Why Validators Need to Be Able to Charge Commission on Block Rewards

The current idea for Cosmos as per validator FAQ ( https://cosmos.network/validators/faq ) seems to be that validators can only charge commission on fees, but not the block reward. This comes from the understandable concern that power shouldn’t accumulate too much in the hands of validators over time. Unfortunately, this idea has many negative implications and would, in my view, significantly reduce the chance Cosmos succeeds. Here is why: • Demand for Transactions Will be Minimal In the bootstrapping phase of any blockchain network, the demand for transactions is very low. This was true for Bitcoin, for Ethereum and any other blockchain network that I know of. There is no reason to think that it will not also be true for Cosmos. In fact, it may even be worse, since Cosmos as the internet of blockchain derives its utility from its connection with many chains. But in the beginning there will be just to hub and no connections. Thus demand for transactions will be very low. This phase can easily last 1 year or longer. • Pricing Power of Validators is Limited In addition, even if there were a lot of transactions, validators aren’t actually able to enforce high fees.…

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