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TIP-045, this proposal, supersedes and replaces [TIP-035](https://forum.threshold.network/t/tip-035-t-grants-for-tbtc-v2-bootstrap-node-providers/405). ### TL; DR: Bootstrap Node Requirements tBTCv2 will launch with three bootstrap node providers: Boar, P2P, and Staked. Each provider will receive a grant of $10,000/month in T. The updated Bootstrap Node Proposal shortens the term commitment to one (1) year and adds the requirement of running an Electrum Server. ### Background: After carefully considering the concerns, suggestions and comments from the community in response to the [first version of this proposal](https://forum.threshold.network/t/tip-035-t-grants-for-tbtc-v2-bootstrap-node-providers/405), this update has been drafted to reduce the expense to the DAO while still ensuring a **robust and timely launch** of tBTCv2. Bootstrap nodes are critical building blocks of infrastructure for the Threshold Network’s tBTC application and are very different from regular nodes. Their operator addresses are hard-coded in off-chain client code. Bootstrap nodes do not participate in activities that expose them to slashing risk, thus they do not earn inflation rewards. Their stake sizes are of no importance and can be the minimum stake. ### Main Revision Points: - The runtime of this proposal has been reduced from three years to one year - The number of operators contracted under this proposal has been reduced from 4 to 3 - Running an Electrum server as a requirement has been added - The monthly grant in liquid T has been reduced to $10,000 - Guaranteed availability has been changed from 99.9% to 96 to 98% ### Detailed Requirements Per Operator Two (2) instances of the tBTCv2 client in independent regions for redundancy, to be deployed on high-availability equipment, whether this is a VPS or bare metal is left up to the provider. Bootstrap node operators agree and guarantee availability of at least 96% to 98%. The rationale in reducing the uptime guarantee from 99.99% is that it is extremely unlikely that all bootstrap node providers will experience downtime at the same time. This reduction in guaranteed availability achieved a significant cost minimization for the DAO. ### Electrum Server Requirement: This requirement was added to further support the tBTCv2 launch. Operators agree to run one instance of an Electrum server, software version and other requirements shall be furnished prior to launch, however, as a reference, tBTCv2 has been tested against three of the most popular types of servers: - ElectrumX (>= 1.16.0) (https://github.com/spesmilo/electrumx) - Esplora/Electrs (>= v0.4.1) (https://github.com/Blockstream/electrs) - Fulcrum (>= 1.8.2) (https://github.com/cculianu/Fulcrum) A Bitcoin node is required for electrum to function properly. Thus, bootstrap providers will need to maintain a Bitcoin node as well. ### Providers: **P2P** - [https://p2p.org/](https://p2p.org/) - P2P Validator provides high uptime, secure staking with advanced monitoring & support. P2P was established in early 2018 and proved the best quality of staking services as one of the top operators in Threshold, Solana, Polkadot/Kusama, Tezos, Graph, Moonbeam, Regen, Chainlink, and Connext Networks. Currently, P2P secures more than 1.5 billion USD value across 30+ networks, provides highly-available RPC services, and contributes to web3 as a core developer for Lido on Solana and Neutron - Cosmos Hub secured smart-contract chain. **Staked** - [https://staked.us/](https://staked.us/) - Staked operates the most secure, performant, and cost-effective block production nodes for decentralized PoS protocols on behalf of institutional investors. Their multi-tier signing and listening node architecture delivers stakeholders the ideal combination of security, scalability and decentralization. **Boar** - [https://boar.network/](https://boar.network/) for transparency, please review the following post: [TIP-035 T grants for tBTC v2 bootstrap node providers](https://forum.threshold.network/t/tip-035-t-grants-for-tbtc-v2-bootstrap-node-providers/405/19) ### Proposal: If approved, each provider will receive a grant of $10,000/month in liquid T for running a tBTC v2 bootstrap node in accordance with the requirements discussed herein.

