Validator Fee Structure Update and Vortex Governance Rewards

Dear Human Nodes,

With the launch of the Vortex Simulator (or proto-Vortex) and the invitation for Human Nodes to begin their journey toward participating as governors of Humanode - holding voting power in Humanode’s decisions and gaining a real voice in its future - we will be implementing several changes to the fee structure. Please note that those who become governors will also gain a voice in future decisions concerning fee structures.

First and foremost, the fee structure for validators who complete 42/42 epochs will remain the same.

The subsidy structure for liquid validators will also remain in place and will continue to operate under the following caps:

• Cap 1: a maximum of 150,000 HMND per month (thus a maximum of 37,500 HMND per week)
• Cap 2: a maximum of 7,500 USD per month worth of HMND (thus a maximum of 1,875 USD per week worth of HMND)
• Cap 3: a fee-rate cap of x100 of the naturally collected fees from the chain

For each period, the lowest of these caps will be the one that takes effect.

For example, if the chain accumulates 1,476 HMND in naturally collected fees in a month, then under Cap 3 the effective cap becomes 147,600 HMND. Since this is lower than the 150,000 HMND cap, then 147,600 HMND is the cap that takes effect for that period.

It is important to note that in the liquid validator set, your position matters. The fewer epochs you miss in a week, the higher you will rank in the list.

Validator polls will be discontinued.

Governance participation and reward

In addition to the validator subsidy structure described above, active governors in Vortex will receive the equivalent of 25 USD in HMND for governance participation, provided they meet the required conditions.

This governor reward is separate from the validator subsidy structure.

To be eligible for this governance reward, a Human Node must satisfy the required conditions for active participation in governance.

This is not an easy task. In order to become a governor, a Human Node would need to have their proposal accepted in Vortex, maintain voting participation above the required threshold, and remain active in governance

Therefore:

• validators continue to be ranked and subsidized under the existing capped validator fee structure, and
• active governors who fulfill their governance requirements receive a separate 25 USD-equivalent HMND governance reward.

As Vortex evolves, there will be further changes, and those participating in Vortex will have the right - and the duty - to take part in the discussions and voting that shape its future.