Kleros Founder Proposes Validator Yield Redirection Mechanism to Fund Ethereum Public Goods

Kleros founder Clément Lesaege has published a proposal on Ethereum open research forum EthResear.ch for a “validator yield redirection mechanism” that would allow validators to redirect part of their staking rewards to fund public goods in the Ethereum ecosystem.

According to Foresight News, the proposal suggests introducing a protocol-level mechanism under which, if more than 51% of validators agree to allocate part of staking income to ecosystem funding, the redirection rate would apply to all validators. The rate would range from 0% to a maximum of 10% of staking rewards.

Under the proposal, validators could choose funding recipients and allocation proportions. Execution clients would aggregate results using relatively simple mechanisms such as King-of-the-Hill or a Condorcet Winner approach, with the aim of reducing governance overhead and enabling a “set-and-forget” operation.

The proposal also outlines potential risks, including the possibility of validator cartel formation and principal-agent issues, such as differing preferences between staking operators and delegators. The proposal remains under discussion.

Foresight News added that King-of-the-Hill is a dynamic replacement mechanism in which, every 128 blocks (about 5 minutes), any validator can propose a new candidate redirection contract to challenge the current “King.” Execution clients would automatically determine whether the new candidate is “better” based on validators’ preset preferences. Condorcet Winner refers to a voting theory concept in which an option that defeats all others in head-to-head comparisons is considered the winner.