*Summary: Allocate a minimum of 5,359,375 T tokens and a maximum of 8,039,062.5 T tokens for an initial tBTCv2 liquidity mining program to incentivize early minters of tBTCv2 and facilitate the desired engagement levels and user actions specified in the guarded launch schedule.* **Background** tBTCv2 minting is expected to go live on January 9, 2023, via a guarded launch with caps (both per-deposit and system-level) that increase over time. This staged launch is designed to test the protocol as it grows, and ensure it is able to handle very high volumes of deposits and redemptions. Each stage entails a maximum deposit per transaction as well as a hurdle (system-wide TVL and number of deposit transactions) that must be met in order to move on to the next stage. **Motivation** tBTCv2's guarded launch is designed to rigorously test the deposit and redemption funcitonality prior to scaling TVL. This liquidity mining program is designed to facilitate the targeted number of deposit transactions in the early capped stage, NOT to naively grow TVL. Allocating T token incentives to early depositors will facilitate the deposits and engagement necessary to properly test the protocol’s functionality and move through the stages in a timely manner. Additionally, targeting eligibility for the liquidity mining program to specific communities and power DeFi users provides an opportunity to strategically grow the Threshold community and tBTC user base. **Proposal** *Allowlist of addresses* An allowlist of eligible addresses drawing from the existing Threshold community, relevant power user communities (LobsterDAO and Degenscore), and the Threshold alumni network (Curve and Tally Ho) will be eligible for rewards. Specifically, the allowlist includes: * T stakers * Liquid T holders with a balance >= 100,000 T * lobsterdao NFT holders (https://www.lobsterdao.io/) * DegenScore Beacon soulbound token holders (https://degenscore.com/) * tBTCv1 minters * veCRV holders * Tally users (as per some TBD metric) While there's value in keeping the allowlist exclusive initially, it could potentially be expanded to include the following communities, if desired: * vlCVX users * wBTC/renBTC minters * BadgerDAO users * Other relevant communities or users *Rewards Schedule* Liquidity mining rewards will proceed in step with the guarded launch schedule previously proposed, along with two proposed changes/clarifications: * Since the System Cap and Total Deposits must be fulfilled before moving on to the next stage, “Week” is renamed to “Epoch”. An Epoch will be at least a week, but may last longer if the specified targets are not met. * For accounting simplicity, fluctuating USD values are ignored in favor of BTC-denominated accounting.  *Examples* In epoch 1, the System Cap is 0.5 BTC and the Deposit Per-Transaction Cap is 0.005 BTC. Once 100 deposits of 0.005 (totaling 0.5BTC) are made into the System, rewards for that epoch will be exhausted. Only deposits equal to the 0.005 BTC per-transaction deposit cap will be rewarded. In Week 8, the System Cap is 150 BTC and the Deposit Per-Transaction Cap is 0.05 BTC. Once 1,000 deposits of 0.05 BTC (totaling 50 BTC) are made into the System, rewards for that week will be exhausted. Only deposits equal to the 0.05 BTC per-transaction deposit cap will be rewarded. *Rules & Mechanics* To qualify for rewards, participants must hold the minted tBTC until redemptions are enabled (currently expected in Epoch 8, but subject to change). Since earlier epochs are required to hold for a longer period, the implied T per BTC rewards decrease each epoch. As a reminder, the goal at this stage is to test system functionality (primarily deposits and redemptions), NOT to naively grow TVL. As such, only transactions that comply with the specified “Deposit Per-Transaction Cap” and that don’t exceed the “System Cap” for the specific week will be eligible for rewards. Participants that sell, transfer, or otherwise dispose of their minted tBTC prior to redemptions going live will be disqualified from receiving rewards, at the sole discretion of the Threshold Council and Threshold Treasury Guild Committee. T rewards will be paid out at the end of Epoch 8, pending a manual review to ensure no inappropriate gaming of the system has occurred. At any point during the liquidity mining period, participants can optionally LP their minted tBTC into the Curve pool for at least an 8 week period, in order to earn a 1.5x boost on their T rewards (meaning the maximum possible T tokens paid out by the DAO for this program is `1.5 x 5,359,375 = 8,039,062.5`). To recap, to qualify for rewards users must: * Deposit in the correct increment for the current epoch * Hold (or LP in Curve) through at least epoch 8, when redemptions go live * Optionally LP in Curve for at least 8 weeks to earn a 1.5x rewards boost * Not attempt to game or circument the rules or intent of the liquidity mining program To avoid being overly prescriptive, this initial proposal only describes liquidity mining for the first 8 epochs before redemptions start. This will provide learnings to inform changes and improvements to any potential future extensions of the liquidity mining program. *Open Questions* * Should there be an additional holding period after redemptions are live for an address to qualify for rewards? * Should the reward boost for Curve LPs be something other than 1.5x? * Should the allowlist be expanded? If so, with which communities? * Are the T rewards calibrated correctly? Are they too high? Too low? * Since this LM program incentivizes LP deposits, should the DAO continue to vote its vlCVX gauge weight for the tBTCv2 pool during this liquidity mining period or should it temporarily use that vlCVX for other purposes (e.g. voting for the teth pool)?

