A new proposal on Ethereum's research forum suggests allowing validators to redirect a portion of their staking rewards to fund ecosystem infrastructure and public goods. The mechanism, termed 'validator redirected revenue,' would permit validators to contribute between 0% and 10% of their earnings. If a majority of validators signal support for a non-zero redirect rate, this contribution would become mandatory for all validators.
The proposal aims to address the long-standing 'free-rider' problem, where valuable projects benefiting the entire network are often underfunded because no single entity is incentivized to bear the full cost. Validators, who are crucial for maintaining Ethereum's security and operations, would be the primary contributors. The system is designed to allow validators to set their preferences for funding recipients through a 'splitter' contract, enabling a 'set and forget' approach.
At current staking levels, validators earn approximately 700,000 ETH annually. A 5% to 10% redirection could potentially channel 50,000 to 70,000 ETH per year towards ecosystem development, estimated to be around $120 million at current market prices. However, the idea is expected to be controversial, with potential risks including validator cartelization and a disconnect between the operators making funding decisions and the ETH holders whose yields are reduced.
