New Rules for Validator Fees and Participation

Dear Human nodes,

In the previous weeks, we introduced a new factor, the “Proof-of-Poll”, to encourage more participation in the community and to help engrave the “one person, one node, one vote” mantra in our validators' minds.

Starting this week, we will be making more changes to the system.  Both to move closer to the model we envision for our future (as clearly written in the whitepaper), and to assist with protecting the treasury against current market conditions.

The first point is that the payouts will change from biweekly to weekly.

The second point is concerning the liquid validator set subsidies and how the validator set is determined.

In order to navigate through the troubled waters of the current market, we will set 3 caps on how much money will be paid out as subsidies.  Each validator who is included in the liquid validator set will receive the equivalent of 25 USD in HMND per month (assuming the validator is included in the validator pool for the full 4 weeks).  The number of validators who get the equivalent of 25 USD per month depends on the distribution cap as set below. Rewards will distributed from the top of the liquid validators list, with each validator eligible to receive up to the equivalent of 25 USD in HMND per month. Distribution continues down the list until the remaining balance in the fee pot is no longer enough to fully cover the next validator at which point distribution stops. 

Cap 1:  A maximum of 150,000 HMND per month (thus a maximum of 37500 HMND per week)

Cap 2:  A maximum of 7,500 USD per month (thus a maximum of 1875 USD worth of HMND per week)

Cap 3:  Fee rate cap: x100 of naturally collected fees from the chain.

Out of the above, for this period, the lowest cap will be the cap that takes effect.  So, as an example, if the chain only accumulates 1476 HMND in a month, as the cap is x100 of naturally collected fees from the chain, the cap would be 147,600 HMND.  As this is lower than the 150,000 HMND cap, the 147,600 HMND cap will take effect.

It is important to note that in the liquid validator set, your positioning is important.

• The fewer epochs you miss in a week, the higher you are in the list.
• Whether you participate in Proof-of-Polls or not is also important.  If you do not participate, you will be ranked lower than those who have participated.
• If there is a tie, who will receive the subsidy will be decided at our discretion.

Other factors may be added in the future, as this experiment continues, and as always, the caps may be adjusted as market conditions change.

Please note that all of this is subject to change as we are experimenting as we move forward towards the implementation of Vortex.