This post is to have a discussion about making a mandate that every validator start with minimum 5% fee. We see too often some delegators staking with zero fee validators until it’s their turn to have the fee. To limit this, what do you all think about having a 5% fee for all validators, new or existing?
We brought this up in the validator Telegram and decided we would bring up the discussion. Here’s what I posted in chat regarding this topic:
James StakeIt.ONE - Harmony Validator, [Nov 25, 2021 at 8:50:04 PM]:
My brother @AffinityShard just mentioned this the other day
all validators must start with a 5% fee and that’s a great idea
would encourage more people to start validators.
could recover the overhead costs right away as soon as elected
it already costs upwards of $4000 to get a validator going maybe more depending on your skill set and what you have to pay to get help with.
Surely made me hesitant or I would have been up there with RockTheBlockChain and early guys. I wasn’t sure enough about it to make the leap, so thinking from one that was in that position recently, I feel like a 5% fee from the gate is absolutely essential to meet our EOY goal of 200 validators
the only thing a 0% fee does, repel new validators
Think about it, if everyone has a 5% fee from the gate, delegators have no 0% fee validators to move to, so it nullifies the appeal of 0% IMO. Am I missing something here?
The 0% is an attractive offer, but the same goes for better rewards when 0% isn’t an option…
These are decisions that we should be careful about making. Little things that seem insignificant and helpful at the time may backfire on us later. We have to be thorough in making decisions. Think of all possible consequences of it before voting on it. IMO too many decisions are being made in haste, and let me remind you that we are laying the foundation for Harmony, the entire future of Harmony is relying on us. We really need to pull it together here and make some wise decisions asap.
All validators fees are automatically set to 5% , 100 epochs are first election.
This was voted on in hip1 I think…
This is to give new validators assistance in gaining delegates as a sort of promotional period.
Of course there are fee chasers that will leave when the fee raise but not as drastic as you would think.
Vote for HIP1
I am absolutely against this change.
We don’t lack validators, we lack delegators that are willing to stake on new validators.
The only competitive advantage new validators have against older ones is the 0% fee. You want to take that away too. The boost is not working because the intermittent election (one epoch elected, the next not and so on) burns the few epochs with higher APY and it doesn’t make it profitable to delegators to undelegate and jump onto new validators for only a boost. Only the 0% fee for the 100 Epochs makes that even, not sure if profitable.
The goal is not 200 validators, the goal is 200 ELECTED validators and with this change, that won’t happen in a long time IMO.
And honesty, 4k USD is a ridiculous price for a validator comparing to other networks. The problem is not to pay 4k USD, the problem is pay 4K + running costs and not get elected. 5% from zero rewards equals zero.
I agree on the 10k to be a validator being high.
That was set when ONE was a lot lower in price… It cost me like 100 USD when I bought!
I encourage you to put this forward as a proposal Here to lower the entry requirements. Maybe there is a reason but it should definatley be discussed!
I am personally not against giving new validators 0% fee to start out to help them gain delegates. However with that said it only works half as well as it was probably intended to work. Due to the current situation it is hard to stay elected until you reach a certain amount of delegation which costs some validators a good bit of their 0% fee time. After their 0% ends they will lose some delegates who chase the 0% fee so that may hurt them as well.
First of all before a 5% fee for everyone can be implemented we need another fix for how to get delegates to smaller validators. Some examples are validator pooling, changes to the staking page, higher rewards for newer/smaller validators, bls key limiting, etc.
First we fix the other issue of helping small validators. Second we implement the 5% fee for everyone.
My thought process behind putting everyone at 5% fee from the start is as follows:
Every new validator can start earning rewards to pay server costs as soon as they are getting elected.
It will stop from delegates constantly chasing the 0% fee unicorn. Yes they can keep validator hopping now but what happens when one day there aren’t many or any new validators coming online? Is it possible that those people will be so used to 0% fees that they will start an argument to get them back? Or simply be dissatisfied with the idea of paying 5% fee at that point?
We should have all delegates used to the idea of paying the same minimum fee across the board and implement a 5% fee now rather than allowing more time to pass and more people to join the Harmony family and then rug pulling the 0% fee later.
I realize that going from 0% to 5% fee may not be a big deal for some people but from the amount of ONE that moves around it seems to be a bigger issue than expected and may at times be counterproductive to the original intent.