Continued [here](https://kusama.polkassembly.io/post/1163)

Further to the points above I wish to again appeal to the council to consider a chain minimum commission.  The downward drive towards 0% commission is just not sustainable but seems unavoidable.  A minimum commission/reward is not a novel implementation and can fairly reward validators for their time & effort.

A canary is only effective if it is alive and healthy.




I understand that many people believe going back to a smaller active set is a good move simply because centralized node operators benefitted from the jump to 1,000. While this might be true in the short run it does not solve the issue of centralized node operators gaming the system.

Slowly increasing the active set will not make it any more difficult for centralized node operators (CNOs) to game the system - referenda are visible on-chain for many days so it's pretty obvious to me that CNOs will be given ample time to react. A calculated action by an individual almost always beats the organic reaction by a decentralized community, so these CNOs would just increment their strategy in-step with the validator set as it slowly grows. Going back and trying a gradual increase won't change much in the longrun. We need *progressive* policies.

I think no matter how you voted on this referendum you'd agree that follow up policies are needed to avoid CNOs gaming the system. It is my opinion that the only way to defeat gaming is to simply game better. If the enemies are these CNOs, let's asses their current state under the current conditions of the active set. CNOs have spread their capital more thinly across the validator set which makes it *easier* for new independent node operators to usurp the spots of these CNOs. The problem is that a vast majority of nominations are not active nominations - they are passive nominations being managed by centralized wallet and exchange service companies. This will never change because manual nomination is too technical for most people and a rational agent in an economy will *always* seek the most profitable investment given the information they have access to. There are not enough nominators who choose their validators based on moral principle, that is the unfortunate state of the ecosystem.

It has always been my belief that the Council is responsible for helping independent node operators by utilizing treasury funds - government's role has always been to give power to the disenfranchised. My first proposal aiming to subsidize 0% validators was naive; I was still green behind the ears with Kusama and didn't understand the ecosystem very well. But now I've learned more about the technical possibilities of substrate in general and I believe we can start working on a solution to bootstrap reliable and independent node operators. My goal is to present a progressive proposal to the Council that will help bootstrap and promote independent node operators more actively than what the Thousand Validator Programme already does. I hope when I release this proposal that the Council and token holders will see my vision about establishing a more hands-on program to help decentralize the active set.

In the meantime I believe it is imperative to leave the active set at 1,000 since it causes foolish CNOs to spread their assets more thinly. While this benefits them in the short run it will be their defeat in the long run.

Dear Council,

I voted Aye to this referendum with the caveat that it is supported with another referendum or motion to increase the active number of validators by X every time Y to a maximum of Z, where Z is >= 1000.   

The previous increase to the validator count was (imo) effected too quickly and those that benefitted from the additional slots were those who controlled their nominated stake.  I draw example to Zug Capital who increased their number of active validators from 50 to 80 and Blackmirror that has effectively 'gamed' the nPoS system into electing 54 validators with ~3,200 KSM total stake each.  

To better define the term, 'gaming', validators who control their nominated stake such as custodial staking services can balance their bonds and narrow their nominations to force themselves into the active set with a low total stake.  For Blackmirror this requires a bond of 16,000 KSM with 5 nominations but there are other combinations that exist.

I cast no aspersions towards any validator aiming to gain the best return from his bond and I further cast no blame on the nPoS system.  The dynamics of staking on Kusama are very much stretched, there are fewer nominators and large amount of validators as compared to Polkadot.  The nPoS system is just doing what it can to provide the best result within the constraints of its three tenets.

The effect of being able to enter the active set with a very low total stake is that it can oust validators who have attained nominations in a very organic way.  These validators attain a total stake that is normalized by the nPoS system to ~4,150 KSM.   Even at above market commissions, a validator with total stake of ~3,200 KSM can still yield better returns than independents operating at ~4,150 KSM and 0% commission.  Nominators would shift towards the 'gamed' validator and the organically nominated validator will lose his place in the active set.  

It is my belief that a reduction in the validator count would disrupt any current 'gaming' of the system. Periodic increases will make 'gaming' attempts more difficult and validators with many nominations will adapt better under the changing conditions.   


Regards,
Will | Paradox









This is a proposal whose proposer address (E4tXA48vYLN4W4grTGwP7WYfJxZezUS863g6jfKSBtT91cT) is shown in on-chain info below. Only this user can edit this description and the title. If you own this account, login and tell us more about your proposal.

Sets the ideal number of validators.

The dispatch origin must be Root.

# <weight>
Weight: O(1)
Write: Validator Count
# </weight>

#155 Untitled