Atm the rewards of chunk producers with small stakes are extremely unstable, which leads to the APY of such validators being much lower than those who produce blocks and chunks, it’s not just 5-10%, it may be twice lower in epoch.
In such case there are no incentive for delegates to support chuck-only pools and stake in small pools. In my opinion, the mechanics should be different, that small pools should have at least a little, but a higher APY than the main validators.
Otherwise, such pools are not viable at a distance and the network will not grow, but continue to centralize in large validators.
Ideally to have a dynamic reward system, depending on the stake size among other things, which will make the network more decentralized and stable.
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Hey @ama31337 - thanks for the proposal.
You’re raising a valid point.
Do we know why chunk producers with small stakes are unstable?
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The main reason is that they do not get a stable number of chunks to sign, and also that they will fall very little, so even 1 missed chunk is already a noticeable % in their case.
Which leads to reduction of reward of such pools and decrease of APY.
Probably, at a distance, it will more or less average out, but this factor definitely does not work in their favor.
The issue of decentralizing the stakes has already been understood many times, even before the launch of the chunk producers.
The current award mechanics make the larger pools bigger and the new smaller ones harder and harder to compete with.
With the current delegations for new chunk producers, it becomes almost impossible.
Try to imagine yourself in the place of a delegate - you have a choice
a) a large pool in the top 3 and a commission of 1%, which successfully validates for a long time
b) a new pool with low stake and 5-10% commission, little known and most likely with little experience
where will you delegate? what should be the additional incentives for you to delegate to a small pool?
I can say with almost 100% probability that the only criteria for a delegator to choose a small pool is an increased profitability, even in spite of the higher commission of such a pool.