While I am a fan of the changes, I just want to clear up one thing around these two comments:
The concerns around the perceived extraction raised by validators have been recognised. To address this, the DAO’s fee on priority fees have been significantly reduced from the originally proposed 3% down to just 1.5%. This new fee structure ensures that validators sharing 50% of their priority fees with stakers will effectively pay only a net 0.75% to the DAO.
Fears of “race-to-zero” dynamics are a valid concern. The updated fee structure reduces the competitive pressure on validators, easing concerns of unsustainable fee compression. The commission cap rather than an auction should provide a floor on priority fees potential JitoSOL delegates can maintain.
Stakers are the ones getting charged here, not validators, and the fee is like a tax. It’s very similar to an employee receiving a paycheck at their job and money being withheld to pay for taxes. In that example, the employee is the one that ends up getting paid less. The employer is really unaffected.
TipRouter functions the same. The validator sends it’s block rewards to TipRouter. TipRouter takes it’s cut and forwards the rest onto stakers. The validator never gets charged there, it’s only the staker.
It’s a slightly nitpicky comment, but I personally think it’s misleading to make it seem like the fee is paid by the validator. In this case, even though there is a fee associated, stakers will be making way more than previously, so I think it’s fine. However, for the future, I think it’s important to call this out. FWIW, I am still fine with this proposal.
Thank you!!!