GAP: 'Swarm Masternodes Fund' (Network Policy Change)


Data available at:

Description of the proposed change to Swarm Network Policy

  • Adjusting the masternodes staking contracts so that from every monthly payment to each node, a chosen % can be automatically sent to a secure wallet named ‘Swarm Masternodes Fund’ (placeholder) for:

A) 3 years;
B) 5 years;

from its inception date, at the percentage rate of:

A) 12.5%;
B) 10%;
C) 5% + 2.5% for each following year; (5%, 7.5%, 10%, 12.5%, 15%. 15% will always be the max, regardless of the duration of this initiative.)

  • Despite the number of nodes possibly changing with time, the percentage of yearly rewards set aside for the Swarm Masternodes Fund will remain fixed at the chosen rate for 3/5 years.

  • Any of the above percentages, rules and timeline can be amended in the future by a new vote.

  • If the GAP is agreed upon, the Swarm Foundation will implement the changes and start the Swarm Masternodes Fund’s before January 1st, 2020. (To be checked with Swarm team, this is just a tentative date.)

  • It will also require the creation of a multisig Ethereum address administered and protected by the Swarm Foundation. It will need at least 3 signatures or a similarly secure protection in accordance to the Swarm Foundation’s own standards. (To be checked with Swarm team.)

  • A new metric will be inserted in the Masternodes page, showing the Fund’s current balance. ( (To be checked with Swarm team.)

  • New GAPs in relation to the Swarm Masternodes Fund are welcome. This particular GAP only focusses on approving its creation and a few basic rules.

Purpose and rationale for the policy change and its intended outcomes

  • Each node would only contribute barely 1943 SWM tokens (very likely less) in a 5 year period, to save up to 700,000+ SWM within a 5-year period.

  • Through a new proposal, the Swarm Masternodes Fund could keep a number of MNs running until the network decides for rebalancing parts of it, with currencies such as BTC, ETH, DAI/USD, all exchanged at the appropriate time and price range agreed upon later. Limits could be set up, however the rebalancing strategy is outside of the scope of this initial GAP and can be widely discussed and approved further down the road.

  • It would establish a climate of collaboration between masternode holders, open discussions, grow engagement and foster ideas that will enrich the network’s reach and its strength.

  • The network can keep track of each node’s contributions over the years. If the network will someday vote to close the fund entirely, each node’s contribution will be tracked and returned to its original Ethereum wallet. Take note that this action is, however, quite unlikely.

  • The Swarm Masternodes Fund will be the ideal way to avoid using the Swarm Treasury for non-critical improvements or low-priority community actions.

  • Since the goal of the nodes isn’t to just receive yearly (decreasing) rewards, but it is to process an increasing number of MAP transactions, I find it beneficial to save a few SWM tokens aside early on, if the plan is to use them to increase adoption, utility, scope and holders long-term.

  • Under ordinary circumstances, it is safe to assume that the Swarm Masternodes Fund will not just be voted down by any future Swarm majority as it’d go against their interests.

  • It is however likely that some masternode holders will sell their SWM tokens before seeing any benefits from the Swarm Masternodes Fund itself, while having contributed to it monthly, albeit just a little bit.

  • If as a consequence to this GAP being approved, any node will decide abandon the network, the rewards to the remaining masternodes will simply rebalance themselves, while offering a chance for new long-term holders to get onboard.


I like this proposal. What I would change is the fact that the Swarm Foundation / the Council should hold the multisig for it. I think we should consider other options. Like maybe creating an Aragon DAO that will vote on how to deploy the funds. Of course the participants of this DAO would be the Masternode owners who contributed to the fund. They would have a proportional vote relative to their contribution.

We need to think how this would be implemented but I think it is a better approach.