I’m against 0% commission. I think it does concentrate power to those validators that rely on the block proposal award. However, I’m also against a 5% minimum. We are a small validator group and have validators on 4 networks. The thing is, we started late and bought our way into the active set. Seeing as much of the delegations were already placed on the top 10 validators on these chains, we set a commission at 1% in order to attract delegators to our validator. On Jackal, this raised us fro 99 to 94. Not much, but we got delegations. In fact the delegator follows our progress as well. Small validators, in order to compete, need to operate a loss until they can safely raise their commission more in line with the chain average once enough delegations have been procured. This is how we approach it.
You can also see that there is as huge distribution to the top 5 validators on Namada already. How are the little guys, such as myself, going to compete if all validators have a minimum of 5%. The top guys can go with 5%, but then the bottom guys can’t compete.
I think a flat 1% minimum is more appropriate. Most validators will probably do 3-6% anyhow and allowing other validators to be competitive is the whole point of the free market.
We are stitting at 3.14% on Namada right now and would like not to have to change it. As we are in the bottom 4 per the chart, and if we can operate at a loss for several months before our contributions are known and possibly receive delegations to put us in the top 75, then that’s greate. 5% minimum will get us no where in the order.
It is the opposite actually. The top validators have more resources and can offer 0% or 1% for a long time, while the small validators cannot afford to subsidize the validator costs for a long time. And what makes you think that if the minimum fee is 1% instead of 5% then only you will have the 1% fee and attract delegators? Most other validators including the top ones will update the commission also to 1% so still you cannot compete. In contrast, if there is a minimum 5% fee then even the small validators can have some commission revenue to cover the costs and there is not a race to the bottom. Whether the minimum commission is 5%, 1% or another number the top validators can also have this commission like you, meaning if you want to compete you should think about showing contributions, great performance or other metrics rather to attract delegators than solely relying on a low commission and hoping you are the only one who chooses the lowest commission
0% fee is a psychological game; delegators see it and jump at 0 fees, whereas instituting a small fee rate then delegators don’t think they are getting anything for free under any circumstances. Thing is most validators, save only a couple, tend to have a 3-6% commission rate regardless of their ranking. I’ve seen it time and time again that new validators come in and offer a low commission rate to attract delegators and it works. It may not get them into the top 25 or even top 50, but it does get them delegations. Look at all the chains and you will see top 10 validators, save only a couple, have at least a 2% commission rate, most hover around 3-5% and some chains a little higher. At least little guys can offer a promotional commission to attract delegators.
I don’t disagree that a good way to attract delegators is by active participation in the network. That goes with out saying, but only a handful of delegators really pay attention to that. Most of them think the bottom 50 are at the bottom because they are inferior. It’s a psychological battle with delegators. Most don’t care and will go with low fee top 25 because they think those validators are in the top because they are the best.
Also, a lot of delegations come from the team, we know this… unfortunately there is strong nepotism in this decision. Well known validators that maybe just spend their time on twitter post and reposting, but are innit with the team get high delegations from the team. I have spent many hours on certain chains, serving RPC/API/gRPC endpoints, keeping things maintained and without delegations from the team on certain chains. The more active you are in aiding the team the better chances of a delegation. But attracting solely delegators not from within the team is another battle all together.
Again you are assuming that if the minimum fee is set at 1% instead of 5% only you and a few other small validators will put a 1% fee. But you yourself are even contradicting your own assumption when you say ‘low fee top 25’ meaning that you are aware that any validator even the top ones can also and will offer the minimum fee. The only difference is that you will need to compete at 1% fee with low revenues to sustain the validator operations instead of a larger revenue with a minimum 5% fee. The reason for the minimum 5% fee is to have at least some minimum base revenue for all validators so that at least they can provide quality infrastructure and services.
Exactly because they mostly just look at low fee. But with a minimum 5% fee and most validators at this minimum fee, then delegators have to think and consider other metrics to select validators.
Did you participate in the Namada testnets and Shielded Expedition? The Anoma Foundation and Luminara delegations will consider as criteria participation in early testnet, performance and outstanding contributions in the Shielded Expedition and other additional criteria. If you didn’t participate in any of these testnets and hence won’t get delegation from those entitities it is not because those receiving delegations are friends with the Namada team and you aren’t, but because they participated in all those testnets while you didn’t
Did you participate in the Namada testnets and Shielded Expedition? The Anoma Foundation and Luminara delegations will consider as criteria participation in early testnet, performance and outstanding contributions in the Shielded Expedition and other additional criteria. If you didn’t participate in any of these testnets and hence won’t get delegation from those entitities it is not because those receiving delegations are friends with the Namada team and you aren’t, but because they participated in all those testnets while you didn’t
I’m not being specific to Namada here, just mentioning what that modus operandi is on a plethora of other chains.
