Modification to Phragmen

Hello everyone! Here’s an idea; let me know what you think:

Problem: Whales are sucking up all nominator space.

Solution: We vote on a proposal to change the Phragmen runtime such that it chooses at random between two outcomes:

A. one whale account staking X DOT. Maximum nominator ceiling for staked validator remains equal to global maximum.
B. an aggregate of numerous small accounts, which I will call a “composite whale,” whose aggregate DOT balance is equal to the account balance of the whale account it replaces. For this validator and era only, Phragmen dynamically increase the maximum number of rewarded nominators to equal global maximum plus number of accounts in the composite whale.

Reasoning: Stake is relative. There is an equal probability that a given stake is a drop in the bucket or of vital importance to it’s owner, whether it’s 5 or 1,000,000 DOT. Therefore all other variables being equal, and so long as the network is 50% staked (the approximate optimal percentage as calculated by core dev team) we should try to design the network to function best for the greatest number of stakeholders. Currently it functions best for whales.

Possible Issues: Whales will never vote for this unless they are uncharacteristically altruistic. Worth a try anyway, because a diverse system is a robust system. And while this proposal is essentially asking whales to relinquish some of their profits in the short-term, long term I believe this would add stability to the network in the form of lower barriers to entry and greater (and more diverse) network participation.

Once parachains go live, this may be a moot point if enough DOT are bonded into parachain contracts and stakers get more elbow room.