Merge pull request #41 from aeternity/fork_resolution

Update with new fork resolution and reward distribution.

Author: richcarl

Periodically-Syncing-HyperChains.md

@@ -675,6 +675,14 @@ below `MINIMUM_STAKE`.)
 
 ### Consensus Details
 
+For hyperchains we calculate the "difficulty" of a normal block as the difficulty of the preceding 
+block + 1. The difficulty of a hole is the same as the difficulty of the preceding block.
+Choosing the best fork is done by choosing the block with the highest difficulty.
+The block with the highest height is better for blocks with the same difficulty.
+
+When a vote for a fork gets 2/3 of the stake the difficulty of the block containing that vote will be 
+updated so that difficulty is set to the height.
+
 #### Producer diagram
 
 ```mermaid
@@ -777,7 +785,7 @@ graph TD
     penalty["Prepare proof of all 'double' blocks in same slot.
      Post proof of missconduct.
      Fill all 'double' blocks with 'holes' "]
-    n21["Prefer chain with holes late"]
+    n21["Prefer chain with holes early"]
     done["pick that fork"]
 
 
@@ -791,65 +799,6 @@ graph TD
  ```
 
 
-#### More...
-```mermaid
-graph TD
-    n13["Unsolved or un-placed problems"]
-    n14["Gossiped block is too late"]
-    n15["Network split?"]
-    n16["Lasting multiple epochs?"]
-    n17["No majority can't finish the epoch"]
-    n18["Malicious or bad nodes"]
-    n19["How to choose the best fork?"]
-    n20["Pick 1 with fewest holes"]
-    n21["Prefer chain with holes late"]
-    n22["Can a producer do multiple blocks in a slot\nNO!"]
-    n23["How to detect?"]
-    n24["Act?"]
-    n25["Producer timing Design decisions"]
-    n26["How long to wait?"]
-    n27["Prefer to gossip early?"]
-    n28["But prefer to build complete chain!\nHow to incentivize?"]
-
-
-
-    n13 --> n14
-    n13 --> n15
-    n15 --> n16
-    n15 --> n17
-    n13 --> n18
-    n10 --> n19
-    n19 --> n20
-    n19 --> n21
-    n13 --> n22
-    n15 --> n23
-    n15 --> n24
-    n8 --> n25
-    n25 --> n26
-    n25 --> n27
-    n27 --> n28
-
- ```
-
-```mermaid
-graph TD
-
-    n29["Attacks?"]
-    n30["Double spend"]
-    n31["Halt"]
-    n32["Take over\n* Force majority while not having majority stake"]
-    n34["Penalties\nhttps://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#crypto-economic-security"]
-    n35["Extra end of epoch logic"]
-
-
-    n29 --> n30
-    n29 --> n31
-    n29 --> n32
-    n13 --> n34
-    n13 --> n35
- ```
-
-
 ### End of Epoch Fork Resolution
 
 A Byzantine Fault Tolerant (BFT) voting mechanism is proposed to allow producers to reach consensus on the correct fork.
@@ -1056,18 +1005,16 @@ Penalties are enforced to deter malicious actions or protocol violations. Slasha
    - **Definition**: A validator casts multiple votes for different forks or outcomes in a single voting phase. This action is considered malicious and undermines the voting process.
    - **Penalty**: The validator's stake is slashed, and their voting rights are suspended for one or more epochs. The network may also distribute the slashed amount among honest validators as a reward for maintaining integrity.
 
-3. **Ignoring Votes:**
-
-   - **Definition**: A validator deliberately ignores valid votes when creating a "Finalize" transaction, attempting to force a minority or incorrect outcome. This is only an offense if the ignored votes
-   would change the outcome. This is so that it is not an attack to send in a late vote for the majority
-   outcome and then slash the validator for not including it.
-   - **Penalty**: The validator's stake is partially slashed, and they are penalized with a temporary ban from participating in leader elections or block production if their deposit stakes fall below the minimum.
+3. **Not producing blocks:**
 
-4. **Submitting an incorrect block, or not submitting a block in time**: If a block producer's block has been replaced by holes more than 50% of the time during one epoch.
+   - **Definition**: A validator that was chosen leader but that does not produce any 
+                     valid or in time blocks during an epoch.
+   - **Penalty**: The validator's stake is partially slashed down below minimum stake, 
+   causing a temporary ban from participating in leader elections and block production.
 
