An EVM compatible Substrate chain, powered by StorageHub and secured by EigenLayer
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Steve Degosserie 67f375860b
feat: Performance-Based Validator Rewards and Inflation Scaling (#306)
## Summary

Building on #304, this PR implements two complementary mechanisms to
improve validator incentives and network performance:

1. **Performance-Based Validator Rewards** (session-level)
2. **Inflation Scaling** (era-level)

## Reward Model Comparison

### Old Model (main branch) vs New Model

| Metric | Old Model (20 pts/block) | New Model (320 pts/block pool) |
|--------|--------------------------|--------------------------------|
| **Per Block** | Author: 20 pts, Others: 0 | Author: ~196 pts, Others:
~4 pts each |
| **Formula** | Direct author reward | 60% authoring + 30% liveness +
10% base |
| **Per Session** (600 blocks, 32 validators) | 12,000 total pts |
192,000 total pts |
| **Per Validator/Session** (uniform) | ~375 pts | ~6,000 pts |
| **Per Validator/Era** (6 sessions) | ~2,250 pts | ~36,000 pts |
| **Offline Validator** | 0 pts | ~600 pts/session (base only) |
| **Over-performer (150% blocks)** | 150% of fair share | Up to 130%
reward (soft cap) |

### Key Differences
- **Pool-based**: New model adds 320 points to a shared pool per block,
distributed via formula
- **Liveness rewarded**: 30% of rewards go to validators who are online
(heartbeat OR block authorship)
- **Base guarantee**: 10% ensures all active validators receive minimum
rewards
- **Soft cap**: Prevents extreme over-performance rewards (max 150% of
fair share credited)

## Performance-Based Validator Rewards

Introduces a **60/30/10 reward formula** that rewards validators based
on their contribution during each session:

- **60%** based on block production (with soft cap allowing up to 150%
of fair share)
- **30%** based on liveness (ImOnline heartbeat OR block authorship)
- **10%** guaranteed base reward for all active validators

### Key Features
- Tracks individual validator block authorship per session
- Calculates fair share dynamically: `fair_share = total_blocks /
total_validator_count`
- Fair share uses **total** validator count (including whitelisted)
since all validators occupy block slots
- **Soft cap**: Over-performers can earn credit up to 150% of their fair
share (configurable via `OperatorRewardsFairShareCap` at 50%)
- With 60% BlockAuthoringWeight, this gives over-performers up to **30%
bonus reward**
- **BasePointsPerBlock**: Defines points added to pool per block
produced (default: 320)
- Integrates with SessionManager for automatic point awards at session
end
- Excludes whitelisted validators from rewards (but includes them in
fair share calculation)
- Slashing check disabled but hook retained for future use
- Points accumulate across sessions within an era

### Dynamic Parameters (Governance-Adjustable)
- `OperatorRewardsBlockAuthoringWeight`: Weight for block authoring
(default: 60%)
- `OperatorRewardsLivenessWeight`: Weight for liveness (default: 30%)
- `OperatorRewardsFairShareCap`: Soft cap percentage above fair share
(default: 50%)

## Inflation Scaling

Implements **dynamic inflation scaling** that adjusts total inflation
based on network block production:

- **Minimum**: 20% of base inflation (network halt protection)
- **Maximum**: 100% of base inflation (caps at expected blocks)
- **Linear scaling** between minimum and maximum based on performance

### Scaling Examples
- 0% blocks produced → 20% inflation (safety floor)
- 50% blocks produced → 60% inflation  
- 100% blocks produced → 100% inflation
- >100% blocks produced → capped at 100%

### Configuration
- **ExpectedBlocksPerEra**: Computed as `SessionsPerEra ×
EpochDurationInBlocks`
- **MinInflationPercent**: 20%
- **MaxInflationPercent**: 100%

## Combined Effect

These mechanisms work together to create a comprehensive incentive
structure:

1. **Session rewards** encourage individual validator performance and
uptime
2. **Era inflation scaling** incentivizes collective network health
3. **Minimum inflation floor** protects against network halt
4. **Soft cap** allows over-performers to earn up to 30% bonus while
preventing extreme centralization

## Implementation Details

### Pallet Changes
- Add `BlocksAuthoredInSession` storage for per-validator tracking
- Add `BlocksProducedInEra` storage for total network tracking (cleaned
up with HistoryDepth)
- Add `note_block_author()` function called on block production
- Add `award_session_performance_points()` function with configurable
60/30/10 formula
- Add `calculate_scaled_inflation()` function for era-level scaling
- Update `on_era_end()` to use scaled inflation
- Integrate with SessionManager via wrapper types
- Defensive weight validation: proportionally scales if sum > 100%

