TL;DR: Baker participation in the Data Availability Layer (DAL) is steadily increasing, supporting the growth and scalability of Tezos. The Rio proposal adjusts rewards to promote honest DAL behavior.
As the Rio protocol proposal moves through the governance process, we’d like to bring you an update on a related topic, the Data Availability Layer (DAL).
First and foremost: We are delighted to see steady growth in the number of bakers running DAL nodes on mainnet! 22.8% of the baking power are now participating, with more bakers joining every week.
There’s still some way to go before hitting the 66% threshold that makes the DAL operational, and we encourage all bakers to get involved. See this tutorial to get started – it’s not a lot of work. We recommend first running the DAL node on the Ghostnet testnet, where it’s possible to test the setup with a fully operational DAL.
We’ve received questions from some bakers, asking why they should be involved in running the DAL, and why the Rio proposal allocates rewards to this.
Let’s look into it.
A part of Tezos’ future
We won’t go into too much detail here – but it’s safe to say that the DAL greatly boosts the scalability of L2 solutions on Tezos. Importantly, it does so while being secured by L1, i.e. bakers.
The question we hear is: Why should bakers be involved in supporting L2? The simple answer is that L2 is as much a part of Tezos as L1 is.
In the short term the DAL can boost Etherlink, an L2 EVM-platform that is already attracting projects, users, and liquidity from the EVM-world to Tezos.
Etherlink is an enshrined Smart Rollup, governed by Tezos bakers. The token is tez (XTZ), and much work has gone into enabling fast and frictionless movement of tokens to and from L1. In effect, Etherlink is an extension of L1.
In the longer term, the Tezos X roadmap relies on an L2 solution – the canonical rollup – to offer unmatched performance, composability, and interoperability. Without an operational DAL, the canonical rollup won’t be able to scale.
To sum up, running the DAL and boosting L2 scalability are key components in enabling the future growth of the Tezos network and ecosystem – growth that ultimately benefits bakers as well.
DAL Rewards in Rio
For the above reasons, the Rio proposal allocates 10% of participation rewards to promoting a well-functioning DAL.
DAL rewards are meant to 1) incentivize honest behavior by DAL participants, and 2) push participation comfortably above the 66% threshold once the DAL is operational. But only if and when the DAL is operational.
If the Rio proposal is adopted, the following will apply:
- When the 66% DAL participation threshold is met, the 10% DAL rewards are distributed among participating bakers. Non-participating bakers forfeit these rewards.
- When the threshold is not met, the DAL rewards are distributed among all active bakers in proportion to their stake, regardless of participation.
Another change in Rio is that baking will require running a DAL node by default, but bakers can opt out. Our internal tests, and feedback from bakers running DAL nodes, indicate that even bakers with low-spec hardware can run the DAL node on their current setup without issues.
To learn more about the DAL rewards, see our post announcing Rio, including the FAQ which answers questions we received during early feedback rounds.
And, of course, don’t hesitate to reach out on the dedicated #dal-testers channel on Discord!