Again you are assuming that if the minimum fee is set at 1% instead of 5% only you and a few other small validators will put a 1% fee. But you yourself are even contradicting your own assumption when you say ‘low fee top 25’ meaning that you are aware that any validator even the top ones can also and will offer the minimum fee. The only difference is that you will need to compete at 1% fee with low revenues to sustain the validator operations instead of a larger revenue with a minimum 5% fee. The reason for the minimum 5% fee is to have at least some minimum base revenue for all validators so that at least they can provide quality infrastructure and services.
I’m not contradicting myself. When I said “low fee top 25” I mean, anywhere from 1-5%. And the truth is only a couple top 15 validators will have a 1% fee. It is very sparse the amount of top validators that have a minimum fee. When is the last time you were the little guy validating for a chain. I always have been and I can tell you first hand, offering a a1% introductory commission does attract delegators to the bottom 25. If every validator is operating at 5%, I can assure you the psychology of the delegator will not go with a bottom 25 validator for the sole (incorrect) assumption that they are inferior.
Just face the music, your argument is that you don’t want to be undercut by anyone else. Such is business though, amirite? Soon you’ll probably create a proposal for an SEC governance body for validator and delegator regulation enforcement
Well, you used that argument to justify a 1% fee in Namada and I explained why your argument is not valid, because at least in the case of Namada the criteria for foundation delegation is mostly participation and performance on the testnets including the Shielded Expedition, testnets in which you didn’t participate either by choice or because you were not aware about Namada until recently before the mainnet launch
This is just your assumption.
Well, we are a small validator like yourself, including in Namada. We just participated and joined the early testnets, and worked insanely hard during the several months long Shielded Expedition to finish 12th overall. Don’t confuse very hard work and achievements with something else
Well, I’m sorry and then you should think how to attract delegators not solely based on a very low commission. But I hope you don’t expect the whole community changing the plan of 5% minimum commission to 1% just because you think it will help you to get a few more delegators
The minimum commission of 5% was extensively discussed within the Namada community on discord, calls, etc., and there was a clear consensus to enforce this minimum 5% fee before the mainnet launch for the many reasons already covered by others in the comments above. And we created this proposal to represent the Namada community, during the discussions on discord, devs from Heliax recommended us to put a proposal in the forum to better discussions and we took the initiative to create the proposal representing the overall consensus of the community
I became aware of Namada last fall, but it didn’t strike me to try out for a validator spot until recently mostly due to other pressing matters of dev work on other chains. MathNodes is a small group of people with myself doing the grunt of most of the labor. My time is limited. I noticed the Sheilded expedition slightly over a month ago, had things worked out differently I certainly would have engaged in participation with it.
Believe me, my life has been nothing short of a day without hard work.
As I mentioned my time is limited with a lot of dev work on other chains; however, I plan on contributing to Namada as well and given the timeframe for mainnet launch, MathNodes may have expanded further freeing up more of my time and/or adding more developers. I’m only voicing my opinion that I think enforced minimums is not in line with free market ideals. I’m in favor of restricting the faulty psychology of delegators when it comes to 0% fees however, but not allowing other validators to “undercut” others is not in line with free market principles.
I certainly will respect the opinion and decisions of the community, but this is a forum and I feel necessary to voice my arguments against it whether or not it be in vain.
If you decided that Namada was not worth to focus and prioritize last year and then you only became interested now shortly before the mainnet launch, then you shouldn’t complain that some validators with great performance in the testnets will receive foundation delegation. In summary, you suddenly arrive now just before the mainnet launch, say that hardworking validators who will get delegations is because they are ‘friends’ with the Namada team and also demand a 1% minimum fee because you think you will get more delegators. There are small teams like yours who have been working so much since last year nonstop to help bring Namada to where it is now, many of these validators support the minimum 5% commission so I don’t see why your opinion should be above theirs comparing the contributions and support of each for Namada
That’s not the point, but that you labelled us as ‘large’ validator’ and I clarified to you that that’s not the case and our achievements in the Shielded Expedition for example were due to a lot of hard work, not due to being a ‘large validator’
Well, even if there is a 5% minimum fee this is just a minimum value, other validators can choose a higher commission and you could still ‘undercut’ them with the 5% minimum fee
I’m not complaining, and as I pointed out earlier, the comment wasn’t necessarily directed at Namada. Teams should get delegations for participation… that goes without saying.
My main argument is that free market principles should be applied. When validators compete, delegators win and delegators and users of the chain are primarily what the chain is intended for; not for validators to decide that they should be entitled to a certain percentage of the inflation.
Riiight. Take a look at BitSong for example. I validate on that chain. They have a 5% minimum… almost every validator on there has a 5% commission. I’ve put up $2000 to be where I am in the active set, with only a very tiny delegation in the last two years (20K BTSG, I put up 90K BTSG, that’s my total delegation figures -110K). I am very active in the network, on the discord, and I have tried to recruit some of the artists I know, also host an RPC/API enpoint, and I have yet to get a delegation. At least if I could set my commission to 3.14159%, I might have got a delegation by now.