**TL;DR** Proposal for establishing Threshold grants for tBTC v2 bootstrap node providers. Bootstrap nodes are essentially gateways to the tBTC network. They are NOT the same as other Threshold nodes, including nodes acting as signers for tBTC. Bootstrap nodes must be deployed on enterprise-grade hardware and require considerable resources and high technical competence to ensure 99.99% availability. Further, their bonded stakes are *not* inflation protected as bootstrap nodes do not participate in rewards because they cannot be exposed to slashing risk. Four providers have been identified that are willing to provide long-term support to Threshold (4 years). This proposal establishes a grant of $18,750/month for each provider. **Background** Bootstrap nodes are critical building blocks of infrastructure for the Threshold Network’s tBTC application and are very different from regular nodes. Their operator addresses are hard-coded in off-chain client code. **Bootstrap Node Requirements** Bootstrap nodes require a long-term commitment and need to be deployed on enterprise-grade infrastructure.. Additionally, Bootstrap node providers need to run 2 Random Beacon and ECDSA nodes as well as a minimum of 2 Ethereum nodes to ensure failover protection and guarantee availability of at least 99.99%. Stakes bonded to a Bootstrap node do not participate in rewards, which means the T locked in their stake is not inflation protected. The DAO will stake the necessary T from its treasury for each bootstrap node Bootstrap operators also need to be in separate geographic regions to protect against outages, ensure availability and provide stability to the network. **Launch Providers** Four professional node operators have been identified that are willing to make this commitment to Threshold: **Boar** - [https://boar.network/](https://boar.network/) **InfStones** - [https://infstones.com/](https://infstones.com/) - InfStones is dedicated to building the next evolution of a better world through limitless Web3 innovation by supporting tens of thousands of nodes on more than 60 major blockchains. The company is dedicated to bringing down the barriers to connecting with the blockchain. InfStones' platform is battle-tested and supports over 15,000 nodes on over 60 blockchains. **P2P** - [https://p2p.org/](https://p2p.org/) - P2P Validator provides high uptime, secure staking with advanced monitoring & support. P2P was established in early 2018 and proved the best quality of staking services as one of the top operators in Threshold, Solana, Polkadot/Kusama, Tezos, Graph, Moonbeam, Regen, Chainlink, and Connext Networks. Currently, P2P secures more than 1,5 billion USD value across 30+ networks, provides highly-available RPC services, and contributes to web3 as a core developer for Lido on Solana and Neutron - Cosmos Hub secured smart-contract chain. **Staked** - [https://staked.us/](https://staked.us/) - Staked operates the most secure, performant, and cost-effective block production nodes for decentralized PoS protocols on behalf of institutional investors. Their multi-tier signing and listening node architecture delivers stakeholders the ideal combination of security, scalability and decentralization. **Proposal** This proposal would create a grant for each Bootstrap operator of $18,750 per month in liquid T tokens, calculated at the TWAP for the period This grant is designed to cover the operational and staffing costs for bootstrap providers and ensure proper alignment and commitment to the network.