Abstract
The Cosmos SDK allow two different parameters that provide rewards for block proposer (a bit similar as miners in Proof of Work models, but don’t have much sense on the current Delegated Proof of Stake model)
A validator that currently own 20% of voting power will have 20% chance to propose a block, which mean that the more voting power a validator have, the more chance he got to get rewarded.
On our current model, this goes in favor of the largest validator, and also give them bonus on proposing more often than lower weight validators.
Solution
A general rework of the model would be more than welcome, potentially adding VRF and not weight based percentage of chance for reward bonus on block creation instead of block proposition.
A more general approach to stop this very old bonus that serve only centralization over decentralization would be to remove any bonus, until our experts in tokenomics revamp it and find a better way to give this bonus (or simply let it at 0, not much sense).
We propose to change the parameters as below:
Base Proposer Reward from 1 to 0
Bonus Proposer Reward from 4 to 0
Any feedback is welcome, and we would love to discuss potential rework of this with interested people.
5 Likes
The debate started here: Set Proposer Base & Bonus Reward to 0
(Wasn’t updated on our screen, sorry)
2 Likes
Given that the chance of selection is proportional to stake, the APR for everyone remains the same even with the bonus mechanism. Therefore I am unsure why you think this is an ‘unfair’ distribution method?
The benefit of the current method is that there is a clear way to incentivise including more than 67% of the signatures so the proposer can get more of the bonus.
Changing the Cosmos SDK settings, including the introduction of a Verifiable Random Function (VRF) and the removal of bonuses based on validator weight, would not necessarily promote decentralization and could harm network security.
If rewards are too low, this may encourage increased centralization, as only validators with significant resources would be able to maintain profitable operations. Increased centralization can compromise network resilience to targeted attacks.
Reduced remuneration may encourage validators to reduce their investments in quality infrastructure. This could lead to a decrease in the quality of services provided by validators, affecting the robustness and reliability of the network.
I would like to point out that I am not a validator and that I do not yet have a firm and definitive opinion on the proposal. I simply want to improve the quality of the debate by humbly trying to bring a different vision.