I think I’ve finally found the flaw in Jonas’ calculations.
The entire model appears to assume that running a validator costs $2,000 per month in server infrastructure.
Here you can see the official hardware requirements for running a validator: 32 GB of RAM and 2 TB of SSD storage.
These requirements are nowhere near what would justify a $2,000/month infrastructure cost for the vast majority of operators. Can someone explain where that number came from? Has nobody at Parity or the W3F pointed out that this simply isn’t representative of what most validators actually pay?
Maybe $2,000/month makes sense if you’re running infrastructure in a very expensive region like APAC with unusually high bandwidth costs, but that’s certainly not the norm.
Here are several hosting providers and their monthly pricing (some with unmetered traffic), compiled by @kukabi in this post
A large number of validators run their infrastructure in Europe using providers such as OVH, Interserver, Vultr, and others, where comparable servers typically cost around $200/month, not $2,000. Here’s an example of OVH’s pricing:
If the economic model used to redesign staking is based on infrastructure costs that are off by an order of magnitude, then it’s no surprise we’re seeing the outcome we have today: validators have seen a significant increase in rewards by 85%, while nominators have suffered a 70% dramatic reduction in their rewards.
I genuinely hope someone steps in, corrects this broken economic model, and remembers that nominators are supposed to be stakeholders too, not just an afterthought.
@OliverTY @thewhiterabbitM @bill_w3f @sorpaas @kianenigma @jonas