This is a nice initiative, and I think it’s great the VDAO is acknowledging there are limitations in the current process. I appreciate that you all have agreed to assist the community in this manner
That said, this initiative does nothing to address the root cause of why the VDAO has to do this in the first place: Access to BLS keys for aspiring validators is restricted. They are not easily attained for new/smaller validators, and the protocol does little to assist in making it more accessible
So while I think this bootstrap initiative is a positive gesture/step forward, I hope we don’t think this is going to solve the issues that are currently afflicting Harmony’s BLS key process. I would prefer we build a bigger boat in order to incorporate more/all validators, instead of tossing only a few life preservers overboard and asking the other validators to tread water while waiting their turn
My suggestion is to bypass all of this. Automatically assign all eligible validators one key. After which point you can either continue the automated key-assigning for all additional keys, or allow the larger validators to continue utilizing their current bidding strategies. If you want to have more elected validators - which is explicitly mentioned in the summary section of this initiative - then auto-assigning keys to all eligible validators is a much more effective method
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@Rutilant_Hub made a few points that I agree with and want to add to (using their numbering system):
#2. Allowing 10% fees seems a bit high when the bootstrap validator will be largely subsidized by the VDAO
I agree with Rutilant that if you allow the fee to be set too high, it will discourage delegators from staking with them, inhibiting the benefit of the VDAO’s support in the first place
#4. I also agree with Rutilant that it will be hard to grow the Bootstrap validators beyond the level that the VDAO is investing in them. For starters, the high APY of “new” validators is definitely an attraction that helps them grow their delegation/delegator count
And secondly, a lot of validators simply hit a “ceiling” that is very hard to break through. You suggest ending the bootstrapping of a validator if they reach 1.2x EMS (6.27M) before the end of the 100 epochs. But out of the 161 elected validators listed on staking.harmony, 87 (54%) of them are below that 1.2x (6.27M) threshold! So I think it will be incredibly rare that you would ever need to end the bootstrapping prior to the conclusion of 100 epochs. It goes to show how difficult it is to grow your delegations as a new/smaller validator
Also, if I’m reading it correctly, if a bootstrap validator doesn’t reach a large enough delegation to remain elected without VDAO support, and there are other validators waiting to be brought into the bootstrap program, that the currently elected validator will lose 100% of their VDAO support after 100 epochs? I think there’s a high likelihood that many of these validators (perhaps 100%) won’t achieve the necessary level of delegation required to remain elected once the VDAO pulls its support. They’d be starting over at square one. These validators will just keep cycling through the bootstrap program every few hundred epochs, imo
Are we ok with resigning ourselves to that reality? Is there a better way to get validators elected and to keep them elected? Shouldn’t we be looking at those options? Again, this initiative is better than the status quo. But I think auto-assigning a key to all eligible validators would be a much more effective means of achieving Harmony’s goal of 1,000 validators