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chore: update vesting readme (cosmos#15107)
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@tac0turtle
tac0turtle authored Feb 20, 2023
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Expand Up @@ -30,41 +30,18 @@ sidebar_position: 1

## Intro and Requirements

This specification defines the vesting account implementation that is used by
the Cosmos Hub. The requirements for this vesting account is that it should be
initialized during genesis with a starting balance `X` and a vesting end
time `ET`. A vesting account may be initialized with a vesting start time `ST`
and a number of vesting periods `P`. If a vesting start time is included, the
vesting period does not begin until start time is reached. If vesting periods
are included, the vesting occurs over the specified number of periods.

For all vesting accounts, the owner of the vesting account is able to delegate
and undelegate from validators, however they cannot transfer coins to another
account until those coins are vested. This specification allows for four
different kinds of vesting:
This specification defines the vesting account implementation that is used by the Cosmos Hub. The requirements for this vesting account is that it should be initialized during genesis with a starting balance `X` and a vesting end time `ET`. A vesting account may be initialized with a vesting start time `ST` and a number of vesting periods `P`. If a vesting start time is included, the vesting period does not begin until start time is reached. If vesting periods are included, the vesting occurs over the specified number of periods.

For all vesting accounts, the owner of the vesting account is able to delegate and undelegate from validators, however they cannot transfer coins to another account until those coins are vested. This specification allows for four different kinds of vesting:

* Delayed vesting, where all coins are vested once `ET` is reached.
* Continous vesting, where coins begin to vest at `ST` and vest linearly with
respect to time until `ET` is reached
* Periodic vesting, where coins begin to vest at `ST` and vest periodically
according to number of periods and the vesting amount per period.
The number of periods, length per period, and amount per period are
configurable. A periodic vesting account is distinguished from a continuous
vesting account in that coins can be released in staggered tranches. For
example, a periodic vesting account could be used for vesting arrangements
where coins are relased quarterly, yearly, or over any other function of
tokens over time.
* Permanent locked vesting, where coins are locked forever. Coins in this account can
still be used for delegating and for governance votes even while locked.
* Continous vesting, where coins begin to vest at `ST` and vest linearly with respect to time until `ET` is reached
* Periodic vesting, where coins begin to vest at `ST` and vest periodically according to number of periods and the vesting amount per period. The number of periods, length per period, and amount per period are configurable. A periodic vesting account is distinguished from a continuous vesting account in that coins can be released in staggered tranches. For example, a periodic vesting account could be used for vesting arrangements where coins are relased quarterly, yearly, or over any other function of tokens over time.
* Permanent locked vesting, where coins are locked forever. Coins in this account can still be used for delegating and for governance votes even while locked.

## Note

Vesting accounts can be initialized with some vesting and non-vesting coins.
The non-vesting coins would be immediately transferable. DelayedVesting and
ContinuousVesting accounts can be created with normal messages after genesis.
Other types of vesting accounts must be created at genesis, or as
part of a manual network upgrade. The current specification only allows
for _unconditional_ vesting (ie. there is no possibility of reaching `ET` and
Vesting accounts can be initialized with some vesting and non-vesting coins. The non-vesting coins would be immediately transferable. DelayedVesting ContinuousVesting, PeriodicVesting and PermenantVesting accounts can be created with normal messages after genesis. Other types of vesting accounts must be created at genesis, or as part of a manual network upgrade. The current specification only allows for _unconditional_ vesting (ie. there is no possibility of reaching `ET` and
having coins fail to vest).

## Vesting Account Types
Expand Down Expand Up @@ -129,9 +106,7 @@ type Periods []Period
https://github.com/cosmos/cosmos-sdk/blob/v0.47.0-rc1/proto/cosmos/vesting/v1beta1/vesting.proto#L71-L81
```

In order to facilitate less ad-hoc type checking and assertions and to support
flexibility in account balance usage, the existing `x/bank` `ViewKeeper` interface
is updated to contain the following:
In order to facilitate less ad-hoc type checking and assertions and to support flexibility in account balance usage, the existing `x/bank` `ViewKeeper` interface is updated to contain the following:

```go
type ViewKeeper interface {
Expand All @@ -157,22 +132,16 @@ Given a vesting account, we define the following in the proceeding operations:

