Continuing the discussion from [Mandatory Upgrade] All minters need to upgrade to B&C Exchange 4.0.1:
Introduction
This draft is dealing with a BKS grant that aims at fixing a serious issue with client updating apathy.
The votes (=blocks minted with version 4 clients) for protocol 4.0 is far below 90%, which is required to initialize the protocol switch.
Without that protocol switch, trading on B&C Exchange can’t be enabled.
Other solutions
There’s a proposal from @JordanLee (https://discuss.nubits.com/t/proposal-to-speed-adoption-of-the-reputation-system/3785) that intends to lower the threshold for a protocol upgrade.
That might be able to get the protocol 4.0 activated.
There’s a proposal from @tomjoad (https://discuss.nubits.com/t/proposal-to-speed-adoption-of-the-reputation-system/3785/8) that requires minters to get in contact with the BKS executor to participate in a distribution of BKS. This is not as transparent as what I propose and it doesn’t provide an incentive to upgrade the client.
What if this is no apathy, but intention
I’m mainly speaking of apathetic minters, because I suppose this is the reason for what we see.
There’s an alternative explanation: people who intentionally mint on protocol 2.0, because they want to protect an alternative investment that might get harmed by a successful B&C Exchange.
They accept a financial setback of their BKS investment, because protecting something else is of superior value for them.
They’ll be called “evil minters” hereafter.
Why this proposal is superior to lowering the threshold for a protocol upgrade
With lowering the threshold the immediate goal of introducing protocol 4.0 can be achieved.
One problem remains: roughly 50 percent of minting BKS are in the hands of people who don’t follow the development or who don’t care.
(Remark: evil minters can’t be tackled with this proposal; they’ll start minting 4.0 blocks to participate in the distribution and keep their relative share of the BKS).
Apathetic minters continue to be a burden for the network if only the threshold for the protocol switch gets lowered.
I believe it’s more important to reduce the power of apathetic BKS minters by reducing their share of the network.
This is why I propose following a drastic measure: partially dispossess apathetic BKS holders, who risk the success of B&C Exchange with their behaviour.
One might say apathetic minters need protection from getting dispossessed.
I say: those who care for the success of B&C Exchange need protection for their investment as well.
Apathetic minters endanger B&C Exchange with their behaviour!
I believe, this draft will be perceived as vastly controversial.
The beauty of this proposal is that is has the potential of awaking apathetic minters.
If the sheer existance of this proposal or the passing of the grant is able to increase the protocol 4.0 votes, it’s likely that awakened apathetic minters are the reason for the increase.
If the minting for protocol 4.0 only starts to increase in the time frame that is taken do determine the minting BKS addresses, to which new BKS will be distributed, it’s more likely that evil minters start voting for protocol 4.0 to keep their share of the total BKS on the same level to keep able to hamsting B&C Exchange.
Implementation
A more detailed schedule and more detailed numbers will follow.
The basic idea is this:
a big number of BKS gets created by a grant. Upon its passing the BKS are distributed to minters who run client version 4.
Their BKS address is gathered from the protocol 4.0 blocks they mint in a given time frame. A time frame of 10,000 blocks might be suitable, because ot allows UTXO to reach maximum minting probability, while preventing that they can be used twice in that time frame.
If a distribution of those BKS to a big number of BKS addresses (those that mint protocol 4.0 blocks) can be made from a multisig BKS address, it’s recommended to form a group that manages a multisig grant address.
This will be done in a preparatory motion.
If multisig is not suitable for that, a trusted executor (maybe @JordanLee) will be elected to distribute the BKS.
With a single executor, multiple grants and a distribution in several time frames reduces the risk for the network.
Either way the granted BKS are not allowed to be used for minting. This can be tracked on the block explorer.
From the discussion where I first proposed a quite detailed version of this idea:
say exactly 50.01% have updated their client and would vote for a BKS grant as well to distribute those BKS to 4.0 minters to increase the ratio of updated clients (precisely: clients minting with 90% of minting BKS) to above 90%.
That’d mean the total amount of BKS would roughly be increased by factor 41.
Without taking psychological effects into account (and just trying to deal with numbers), that’d reduce the value per BKS by factor 4.
The BKS would be distributed to BKS addresses that signed protocol 4.0 blocks in an announced time frame which needs to be big enough to give small holders a chance to mint.
Whether that is perceived as ruthless action and harms the BKS rate even more than by factor 4 or is considered a measure that shows how much BKS holders want the exchange to succeed no one can foresee.
An announcement of this measure alone could wake up BKS holders.
Even if it were taken, it could be done in more than just one round.
There’s a lot that needs to be defined before.
Distributing the BKS would be a pain.
I don’t know whether that can be done from multisig addresses.
I suppose we discuss the details once it’s become clear that such a measure can’t be avoided.
I just wanted to explain why not all is lost 
1
for the sake of simplicity say 100 BKS exist.
50 are on protocol 2.0, 50 are on protocol 4.0.
To bring protocol 4.0 at 90%, you need 400 BKS and distribute them to those addresses that vote for 4.0.
A grant to create 400 BKS passes.
After the 400 BKS are distributed, 450 BKS are on 4.0, 50 BKS are on 2.0.
450/(50+450)=0.9=90%
Mission accomplished.