The NNS is designed to maximize node decentralization. As highlighted in the developer forum post “The State and Direction of Decentralization & Nodes on the Internet Computer”, there have been various gaps between design and implementation that are being addressed in the node decentralization roadmap.
Over the next few days, there will be NNS proposals that will close one of those gaps: node provider remuneration. These NNS proposals are to upgrade the NNS so current node providers’ remuneration is much more transparent, automated, and standardized as NNS was originally designed.
This is an important step towards removing human factors in the NNS towards the goal of making the Internet Computer the most decentralized blockchain in the world. It is important to be intellectually honest about the shortcomings between design and implementation (without any delusions) so we can fulfill the IC’s potential.
As of January 28, 2022, there are
- Node Providers: 72 (see: Internet Computer Network Status )
- Nodes: 414 (see: https://dashboard.internetcomputer.org )
- Subnets: 30 (see: https://dashboard.internetcomputer.org )
The NNS is designed so node providers are remunerated in ICP for the well-behaving nodes they have in the network. This amount of ICP they receive is pegged to XDR. The NNS and the open market set heterogeneous but transparent standards for what node providers are paid.
The long-term design goal is to create a healthy network that incentivizes node providers to have necessary hardware available and ready in data centers. The constraint is to make sure that node providers would not be paid so much that it creates unnecessary ICP minting (inflation).
The current state of the world is a combination of the following:
- NNS proposals are submitted to pay node providers (the NNS mints and pays node providers). Community votes on these. This is good and as intended.
- NNS proposals are submitted on the node providers’ behalf. This is not what is intended and instead, these proposals will be automated to remove human components.
- The node providers are paid varying rates (the biggest reason is geography). The variance of rates is ok by itself, but the intent is that there would be set and transparent standards (e.g. “Nodes in Germany” vs “Nodes in Chile”) that currently do not exist. These new NNS proposals will create a starting point for transparent & standardized rates for node providers all over the world. More areas will be added, for example.
Using the historical information from the last 8 months since network Genesis in May 2021, the following standards are being proposed in the NNS proposals:
|Region||node category||XDR reward per month per node|
|EU (European Union)||0||1087.24875|
|AP (Asia Pacific)||0||1212.015|
|US (United States)||2||1604.1375|
|EU (European Union)||2||2174.4975|
Please note: This table is for existing (Generation 1) node providers. For the subsequent generation of node providers, the payout rates may change.
The relevant NNS Proposals will be added to this forum thread once live.
We are asking the IC community to review these NNS proposals, ask questions, vote ACCEPT or REJECT.