Vesting

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:

  • 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.

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 having coins fail to vest).

Vesting Account Types

// VestingAccount defines an interface that any vesting account type must
// implement.
type VestingAccount interface {
  Account

  GetVestedCoins(Time)  Coins
  GetVestingCoins(Time) Coins

  // TrackDelegation performs internal vesting accounting necessary when
  // delegating from a vesting account. It accepts the current block time, the
  // delegation amount and balance of all coins whose denomination exists in
  // the account's original vesting balance.
  TrackDelegation(Time, Coins, Coins)

  // TrackUndelegation performs internal vesting accounting necessary when a
  // vesting account performs an undelegation.
  TrackUndelegation(Coins)

  GetStartTime() int64
  GetEndTime()   int64
}

BaseVestingAccount

// BaseVestingAccount implements the VestingAccount interface. It contains all
// the necessary fields needed for any vesting account implementation.
message BaseVestingAccount {
  option (gogoproto.goproto_getters)  = false;
  option (gogoproto.goproto_stringer) = false;

  cosmos.auth.v1beta1.BaseAccount base_account       = 1 [(gogoproto.embed) = true];
  repeated cosmos.base.v1beta1.Coin original_vesting = 2
      [(gogoproto.nullable) = false, (gogoproto.castrepeated) = "github.com/cosmos/cosmos-sdk/types.Coins"];
  repeated cosmos.base.v1beta1.Coin delegated_free = 3
      [(gogoproto.nullable) = false, (gogoproto.castrepeated) = "github.com/cosmos/cosmos-sdk/types.Coins"];
  repeated cosmos.base.v1beta1.Coin delegated_vesting = 4
      [(gogoproto.nullable) = false, (gogoproto.castrepeated) = "github.com/cosmos/cosmos-sdk/types.Coins"];
  int64 end_time = 5;
}

ContinuousVestingAccount

// ContinuousVestingAccount implements the VestingAccount interface. It
// continuously vests by unlocking coins linearly with respect to time.
message ContinuousVestingAccount {
  option (gogoproto.goproto_getters)  = false;
  option (gogoproto.goproto_stringer) = false;

  BaseVestingAccount base_vesting_account = 1 [(gogoproto.embed) = true];
  int64              start_time           = 2;
}

DelayedVestingAccount

// DelayedVestingAccount implements the VestingAccount interface. It vests all
// coins after a specific time, but non prior. In other words, it keeps them
// locked until a specified time.
message DelayedVestingAccount {
  option (gogoproto.goproto_getters)  = false;
  option (gogoproto.goproto_stringer) = false;

  BaseVestingAccount base_vesting_account = 1 [(gogoproto.embed) = true];
}

Period

// Period defines a length of time and amount of coins that will vest.
message Period {
  option (gogoproto.goproto_stringer) = false;

  int64    length                          = 1;
  repeated cosmos.base.v1beta1.Coin amount = 2
      [(gogoproto.nullable) = false, (gogoproto.castrepeated) = "github.com/cosmos/cosmos-sdk/types.Coins"];
}
// Stores all vesting periods passed as part of a PeriodicVestingAccount
type Periods []Period

PeriodicVestingAccount

// PeriodicVestingAccount implements the VestingAccount interface. It
// periodically vests by unlocking coins during each specified period.
message PeriodicVestingAccount {
  option (gogoproto.goproto_getters)  = false;
  option (gogoproto.goproto_stringer) = false;

  BaseVestingAccount base_vesting_account = 1 [(gogoproto.embed) = true];
  int64              start_time           = 2;
  repeated Period    vesting_periods      = 3 [(gogoproto.nullable) = false];
}

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:

type ViewKeeper interface {
  // ...

  // Calculates the total locked account balance.
  LockedCoins(ctx sdk.Context, addr sdk.AccAddress) sdk.Coins

  // Calculates the total spendable balance that can be sent to other accounts.
  SpendableCoins(ctx sdk.Context, addr sdk.AccAddress) sdk.Coins
}

PermanentLockedAccount

// PermanentLockedAccount implements the VestingAccount interface. It does
// not ever release coins, locking them indefinitely. Coins in this account can
// still be used for delegating and for governance votes even while locked.
//
// Since: cosmos-sdk 0.43
message PermanentLockedAccount {
  option (gogoproto.goproto_getters)  = false;
  option (gogoproto.goproto_stringer) = false;

  BaseVestingAccount base_vesting_account = 1 [(gogoproto.embed) = true];
}

Vesting Account Specification

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.

