Proposal: Minimum Validator Commission Rate - 5%

I fully support this proposal.

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We are in support of this proposal, and have a long history of fighting for minimum commissions. Example: Minimum Validator Commision - Discussion - #2 by dylanschultzie - Secret Governance - Secret Network

We are also willing to help implement this in code, as we’ve helped done so on other networks.

For what it’s worth - we run relayers and fighting against a 0% commission when we’re already sucked dry by relaying is a tough ask.

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I am in complete agreement with this proposal, as a validator, having to compete with loss-leader validators is pretty hard.
For people who don’t really understand how commission works and seeing an attractive 0%, theyll stake with them.

I fully support the 5% minimum commission. Start on a level playing field with all…

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this rule can be circumvented easily by the validator distributing the 5% commission they made, so this is a useless rule

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I do not think that is the case. Not as useless as one might think. This will prevent everyday people just seeing the 0% and staking with them. If they have more choice, will force them to make a much more informed decision than just “ah yeah, this looks good”

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LUNC DAO has conferred and will not support this proposal - Status C (rejected with comments).

In order to receive LUNC DAO support, the proposal should be submitted with the following amendments:

  1. Incorporate burning of LUNC into the proposal.

Thank you.

LUNC DAO

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I am against this proposal for several reasons. Rebel_Defi raises some interesting points, but
this governance proposal as written should be rejected.

First, the motivation is murky. Even if the only validators who can offer 0% commission for a prolonged period are “huge validator operations validating across multiple chains” this is not per se bad for Terra. Our community should seek to make connections across multiple chains and imbed ourselves into the entire ecosystem. Silo-ing ourselves off, especially at an embryonic stage is counter-productive.

Second, even if 0% is bad for the community long-term, there is no justification provided for going straight from 0% to 5% as a minimum. If a delegator is able to break even or provide its services while receiving only a 2 or 3% commission, it should be allowed to have that opportunity. A minimum commission set at 5% stifles the incentive to innovate. The proposal doesn’t explain why 5% was chosen. As a community, we must require a rationale for proposals based on facts; not random numbers.

Third, we should lead by example, not by words. If Orbital Command wants other validators to set at least a 5% commission, it should set its own commission at, at least, 5%. This community is currently crying out for trust. Asking others to do something that we ourselves are not willing to do can be perceived as disingenuous.

Finally, the proposal in no way addresses the outstanding 6.9 trillion $lunc in circulation. At a bare minimum, the proposal should be amended to require that at least 1% of validator commissions be used to burn $lunc. See LUNC DAO’s reply. Proposal: Minimum Validator Commission Rate - 5% - #13 by LUNC_DAO

In conclusion, let us be much more careful about governance than we have been in the past. I wholeheartedly agree that “Validators should be judged by delegators based upon the value of our contributions to the community.” However, the proposal has not justified that mandating a 5% commission will make a valuable contribution to the community.

Accordingly, I will be voting NO on this proposal.

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I also suggest the validator community run a liquid staking service and the liquid staking only delegates to those who abide by the minimum commission besides other things like uptime etc.

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Righto… I’ll take that bet.

Support this proposal, and I’ll burn 1 LUNC for every 1 LUNA staked to the Angel Protocol validator when the vote passes. :slight_smile:

There is currently 4.1million LUNA staked to Angel, so if you want more $LUNC burnt… encourage people to stake to Angel Protocol:

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Totally agree! 0 commission will lead to skew in VP.

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As a fellow validator, I support this proposal.

Mainly from a decentralization standpoint.

At launch we had a Nakamoto Coefficient (how decentralized a crypto is) of around 49-50?
to read more about this: The Nakamoto Coefficient (You may see Terra on here, this is from Luna Classic, not 2.0)

Over time as delegators move to their preferred validators this coefficient goes down and the network becomes more decentralized, which is bad for validators, delegators / stakers, and the ecosystem as a whole. Having a minimum commission allows for validators to cover costs of operation and allows delegators to focus on other important factors of a validator such as uptime, reliability, community engagement, etc rather than just commission rates.

I would also add that some of these delegators with low commission are being a bit nefarious in that they have a 0% commission rate but have a 20% max commission (max they can ever charge) and a daily commission change of 20% (rate at which they can change the commission per day). This means that some of these delegators will either operate at a loss or once they get a bunch of delegators up the commission to 20% in one day, not giving delegators alot of time to react and move their Luna to another validator. This is inherently bad imo, as not only is it disingenuous but it can cause distrust among the community and validators.

My validator, Moon Platoon, is at 5% commission as many of us agreed to start with 5%…some are a bit higher however, some validators decided to go this route with 0% which really imo is a power grab / they just want more rewards but they are doing it in a dishonest way, and this isn’t good for the community.

If anyone has any questions feel free to ask and I will try to answer to the best of my ability.

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Eclipse is in support of this proposal.

This is required to allow small community validators to compete. This lessens the focus on commission price, and brings more focus on other factors such as engagement with governance, securing the network, providing a high uptime, avoiding slashing, and creating tools and products for the community. All of these are extremely valuable.

We support a 5% minimum but we would also support a slightly lower rate.

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Over time as delegators move to their preferred validators this coefficient goes down and the network becomes more centralized*

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I created another proposal with an alternative approach to solve this problem:

Please let me know your opinion!

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CoreWeave validator supports this proposal for the same reason as Ceres, SuperKing, and and the rest of the validator community interested in running high availability validator nodes without forcing zero sum brinksmanship in the validator community.

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Thanks for putting this thread together for everyone @Rebel_Defi! :blush:

Following up from the discussions within the Validator Discord and Terra Rebirth TG, Ceres Ventures / Terrafirma NFTs supports this proposal on Terra2 (phoenix-1). That being said, there has since been a second proposal suggesting a shared minimum across all validators, which we think is also a pretty darn good idea.

However, in either case, we also support an ammendment that re/delegation restrictions be reset after the implementation of this update, allowing anyone who staked to a 0% validator be able to adjust their delegations accordingly (to avoid any situation where people feel it was a “bait and switch”).

"Why 5%?": While Agora was still being prepared, I created a poll within the Validator Discord asking what they believe the minimum commission should be (options ranged from 0-10%).

At time of writing, over 81% of votes cast on this Discord validator poll are for “5%”, showing strong unity within the Terra Validator Community on this matter :heart:

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I support this proposal. The main reasons for that are already posted in this thread. Also, several Cosmos-based chains have already implemented this minimum commission rate successfully.

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Hey, just wanted to say the second proposal is for a shared commission rate, not a shared minimum commission rate

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50,000 luna at 5% on 1mil

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I suggested 5% on this proposal simply to have a hard number to base discussions around. Sounds like you’ve been a bit more scientific!

I love the proposal from @etienne-napoleone about a “shared commission rate”. Seems more elegant than a fixed minimum rate. I would vote for it.

My priority is to get rid of 0% being an option as this goes a long way to preventing corporate validators joining the chain and subsidising a 0% rate from their other operations. I struggle to see how this benefits Terra, long-term. I’m not against corporate validators, but we don’t need corporate zombie validators which there were on Terra Classic.

I just want to see tons of great validators doing amazing things for the Terra community.

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