Clarifying Council intent on flattened GAS rewards

[deanragnarok]

After listening to the most recent Core Developer Call, I realized there’s still some confusion around what the Council is requesting with regard to flattened GAS rewards. I’m opening this issue to clarify that intent.

As a side note, I think this also serves as a good reminder that when the Council makes decisions—even when some core members are present during the discussion—the first step we should take afterward is to open an issue here to clearly document what we’re asking for.

The problem we’re trying to solve

As Council members, we currently face no real competition. That’s a problem. We need to create a pathway for new candidates to enter the Council, and for token holders to be able to vote for whomever they believe will work for the ecosystem—without being penalized.

The financial cost of voting for someone outside the top 21 (i.e sacrificing your GAS rewards) currently means that nobody ever does that. There is no incentive to support anyone other than the existing Council members. As a result, the current system simply reinforces the status quo. The sitting Council has very little fear of being voted out and very little incentive to actively work to retain their seats.

Under this scenario, the amount of NEO required to breach the top 21 is too high for most candidates (830k+ NEO), which creates a closed-loop system dominated by incumbents.

⸻

The agreed solution: Flatten voter GAS rewards

In Singapore, the Council agreed on a very specific and limited change:

• Flatten GAS rewards for voters: All NEO holders who vote should receive the same level of GAS rewards per NEO, regardless of whether they vote for a current Council member or a candidate outside the top 21.

This change would:

• Remove the disincentive for voting outside the top 21.
• Enable new candidates to gradually build support.
• Give token holders a meaningful vote, rather than forcing them to choose between earning rewards or voting their conscience.

⸻

On timing and compatibility

We fully recognize that this change may not be compatible with N4, or that governance may change so significantly enough in N4 that this is no longer a concern in the future. However, as a Council, we agreed that this matter is more urgent. We believe this change should be implemented for N3 regardless of what happens in N4.

We need a more active and engaged Council now, and we need to give NEO token holders a more meaningful vote now. Waiting months—or longer—for a full N4 transition is not acceptable when there’s a clear opportunity to improve Council accountability and token holder empowerment in the present.

[vncoelho]

1. Flatten GAS reward for the Voting process. The act of voting enables boosted reward.
2. Defines voting flexible locking period: let's say from 1 week to 1 year.
3. Define the linear rate for the locking period.
4. Define the penalty for unlocking before period.

[erikzhang]

Let's skip the complicated "lock-in period" stuff for now and start by flattening the GAS reward.

[vncoelho]

Regarding "3. Define the linear rate for the locking period."

An initial suggestion:

• non-voting receive 0.1x multiplier or no-gas
• voter receives from 0.5x to 2x
• committee (CN or note) receive some fixed as it is right now, but divide equally between committee.

I suggest that any committee receive the same because I believe that any committee should be ready and run a seed node with correct specifications.

The total GAS generated per block is kept the same as it is, just the distribution changes based on the number of voters and their locking.

[vncoelho]

Let's skip the complicated "lock-in period" stuff for now and start by flattening the GAS reward.

Who can start the draft PR? @neo-project/core
I am ready here for testing and reviewing. In last case I can also start it asap.

[vncoelho]

Finally, regarding "4x Define the penalty for unlocking before period."

An initial suggestion that solves in an easy way:

• I suggest something like 1%-5% (5% for 365 days and 1% for 1 day, reduced linearly) penalty on the NEO locked, which is burned.

[shargon]

I think that this issue have two main phases:

• flat rewards for the 21 nodes, easy to do in 3.9.
• reward people if vote outside this 21, hard to do it in 3.9.

[deanragnarok]

I think that this issue have two main phases:

• flat rewards for the 21 nodes, easy to do in 3.9.
• reward people if vote outside this 21, hard to do it in 3.9.

I think that’s totally fine to do if it makes the rollout easier for Core. But I do want to note that flattening rewards only for the top 21 doesn’t really change the core dynamics we’re trying to address. In that scenario, voters are still limited to choosing between the existing Council members. It might make it slightly easier to vote for their favorite among the top 21, but that’s about it.

What we’re really trying to achieve as Council members is to create more competition for our seats. We want to give token holders the ability to vote for candidates outside the current council without being penalized, and for new candidates to have a real path to getting elected.

So again, if an incremental rollout makes sense for you guys from a technical or network safety perspective, I'm supportive. But I just want to flag that this limited version won’t meaningfully solve much on its own.

[vncoelho]

I think that this issue have two main phases:

• flat rewards for the 21 nodes, easy to do in 3.9.
• reward people if vote outside this 21, hard to do it in 3.9.

I think that’s totally fine to do if it makes the rollout easier for Core. But I do want to note that flattening rewards only for the top 21 doesn’t really change the core dynamics we’re trying to address. In that scenario, voters are still limited to choosing between the existing Council members. It might make it slightly easier to vote for their favorite among the top 21, but that’s about it.

What we’re really trying to achieve as Council members is to create more competition for our seats. We want to give token holders the ability to vote for candidates outside the current council without being penalized, and for new candidates to have a real path to getting elected.

So again, if an incremental rollout makes sense for you guys from a technical or network safety perspective, I'm supportive. But I just want to flag that this limited version won’t meaningfully solve much on its own.

I will check implementation feasibility next week.

Indeed it will not represent any real change if we just flatten among the 21 already elected.

