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This is the draft that ultimately became https://medium.com/@filoz/the-f3-journey-incentivising-f3-participation-f6aa4aa3a3f5

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In our previous The F3 Journey update, we shared how we’re speeding up the activation of Fast Finality (F3) on the Filecoin mainnet. Today, we’re diving into another exciting development: how we’re making sure everyone has a reason to participate in F3.

F3 is a game-changer for Filecoin. It’s designed to make the network faster and more reliable by ensuring that transactions are finalized quickly and securely. For F3 to reach its full potential and speed, we need every Storage Provider (SP) on board. The good news? We're already seeing incredible momentum - in the latest passive testing round on Mainnet (from nv24), 80% of the network's power was participating 👏. After F3 has been activated on Mainnet and successfully been running for a long period of time, the F3 team intends to ensure that the participation rate is always the highest. That’s where incentives come in.

🚧 The Challenge: Why Network-Wide Participation Matters

Imagine F3 as a team sport. The more players on the field, the better the game runs. If only a few players show up, the game slows down and there is gaps on the field, and the experience isn’t as good for everyone. Similarly, F3 needs full participation from SPs to deliver optimal benefits—like consistent fast finality and a smooth user experience for builders, exchanges and storage providers.

Low participation can prevent F3's ability to finalize recent epochs, causing it to lag behind the chain head. This creates inconsistent finalization times and reduces the network's reliability. For applications building on top of the F3 APIs and Filecoin—whether they're storage and client solutions, exchanges, or other services—this inconsistency poses significant challenges. They need a stable, predictable environment to create great applications and user experience.

That's why maintaining high participation is crucial. With strong participation, F3 can deliver its core benefits: consistent fast finality, reliable transaction confirmation, and a robust foundation for the entire Filecoin ecosystem.

This screenshot is from one of the passive testing rounds completed on Mainnet in December 2024, and shows what can happen with F3 finalization when the participation rate is close to the 66% threshold.

💡 The Proposal: Ensuring Participation through Rewards

The proposal introduces a thoughtful adjustment to mining rewards that maintains total rewards while incentivizing F3 participation. The key change? Up to 10% of mining rewards would be tied to F3 participation, verified through on-chain finality certificates.

The rewards system for F3 is built on three main principles:

1. Transparent Verification: Participation is verified through finality certificates posted on-chain. These certificates contain aggregated BLS signatures from participating validators, creating an immutable record of who participated and when.
2. Fair Distribution: Rewards are split between two groups:
   1. Validators who sign the F3 certificates (participation rewards)
   2. Validators who include these certificates in their blocks (inclusion rewards)
3. Efficient Allocation: The reward per signature is proportional to each validator's network power, ensuring fair distribution. A validator's signature representing 1% of network power receives 1% of the available certificate rewards.

📝 As an example, when a certificate is included in a block:

• The participating signers share (1-α) × 10% of the rewards, based on their power.
  • The final number for α has not yet been defined, but is suggested to be in the low double digit %.
• The validator including the certificate receives α × 10% of the rewards
  • The final number for α has not yet been defined, but is suggested to be in the low double digit %.
• The remaining 90% stays tied to traditional block production