So many proposals have been brought forward for improving the decentralization of the network. Here is another one. The calculations shown are simplistic but actual implementation will require fundamentally changing how effective bid is calculated.

Approaches:

- Approach 1 - Penalize subsequent key effectiveness by a fixed amount - First key - similar to today (except its calculation) - an effective bid. Key #2’s bid would be higher by xxxx ONE (calculated based on %age of first key). Key #3 will have a bid that is higher by another xxxx ONE and so on.
- Approach 2 - Penalize subsequent key effectiveness by a fixed % - First key - similar to today (except its calculation) - an effective bid. Key #2’s bid would be higher by x% . Key #3 will have a bid that is higher by another x% and so on.
- Approach 3 - to keep outcomes simpler and more inline with current implementation, calculate an effective bid that uses one of the above approaches and is an average of all the bid values from Approach 1 or Approach 2.

**This may be a complicated mathematical change but will discourage higher than certain number of keys. Delegates will be discouraged to keep staking with large validators as their returns will be lower.**

Let me know what your thoughts are.

Read the summary of each model to know the eventual impact on # of keys and effective stake.