There was no on-chain (but also off-chain) contract.
Implicitly, you could say no one would agree to 100% commission, so one doesn’t need a contract.
But, going back to that reply I quoted, its point still stands - there could be an on-chain contract, but that the odds of validators trying to scam the network would increase and they’d rather have them stacked against nominators than the network, which is a fair point. The users and network come before nominators and validators.
Well, I just quoted another guy’s explanation why it works the way it does.
I think it is not ridiculous because it creates market for reputation and professional services (validator % setting alerts, for example). What doesn’t work (in my opinion) is too many people in Polkadot world think everything that many users need should be solved with DAOs funds rather than developed based on market requirements.
I don’t reach the same conclusion. If you have (dollar equivalent) of $50K in nomination and you get scammed for $300 every year (due to unannounced validator commission hikes), that means paying $10/mo ($120/year) is a good deal that anyone with $50K o more can afford.
What about those with less? They can delegate validation to reputable community members who have own scripts and tools to deal with that, and tip them for that service. Maybe you now have $5000 and lose $50/year to scammers. Pay the guy $1/mo and relax.
But here almost everyone wants this to be done for free and no almost one wants to assume responsibility for their actions or spend money on actually developing and supporting valuable services (that is, those that emerge due to real user demand).
That was based on the quoted post, so maybe you can ask the guy who posted it in the original discussion/thread, but I think the idea is scammers gonna scam. Scamming nominators is easier, so they scam nominators. It’s a good deal for the network because the opportunity cost is low and paid by nominators. We don’t get into the situation where they look for bigger scams, and nominators burned that way pay more attention to who they nominate, contributing to more/better vetting.
One of the things I plan on doing in my community is create validator updates and recommendations, and promote the use of reputation systems. This thread talks about various ideas.
Regarding that specific 100% commission scam, once we drop those in the staking tool, new ones appear and go with 99%. Obviously this would continue until we hit some “reasonable” maximum such as 25%, but the risk to the network would be that a sudden drop in the price of DOT could make 50% of validators quit within weeks. Of course, that’s not likely, but it’s possible and so a conservative upper limit would maybe be set to 50%, which in most cases would be considered a scammy commission level that would continue to be allowed…
It’s cheaper to let them scam nominators, but you’d still have to allow 99%, or go after those as well until you hit 50% or something like that - still a scam deal, but would have to be allowed or else introduce new risks to the network…
On-chain identity, reputation systems, low-cost newsletters, low-cost or even free notification services , etc. All those things can help and are available today.
One can watch the chain for commission changes and post them to a Discord channel. ten users pay $2 each (for the VM running Discord bot) and that can cover the costs of running that service. Instead everyone wants someone to make a $400K proposal to pay for a fat & complicated app to solve their problem. Then when that money runs out they’ll go down because they’ve built a bloated app which costs $1,000/month to run and relies on 17 microservices that need 2 developers to maintain. 