Written by: Rabbi Jebediah (https://twitter.com/RabbiJebediah)
Main Co-Signer: Panvasi (https://twitter.com/ApeironNodes)
This is an open discussion meant to re-open and re-visit the issue of validator Maximum Voting Power (MVP) and validator Minimum Commission Fee (MCF). Currently, the MVP is set at 20%, and the MCF at 0%. Both these values are, in our humble opinions, not optimally calibrated towards the chain’s long-term health and growth. They’re relics of a previous system, and need updating. This thread aims to stimulate an open discussion on that topic; after a minimum of 14 days, the proposals will be sent to the Station for voting.
One of the main reasons for aiming to put a hard cap on validator MVP is to promote decentralization and delegation dispersion. Giving any one validator too much power over governance represents an active threat to the entire chain. Most of the top validators have proven themselves to be benevolent so far, but it’s better to err on the side of caution when a $1B+ asset like LUNC is concerned, as we cannot predict what the active validator set will look like in the future, nor do we know who’ll occupy the top spots. Reducing the MVP from 20% to 10% would go a long way toward stopping any potential governance abuse and validator overreach.
Likewise, the MCF value needs to be increased from 0% to 5%, otherwise larger and more affluent validators can play the waiting game while “starving out” the smaller ones until the latter capitulate (which is already happening). Set wars of this type are a net-negative for the chain, since they negatively impact and diminish the currently active validator stack, and thus ought to be prevented. Human nature and game theory being what they are, most delegators will opt for no-commission validators (0%), so by forcing the entire active set up to a 5% minimum fee we hope to spur re-delegations that will further equalize voting power across the entire validator spectrum.
It is for all these reasons that we propose the following changes…
We propose that validators’ maximum voting power (MVP) be capped at 10%.
We propose that validators’ minimum commissions fee (MCF) be raised to 5%.
Since this is an open discussion, we invite everyone to participate and offer feedback… including the validators themselves. This thread is meant to serve as a locus of debate for both of these changes, but once the time for voting comes we will be putting up 2 separate proposals on the Station (one for the 10% cap, and one for the 5% fees uptick). Thank you for reading, and we look forward to your comments below! Also many thanks to Panvasi for spearheading this initiative, and to Terra Allies (SolidSnake, Bilbo Baggins, Orko) for their invaluable feedback.
Signed by: Rabbi Jebediah, Panvasi (Apeiron Nodes)
Co-Signers: SolidSnake, Bilbo Baggins, Orko