Temp Check: Reduce Collator Rewards and Active Collator Slots by 50%

[hackfisher]

Summary

This proposal seeks community feedback on reducing both of the following parameters on Darwinia Chain by 50%:

• The total block rewards allocated to Collator Staking
• The number of active collator slots

Because the reward allocation and the number of active collators would be reduced by the same proportion, the expected reward available to each active collator should remain broadly unchanged, assuming similar block production performance and reward distribution.

The main objectives are to improve competition and operational reliability within the collator set while reducing protocol expenditure and supporting Darwinia’s long-term economic sustainability.

Motivation

1. Improve competition and collator effectiveness

The current active collator capacity appears to be larger than what the market presently requires. Some collators have become inactive, stopped operating, or have not produced blocks for extended periods. This suggests that the current collator market lacks sufficient effective competition.

Reducing the number of active slots would make admission to the active collator set more competitive. Collators would have a stronger incentive to:

• Maintain reliable infrastructure and consistent uptime
• Avoid extended periods of inactivity
• Offer competitive commission rates
• Attract and retain delegator support
• Respond promptly to operational problems

A smaller and more competitive active set should help concentrate rewards on collators that are actively contributing to network operations.

2. Reduce expenditure and improve economic sustainability

Collator Staking block rewards are an ongoing cost to the Darwinia economy. When the number of active and reliably operating collators is lower than the configured capacity, maintaining the existing reward budget may no longer be economically efficient.

Reducing the total Collator Staking reward allocation by 50% would lower protocol expenditure and help reduce the network’s budget deficit or inflationary pressure. This is important for improving the long-term sustainability of Darwinia’s token economy.

Since the number of active collator slots would also be reduced by 50%, the expected reward per active collator should remain approximately unchanged. The proposal is therefore intended primarily to reduce inefficient aggregate spending—not to reduce the expected compensation of collators that remain active.

Expected Effects

If implemented, the proposal is expected to:

• Reduce total Collator Staking expenditure by approximately 50%
• Keep expected rewards per active collator broadly stable
• Increase competition for active collator slots
• Encourage stronger uptime and operational performance
• Remove persistently inactive operators from the active set over time
• Improve the efficiency of staking-related token issuance
• Support the long-term economic sustainability of Darwinia Chain

Actual rewards would continue to vary based on block production, uptime, stake distribution, commission rates, and other protocol-level reward rules.

Risks and Considerations

A smaller active collator set may create several trade-offs:

• Delegations may become more concentrated among fewer collators
• Some existing collators may lose their active status
• A poorly calibrated reduction could reduce operational diversity
• The transition may temporarily increase competition or delegation movement

[hackfisher]

Most of the second half collators are inactive or in risk flag:

Ref: https://collator-staking.ringdao.com/stake

[2xJDubs]

I completely agree with reducing the collator set as it seems we don't have enough community backing and need for as many active collators as we currently have. I am not necessarily in agreement with reducing rewards by 50% as well. If 50% of the collators are trimmed it doesn't mean 50% of the staked RING will be disappear, it will get redistributed amongst the remaining collators thus reducing rewards overall. I do agree the fact we are seeing collators with very small stakes in the session means not as much RING is being staked as before but I would prefer to address this in two steps. First reduce the collator set. If existing RING does not redistribute then consider a reduction in rewards.

[Laki389]

Is there a reason to rush?
There was a governance Constitution, according to which Github discussions last (at least) 14 days, I think.
Or was that a recommendation and not a requirement?
I can't find the constitution, I think it's from the time we used Snapshot.
Or was the Constitution only for DCDAO, the current RCG?
I can't remember..

https://gov.ringdao.com/proposal/0xd6e8dab8cc1d36161572d253bb22be84c8f83aeb44dc392639593a23641c9a26

[Laki389]

ok, I found it, however this Constitution is for DCDAO, currently RCG...

https://snapshot.org/#/s:darwiniacommunitydao.eth/proposal/0xd750140eccee3434f65feb156c985f6425ed884d56aa2a295c189d5e76fe9dc5

"Phase 1: Temperature Check (1 week) (Optional but Recommended)"

But this is RingDAO governance. 👍

[Laki389]

RingDAO governance: Reduce Collator Rewards and Active Collator Slots by 50%

https://gov.ringdao.com/proposal/0xd6e8dab8cc1d36161572d253bb22be84c8f83aeb44dc392639593a23641c9a26

Mon Sep 7, 01:47 am UTC
End voting period
in 13 days