I simply wanted to address directly the concept of decreasing the number of keys allowed per validator.
I think the harmony team is doing a fantastic job at staying on top of this topic and seeking community feedback, this is exactly the kind of initiative that will result in the best possible solutions and I applaud the efforts.
An Increased number of slots is a fine Idea. On its own it will likely have little impact on the diversity of the validators we see today.
A Slot Cap however can have the desired effect of increasing diversity, however it may also unwanted repercussions, as those that can afford it will see this as a minor inconvenience to overcome, with enormous upside potential.
This cap will disproportionately impacts those that are community staking vs self staking.
A self staking entity with complete control over the stake it obtains, (e.g. an exchange, large investment fund, etc.) can simply open a new validator to operate more keys. A community validator has the insurmountable burden of: 1.Educating its community 2.Balancing community stake across multiple nodes, and 3. Proper maintaining this more complex and costly system. This provides a significant advantage to those that are self staking, and further provides less competition to those that do.
As a result of whats listed above, we may experience a scenario where the most efficient stakers are these large self stakers over communities. (% return is based on BLS key efficiency and self stakers will now be at the top of that list rather than the bottom) which may in-turn lead to more community staking to the already large self stakers.
Although I do understand the principal of a BLS key cap on the efforts to improve the diversity of the network, if not carefully monitored it may cause the opposite effect in the future.
Some examples of solutions that have worked on other blockchains:
- Lower the per key reward by some factor, and provide this factor directly to validators that meet a specific set of criteria (SEE IOST: uses a model to provide 3 tiers of grants, from a proportion of node rewards to those that provide community educational, development and other functions)
- Decrease the number of Slots; This sounds unintuitive, however think of how stones / Sand fills a jar, Large stones will leave more gaps (to be filled by smaller grains) This will in-fact lower the number of Keys a validator can run, and increase the Jump between Validators creating more disparity in the amount Staked with each associated BLS…
I’ve put together a model for this and is really more of a discussion point than anything else.
I look forward to the dialogue and I trust the Harmony Team will find the best solution for the community.
See A Simulation for discussion purposes at: https://docs.google.com/spreadsheets/d/17HfJmld05BXeFXjDd9-BYsfFomV6bdwIagEQYkLFIa0/edit?usp=sharing
*Please note, this model does not take into account the competition of the existing validators after the minimum BLS bid is reached. This is meant to be a discussion point rather than an definitive answer for demonstration purposes only. Please feel free to add to this document or other, its free for public use.