Thanks everyone for sharing your thoughts on enforcing a 5% minimum commission. While I respect the concerns raised, Iād like to express a different perspective on the matter, especially regarding the portrayal of 0% commission validators.
Itās troubling to see 0% commission validators repeatedly framed as if they are engaging in shady tactics or scams. In this discussion, and even in the broader conversation on Discord, there have been some biased conclusions and accusations that simply arenāt based on facts. Letās remember that decentralization thrives on a diversity of strategies, and using 0% commission is just that - a strategy to attract external stake.
1. Enforcing minimal commission removes the delegatorās choice. Forcing all stakers to pay 5% without exception limits their ability to make decisions about where to delegate, moreover, it loses them money from the genesis. In a decentralized ecosystem, itās important to preserve competition and choice, not mandate one-size-fits-all solutions. Imposing such restrictions fosters centralization by dictating terms rather than allowing free market dynamics to play out.
2. Safeguards already exist. Validators have a max commission (Ā«max_rateĀ») parameter that is clearly visible to delegators. If a validator currently has a 0% commission but a max_rate of 10%, they canāt suddenly raise it to an unreasonable number without warning. The potential for rug pulls is not linked to the current commission but to the transparency around the max commission settings. A rug pull could just as easily happen with a 5% commission if the max is set too high or undefined.
3. Small validators lose out. Enforcing a minimum commission discourages new or smaller validators from competing fairly, as one of the competitive avenues is simply eliminated. Validators with external stakes are vital for keeping the network decentralized, but with a 5% floor, it will become harder for them to attract retail delegations. Instead, weāll see all the stakers moving to the top 5-10 validators, and smaller independent validators will be pushed out.
4. 0% commission is a valid long-term strategy. Validators offering 0% commissions often do so to build long-term relationships with their stakers, establishing trust and collaboration that could benefit everyone in the long run. Not every business or validator seeks to be profitable from day one.
5. Centralization risk. By enforcing a minimum commission, weāre inadvertently increasing centralization. Validators with foundation stakes or those closely tied to major funding sources will dominate, while independent validators who rely on external delegations will find it harder to compete.
In conclusion, while the intent behind the 5% minimum commission may be to ensure fairness, itās essential to consider the broader implications on decentralization and validator diversity. We should understand that all validators are working for stakers and the team should ensure Namada stakers with a variety of choices and an opportunity to decide whether they want to stake with 0% validators or not.