Merge PR #1702: lamborghini distribution & inflation spec upgrade

PENDING.md

@@ -52,6 +52,7 @@ IMPROVEMENTS
 * [tools] Remove `rm -rf vendor/` from `make get_vendor_deps`
 * [x/auth] Recover ErrorOutOfGas panic in order to set sdk.Result attributes correctly
 * [x/stake] Add revoked to human-readable validator 
+* [spec] \#967 Inflation and distribution specs drastically improved
 * [tests] Add tests to example apps in docs
 * [x/gov] Votes on a proposal can now be queried
 * [x/bank] Unit tests are now table-driven

docs/spec/README.md

@@ -17,7 +17,8 @@ said, they provide a detailed resource for understanding the Cosmos-SDK.
 - [Governance](governance) - Proposals and voting.
 - [Staking](staking) - Proof-of-stake bonding, delegation, etc.
 - [Slashing](slashing) - Validator punishment mechanisms.
-- [Provisioning](provisioning) - Fee distribution, and atom provision distribution 
+- [Distribution](distribution) - Fee distribution, and atom provision distribution 
+- [Inflation](inflation) - Atom provision creation
 - [IBC](ibc) - Inter-Blockchain Communication (IBC) protocol.
 - [Other](other) - Other components of the Cosmos Hub, including the reserve 
   pool, All in Bits vesting, etc.

docs/spec/distribution/end_block.md

@@ -0,0 +1,36 @@
+# End Block
+
+At each endblock, the fees received are sorted to the proposer, community fund,
+and global pool.  When the validator is the proposer of the round, that
+validator (and their delegators) receives between 1% and 5% of fee rewards, the
+reserve tax is then charged, then the remainder is distributed proportionally
+by voting power to all bonded validators independent of whether they voted
+(social distribution). Note the social distribution is applied to proposer
+validator in addition to the proposer reward. 
+
+The amount of proposer reward is calculated from pre-commits Tendermint
+messages in order to incentivize validators to wait and include additional
+pre-commits in the block. All provision rewards are added to a provision reward
+pool which validator holds individually
+(`ValidatorDistribution.ProvisionsRewardPool`). 
+
+```
+func SortFees(feesCollected sdk.Coins, global Global, proposer ValidatorDistribution, 
+              sumPowerPrecommitValidators, totalBondedTokens, communityTax sdk.Dec)
+
+     feesCollectedDec = MakeDecCoins(feesCollected)
+     proposerReward = feesCollectedDec * (0.01 + 0.04 
+                       * sumPowerPrecommitValidators / totalBondedTokens)
+     proposer.ProposerPool += proposerReward
+     
+     communityFunding = feesCollectedDec * communityTax
+     global.CommunityFund += communityFunding
+     
+     poolReceived = feesCollectedDec - proposerReward - communityFunding
+     global.Pool += poolReceived
+     global.EverReceivedPool += poolReceived
+     global.LastReceivedPool = poolReceived
+
+     SetValidatorDistribution(proposer)
+     SetGlobal(global)
+```

docs/spec/distribution/future_improvements.md

@@ -0,0 +1,16 @@
+## Future Improvements
+
+### Power Change
+
+Within the current implementation all power changes ever made are indefinitely stored
+within the current state. In the future this state should be trimmed on an epoch basis. Delegators
+which will have not withdrawn their fees will be penalized in some way, depending on what is 
+computationally feasible this may include:
+ - burning non-withdrawn fees
+ - requiring more expensive withdrawal costs which include proofs from archive nodes of historical state
+
+In addition or as an alternative it may make sense to implement a "rolling" epoch which cycles through 
+all the delegators in small groups (for example 5 delegators per block) and just runs the withdrawal transaction 
+at standard rates and takes transaction fees from the withdrawal amount.  
+
+

docs/spec/distribution/overview.md

@@ -0,0 +1,54 @@
+# Distribution
+
+## Overview
+
+Collected fees are pooled globally and divided out passively to validators and
+delegators. Each validator has the opportunity to charge commission to the
+delegators on the fees collected on behalf of the delegators by the validators.
+Fees are paid directly into a global fee pool, and validator proposer-reward
+pool. Due to the nature of passive accounting whenever changes to parameters
+which affect the rate of fee distribution occurs, withdrawal of fees must also
+occur when: 
+
+ - withdrawing one must withdrawal the maximum amount they are entitled
+   too, leaving nothing in the pool, 
+ - bonding, unbonding, or re-delegating tokens to an existing account a
+   full withdrawal of the fees must occur (as the rules for lazy accounting
+   change), 
+ - a validator chooses to change the commission on fees, all accumulated 
+   commission fees must be simultaneously withdrawn.
+
+The above scenarios are covered in `triggers.md`.
+
+The distribution mechanism outlines herein is used to lazily distribute the
+following between validators and associated delegators:
+ - multi-token fees to be socially distributed, 
+ - proposer reward pool, 
+ - inflated atom provisions, and
+ - validator commission on all rewards earned by their delegators stake
+
+Fees are pooled within a global pool, as well as validator specific
+proposer-reward pools.  The mechanisms used allow for validators and delegators
+to independently and lazily  withdrawn their rewards.  As a part of the lazy
+computations adjustment factors must be maintained for each validator and
+delegator to determine the true proportion of fees in each pool which they are
+entitled too.  Adjustment factors are updated every time a validator or
+delegator's voting power changes.  Validators and delegators must withdraw all
+fees they are entitled too before they can change their portion of bonded
+Atoms. 
+
+## Affect on Staking
+
+
+Charging commission on Atom provisions while also allowing for Atom-provisions
+to be auto-bonded (distributed directly to the validators bonded stake) is
+problematic within DPoS.  Fundamentally these two mechnisms are mutually
+exclusive. If there are atoms commissions and auto-bonding Atoms, the portion
+of Atoms the fee distribution calculation would become very large as the Atom
+portion for each delegator would change each block making a withdrawal of fees
+for a delegator require a calculation for every single block since the last
+withdrawal. In conclusion we can only have atom commission and unbonded atoms
+provisions, or bonded atom provisions with no Atom commission, and we elect to
+implement the former. Stakeholders wishing to rebond their provisions may elect
+to set up a script to periodically withdraw and rebond fees. 
+