-5. **Ignoring the finalize_epoch fork**: This is a minor event just as any other incorrect block. It should probably just be ignored with no penalty.
+4. **Ignoring the finalize_epoch fork**: This is a minor event just as any other incorrect block. It should probably just be ignored with no penalty.
 
-6. **Ignoring a correctly pinned fork**: This is a minor event just as any other incorrect block. It should probably just be ignored with no penalty.
+5. **Ignoring a correctly pinned fork**: This is a minor event just as any other incorrect block. It should probably just be ignored with no penalty.
 
 
 #### Submitting Proof of Wrongdoings

staking.md

@@ -424,7 +424,7 @@ the whole locking period.
     - Serves as a placeholder to maintain the continuity of the blockchain.
   - **No Rewards for Holes**:
     - Validators producing holes do **not** receive any rewards for these blocks.
-    - The missed block's potential rewards are effectively forfeited, including the award of fees for following the previous block.
+    - The missed block's potential rewards are effectively forfeited, including the award of fees for following the previous block, and for the following block.
 
 
 ## Reward Distribution for Correct Blocks
@@ -439,34 +439,43 @@ When a validator successfully produces a block on time, the rewards are distribu
 ### Distribution Breakdown
 
 - **Block Producer (Current Validator)**:
-  - Receives **X% of the block fees**, X defaults to 75% but is configurable in genesis.
+  - Receives **X% of the block fees**, X defaults to 40% but is configurable in genesis.
   - Receives the **full epoch coinbase reward**.
   - **Incentive**: Encourages validators to produce blocks promptly and include transactions to maximize fees.
 
 - **Next Validator (Following Validator)**:
-  - Receives **(100-X)% of the block fees** from the previous block.
+  - Receives **Y% of the block fees**, Y defaults to 30% from the previous block.
   - **Role**:
     - Validates the correctness of the previous block.
     - Builds upon it by producing the next block in the chain.
   - **Incentive**: Motivates validators to participate actively in the validation process and ensures they have a stake in the accuracy of preceding blocks.
 
+- **Previous Producer (Preceding Validator)**:
+  - Receives **(100-(X+Y))% of the block fees** from the following block.
+  - **Role**:
+    - Validates the correctness of the previous block.
+    - Is encouraged to produce the block in time so that the next validator builds on top of it.
+  - **Incentive**: Motivates validators to produce blocks in a timely manner.
+
+
 ### Visualization of Reward Flow
 
 ```plaintext
-+-----------------------+                   +-----------------------+
-|                       |                   |                       |
-|  Validator A          |                   |  Validator B          |
-|  (Block Producer)     |                   |  (Next Validator)     |
-|                       |                   |                       |
-| - Validates Block N-1 |                   |  - Validates Block N  |
-|  - Produces Block N   |                   |  - Builds Block N+1   |
-|  - Receives:          |                   |  - Receives:          |
-|    * 25% of N-1 Fees  |                   |    * 75% of Block N+1 |
-|    * 75% of Block     |------------------>|    * 25% of N-1 Fees  |
-|            N Fees     |                   |                       |
-|    * Epoch Coinbase   |                   |    * Epoch Coinbase   |
-|                       |                   |                       |
-+-----------------------+                   +-----------------------+
++-----------------------+         +-----------------------+        +-----------------------+
+|                       |         |                       |        |                       |
+|  Validator: A         |         |  Validator B          |        |  Validator C          |
+|  Block: N-1           |         |  Block: N             |        |  Block: N+1           |
+|  (Previous Producer)  |         |  (Block Producer)     |        |  (Next Validator)     |
+|                       |         |                       |        |                       |
+| - Validates Block N-2 |         | - Validates Block N-1 |        |  - Validates Block N  |
+|  - Produces Block N-1 |         |  - Produces Block N   |        |  - Builds Block N+1   |
+|  - Receives Fees:     |         |  - Receives Fees:     |        |  - Receives Fees:     |
+|    * 30% of N-2       |         |    * 30% of N-1       |        |    * 30% of N         |
+|    * 40% of N-1       |-------->|    * 40% of N         |------->|    * 40% of N+1       |
+|    * 30% of N         |         |    * 30% of N+1       |        |    * 30% of N+2       |
+|    * Epoch Coinbase   |         |    * Epoch Coinbase   |        |    * Epoch Coinbase   |
+|                       |         |                       |        |                       |
++-----------------------+         +-----------------------+        +-----------------------+
 ```
 