* `OV`: The original vesting coin amount. It is a constant value.
* `V`: The number of `OV` coins that are still _vesting_. It is derived by
`OV`, `StartTime` and `EndTime`. This value is computed on demand and not on a
per-block basis.
* `V'`: The number of `OV` coins that are _vested_ (unlocked). This value is
computed on demand and not a per-block basis.
* `DV`: The number of delegated _vesting_ coins. It is a variable value. It is
stored and modified directly in the vesting account.
* `DF`: The number of delegated _vested_ (unlocked) coins. It is a variable
value. It is stored and modified directly in the vesting account.
`OV`, `StartTime` and `EndTime`. This value is computed on demand and not on a per-block basis.
* `V'`: The number of `OV` coins that are _vested_ (unlocked). This value is computed on demand and not a per-block basis.
* `DV`: The number of delegated _vesting_ coins. It is a variable value. It is stored and modified directly in the vesting account.
* `DF`: The number of delegated _vested_ (unlocked) coins. It is a variable value. It is stored and modified directly in the vesting account.
* `BC`: The number of `OV` coins less any coins that are transferred
(which can be negative or delegated). It is considered to be balance of the
embedded base account. It is stored and modified directly in the vesting account.
(which can be negative or delegated). It is considered to be balance of the embedded base account. It is stored and modified directly in the vesting account.

### Determining Vesting & Vested Amounts

It is important to note that these values are computed on demand and not on a
mandatory per-block basis (e.g. `BeginBlocker` or `EndBlocker`).
It is important to note that these values are computed on demand and not on a mandatory per-block basis (e.g. `BeginBlocker` or `EndBlocker`).

#### Continuously Vesting Accounts

Expand Down Expand Up @@ -211,10 +180,7 @@ func (cva ContinuousVestingAccount) GetVestingCoins(t Time) Coins {

### Periodic Vesting Accounts

Periodic vesting accounts require calculating the coins released during each
period for a given block time `T`. Note that multiple periods could have passed
when calling `GetVestedCoins`, so we must iterate over each period until the
end of that period is after `T`.
Periodic vesting accounts require calculating the coins released during each period for a given block time `T`. Note that multiple periods could have passed when calling `GetVestedCoins`, so we must iterate over each period until the end of that period is after `T`.

1. Set `CT := StartTime`
2. Set `V' := 0`
Expand Down Expand Up @@ -253,9 +219,7 @@ func (pva PeriodicVestingAccount) GetVestingCoins(t Time) Coins {

#### Delayed/Discrete Vesting Accounts

Delayed vesting accounts are easier to reason about as they only have the full
amount vesting up until a certain time, then all the coins become vested (unlocked).
This does not include any unlocked coins the account may have initially.
Delayed vesting accounts are easier to reason about as they only have the full amount vesting up until a certain time, then all the coins become vested (unlocked). This does not include any unlocked coins the account may have initially.

```go
func (dva DelayedVestingAccount) GetVestedCoins(t Time) Coins {
Expand All @@ -275,23 +239,17 @@ func (dva DelayedVestingAccount) GetVestingCoins(t Time) Coins {

At any given time, a vesting account may transfer: `min((BC + DV) - V, BC)`.

In other words, a vesting account may transfer the minimum of the base account
balance and the base account balance plus the number of currently delegated
vesting coins less the number of coins vested so far.
In other words, a vesting account may transfer the minimum of the base account balance and the base account balance plus the number of currently delegated vesting coins less the number of coins vested so far.

However, given that account balances are tracked via the `x/bank` module and that
we want to avoid loading the entire account balance, we can instead determine
the locked balance, which can be defined as `max(V - DV, 0)`, and infer the
spendable balance from that.
However, given that account balances are tracked via the `x/bank` module and that we want to avoid loading the entire account balance, we can instead determine the locked balance, which can be defined as `max(V - DV, 0)`, and infer the spendable balance from that.

```go
func (va VestingAccount) LockedCoins(t Time) Coins {
return max(va.GetVestingCoins(t) - va.DelegatedVesting, 0)
}
```

The `x/bank` `ViewKeeper` can then provide APIs to determine locked and spendable
coins for any account:
The `x/bank` `ViewKeeper` can then provide APIs to determine locked and spendable coins for any account:

```go
func (k Keeper) LockedCoins(ctx Context, addr AccAddress) Coins {
Expand All @@ -309,8 +267,7 @@ func (k Keeper) LockedCoins(ctx Context, addr AccAddress) Coins {

#### Keepers/Handlers

The corresponding `x/bank` keeper should appropriately handle sending coins
based on if the account is a vesting account or not.
The corresponding `x/bank` keeper should appropriately handle sending coins based on if the account is a vesting account or not.

```go
func (k Keeper) SendCoins(ctx Context, from Account, to Account, amount Coins) {
Expand Down Expand Up @@ -349,8 +306,7 @@ func (va VestingAccount) TrackDelegation(t Time, balance Coins, amount Coins) {
}
```

**Note** `TrackDelegation` only modifies the `DelegatedVesting` and `DelegatedFree`
fields, so upstream callers MUST modify the `Coins` field by subtracting `amount`.
**Note** `TrackDelegation` only modifies the `DelegatedVesting` and `DelegatedFree` fields, so upstream callers MUST modify the `Coins` field by subtracting `amount`.