[shargon]

Also this condition must be removed? CN work more than the regular committee nodes, so first we should ensure what flat means, because maybe it's not totally clear

neo/src/Neo/SmartContract/Native/NeoToken.cs

Line 267 in ac7ebab

var factor = index < n ? 2 : 1; // The `voter` rewards of validator will double than other committee's

[vncoelho]

Also this condition must be removed? CN work more than the regular committee nodes, so first we should ensure what flat means, because maybe it's not totally clear

neo/src/Neo/SmartContract/Native/NeoToken.cs

Line 267 in ac7ebab
var factor = index < n ? 2 : 1; // The voter rewards of validator will double than other committee's

In theory , yes, they work more @shargon .
But every committee should be prepared with the same hardware specification in theory as well, they should be ready to assume CN responsibilities.
In my view this should be flattened as well, so this condition removed.

More precisely, what worries Dean is that our vote still receives GAS rewards even if voted outside 21. This is important for what is being proposed.

[vang1ong7ang]

understand the goal of encouraging broader participation and making it easier for new candidates to gain visibility

however, im concerned that this approach might not achieve the intended outcome

if all voters receive identical GAS rewards regardless of whom they vote for, not only the disincentive for voting outside the top 21 is removed, but also any meaningful signal of voter responsibility

many token holders might simply vote randomly, or even just vote for themselves, since there’s no economic reason to make an informed decision

it could lead to a highly fragmented vote distribution, where many candidates receive only a small fraction of total votes

such “vote-splitting” weakens the consensus layer and could make the network more vulnerable to manipulation or coordinated attacks

[deanragnarok]

I think most people in favor of this proposal agree it’s not a perfect solution, but we’re at a point where we have to decide which set of issues is doing the most harm.

Every NEO token comes with an inherent promise: you can use it to vote and help shape the direction of the Neo ecosystem. That’s supposed to be a foundational pillar of our blockchain.

But in practice, we don’t deliver on that promise at all. The reality is simple: if you want GAS rewards, you have to vote for someone already in the Council.

The result is that token holders have zero power of influence when it comes to enacting any kind of change in Neo. Council members have zero motivation to deliver anything meaningful to the ecosystem. So token holders are left with two options: complain loudly or sell their tokens.

In regards to this:

if all voters receive identical GAS rewards regardless of whom they vote for, not only the disincentive for voting outside the top 21 is removed, but also any meaningful signal of voter responsibility

many token holders might simply vote randomly, or even just vote for themselves, since there’s no economic reason to make an informed decision

I think we can make a strong case that most voters are already casting votes without any meaningful signal of voter responsibility - because they're not asked to or incentivized not to. A personal economic decision ≠ an informed decision for the ecosystem. And that problem is only worsened by the fact that our voting platforms currently provide almost no useful information about candidates or their activities. But at least that’s being addressed through a new governance platform currently in development.

I’ve said this elsewhere, but I’ll repeat it here because I think it’s relevant.

In my view, there are three broad groups of voters in the Neo ecosystem:

1. The first group includes those who don’t vote conscientiously, and likely never will. They vote purely for maximum profit or randomly, just to claim rewards. Nothing we do is likely to influence this group’s behavior, flat rewards or no flat rewards. If the argument that this group at least voting randomly for the existing Council is better than someone outside the Council, I guess I will concede that point.
2. The second group consists of people who would vote conscientiously, who genuinely care about the ecosystem, but are currently incentivized not to. The system nudges them toward candidates with the best GAS returns, so they abandon their principles because the protocol punishes them otherwise.
3. The third group includes those who do vote conscientiously, but only within the boundaries the system allows. They’ll only vote for candidates they believe in if those candidates are already in the top 21. Voting outside of that is seen as throwing their GAS away.

So in my view, the goal should be:

• Shift that second group toward voting according to their values by removing the penalty for doing so.
• Empower the third group to support any candidate they believe in, not just those already in power, without being punished for it.

Of course, there are still important challenges we’ll need to solve. One major example is making sure that all candidates are already running a node and able to participate in consensus. But then, this is a problem we already have. There is nothing that enforces Council members to run a node right now, so any could be elected into a Consensus position and not be ready to fulfill this requirement today.

But at the heart of it, this change is about reinvigorating voter engagement and putting meaningful pressure on Council members to perform. It would give token holders a real vote, and give aspiring candidates a real path - one where hard work and value creation for the ecosystem can actually lead to election.

So, if we want an active, accountable Council and a more participatory community, this is the single most effective step we can take right now. And we should always be thinking about how to improve upon it. I'm personally open to other solutions, and I'm all for wargaming risky scenarios we might not have considered. But this has been under discussion for 6 months now and no better proposals have come forth. Hence why the Council has voted to enact this change.

[shargon]

understand the goal of encouraging broader participation and making it easier for new candidates to gain visibility

however, im concerned that this approach might not achieve the intended outcome

if all voters receive identical GAS rewards regardless of whom they vote for, not only the disincentive for voting outside the top 21 is removed, but also any meaningful signal of voter responsibility

many token holders might simply vote randomly, or even just vote for themselves, since there’s no economic reason to make an informed decision

it could lead to a highly fragmented vote distribution, where many candidates receive only a small fraction of total votes

such “vote-splitting” weakens the consensus layer and could make the network more vulnerable to manipulation or coordinated attacks

I'm agree with @vang1ong7ang