Good questions, let me go through them
Regarding the 2nd kind of validator compensation: I don’t think I understand what you mean by “equal to how it is currently”. Does this mean like today that staking rewards being paid every era proportional to the stake of the node? And if so, this would be based on which APY the one to be set for nominators as described further below?
What I meant to say is that your self-stake of your own validator just counts as a nomination of yourself and you will be rewarded accordingly from the nominator budget. This is important, because the nominator APY is flexible (based on the staking rate) and making sure that validators are exposed to the same flexibility means that we don’t have to worry about the outside option to self-nominate instead of self-stake.
Are you referring here to both of these respectively?
- a variable DOT compensation from the nominator budget (equal to how it is currently).
- a variable DOT incentive payment.
No, as described above, I am only referring to the nomination APY you get on self-stake. A validator would get an additional incentive payment from the security budget.
How would you determine a whitelisted account? Does this mean a verified account? KYC? other?
No, the validator itself could define an account that is allowed to put the self-stake. This would help validators that do not have enough self-stake (10k) yet. There are still things to discuss on the implementation side, but it appears to me that this is a good approach.
Operational fixed costs here are including more than infra, for example living expenses are also accounted for, I agree with @SAXEMBERG that $2000 per node seems low. Regarding determining the exact amount, this needs to be discussed especially in light of minimum hardware requirements and the expected evolution with JAM, without having more clarity on these aspects I find it hard to know whether this number is realistic.
Yes, this will require some more discussions. Importantly, the system can process any number that won’t exceed the inflow.
I fully support validators having skin-in-the-game and true alignment with the network. Like @deigenvektor.io I am convinced that running a node is more than hosting infra. I believe that community participation and true investment in the future of the network, past economic returns, is essential and I look forward to seeing how this can potentially be integrated as well with PoP.
Great, I want our validators to be truly aligned with the network and not only mercenaries. I think our set is overall great and I would like to maintain it that way.
Does this mean that the minimum 10k DOT self-stake is enough to get into the active set? And if so, does this mean that the current ~1.3M DOT stake would no longer be required? Is this meant to happen still under NPoS? or are we anticipating this already under the potential PoP secured model mentioned by Gavin?
The 10k is a requirement for the self-stake. The backing still needs to come from enough nominators through NPoS just as it is now. Gavin mentioned that the backing mechanism could change in the future through PoP and replace the stake-weighted nomination, but that is outside the scope of this proposal. For now, we just use the same election algorithm as before.
What type of agreements? Like “investors”? or what kind of external stakeholders?
The goal of the mechanism that I am proposing is that validators increase their self-stake which is slashable. Therefore, we can expect that the self-stake is either from their own pocket or that they have somebody that trusts them with that capital. Given the incentive structure, validators will be able to earn a significant amount of DOT through the incentives. A validator that has, let’s say, the 10k self-stake might still want to find people that trust them with more DOT, so they can increase the self-stake even further and earn more DOT. This is all an incentive, and not a requirement. The only “hard” requirement is 10k minimum. But if you look at the formula and do some calculations, you’ll see that the rewards for more DOT are quite significant.
The same way the validator variable DOT incentive would be vested over a year?
I’d keep the on-chain rules as minimal as possible. The DOT that the Treasury receives are totally liquid. But I don’t see a good reason why the Treasury should pay out liquid DOT if it has access to the stablecoin. All expenses that need to be met short-term are fiat-denominated and could be covered by the stablecoin. A (vested) DOT payment could be made to align that Treasury beneficiary with the success of the network longterm, on top. But ultimately, this is all decided by the ones doing the proposals that aim to maximize the chance that voters will approve it.