28 Day Delegation Unbonding Period.

In the blockchain ecosystem, any participant of a Proof of Stake (PoS) network can stake their tokens. This is accomplished by locking the network’s native token, which helps to support the security of the network and allows participants to earn staking rewards.

However, unstaking from a network usually comes with a predeterminded lockup period (called “unbonding perdiod“). During said period, staking participants will have their tokens locked before they can sell or transfer them. This delayed exit period serves as a cooldown during which participants will not receive any staking rewards.

In The Graph Network, Delegators stake (i.e. “delegate”) their GRT tokens to a validator (i.e. an “Indexer”) as the network allows so called “Delegated Proof of Stake (DPoS)”. When a Delegator unstakes (i.e. “undelegates”) their GRT from an Indexer, The Graph Protocol induces an unbonding period for the GRT tokens a Delegator has undelegated from an Indexer:

Let’s have a look at each topic in more detail.

Delegators in The Graph Network are incentivized to meet sound delegation decisions. The process of identifying and selecting profitable and trustworthy Indexers is one such decision and greatly impacts a Delegator’s success in the network.

The 28 day delegation unbonding period provides an economic incentive for Delegators to invest a considerable amount of time into the process of researching Indexers and carefully selecting the best one(s). In doing so, the network rewards Delegators that keep delegating to the Indexers of their choice for a longer period of time while it may confront imprudent Delegators that switch from one Indexer to another with opportunity costs.

Aside from providing economic incentives to delegate with a long-term orientation, the delegation unbonding period serves as a tool to prevent double-counting:

Without the 28 day unbonding period, Delegators could allocate their GRT tokens multiple times, which could theoretically inflate the number of allocated tokens massively. Such an artificial inflation of allocated tokens introduces a variety of issues to the network. For instance, Delegators would be able to have more tokens allocated than their total stake, since a Delegator’s tokens are still allocated for another 28 days after undelegating.

The Graph Protocol allows Delegators to receive delegation rewards from an allocation even if they haven’t delegated their GRT tokens during the entire allocation of an Indexer. In theory, this could be abused by Delegators if there was no delegation unbonding period (or just a very short one). This is referred to as “Delegator Front Running” and describes the process of Delegators switching from one Indexer to another just to “front-run” the pending rewards of an Indexer.

Once Delegators have received the pending rewards, Delegators engaging in this malicious practice would simply switch to the next Indexer that they want to front-run.

The question is often raised in the community why the delegation unbonding period is not removed or shortened. In the above, we have learned that the 28 day thawing period specifically protects Delegators from malicious practices. For this reason, it would not be in the best interest of Delegators to remove the unbonding period entirely. But what about shortening the timespan of the thawing period?

Interestingly enough, Brandon Ramirez from Edge & Node has already addressed this subject and indicated a favor towards shortening the unbonding period in the future:

However, the challenge is to find a solution that accounts for double-counting of delegations and does not introduce new attack vectors: