I understand that SMH has already updated everyone on what the next phase of thir process will be. I’ll add a few thoughts for the 3-4 validator representatives to consider moving forward.
#1:
It is my understanding that Li is involved in the management of the Harmony 2 wallet that currently is staking 90.4 million with 13 validators. If that information is correct, I would like to voice my concern with having him involved with the handling of this 200 million ONE effort. The management of the Wallet 2 funds and the lack of communication and transparency has been problematic, as presented in this thread: Harmony Team - Please Explain “Wallet 2” Staking Procedures.
#2:
I like the idea of helping long-time validators out. Currently EMS is a little under 4.7 million. I think giving all currently elected and recently unelected validators enough funds to get to 5.0 million would be a good start.
I’ve asked around and been told that 5 million isn’t enough to cover all server costs at ONE’s current price. But I’m not sure that Harmony needs to be covering all server costs, either. Validators should all take some personal responsibility in how to promote, market, operate (including minimizing costs) for their nodes. If Harmony is able to ensure you are safely elected, that is more than fair imo. Providing additional funding beyond that could become tricky, and could be seen as playing favorites? Perhaps someone can come up with a good method to make it more objective/fair?
There are 50 elected validators below 5 million, and I see another 10 unelected validators over 1 million (9 of whom were elected prior to “wallet 19” unstaking).
If we assume those 60 validators need an average of 3 million apiece (I didn’t do the actual math) to get to 5 million, that would require the use of 180 million ONE. There would still be ~20 million leftover to play with.
It is also important to acknowledge that these validators who will be receiving Harmony funding are going to be dependent on that funding the same way they were reliant on wallet 19. It seems doubtful that will ever change, and if/when the time comes for Harmony to remove funds, we will be having this same issue all over again.
So when @StrongMindsHold asks how long of a period should these validators be funded by Harmony, I honestly don’t know how to answer that.
#3:
One thing I think Harmony should avoid is funding validators who are not active on social media (i.e., no interaction with their delegates) and/or who don’t have any contact information available on their Harmony staking page. This should be an automatic disqualifier for funding imo.
I also think Harmony should avoid funding validator’s whose namesake projects have left the ecosystem.
#4:
I think all validators receiving Harmony funding should have to agree to bidding on the least number of keys required to maintain their stake between .65 and 1.35*EMS.
I think any validator that is receiving Harmony funding and bids below .65*EMS should have their funding withdrawn immediately. It’s that same type of behavior that has exacerbated the fallout from wallet 19’s unstaking.
(For example, Harmony Rocket is currently receiving Harmony funding from Wallet 2 and has routinely abused the BLS key bidding process with impunity.)
Harmony needs to pass a HIP to prevent abuse BLS key bidding. I know @ONE4All and @CryptoTech have proposed ideas in the past.
#5:
I would prefer that validators must be running adequate servers in order to qualify for funding. I understand that this may be impossible to enforce and verify, but I would still prefer all validators, on record, stating what they are operating in order to receive funding.
#6:
Probably needs to be a limit on commission, like @PeaceLoveHarmony mentioned. Since 5/6 of all validators are at 5% commission currently, I think it would be unfair to allow Harmony supported validators to charge more than 5%.
Like @realcoinchowder said, we also need to consider how to handle poor signing rates and/or if the node operator goes radio silent.
#7:
I like the idea of having a small portion of the funds being used to bootstrap previously unelected validators in a similar manner to how Harmoforce has been doing it. A “sign up” of sorts for unelected validators would be necessary, I think. And they’d need to agree to #3-6 above.
Because we can’t simply fund these validators straight into stable election. If we do that then they’ll never receive the early rewards boosts (<.65*EMS) that early validators receive. And those early high rewards are vital to organic growth. Otherwise nearly 100% of these validator’s funds may likely come from Harmony, and as soon the funds are withdrawn, these validators will become unelected again. (Look at most of the validators who have funding from Binance. Many of them have the same dependency on Binance that smaller validators had with wallet 19.)
It would likely be most effective to only bootstrap a few unelected validators at a time. As was already mentioned, otherwise they’ll just be competiting with each other for delegations and may inhibit each other from becoming stable.
However, the biggest obstacle to this method is abusive BLS key bidding behavior that some validators exhibit. We must pass a HIP to restrict this behavior in order to provide a more hospitable environment for these new and small validators. Relying on the kindness of others to not overbid on keys and to “drop keys” has proven to be a largely ineffective method to assist validators into election. Human nature dictates that some validators will always take advantage of the situation if given the opportunity. So let’s not give them the opportunity.
#8:
If a HIP were to be passed that limited abusive key bidding, I’m not sure any of the 200 million ONE would even be needed to bootstrap new and previously unelected validators. Many of them would be automatically elected
This 200 million ONE is a bandaid. A needed bandaid, and as a community member/investor, it’s one I’m grateful/hopeful for. But it’s still a bandaid. It doesn’t solve the underlying causes. And we don’t know if these funds will always be available.
I believe Harmony/the community must use this situation to fix governance voting and pass HIPs that would fix issues that this 200 million fund is attempting to alleviate. If validators weren’t allowed to aggressively low-bid on BLS keys, would any of the wallet 19 validators have gone unelected in the aftermath? We know there were enough keys to go around since they were already elected. But some validators took advantage of the situation, either for personal greed or because they couldn’t be bothered to check on their validators/auto bidders. Neither is something that Harmony’s future should be relying on imo.
#9:
Might it be beneficial to reserve some of the 200 million ONE as an “emergency fund”? Perhaps 5%, that could be used to quickly assist a validator who might abruptly find themselves in danger of election given the current market conditions and still fluid post-bridge sentiment.
#10:
Is this going to be voted on by the community? If so, how? Governance voting has been non-functional since February.
#11:
I support @PeaceLoveHarmony @AffinityShard @Jimbo_JCR.one in being the validator representatives.
#12:
@Maba078 said I needed more emojis haha. So I present my favorite one: 