### Configuration Parameters
- `ValidatorSet`: Provides active validator list
- `LivenessCheck`: Uses `ImOnline::is_online()` (heartbeat OR block
authorship)
- `SlashingCheck`: Integration with slashing pallet (currently disabled)
- `BasePointsPerBlock`: Points added to pool per block (default: 320)
- `BlockAuthoringWeight`: Dynamic parameter (60%)
- `LivenessWeight`: Dynamic parameter (30%)
- `FairShareCap`: Dynamic parameter (50%)
- `ExpectedBlocksPerEra`: Computed from session/epoch config
- `MinInflationPercent`: 20%
- `MaxInflationPercent`: 100%

### Runtime Updates
- Full configuration added to mainnet, testnet, and stagenet runtimes
- Dynamic parameters added to `runtime_params.rs` for governance control
- Uses `prod_or_fast!()` macro for environment-specific parameters
- `ValidatorIsOnline` uses `ImOnline::is_online()` for accurate liveness
detection

## Testing

- **76 tests passing** 
- Comprehensive coverage of both mechanisms

### Test Coverage
- Inflation scaling at 0%, 25%, 50%, 75%, 100%, >100% blocks
- Session performance with 60/30/10 formula
- Fair share calculations with soft cap (150%)
- Whitelisted validator exclusion from rewards (with correct fair share
using total count)
- Total points verification (sum of individual = total)
- Whitelisted over-producer scenarios
- Overflow protection (large block counts, near-u32::MAX)
- End-to-end session to era flow
- MockLivenessCheck mirrors ImOnline behavior (block authorship =
online)
- Multiple eras with different performance levels
- Edge cases (zero participation, single validator, large numbers)
- BlocksProducedInEra cleanup on era start

## ⚠️ Breaking Changes ⚠️

### Reward Distribution

Previously, rewards were distributed equally among all validators
regardless of their contribution. Now:

- **Performance-based**: Validators earn rewards proportional to their
block production (60%), liveness (30%), and a guaranteed base (10%)
- **Pool-based**: `BasePointsPerBlock` defines points added to pool per
block (320), distributed via formula
- **Fair share uses total validators**: Ensures non-whitelisted aren't
penalized for whitelisted validators' block slots
- **Soft cap**: Block production rewards allow up to 150% of fair share
(50% cap = 30% bonus with 60% weight)
- **Slashing check disabled**: Hook retained for future use, but
currently not applied

### Inflation Mechanism

Previously, the full calculated inflation was minted each era. Now:

- **Scaled by performance**: Total inflation scales between 20%-100%
based on actual blocks produced vs expected
- **Safety floor**: Even with zero blocks, 20% of inflation is still
minted to prevent complete halt
- **Network incentive**: Collective block production directly impacts
total rewards available

### Pallet Configuration

The `pallet-external-validators-rewards` Config now requires additional
types:
- `BlockAuthoringWeight`, `LivenessWeight`, `FairShareCap` for reward
formula
- `ValidatorSet`, `LivenessCheck`, `SlashingCheck` for validator
tracking
- `ExpectedBlocksPerEra`, `MinInflationPercent`, `MaxInflationPercent`
for inflation scaling

---------

Co-authored-by: Claude <noreply@anthropic.com>
Co-authored-by: Ahmad Kaouk <56095276+ahmadkaouk@users.noreply.github.com>
2025-12-16 16:27:03 +01:00
.github fix: Grant required permissions to reusable workflows in CI.yml (#355) 2025-12-12 11:33:00 +00:00
contracts fix: 🛡️ Check origin for validator set messages (#343) 2025-12-15 14:11:08 +01:00
deploy fix: 🪳 Add --msp-distribute-files flag to MSP node in Devnet config (#297) 2025-11-13 14:09:34 +01:00
docker Revert "feat: statically build binary (#292)" (#330) 2025-12-02 15:42:43 +01:00
operator feat: Performance-Based Validator Rewards and Inflation Scaling (#306) 2025-12-16 16:27:03 +01:00
resources test: Add E2E Tests (#36) 2025-04-14 16:22:43 -03:00
test feat: Performance-Based Validator Rewards and Inflation Scaling (#306) 2025-12-16 16:27:03 +01:00
tools fix: 🔧 Fix publish runtime draft release (#226) 2025-10-12 23:59:32 +02:00
.gitignore test: Update validator set e2e test (#126) 2025-10-02 11:23:40 +00:00
.gitmodules build: Change Snowbridge contracts dependency from upstream to fork (#18) 2025-03-28 15:49:43 -03:00
biome.json test: port ethereum tests from moonbeam (#278) 2025-11-22 10:02:05 +01:00
CLAUDE.md test: Native token transfer e2e tests (#120) 2025-08-22 18:27:14 +02:00
file_header.txt chore: ♻️ Add missing license header in operator & AVS contracts source code (#285) 2025-11-10 12:56:41 +01:00
LICENSE chore: ♻️ Add missing license header in operator & AVS contracts source code (#285) 2025-11-10 12:56:41 +01:00
README.md test: only inject contracts in e2e tests if INJECT_CONTRACTS env is 'true' (#315) 2025-11-24 12:07:36 +01:00
taplo.toml ci: 🐳 Start Publishing Docker Images (#64) 2025-05-08 20:32:55 -03:00

