I have been part of the validator community for a while now; and more than any other project I'm involved in, this is the ONE I believe in to become a significant player, supporting real-live cases moving forward.
Our group puts in work to connect people from business with IT, developers and investors who are interested in building on top of platforms. This has taught me that we have a problem when it comes to Harmony when we bring it up during conversations.
'We need more validators' – that's it. That's the next element that will bring more developers, investors,.. and basically eyes to this project; and ultimately move the price up. I think that's why many are invested today.
So what's the issue? Well, the issue is finding new validators and keeping them. It has become more difficult to make this work for new validators and some of the existing validators are seeing rising costs as a reason to shut down their validator. Stakers are delegating only to a few bigger validators and there is no significant incentive and/or reason to delegate to smaller validators.
Let me first share how I staked the first time. I bought a significant amount of ONE and sorted the list on biggest and those with highest %age return. That's how myself, and many who stake their ONE are doing it. “This guy has a high amount of delegations, he must be doing something right, let me just add to the pile”. So the big ones become bigger, the small ones stay small or struggle to stay afloat… and new ones either give up quickly or don't even start a new validator.
That was not my intent when I staked the first time. While my idea was that staking will help us further decentralize, i was actually helping put in place the opposite effect. Making the bigger validators biggers which concentrates the stake with them. If I hadn't gotten into the validator space myself as a way to learn more about the project, I wouldn't have understood this issue at all. Between ourselves, the validators, we are unable to solve this persistent issue; and as voting is weighted; a small number of bigger validators will always have the over-weight and can sway any vote in their desired direction.
So now my conversation is with you, the stakers, the delegators… how can we fix this? My conversation is with the founder and the team around him? how can we fix this and put this ONE in its rightful place?
Would love to hear opinions?
I'll share my solution – which is pretty simple and straight forward. Install incentives that make it clear to the delegators that it makes sense to help decentralize and secure by delegating to the smaller validators. How? by playing with the percentage AYP that you can make per validator.
Validator with a stake of:
under 10 million = APY 12%
between 10 and 20 million = APY 10%
between 30 and 40 million = APY 9.5%
between 40 and 50 million = APY 8.75
+50 million = APY 7.5%
it's not a perfect system, and a brighter mind can fine-tune the maths behind this, but it will rebalance and attract many new validators which will help us decentralize quicker and better and add security.. as this is not just an incentive to start a validator but also to keep it up and running longer term with a more diversified group.
Share your unfiltered thoughts and ideas – in the end we all want this project to succeed. That's what binds us. Let's be constructive. So hopefully the next time we say 'harmony we have a problem' is when we land this on the moon..