Summary: This proposal is to introduce a base 5% fee for all validators on the network level.
Background: The validators in Harmony have always been competitive with their fee settings, resulting in numerous 0% fee campaigns that lasted for months. This has deterred other validators from actually setting a proper fee to pay for their expenses and get a little bit of profit out of it too. It has basically led to the race to the bottom, where every validator has had a low fee set so it didn’t lose much delegation. As a result, Harmony currently has one of the cheapest validators (in terms of fees) compared to other networks, while having a higher workload due to specifics of EPoS. Other networks such as Avalanche have already set a minimum fee, which currently stands at 2% for them.
Motivation: This proposal should release the race to the bottom in fees and kick start a healthy validator economy where validators would actually cover their expenses and earn a little bit. It will also help smaller validators as the bigger ones will now be able to move above 5% without much fear of losing delegators. The set minimum fee will be the new bottom, instead of current 0%.
Specification: The suggested minimum fee is 5%. This can be discussed further below.
Suggested voting options: Set minimum fee to 5% or keep minimum fee at 0%.