Firstly I want to thank the authors for this well-constructed proposal.
However, I disagree with this proposal.
While it’s true that many validators are arguably earning “too much” at the moment, it’s also true that many of us operated at break-even or at a loss during the years of 2022 and 2023. Block rewards and MEV were non-existent, and we depended on commission on voting rewards to survive. When the bull market started, many of us moved to a 0% voting commission fee and a 0% MEV commission fee, earning just the block rewards. But block rewards vary extremely from epoch to epoch depending on volatility in the market day-to-day. MEV is the same. Once the bull market is over, I expect block rewards and MEV to significantly decrease, requiring many validators to raise commissions and once again depend on voting /inflation in order to stay profitable.
Solana is one of the few networks with a large, permissionless set of validators. However, the distribution of stake is very long-tail.
If you imagine that the break-even point (how much stake does a validator need to break even) depends on the current MEV, block rewards, and inflation / voting rewards, it’s not hard to image a scenerio where this proposal passes, reducing inflation by 80% as stated previously, then a bear market reduces MEV and block rewards by 80% or more, and suddenly we go from 1500+ profitable validators to 150. For me, one of Solana’s strengths is it’s decentralization, (despite what the nay-sayers would have you believe) and it would be hugely bearish for the validator set to reduce by 80% or more in the name of saving 3 or 4% per year in inflation.
Additionally, I also agree with the previous points that a “dumb” curve is actually much easier to understand and model, whereas a “smart” curve is more complicated and unpredictable.
I do understand the reasoning behind this proposal, but I think it would be exceptionally poor timing to pass this during the height of the bull market. I am fully supportive of revisiting this in a year’s time when we can see evidence of persistent MEV and block rewards over more than a few quarters.