Commission
The commission system determines how task rewards are split between validators and their voters. Starting with a maximum value for all new validators, commissions can be adjusted to balance earning retention with voter attraction, creating incentive mechanisms for competitive positioning.
Commission mechanics
In Overlap, the commission system operates based on a percentage split. Commissions start by default at 20% and can be adjusted by the validator based on their strategy. The commission percentage determines how much of earned rewards the validator retains versus what gets distributed to their voters. This creates dynamic adjustments where a validator's commission rate continuously affects their competitiveness and voter appeal.
Validators need to pursue optimal commission settings to balance personal earnings with voter attraction.
Commission and voter incentives
The commission rate directly influences a validator's ability to attract and retain voters:
- Lower commissions increase voter returns, making a validator more attractive to voters.
- Commission adjustments affect voter behavior and delegation patterns in real-time.
- Competitive commission rates incentivize voters to support validators who provide better returns.
- Commission must balance with a validator's performance to make them attractive.
A balance of low commission and high performance is the key to success. Attractive rates draw voters while strong performance generates the rewards to share.
The commission rate determines a user's competitive appeal and voter attraction to that candidacy.