  • 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.

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).

Continuously Vesting Accounts

To determine the amount of coins that are vested for a given block time T, the following is performed:

  1. Compute X := T - StartTime

  2. Compute Y := EndTime - StartTime

  3. Compute V' := OV * (X / Y)

  4. Compute V := OV - V'

Thus, the total amount of vested coins is V' and the remaining amount, V, is vesting.

func (cva ContinuousVestingAccount) GetVestedCoins(t Time) Coins {
    if t <= cva.StartTime {
        // We must handle the case where the start time for a vesting account has
        // been set into the future or when the start of the chain is not exactly
        // known.
        return ZeroCoins
    } else if t >= cva.EndTime {
        return cva.OriginalVesting
    }

    x := t - cva.StartTime
    y := cva.EndTime - cva.StartTime

    return cva.OriginalVesting * (x / y)
}

func (cva ContinuousVestingAccount) GetVestingCoins(t Time) Coins {
    return cva.OriginalVesting - cva.GetVestedCoins(t)
}

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.

  1. Set CT := StartTime

  2. Set V' := 0

For each Period P:

  1. Compute X := T - CT

  2. IF X >= P.Length

    1. Compute V' += P.Amount

    2. Compute CT += P.Length

    3. ELSE break

  3. Compute V := OV - V'

func (pva PeriodicVestingAccount) GetVestedCoins(t Time) Coins {
  if t < pva.StartTime {
    return ZeroCoins
  }
  ct := pva.StartTime // The start of the vesting schedule
  vested := 0
  periods = pva.GetPeriods()
  for _, period  := range periods {
    if t - ct < period.Length {
      break
    }
    vested += period.Amount
    ct += period.Length // increment ct to the start of the next vesting period
  }
  return vested
}

func (pva PeriodicVestingAccount) GetVestingCoins(t Time) Coins {
    return pva.OriginalVesting - cva.GetVestedCoins(t)
}

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.

func (dva DelayedVestingAccount) GetVestedCoins(t Time) Coins {
    if t >= dva.EndTime {
        return dva.OriginalVesting
    }

    return ZeroCoins
}

func (dva DelayedVestingAccount) GetVestingCoins(t Time) Coins {
    return dva.OriginalVesting - dva.GetVestedCoins(t)
}

Transferring/Sending

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.

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.

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:

func (k Keeper) LockedCoins(ctx Context, addr AccAddress) Coins {
    acc := k.GetAccount(ctx, addr)
    if acc != nil {
        if acc.IsVesting() {
            return acc.LockedCoins(ctx.BlockTime())
        }
    }

    // non-vesting accounts do not have any locked coins
    return NewCoins()
}

Keepers/Handlers

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

func (k Keeper) SendCoins(ctx Context, from Account, to Account, amount Coins) {
    bc := k.GetBalances(ctx, from)
    v := k.LockedCoins(ctx, from)

    spendable := bc - v
    newCoins := spendable - amount
    assert(newCoins >= 0)

    from.SetBalance(newCoins)
    to.AddBalance(amount)

    // save balances...
}

Delegating

For a vesting account attempting to delegate D coins, the following is performed:

  1. Verify BC >= D > 0

  2. Compute X := min(max(V - DV, 0), D) (portion of D that is vesting)

  3. Compute Y := D - X (portion of D that is free)

  4. Set DV += X

  5. Set DF += Y

func (va VestingAccount) TrackDelegation(t Time, balance Coins, amount Coins) {
    assert(balance <= amount)
    x := min(max(va.GetVestingCoins(t) - va.DelegatedVesting, 0), amount)
    y := amount - x

    va.DelegatedVesting += x
    va.DelegatedFree += y
}

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

Keepers/Handlers

func DelegateCoins(t Time, from Account, amount Coins) {
    if isVesting(from) {
        from.TrackDelegation(t, amount)
    } else {
        from.SetBalance(sc - amount)
    }

    // save account...
}

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.