#### Keepers/Handlers

Expand All @@ -369,8 +325,8 @@ func DelegateCoins(t Time, from Account, amount Coins) {
### Undelegating

For a vesting account attempting to undelegate `D` coins, the following is performed:
NOTE: `DV < D` and `(DV + DF) < D` may be possible due to quirks in the rounding of
delegation/undelegation logic.

> NOTE: `DV < D` and `(DV + DF) < D` may be possible due to quirks in the rounding of delegation/undelegation logic.
1. Verify `D > 0`
2. Compute `X := min(DF, D)` (portion of `D` that should become free, prioritizing free coins)
Expand All @@ -388,17 +344,11 @@ func (cva ContinuousVestingAccount) TrackUndelegation(amount Coins) {
}
```

**Note** `TrackUnDelegation` only modifies the `DelegatedVesting` and `DelegatedFree`
fields, so upstream callers MUST modify the `Coins` field by adding `amount`.
**Note** `TrackUnDelegation` only modifies the `DelegatedVesting` and `DelegatedFree` fields, so upstream callers MUST modify the `Coins` field by adding `amount`.

**Note**: If a delegation is slashed, the continuous vesting account ends up
with an excess `DV` amount, even after all its coins have vested. This is because
undelegating free coins are prioritized.
**Note**: If a delegation is slashed, the continuous vesting account ends up with an excess `DV` amount, even after all its coins have vested. This is because undelegating free coins are prioritized.

**Note**: The undelegation (bond refund) amount may exceed the delegated
vesting (bond) amount due to the way undelegation truncates the bond refund,
which can increase the validator's exchange rate (tokens/shares) slightly if the
undelegated tokens are non-integral.
**Note**: The undelegation (bond refund) amount may exceed the delegated vesting (bond) amount due to the way undelegation truncates the bond refund, which can increase the validator's exchange rate (tokens/shares) slightly if the undelegated tokens are non-integral.

#### Keepers/Handlers

Expand All @@ -418,25 +368,15 @@ func UndelegateCoins(to Account, amount Coins) {

## Keepers & Handlers

The `VestingAccount` implementations reside in `x/auth`. However, any keeper in
a module (e.g. staking in `x/staking`) wishing to potentially utilize any vesting
coins, must call explicit methods on the `x/bank` keeper (e.g. `DelegateCoins`)
opposed to `SendCoins` and `SubtractCoins`.
The `VestingAccount` implementations reside in `x/auth`. However, any keeper in a module (e.g. staking in `x/staking`) wishing to potentially utilize any vesting coins, must call explicit methods on the `x/bank` keeper (e.g. `DelegateCoins`) opposed to `SendCoins` and `SubtractCoins`.

In addition, the vesting account should also be able to spend any coins it
receives from other users. Thus, the bank module's `MsgSend` handler should
error if a vesting account is trying to send an amount that exceeds their
unlocked coin amount.
In addition, the vesting account should also be able to spend any coins it receives from other users. Thus, the bank module's `MsgSend` handler should error if a vesting account is trying to send an amount that exceeds their unlocked coin amount.

See the above specification for full implementation details.

## Genesis Initialization

To initialize both vesting and non-vesting accounts, the `GenesisAccount` struct
includes new fields: `Vesting`, `StartTime`, and `EndTime`. Accounts meant to be
of type `BaseAccount` or any non-vesting type have `Vesting = false`. The
genesis initialization logic (e.g. `initFromGenesisState`) must parse
and return the correct accounts accordingly based off of these fields.
To initialize both vesting and non-vesting accounts, the `GenesisAccount` struct includes new fields: `Vesting`, `StartTime`, and `EndTime`. Accounts meant to be of type `BaseAccount` or any non-vesting type have `Vesting = false`. The genesis initialization logic (e.g. `initFromGenesisState`) must parse and return the correct accounts accordingly based off of these fields.

```go
type GenesisAccount struct {
Expand Down

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