docs/spec/distribution/state.md

@@ -0,0 +1,100 @@
+## State
+
+### Global
+
+All globally tracked parameters for distribution are stored within
+`Global`. Rewards are collected and added to the reward pool and
+distributed to validators/delegators from here. 
+
+Note that the reward pool holds decimal coins (`DecCoins`) to allow 
+for fractions of coins to be received from operations like inflation. 
+When coins are distributed from the pool they are truncated back to 
+`sdk.Coins` which are non-decimal. 
+
+ - Global:  `0x00 -> amino(global)`
+
+```golang
+// coins with decimal 
+type DecCoins []DecCoin
+
+type DecCoin struct {
+    Amount sdk.Dec
+    Denom  string
+}
+
+type Global struct {
+    PrevBondedTokens  sdk.Dec  // bonded token amount for the global pool on the previous block 
+    Adjustment        sdk.Dec  // global adjustment factor for lazy calculations
+    Pool              DecCoins // funds for all validators which have yet to be withdrawn
+    PrevReceivedPool  DecCoins // funds added to the pool on the previous block
+    EverReceivedPool  DecCoins // total funds ever added to the pool 
+    CommunityFund     DecCoins // pool for community funds yet to be spent
+}
+```
+
+### Validator Distribution
+
+Validator distribution information for the relevant validator is updated each time:
+ 1. delegation amount to a validator are updated, 
+ 2. a validator successfully proposes a block and receives a reward,
+ 3. any delegator withdraws from a validator, or 
+ 4. the validator withdraws it's commission.
+
+ - ValidatorDistribution:  `0x02 | ValOwnerAddr -> amino(validatorDistribution)`
+
+```golang
+type ValidatorDistribution struct {
+    CommissionWithdrawalHeight   int64   // last time this validator withdrew commission
+    Adjustment                 sdk.Dec   // global pool adjustment factor
+    ProposerAdjustment         DecCoins  // proposer pool adjustment factor
+    ProposerPool               DecCoins  // reward pool collected from being the proposer
+    EverReceivedProposerReward DecCoins  // all rewards ever collected from being the proposer
+    PrevReceivedProposerReward DecCoins  // previous rewards collected from being the proposer
+    PrevBondedTokens           sdk.Dec   // bonded token amount on the previous block 
+    PrevDelegatorShares        sdk.Dec   // amount of delegator shares for the validator on the previous block 
+}
+```
+
+### Delegation Distribution 
+
+Each delegation holds multiple adjustment factors to specify its entitlement to
+the rewards from a validator. `AdjustmentPool` is  used to passively calculate
+each bonds entitled fees from the `RewardPool`.  `AdjustmentPool` is used to
+passively calculate each bonds entitled fees from
+`ValidatorDistribution.ProposerRewardPool`
+
+ - DelegatorDistribution: ` 0x02 | DelegatorAddr | ValOwnerAddr -> amino(delegatorDist)`
+
+```golang
+type DelegatorDist struct {
+    WithdrawalHeight   int64    // last time this delegation withdrew rewards
+    Adjustment         sdk.Dec  // fee provisioning adjustment factor
+    AdjustmentProposer DecCoins // proposers pool adjustment factor
+    PrevTokens         sdk.Dec  // bonded tokens held by the delegation on the previous block
+    PrevShares         sdk.Dec  // delegator shares held by the delegation on the previous block
+}
+```
+
+### Power Change
+
+Every instance that the voting power changes, information about the state of
+the validator set during the change must be recorded as a `PowerChange` for
+other validators to run through. Each power change is indexed by its block
+height. 
+
+ - PowerChange: `0x03 | amino(Height) -> amino(validatorDist)`
+
+```golang
+type PowerChange struct {
+    Height                        int64     // block height at change
+    ValidatorBondedTokens         sdk.Dec   // following used to create distribution scenarios
+    ValidatorDelegatorShares      sdk.Dec
+    ValidatorDelegatorShareExRate sdk.Dec
+    ValidatorCommission           sdk.Dec
+    PoolBondedTokens              sdk.Dec
+    Global                        Global
+    ValDistr                      ValidatorDistribution
+    DelegationShares              sdk.Dec
+    DelDistr                      DelegatorDistribution
+}
+```