Incentive mechanism (cryptoecon) questions

Hey all! I was chatting with Pranay and he suggested I post some of my questions here.

My understanding is that snarkers (snark workers) don’t need to stake to participate. They just need the necessary hardware. To make a snarker node worth running, a snarker will rely on validators (block producers) to pay them for their work. But what if the validators don’t pay the snarkers?

I’m wondering if this could happen in two different ways:

  1. What if validators simply run their own snarker nodes to avoid having to pay other snarkers? I imagine that this is not a likely scenario, since validators would need machines provisioned to handle peak traffic, and idle compute capacity should always be cheaper than dedicated capacity.

  2. What if I spin up a bunch of snarker nodes and offer snarks at no charge? In order to capture the entire snark market. How many resources would I need to put competing snarkers out of business?

I’m also curious to know how dependent block producers are upon snarkers. What happens if a validator sets their buy price too low for snarks? Will they be unable to do their job as a validator?

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These are great questions! I will try to answer them, but I want to make it clear that this is from my personal understanding of the cryptoeconomics.

This is totally plausible, and in fact entirely likely. I can envision a scenario where a node operator runs a pool of snark workers in order to offset the cost of idle infrastructure. However, you’d have to process a lot of SNARKs in order to preclude the use of SNARKs generated by external actors.

With CPUs, this is actually plausible and something we’ve seen in our testnets. However once the SNARK prover requires specialized hardware like GPUs, I believe that this will become prohibitively expensive. In a large network processing many transactions (10+ TPS) there’s a lot of SNARK work that needs to be generated.

Hopefully someone else from the core team can chime in with some napkin math or something, as I don’t know the math off the top of my head.

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