Commission Rate in Basis Points

Summary

Allow validators to update their inflations reward commission rate with basis points and update commission calculation.

Motivation

Validators should have more fine grained control over commission values beyond integer percentage values.

Dependencies

This proposal depends on the following previously accepted proposals:

• SIMD-0185: Vote Account v4

  Introduces version 4 of the vote account state, updating the commission field to use basis points for greater precision.

• SIMD-0249: Delay Commission Updates

  Simplifies commission update rules so that the UpdateCommissionBps instruction will not need to restrict updates in any way.

New Terminology

NA

Detailed Design

Commission Calculation

After the adoption of SIMD-0185, commission rates will begin to be stored in basis points but they could still only be set in whole integer percentages. As a result, all stored values were multiples of 100 basis points. As a result, the actual commission calculation logic remained unchanged: the system continued to divide by 100 and use whole integer percentage values.

This proposal introduces support for setting commission rates with full basis point precision (e.g., 1,234 basis points = 12.34%). Because commission values are no longer limited to clean multiples of 100, the calculation logic must now operate directly on basis point values. To compute the inflation reward commission while avoiding overflow, first convert the pending inflation reward to a u128 integer. Then multiply it by the lesser of the vote account’s commission rate or the maximum of 10,000 basis points. Lastly, divide by 10,000 using integer division and discard the remainder.

To calculate the portion of the reward that goes to delegated stake, again convert to u128. Multiply by the greater of 0 or 10,000 minus the vote account’s commission rate. Lastly, divide by 10,000 and discard the remainder.

Vote Program

pub enum VoteInstruction {
    /// # Account references
    ///   0. `[WRITE]` Vote account to be updated with the new commission
    ///   1. `[SIGNER]` Withdraw authority
    UpdateCommissionBps { // 18u32
        commission_bps: u16,
        kind: CommissionKind,
    },
}

#[repr(u8)]
pub enum CommissionKind {
    InflationRewards = 0,
    BlockRevenue = 1,
}

UpdateCommissionBps

A new instruction for setting a commission rate denominated in basis points will be added to the vote program with the enum discriminant value of 18u32 little endian encoded in the first 4 bytes.

Perform the following checks:

• If the number of account inputs is less than 1, return InstructionError::NotEnoughAccountKeys
• If the vote account (index 0) fails to deserialize, return InstructionError::InvalidAccountData
• If the vote account's authorized withdrawer is not an account input for the instruction or is not a signer, return InstructionError::MissingRequiredSignature

Update the corresponding field for the specified commission kind:

• CommissionKind::InflationRewards: update the inflation_rewards_commission_bps field
• CommissionKind::BlockRevenue: return InstructionError::InvalidInstructionData

Note that the commission rate is allowed to be set and stored as any u16 value but as detailed above, it will capped at 10,000 during the actual commission calculation.

Alternatives Considered

NA

Impact

Validators will be able to set inflation rewards commission rates in basis points.

Security Considerations

NA

Drawbacks (Optional)

Why should we not do this?

Backwards Compatibility (Optional)

A feature gate will be used to simultaneously update the vote program to support commission rates in basis points as well as update the runtime's commission calculations at epoch boundaries.