Use coretime revenue to reward validators rather than burning

Governance
1

Rather than burning coretime revenue as a means to reduce inflation, here is what I think is a better alternative:

Distribute coretime revenue to validators as rewards similar to how a business rewards its investors with dividends. This would make Polkadot operate more like a real business, and give validators(investors) economic incentives to increase coretime revenue. Validators would receive staking+dividend rewards. Staking rewards could then be reduced to maintain ~%15 overall reward and control inflation.

This solution is better than burning dot since not only does it reduce inflation, but it also directly connects validator rewards to Polkadot’s revenues.

2

A direct rewards-revenue connections sounds dubious. It’s parachain projects who determine usage, not validators.

At a high level, ones’ default model should always be: Inflation for security, but burn fees. Any other model needs some formal analysis before even being considered. As an example: On the instability of Bitcoin without the block reward - Princeton University - Department of Economics

Operator rewards must cover operator expenses, including taxes, plus some profit, not currently true on Kusama. An enforced minimum commission is the real solution there, so kusama inflation need not increase or decrease, but non-operator staking rewards should go down due to minimum commissions.

3

Interesting article thanks-- I did not consider how this could potentially impact the security for chain. If not rewarding validators then, maybe there is some other way to intelligently use this revenue to better Polkadot’s economics and use cases.

Coretime revenue is quite a valuable thing, it would be wasteful just to burn it when that revenue could be used to attract investors or fund ventures. Forget validators, what if we literally just made polkadot stocks (of course have to make sure this wouldn’t be classified as a security by SEC). Investors could buy “stocks” in exchange for coretime revenue dividends. The money generated from buying stocks could be used to fund software development/projects/whatever is voted on. I am not familiar with what legally would qualify as a security, but maybe there is something that can be created in this spirit but does not fall under the SEC’s jurisdiction.

Edit: Just looked up legal definition of a security–and why the SEC does not consider DOT one-- and it seems something like this would make it a security. In fact anything that attracts VC and investors with an expected return is considered a security. Nonetheless, maybe there is a better use of coretime revenue no one has thought of yet.