In the spirit of moving things forward quickly, I’d like to draw attention to PUP-19 which is proposing an immediate increase of the validator reward from today’s 1% to 5%.
While upping the validator reward alone doesn’t significantly impact the number of nodes on the network, it starts the ball rolling on #1 in the Security Phase:
Because PUP-19 is so closely aligned in spirit to the Phase Plan, I’d recommend allowing PUP-19 to be considered the first step in a phased approach. Though PUP-19 was only just published yesterday, the concept of upping the validation reward has already been heavily discussed here, so I would consider PUP-19 an extension to this conversation.
There will still need to be other steps to address node consolidation and inflation balance, but starting with block producer reward is good start. I’ve modeled out where validator and servicers balance out in terms of rewards with an increase of validator rewards to 5%. You can see my PUP-19 Impact Model.
NOTE: There are major risks with folks aping into validation, since it by nature locks ups larges amounts of POKT. The PUP-19 Impact Model should be taken as theoretical. But what can be seen is how the change the price can quickly make validation unprofitable compared to servicing. There will need to be further consolidation and inflation proposals to address these issues in the future.
As a first step to the spirit of the Phase Plan, please check out @nfahenry’s PUP-19 as a start to a phased approach.