 ## Fee Payout Timing
@@ -489,9 +498,9 @@ When a validator successfully produces a block on time, the rewards are distribu
 
 ### Configurable Parameters
 
-- **75/25 Fee Split**:
+- **30/40/30 Fee Split**:
   - The proportion of fees allocated to the block producer and the next validator is **configurable** for a Hyperchain.
-  - Networks can adjust the split (e.g., 80/20, 70/30) based on governance decisions or to incentivize certain behaviors.
+  - Networks can adjust the split (e.g., 10/70/20, 20/30/50) based on governance decisions or to incentivize certain behaviors.
 
 - **Epoch Coinbase Amount**:
   - The coinbase reward (newly minted tokens) per epoch is **configurable** per chain.
@@ -523,36 +532,43 @@ When a validator successfully produces a block on time, the rewards are distribu
 
 ### Assumptions
 
-- **Fee Split**: 75% to block producer, 25% to next validator.
+- **Fee Split**: 30% previous produer, 40% to block producer, 30% to next validator.
 - **Epoch Coinbase**: 10 tokens per epoch.
 - **Block Fees**: Varies per block.
 
 ### Block Production Sequence
 
-1. **Validator A** produces Block N on time.
-2. **Validator B** is scheduled to produce Block N+1.
+1. **Validator A** has produced Block N-1 on time.
+2. **Validator B** produces Block N on time.
+2. **Validator C** is scheduled to produce Block N+1.
 
 ### Reward Distribution
 
-- **Validator A (Block N Producer)**:
+- **Validator A (Block N-1 Producer)**:
+  - Receives:
+    - **30% of Block N Fees**.
+    - **Epoch Coinbase** (10 tokens).
+
+
+- **Validator B (Block N Producer)**:
   - Receives:
-    - **75% of Block N Fees**.
+    - **40% of Block N Fees**.
     - **Epoch Coinbase** (10 tokens).
 
-- **Validator B (Block N+1 Producer)**:
+- **Validator C (Block N+1 Producer)**:
   - Receives:
-    - **25% of Block N Fees** (for validating and building upon Block N).
+    - **30% of Block N Fees** (for validating and building upon Block N).
     - Their own rewards for producing Block N+1 when applicable.
 
 ### Missed Block Scenario
 
-- If **Validator A** fails to produce Block N:
-  - **Validator B** produces a **hole** instead.
+- If **Validator B** fails to produce Block N:
+  - **Validator C** produces a **hole** instead.
   - **No Rewards**:
-    - Validator B receives **no rewards** for the hole.
-    - Validator A forfeits potential rewards for Block N.
+    - Validator C receives **no rewards** for the hole.
+    - Validator B forfeits potential rewards for Block N.
   - **Continued Operation**:
-    - **Validator B** continues with Block N+1.
+    - **Validator C** continues with Block N+1.
 
 ---
 
@@ -579,8 +595,7 @@ Penalties are enforced to deter malicious actions or protocol violations. **Slas
 
 1. **Producing Two Versions of a Block at a Specific Height (Double-Spending Attack)**
 2. **Double Voting**
-3. **Ignoring Votes**
-4. **Consistently Failing to Submit Blocks on Time**
+3. **Consistently Failing to Submit Blocks on Time**
 
 ### Minor Offenses
 1. **Ignoring the `finalize_epoch` Fork**