  1. Verify D > 0

  2. Compute X := min(DF, D) (portion of D that should become free, prioritizing free coins)

  3. Compute Y := min(DV, D - X) (portion of D that should remain vesting)

  4. Set DF -= X

  5. Set DV -= Y

func (cva ContinuousVestingAccount) TrackUndelegation(amount Coins) {
    x := min(cva.DelegatedFree, amount)
    y := amount - x

    cva.DelegatedFree -= x
    cva.DelegatedVesting -= y
}

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: 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

func UndelegateCoins(to Account, amount Coins) {
    if isVesting(to) {
        if to.DelegatedFree + to.DelegatedVesting >= amount {
            to.TrackUndelegation(amount)
            // save account ...
        }
    } else {
        AddBalance(to, amount)
        // save account...
    }
}

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.

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.

type GenesisAccount struct {
    // ...

    // vesting account fields
    OriginalVesting  sdk.Coins `json:"original_vesting"`
    DelegatedFree    sdk.Coins `json:"delegated_free"`
    DelegatedVesting sdk.Coins `json:"delegated_vesting"`
    StartTime        int64     `json:"start_time"`
    EndTime          int64     `json:"end_time"`
}

func ToAccount(gacc GenesisAccount) Account {
    bacc := NewBaseAccount(gacc)

    if gacc.OriginalVesting > 0 {
        if ga.StartTime != 0 && ga.EndTime != 0 {
            // return a continuous vesting account
        } else if ga.EndTime != 0 {
            // return a delayed vesting account
        } else {
            // invalid genesis vesting account provided
            panic()
        }
    }

    return bacc
}

Examples

Simple

Given a continuous vesting account with 10 vesting coins.

OV = 10
DF = 0
DV = 0
BC = 10
V = 10
V' = 0

  1. Immediately receives 1 coin

BC = 11

2. Time passes, 2 coins vest

V = 8
V' = 2

3. Delegates 4 coins to validator A

DV = 4
BC = 7

4. Sends 3 coins

BC = 4

5. More time passes, 2 more coins vest

V = 6
V' = 4

6. Sends 2 coins. At this point the account cannot send anymore until further coins vest or it receives additional coins. It can still however, delegate.

BC = 2

Slashing

Same initial starting conditions as the simple example.

  1. Time passes, 5 coins vest

V = 5
V' = 5

2. Delegate 5 coins to validator A

DV = 5
BC = 5

3. Delegate 5 coins to validator B

DF = 5
BC = 0

4. Validator A gets slashed by 50%, making the delegation to A now worth 2.5 coins

5. Undelegate from validator A (2.5 coins)

DF = 5 - 2.5 = 2.5
BC = 0 + 2.5 = 2.5

6. Undelegate from validator B (5 coins). The account at this point can only send 2.5 coins unless it receives more coins or until more coins vest. It can still however, delegate.

DV = 5 - 2.5 = 2.5
DF = 2.5 - 2.5 = 0
BC = 2.5 + 5 = 7.5

Notice how we have an excess amount of DV.

Periodic Vesting

A vesting account is created where 100 tokens will be released over 1 year, with 1/4 of tokens vesting each quarter. The vesting schedule would be as follows:

Periods:
- amount: 25stake, length: 7884000
- amount: 25stake, length: 7884000
- amount: 25stake, length: 7884000
- amount: 25stake, length: 7884000
OV = 100
DF = 0
DV = 0
BC = 100
V = 100
V' = 0

  1. Immediately receives 1 coin

BC = 101

2. Vesting period 1 passes, 25 coins vest

V = 75
V' = 25

3. During vesting period 2, 5 coins are transferred and 5 coins are delegated

DV = 5
BC = 91

4. Vesting period 2 passes, 25 coins vest

V = 50
V' = 50

Glossary

  • OriginalVesting: The amount of coins (per denomination) that are initially part of a vesting account. These coins are set at genesis.

  • StartTime: The BFT time at which a vesting account starts to vest.

  • EndTime: The BFT time at which a vesting account is fully vested.

  • DelegatedFree: The tracked amount of coins (per denomination) that are delegated from a vesting account that have been fully vested at time of delegation.

  • DelegatedVesting: The tracked amount of coins (per denomination) that are delegated from a vesting account that were vesting at time of delegation.

  • ContinuousVestingAccount: A vesting account implementation that vests coins linearly over time.

  • DelayedVestingAccount: A vesting account implementation that only fully vests all coins at a given time.

  • PeriodicVestingAccount: A vesting account implementation that vests coins according to a custom vesting schedule.

  • PermanentLockedAccount: It does not ever release coins, locking them indefinitely. Coins in this account can still be used for delegating and for governance votes even while locked.

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