DataHaven 🫎

An EVM-compatible Substrate blockchain secured by EigenLayer, bridging Ethereum and Substrate ecosystems through trustless cross-chain communication.

Overview

DataHaven is an EigenLayer Actively Validated Service (AVS) that combines:

  • EVM Compatibility: Full Ethereum support via Frontier pallets for smart contracts and dApps
  • EigenLayer Security: Validator set secured by Ethereum's economic security through restaking
  • Cross-chain Bridge: Seamless asset and message transfers with Ethereum via Snowbridge
  • Dynamic Validators: Operator registry managed on-chain through EigenLayer contracts
  • Performance Rewards: Validator incentives distributed cross-chain from Ethereum

Architecture

DataHaven bridges two major blockchain ecosystems:

┌───────────────────────────────────────────────────────────────┐
│                       Ethereum (L1)                           │
│  ┌────────────────────────────────────────────────────────┐   │
│  │  EigenLayer AVS Contracts                              │   │
│  │  • DataHavenServiceManager (operator lifecycle)        │   │
│  │  • RewardsRegistry (performance tracking)              │   │
│  │  • VetoableSlasher (misbehavior penalties)             │   │
│  └────────────────────────────────────────────────────────┘   │
│                            ↕                                  │
│                  Snowbridge Protocol                          │
└───────────────────────────────────────────────────────────────┘
                             ↕
┌───────────────────────────────────────────────────────────────┐
│                    DataHaven (Substrate)                      │
│  ┌────────────────────────────────────────────────────────┐   │
│  │  Custom Pallets                                        │   │
│  │  • External Validators (sync validator set)            │   │
│  │  • Native Transfer (cross-chain tokens)                │   │
│  │  • Rewards (distribute validator rewards)              │   │
│  │  • Frontier (EVM compatibility)                        │   │
│  └────────────────────────────────────────────────────────┘   │
└───────────────────────────────────────────────────────────────┘

Repository Structure

datahaven/
├── contracts/      # EigenLayer AVS smart contracts
│   ├── src/       # Service Manager, Rewards Registry, Slasher
│   ├── script/    # Deployment scripts
│   └── test/      # Foundry test suites
├── operator/       # Substrate-based DataHaven node
│   ├── node/      # Node implementation & chain spec
│   ├── pallets/   # Custom pallets (validators, rewards, transfers)
│   └── runtime/   # Runtime configurations (mainnet/stagenet/testnet)
├── test/           # E2E testing framework
│   ├── suites/    # Integration test scenarios
│   ├── framework/ # Test utilities and helpers
│   └── launcher/  # Network deployment automation
├── deploy/         # Kubernetes deployment charts
│   ├── charts/    # Helm charts for nodes and relayers
│   └── environments/ # Environment-specific configurations
├── tools/          # GitHub automation and release scripts
└── .github/        # CI/CD workflows

Each directory contains its own README with detailed information. See:

Quick Start

Prerequisites

  • Kurtosis - Network orchestration
  • Bun v1.3.2+ - TypeScript runtime
  • Docker - Container management
  • Foundry - Solidity toolkit
  • Rust - For building the operator
  • Helm - Kubernetes deployments (optional)
  • Zig - For macOS cross-compilation (macOS only)

Launch Local Network

The fastest way to get started is with the interactive CLI:

cd test
bun i                    # Install dependencies
bun cli launch           # Interactive launcher with prompts

This deploys a complete environment including:

  • Ethereum network: 2x EL clients (reth), 2x CL clients (lodestar)
  • Block explorers: Blockscout (optional), Dora consensus explorer
  • DataHaven node: Single validator with fast block times
  • AVS contracts: Deployed and configured on Ethereum
  • Snowbridge relayers: Bidirectional message passing

For more options and detailed instructions, see the test README.

Run Tests

cd test
bun test:e2e              # Run all integration tests
bun test:e2e:parallel     # Run with limited concurrency

NOTES: Adding the environment variable INJECT_CONTRACTS=true will inject the contracts when starting the tests to speed up setup.

