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# System prepended metadata

title: SSV.Network Incentivized testnet V2

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# SSV.Network Incentivized testnet V2

The network's incentivized testnet has end on April 6th, running for 2 months. 

Success points:
* Incredible node operator growth, over 2.5K nodes.
* Significant increase in # of validations, over 15K
* The above helped design major improvements to the protocol, preparing us for mainnet
* The last 2 rounds we saw big increase in SSV staked, 420K

Improvements needed:
* Bot operations took a few weeks to stabilize
* Initially the program drained other goerli faucets in other communities, causing issues.
* Majority of SSV staking rewards distribuited to a few addresses

With the above in mind we've set out to design the next incentivized testnet which will start on the next ssv.network testnet.

## What is a successful testnet?
The testnet has 2 purposes:
1. Serve as a testing enviroment for protocol development
2. Serve as a testing enviroment for teams building ontop of ssv.network

A successful testnet maximize the unique number of operators and validators.


## Preparing for mainnet
Other than development, the biggest challenge before moving to mainnet is to build an ecosystem of projects building on top of ssv great services that take full advantage of the technology.
Such services, and others, will create a constant flow of ETH to the protocol. 
Their success is our success.

The above means that the ssv community needs to evolve to the next stage towards mainnet readiness, focusing on developers and projecs to build on top of the protocol.
Amongst other things the core team is heavily investing in finding the right partners in the space, finalizing a significant grant program and designing the next incentivized testnet to help spread the word about ssv.network, the tech, the protocol and above all the endless possibilities it offers.

## Incentivized testnet goals
* Incentivize a diverse and large group of operators to run an ssv node
* Create economical accountability between valdiators choosing operators and the operators performance
* Align incentives towards developers building on top of ssv

## Design
*  12 months incentivized testnet (well after mainnet), rewards every month  
*  Operators get 50%, validators get 40% and liquidators 10%
*  Validators are eligable if the registering address holds at least X amount of tokens from one of the following tokens (SSV, stETH (Lido), rETH (RPL), etc.) 
*  X tokens from the above is both the min and max for rewards distribuition (account holding more will earn the same as others)
*  Validators eligability is for the validator they created within a certain distribuition period (month), for the following period they will need to create another validator to be eligable. 
*  Every month the amount of SSV rewards is based on the amount of eligable validators, the more there are the higher the rewards pool
*  All accounts earn the same, regardless of how many tokens they hold or validators registered.

The basic structure of this idea is to include other communities in the SSV testnet which are highly relevant as future partners. 
Such communities can extend beyond just staking pools into defi protocols and even DAOs, basically any project we think has the potential to integrate with ssv.network.
By including other communities we take bottom up approach in spreading the word about ssv.network, introduce developers and communities to the protocol and what is possible to do with it. 

If the incentivized testnet is all about turobo-charging the testnet to new heights than this V2 incentivized testnet does that bigger and better than the previous one by reaching out to the very ecosystem we are trying to interest in ssv.network

This proposal requires eligable validators to be active, creating at least 1 validator every reward period to discourage "fire, forget and earn" behaviour where passive validators earn withot doing much.

## Partnering up
As we enable other projects tokens to be eligable we can partner up with those projects for the intial launch and later on have a DAO "listing" process for future projects we want to enable. 

## How much rewards to distribuite
The scope of this testnet is both larger and longer than the previous one. With that said, as the actual SSV reward pool gets larger with the increase of the eligable validators count the DAO only "pays" for what it gets. Basically, the more successful the incentivized testnet is the higher are the rewards. 

The DAO should allocate SSV tokens for V2 to reflect the idea it's bigger and longer while knowing that not all tokens will actually be allocated if the incentivized testnet doesn't succeed the way we plan.

I'd suggest allocating, at max, 5K SSV/ month (for validators) with the following reward pool unlocking. 

For example:


| Eligable validators | Rewards unlocked | min/ validator | max/ validator
| -------- | ------- | ----- |------ |
| 0-1K     | 1,750   | 1.75  |1,750  |
| 1K-2K    | 3,250   | 1.625 |3.24   |
| 2K-3K    | 4,250   | 1.41  |2.12   |
| 3K-4K    | 4,750   | 1.18  |1.58   |
| 4K-5K    | 5,0000  | 1     |1.24   |
| >5K      | 5,000   | >0    |---    |


With the above the DAO will distribuite as little as 30K SSV every month or as much as 100K every month.