Dear Council,

I write to you in the aftermath [of a failed referendum](https://kusama.polkassembly.io/referendum/155), despite the outcome, a fair majority of the community voted for change. I don’t perceive this as votes strictly for a decrease of the active validator count but votes in principle against disparity of entry into the active set.

With this referendum failed I would like to steer discussion towards determining the root cause of the issue and how it may be addressed. It is my belief that if nPoS receives ‘ideal’ information it would do a better job at levelling stake. This issue, as I perceive it, is that there are barriers towards a natural progression of nominations. If a validator is able to enter the active set with a lower total-stake, their return per KSM would be high and attract nominations, thus helping to level stake. This natural and ideal progression is inhibited by exorbitant commissions, at many times 100% and blocking of nominations.

My suggestions are as follows:

- Establish minimum and maximum commissions on-chain, the values of which can be determined by governance. The establishment of a maximum commission to some reasonable amount like 12.5% should allow fair earning for validators and allow attractive returns for nominators. This change also aids with removing 100% commission duping i.e. fooling a nominator into believing that your commission is lower than it really is. Duping will still exist but it would not be as detrimental.

- Remove blocking of nominations.

- Increase the transaction fee for kicking a nominator and allow this fee to be configurable via governance. This is recommended with the intent to dissuade nominator kick scripts. My suggestion is 0.01 KSM, governance configurable.

Despite having a maximum commission that is <100%, custodial staking services can still make themselves unattractive to nominators by positioning their self-stake higher than average or at average and with maximum commission. Providing that they own their nominated stake (which is generally the case) commission vs staking rewards matter not.

Your thoughts are as always appreciated. I look forward to them.  Please see follow up posts with example calculations and suggestions from the community.

I would like to make it abundantly clear that the nPoS system is not making any deliberate attempt to favour any one party.  This is just as a circumstance of nominations and the demand on the nPoS system to produce 1000 validators within the 3 nPoS tenets.

Kind Regards,
Will | Paradox

 - Summary points:
1. A referendum failed for decreasing the number of active validators, but majority of voters were in favor of creating a level entry in the active set. 
2. The issue of disparity in entry into active set can be addressed by: 
  - Establishing minimum and maximum commissions on-chain 
  - Removing blocking of nominations
  - Increasing the transaction fee for kicking nominator, with governance configurable
3. Custodial staking services can make themselves unattractive by positioning high/average stake and maximum commission
4. nPoS is not deliberately favouring any one party, it's an issue of nominations and producing 1000 validators within nPoS tenets.

#1163 Disparity of the minimum stake requirement (MSR) for entry into the active set