Increase validators fee

Hi,
I would like to discuss a way how we could make validators receiving only MF delegation (now only from 1 account as the validator list was extended) profitable. Based on the last cycle remediation, average validator should earn 1300 MINA in 3 months (which is based on 9/08/2022 conversion rate ~280 USD per month).
Majority runs at least 3 dedicated servers so profit is just enough to cover server rent.

May I suggest to increase validators fee from 5% to 10% and not sound greedy?

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Find a better host provider rather than changing the fee. If you are paying 90$ per month for a dedicated server you are being ripped off

Well, before saying that you need to know my specs right?
For example Hetzner 8 CPU, 64GB would cost you ~70 USD. And for other DC like Vultr, OVH it’s even more. And I’m not gonna switch to lower specs for savings.

Actually, Hertzler is not an option anymore they clearly stated they ban all crypto-related operations and terminate the existing users at some future date. You can see the details here and follow up https://twitter.com/Hetzner_Online/status/1563083561975984130

For some context we run 3 server, one of them is our own server on our own infra other 2 on GCP which GCP part cost more than 280. In general, our operations are a bit costly and can be reduced. Consideration with everything the reward from delegation is not enough from the looks of it so I support that. Drop of quality of nodes is not healthy for the network while the issue with the higher rewards also needs to be enforced because the majority of node operators do to best to maximise their profit. This result with them going for the cheapest option. Centralization on that provider. All of that is hurting more than helping the chain when there is a load etc. not to mention centralization and other aspects.

Considering how the delegation program was handled I don’t think this kind of enforcement will happen so I am against the commission increase. Either way it’s not gonna help the network while we release more mina to not helpful nodes. This is lose/lose all the way.

2 Likes

I don’t like raising commission because it could be bad for decentralization. I’m my opinion MF delegation program must help validators to bootstrap and attract natural delegations.

Since there is no way to force a minimum validator fee on mina network, a validator with 10% fee will not attract natural delegations when bigger players are able to maintain fees lower than 5%. For this reason, a minimum fee of 3% was adapted by governance on kusama.
I’d like a mina update to do such a thing but it probably requires a hard fork.

Currently, validators don’t need to run 3BPs to provide good uptime to their delegators. 1 or 2 BP will do more than 99% which is good enough. This only reason is that competition based on sole uptime leads to a 100% requirement.

In my opinion, we should design a system that promote commitment to the project and best practices (more criteria like skin in the game, experience, participation in the community, etc). And set uptime requirement to 99%.
Then Mina will have a stronger validator set. And probably ±150 high valuable validators worth 240 with half of them in the project for only 3 months (see (Better) Mina Uptime Leaderboard - TowerStake). So we can lower seats.

  1. I think commission raise could only support decentralization as more validators would be incentivized to run a node.
  2. there are already plenty of validators with commission 5% and lower but 40% of the total stake is spread across 30 validators (10% of the stake across 2)
  3. I agree with any protocol that enforce bounders for commission as long as running a node is profitable activity. With 3% rule many will leave as it does not make sense to run a node with negative income.
  4. Sole uptime competition is to get MF delegation (and O(1)Labs) otherwise only top30 (sorted by stake amount) of validator set will be profitable. Taking current situation on the market.
  5. I completely agree with “design the promote commitment to the project and best practices” but it’s not there yet.

Once again, the raise of commission is intended to support “small” validators who just cannot compete with big names. After all, who will scroll the list of 240!!! stake-pool providers to find a suitable one.

Once again, the raise of commission is intended to support “small” validators who just cannot compete with big names. After all, who will scroll the list of 240!!! stake-pool providers to find a suitable one.

What’s the point of having so much validators if most of them have no chance to get delegations outside of the MF/O1lab program?

It does not achieve decentralization, as soon as MF/O1 undelegate, they are out.

I think we should target a smaller set of qualified validators on quality metrics. Then we can say to holders:

here are 150 validators. We know they work well, you should consider to delegate to them it will improve decentralization.

It won’t provide decentralization overnight, but that’s a start… At least, it is a good first step.

Currently, the reality is that we don’t know if a validator receiving its first delegation already triggered a payout. And he probably did not. And such validators represent a significant part of the 240…

Decentralization.

Yes, but that’s how PoS works. No stake - no profit, no profit - out of the game.

I would suggest to discuss this in other topic.

This one also, it’s not about validator’s fee.

Actually one staker delegating to one or many validators is about the same. It does not provide decentralization since the staker concentrates the same ‘voting’ power.
That is a problem that most (or all) PoS protocols have. They are very centralized (due to initial token distributions).

So any foundation program should help decentralization and encourage validators with a strategy to attract natural delegations. It is the way to build a independent validators set and achieve better decentralization.

Mina doesn’t have an incentive at protocol level to improve decentralization.
So the team and the community should do their best to help it. This will provide stronger fundamentals to Mina.

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The problem is whatever you put out there most stakers just don’t pay any attention to these. That’s why I am against the pos because it just distributes and is mostly stale after a certain point. I wish I have a solution but there is no other way to secure a network either.