Development Workflows

Smart Contract Development:

cd contracts
forge build               # Compile contracts
forge test                # Run contract tests

Node Development:

cd operator
cargo build --release --features fast-runtime
cargo test
./scripts/run-benchmarks.sh

After Making Changes:

cd test
bun generate:wagmi        # Regenerate contract bindings
bun generate:types        # Regenerate runtime types

Key Features

EVM Compatibility

Full Ethereum Virtual Machine support via Frontier pallets:

  • Deploy Solidity smart contracts
  • Use existing Ethereum tooling (MetaMask, Hardhat, etc.)
  • Compatible with ERC-20, ERC-721, and other standards

EigenLayer Integration

Validator security anchored to Ethereum:

  • Operators register via DataHavenServiceManager contract
  • Economic security through ETH restaking
  • Slashing protection with veto period via VetoableSlasher
  • Performance-based rewards through RewardsRegistry

Cross-chain Communication

Trustless bridging via Snowbridge:

  • Native token transfers between Ethereum ↔ DataHaven
  • Cross-chain message passing
  • Finality proofs via BEEFY consensus
  • Three specialized relayers (beacon, BEEFY, execution)

Dynamic Validator Set

Validator management synchronized with Ethereum:

  • EigenLayer operator registry as source of truth
  • On-chain validator set updates via External Validators pallet
  • Automatic consensus participation changes
  • Cross-chain coordination for validator lifecycle

Docker Images

Production images published to DockerHub.

Build optimizations:

Build locally:

cd test
bun build:docker:operator    # Creates datahavenxyz/datahaven:local

Development Environment

VS Code Configuration

IDE configurations are excluded from version control for personalization, but these settings are recommended for optimal developer experience. Add to your .vscode/settings.json:

Rust Analyzer:

{
  "rust-analyzer.linkedProjects": ["./operator/Cargo.toml"],
  "rust-analyzer.cargo.allTargets": true,
  "rust-analyzer.procMacro.enable": false,
  "rust-analyzer.server.extraEnv": {
    "CARGO_TARGET_DIR": "target/.rust-analyzer",
    "SKIP_WASM_BUILD": 1
  },
  "rust-analyzer.diagnostics.disabled": ["unresolved-macro-call"],
  "rust-analyzer.cargo.buildScripts.enable": false
}

Optimizations:

  • Links operator/ directory as the primary Rust project
  • Disables proc macros and build scripts for faster analysis (Substrate macros are slow)
  • Uses dedicated target directory to avoid conflicts
  • Skips WASM builds during development

Solidity (Juan Blanco's extension):

{
  "solidity.formatter": "forge",
  "solidity.compileUsingRemoteVersion": "v0.8.28+commit.7893614a",
  "[solidity]": {
    "editor.defaultFormatter": "JuanBlanco.solidity"
  }
}

Note: Solidity version must match foundry.toml

TypeScript (Biome):

{
  "biome.lsp.bin": "test/node_modules/.bin/biome",
  "[typescript]": {
    "editor.defaultFormatter": "biomejs.biome",
    "editor.codeActionsOnSave": {
      "source.organizeImports.biome": "always"
    }
  }
}

CI/CD

Local CI Testing

Run GitHub Actions workflows locally using act:

# Run E2E workflow
act -W .github/workflows/e2e.yml -s GITHUB_TOKEN="$(gh auth token)"

# Run specific job
act -W .github/workflows/e2e.yml -j test-job-name

Automated Workflows

The repository includes GitHub Actions for:

  • E2E Testing: Full integration tests on PR and main branch
  • Contract Testing: Foundry test suites for smart contracts
  • Rust Testing: Unit and integration tests for operator
  • Docker Builds: Multi-platform image builds with caching
  • Release Automation: Version tagging and changelog generation

See .github/workflows/ for workflow definitions.

Contributing

Development Cycle

  1. Make Changes: Edit contracts, runtime, or tests
  2. Run Tests: Component-specific tests (forge test, cargo test)
  3. Regenerate Types: Update bindings if contracts/runtime changed
  4. Integration Test: Run E2E tests to verify cross-component behavior
  5. Code Quality: Format and lint (cargo fmt, forge fmt, bun fmt:fix)

Common Pitfalls

  • Type mismatches: Regenerate with bun generate:types after runtime changes
  • Contract changes not reflected: Run bun generate:wagmi after modifications
  • Kurtosis issues: Ensure Docker is running and Kurtosis engine is started
  • Slow development: Use --features fast-runtime for shorter epochs/eras (block time stays 6s)
  • Network launch hangs: Check Blockscout - forge output can appear frozen

See CLAUDE.md for detailed development guidance.

License

GPL-3.0 - See LICENSE file for details