Proposal - Align stake pools and validators incentives #244
evgeniyvbystrov
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Proposal is:
To change the way stake pools manager fees are calculated for % of revenue to % of validator's revenue.
Stake pools now take profits for pool operations from inflation rewards on stakes.
Some of them are squeezing everything they can from validators. Most validators now have inflation commission fee set to 0% and MEV commission set to 10%.
Average manager fee of a stake pool is 5%
According to SAM calculator - rewards currently are (per 100K stake per epoch):
Inflation revenue - 42.42 SOL (100% goes to stakers and pool)
MEV revenue - 12.37 SOL (90% goes to stakers (and pool), 10% to validator)
Block rewards revenue - 5.28 SOL (100% goes to validator)
Voting costs - 1.93 SOL.
Validator profit is (5.28 + 1.237 - 1.93) = 4.587 SOL
Pools profit is (42.42 + 12.37 * 0.9) * 0.05 = 2.667 SOL
Stakers profit is (42.42 + 12.37 * 0.9) * * 0.95 = 50.87 SOL
Proposals for sharing block rewards, supported by pools in one way or another may lead to 10% increase in stakers rewards (at best - if validator shares all the profit from block rewards).
It becomes a marketing point for stake pools, but that does not affect their own rewards in a negative way.
Pools do not pay for that marketing at all, so their best strategy becomes pushing validators to 0 profitablity.
On the other hand - those claims seem potentially very for the network.
If validators can not earn profit in an "good" way - they will mostly end up participating in one or another type of shady activities like sandwiching.
If the subset of validators decreases - there will be more questions on decentralization of the network.
So proposal is:
To change the way stake pools manager fees are calculated for % of revenue to % of validator's revenue.
5% of revenue after validators commision will transit to validator commission of 10% and pool commission of 50% on that.
That is supposed to align pool incentives with validator incentives.
There will be no point of pushing validators to 0 revenue, as pool will earn 0 either.
All the marketing about 0.7% extra APY for stakers will be based not only on rewards that are deducted from a validator fee, but from pools fee also - in the proportion of pools commission.
SFDP can also transparently see if a pools commission is aligned with their goals then.
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