lasts for 6 months after which the seats are up for election again. To be clear, the CFC is only meant to be a temporary solution until a quadratic voting/matching fund can be put in place. Once that system is in place it will be decentralized and the CFC won’t be necessary any longer. At that point, the community as a whole will determine what they want by donations and the matching fund will work autonomously to match those funds. For more information, you can read the blog post.

Is this Permanent?

Strictly speaking, no. This tokenomics change will be under review 6 months after the hardfork date to determine the pros and cons of the change, and whether the community decides further alteration or reverting back to the original tokenomics are necessary. As before, this is open to everyone to discuss, and ultimately miners, just as much as any other community member, will be able to vote on what they think will be best.

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FAQ

  • Only 140 votes?

Yes, there were 140 voters for this, but this is also a good turnout considering the participation usually had from the community on such topics. While some may find this unsatisfactory, the simple fact of the matter is all we can do is reach out to the community on such topics for you to participate - we cannot force you to vote, we can not force you to participate, and we can’t do it for you. This was not for a lack of trying, either. Firo reached out about this topic for community input and participation through every avenue at our disposal. We are sorry to those who missed the call, but just as in real-life elections, you will merely have to wait until future voting periods. The good news for you is that there is the possibility of it in 6 months on this topic! As community member has pointed out previously, elections are won by those who show up.

  • What did Firo do to reach out about this?

Firo used every social media platform at its disposal. YouTube, Reddit, Twitter, Facebook, Telegram, Discord, Matrix, etc. We made extensive efforts to reach Firo holders, especially miners. Thankfully, many miner YouTubers were willing to give us a platform to reach out to miners through them to get as much of their attention as possible.

  • This will make Firo unprofitable!

This will vary from one miner to another and there are numerous variables to this from hashrate, to electricity costs, difficulty, and the value of Firo. With the halving of reward, there is expected to be a halving of difficulty and hashrate, and a new equilibrium will be achieved for miners. In this same vein, if Firo increases in value the difficulty and hashrate will increase as more miners onboard while maintaining that equilibrium.

  • This was just for the insiders!

No. This was open to literally any Firo holder. Whether that be a masternode owner, a miner, or someone with just a few Firos. To top it all off, Firo made extensive attempts to reach out to the community to get them involved; especially the mining community. There are no “insiders” with Firo.

  • This isn’t part of the whitepaper!

Firo doesn’t have a whitepaper, and neither did Zcoin. The whitepaper was simply the original Zerocoin paper, back when Firo first launched (then Zcoin). Therefore this argument is mute. Nonetheless, Firo does not take changes to tokenomics or key technology lightly - this is also why it is so crucial for the community to be involved in such decisions. However, it is wrong to think that a coin should not, or cannot change to meet the needs or times - especially one that evolves so rapidly as the cryptocurrency space. We aren’t Bitcoin and we shouldn’t aim. When Firo started as Zcoin it was simple, mining similar to Bitcoin with ASIC resistance and Zerocoin on top. That morphed as things went along and we added a lot of tech to it but we never had a whitepaper.

  • I thought Firo was pro-PoW?

Firo is and will remain so. Firo has repeatedly stated throughout its history the importance of PoW. Mining is anonymous, it is accessible to effectively anyone, and it levels the playing field as anyone has access to GPUs to mine, while Firo has gone out of its way to ensure the chain is ASIC and FPGA resistant to maximize the performance and benefits of commodity hardware. PoW is important for fair distribution, it ties the value of Firo to the physical world, and it is generally decentralized.

Even more to this is that Firo has spent an exhaustive amount of time and resources to create mining algorithms to benefit the mining community - from MTP to FiroPoW. While it could be argued MTP did not perform as was intended, FiroPoW does, but both efforts have remained unappreciated. Even when it is explained that in order to be ASIC and FPGA resistant which causes the cards to run hot, why it needs more GPU VRAM, miners largely do not care.

These are all very important for a privacy coin such as Firo, there’s no denying that, and Firo does quite the opposite and highlights this. In fact, you can watch a video featuring Project Steward, Reuben Yap, on our YouTube channel where he goes over why we use PoW, and further still, why we specifically use GPU mining here

We understand that, for many miners, this change is a disappointment, but this does not mean we are anti-PoW. This was a community decision, and their reasonings are various, but this does not change Firo from being PoW and does not threaten that.

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Very well structured post! Well done!

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Very nice posts @DinkBlitz, thanks for the info!

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Thank you both! It took me a bit to put together, but I hope this will help clear up some of the misunderstandings occurring. :slight_smile:

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140 votes does show that the message didn’t get out there and that the select few got what they wanted.
Otherwise a good read. Thanks.
Unfortunately the fork hasn’t really changed the miner distribution and the node distribution and has pretty much just shrank the support base.

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Message was quite persistently announced. It just shows that some people didn’t care to vote. And most of those who voted did quite responsibly (for example masternode owners didn’t vote for option which gives them biggest reward, but option which seems better for the project).

It was discussed at least month before vote and vote took another month. If somebody wanted to vote he had opportunity.

If tou look on most comments of loudest people who complain many times you see that they are not even mining Firo and never were, they supposedly only considered to mine Firo after ETH was not mineable or profitable enough. It is sad reality.

Seems like when ETH will go full POS, miners will have to simply accept reality that ecosystem changed and it will not be same.

BTW, Firo project spent significant energy to accommodate GPU miners for quite some time as you can read in forum posts, telegram, roadmap and hear in videos, but miners don’t appreciate it much and seems they don’t care about the project, it is just plain business for most of them.