Validator Management Must Be Part of Layer 1 Tokenomics While mature networks like @ethereum or @solana may warrant a different discussion, the reality is starkly different for newly launched Layer 1 chains. In their early stages, these networks often engage in a quasi-transactional process of distributing massive delegations to validators as a form of “compensation,” laying down the starting line for network participation. Though I haven’t analyzed every new chain’s validator set in detail, the overall trend is clear. Becoming a top 10 validator often guarantees annual token rewards exceeding $100,000. For chains with even moderate recognition, the figure climbs to $300,000–$500,000, and cases exceeding $1 million per year are not uncommon. But the issue isn’t simply that validators earn a lot. My position has always been: “As long as validators contribute value equal to—or greater than—what they receive, the system is functioning appropriately.” The real problem is that we lack the means to verify those contributions. If token inflation burdens holders while the validator’s tangible impact remains opaque, isn’t that a design flaw? Quantitative metrics like token rewards are transparently recorded on-chain. But the actual contributions of validators—community support, SDK improvements, participation in governance, or organizing local events—aren’t easily captured through on-chain data. As a result, most networks offer near-zero visibility into a critical question: “How much positive impact is this validator actually having on the ecosystem?” I believe foundations and core teams must establish minimum contribution standards. The era of assessing validators solely by uptime and performance is over. Technical reliability is just the baseline. Networks should holistically evaluate validators based on community building, developer ecosystem growth, and their role in governance discourse. In essence, each validator should have a public “KPI dashboard.” Transparency isn’t optional—it’s a mandate. Foundations must publish standardized, periodic (e.g., quarterly or biannual) validator contribution reports. Ideally, these reports should allow side-by-side comparison of on-chain data (e.g., rewards, uptime) and off-chain contributions (e.g., number of dev PRs, hosted events, community engagement). This level of disclosure would empower token holders and the community to answer a crucial question themselves: “Why is this validator receiving so much?” Furthermore, it may be time to consider dynamic reward adjustments. Validators falling below a defined contribution threshold could face reduced—or even revoked—rewards. Conversely, outstanding contributors should be incentivized with additional rewards. Just as healthy businesses measure ROI, a healthy protocol should assess its “inflation ROI.” Token holders and the community deserve to know: What services are validators providing to justify hundreds of thousands in annual rewards? If this information asymmetry persists, it will ultimately erode trust in the token—and suppress its value. If the crypto ecosystem wants to champion decentralization and transparency, it must start by scrutinizing the activities of its largest inflation beneficiaries. At the end of the day, inflation is a cost paid by the network. If we can’t clearly account for who is receiving it, why, and how much—then tokenomics devolves into empty arithmetic. Especially when validators sit at the top of the cost structure, measuring and disclosing their utility isn’t just good practice—it’s an existential strategy. And every time I hear that a validator on a certain chain is earning over a million dollars a year, I find myself asking, in all honesty: “What kind of service or value are they delivering to command such compensation?” That curiosity, I believe, is where the journey toward a more transparent and resilient ecosystem begins.