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pintail
@pintail
Validators derive a significant proportion of their yield from proposing blocks - both proposer rewards on CL and tips on the EL. Since this leads to increased reward variability (which hurts small stakers) wouldn't it be better if there were no CL reward for proposing, or even a fee?
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pintail
@pintail
So at minimum the proposer fee would cancel out all the rewards received via attestations, and by proposing honestly, validators earn back some or all of that fee, plus whatever they receive in EL tips.
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Barnabé Monnot
@barnabe
Similar mechanisms were discussed in the case of a negative issuance regime with stake targeting, you still need to incentivise for correct duties to be performed, so it could take the form of an upfront fee that you attempt to make back when it’s your turn to propose
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Barnabé Monnot
@barnabe
One issue of course is missed slot penalties affecting small stakers more than larger ones
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pintail
@pintail
But if the upfront fee is not linked to a specific proposal opportunity then it won't reduce reward variability. I guess any idea to change proposer rewards would need to look at the combined impact of missed slot penalty and proposer fee (possibly the fee just replaces the penalty?)
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Barnabé Monnot
@barnabe
Yes I meant indeed that the fee (or penalty) is charged as you become proposer of the slot, and then you try to make it back during that slot. Same for attestations too. Also hard to calibrate with correlated rewards/penalties
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