Latest Splinterlands Town Hall was truly impressive at so many levels they can't be talked about in a single post.
I choose to talk today about the news Matt has brought about the validator nodes for SPS, which is intriguing to say the least.
Matt said they are "pretty close to building their own blockchain platform" for the validator nodes, even though all the transactions will be on Hive. And that's in internal testing phase.
So, what are they up to?
Apparently they will be selling validator node licenses. Wait, don't dismiss it yet! It's not for profit, they'll be burning SPS using the revenue from the licenses. The price will be in USD (but paid with SPS+vouchers), and the licenses will be sold in lots, with increasing price at every lot.
Now, what are these licenses for? Obviously, it allows the licensee to run a validator node AND receive rewards for doing so. Because otherwise everyone will be able to run a validator node for free, but without being rewarded the same way as the licensees are.
But there is more...
Licenses are NOT the only one way to get rewarded for running a validator node. The other way is the classical one we have on Hive and other DPOS blockchains. By being upvoted to the top by SPS stakeholders.
From what I understood from Matt, there will be two pools for validator node operator rewards, one for being upvoted by SPS stakeholders, and the other for license holders. Not sure if one could benefit of both of them together or not.
Their plan is that using these licenses the number of active nodes to grow into the thousands all over the world, instead of a smaller number competing for a limited number of spots.
Matt was inspired for using licenses for the validator nodes from Gala Games.
Let's move further.
The operators of node validators don't need to be geeks to install and run them. Matt said there will be installers for both Windows and Mac OS, but it will make sense economically to run the node 24/7. Seems like Splinterlands wants to democratize this further.
Another interesting part Matt mentioned is there will be possibilities of associations or pooling together to run a validator node. For example, I'm thinking one could come with the license and another could run the node and they split the rewards. But maybe I'm thinking small. Let's see...
Licenses will be NFTs, they will be tradable (and can be delegated) and someone can own (or be delegated) multiple licenses for the same software instance. So that means the number of licenses one holds also dictate the amount of rewards which are received.
Therefore it makes sense why the idea of pooling together was brought into discussion. But in this case we might run into the opposite of decentralization scenario, where we will only have a few huge pools, which might also compete for the rewards from the pool which is slated for node operators voted by SPS stakeholders. That is if they can be cumulated.
Will licenses help decentralize the governance and have thousands of active nodes all over the world or will the pooling incentives make things turn into a couple of huge pools with great influence on the governance?
That will only be dictated by the value of the rewards, but to be honest, I don't believe Splinterlands will be anywhere close to having only a couple of huge pools, because the cost of running a node will be extremely low compared to most blockchains, not to mention POW, where huge pools are customary.
Therefore, I'm inclined to believe we will have some pools, but at most medium, and we will also have many (maybe even thousands as Matt said) single license nodes, or maybe 2-3 persons banding for convenience.
Just think about this scenario. Many guilds may want to run their own node or nodes, but top investors will have their own sponsored nodes as well.
From what Matt said indirectly when he referred to running the node 24/7 and the economic viability, I believe the cost of the license is recurring, not one-time. But if it's a one-time cost, it doesn't matter how much you run your node, does it? You are not pressured by time to recoup the investment and make profit. In this case I can easily see many thousands, maybe even tens of thousands nodes running solo.
Matt's intervention on this topic starts at 1:11:50 on the Town Hall, if you want to hear him directly, which I always recommend.