The long-term goal of SubQuery is to put the network in the hands of its community with the Foundation providing overall guidance and governance. To this end, the Foundation has executed its first community-driven decision which was to change the Node Operator Commission Rate or NOCR. 

Community Governance in SubQuery

Community governance plays a crucial role in SubQuery to ensure that decision-making is distributed among a wide range of stakeholders rather than being centralised in the hands of a few. This approach aligns with the core principles of web3 decentralisation, promoting transparency, inclusivity, and a sense of shared ownership within the SubQuery community.

By allowing community members to participate in governance, the SubQuery ecosystem can tap into a diverse pool of ideas and perspectives, leading to more innovative and well-rounded solutions and decisions. Additionally, our community governance provides democratic legitimacy and trustworthiness to our project, as decisions are made through a democratic process that reflects the collective will of the community.

The involvement of SQT in governance is a key aspect of the SubQuery Network token. SQT can serve as a means of voting power, as well as a utility token in our network. This mechanism incentivizes token holders to actively participate in governance and align their interests with the long-term success of the network. 

In the long term, we are going to continue to involve the community and SQT in the governance of the SubQuery Network. The use of SQT can also be expanded to facilitate more nuanced governance models, such as quadratic voting or delegated voting, which aim to balance the influence of large and small token holders and ensure a fair representation of the community's interests.

What is the NOCR?

The Node Operator Commission Rate is a value that is chosen by Node Operators as payment for their services. The remainder is then shared amongst their delegators. A high commission rate favours Node Operators whereas a low commission rate will be more attractive for their Delegators. Node Operators therefore need to find a balance. 

At the start of the network, Node Operators set very low commission rates of around 5% to attract Delegators. However, this meant that the rewards were not enough to cover their cost. Some Node Operators then feared losing Delegators if they increased their commission rate. Also, Node Operators with deep pockets could continue to operate at a loss, drive out their competition, and then drive up their rewards in a monopolistic scenario. 

The Proposal

The proposal was created to decide and set a minimum commission rate and the snapshot voting platform was used to choose between various options ranging from 20% to 35%. 

A quadratic voting system was used which places more emphasis on the number of individual voters rather than the size of their voting power.

The Dynamics

In a purely selfish scenario, game theory suggests that Node Operators should vote for the highest commission rate possible and Delegators to vote for the lowest commission rate possible. 

What happened was that some Delegators agreed that a race to the bottom was not beneficial for the network and avoided voting for no minimum default. 

The Results

The final result was that 20% was chosen as the minimum NOCR with over half of the voters opting for this option.


Whether this new NOCR is the right value or not, time will tell. However, the governance process here highlights another step in the right direction for SubQuery, the Network, and its community.

Are you intrigued to participate in shaping the SubQuery Network's future? Discover how you can easily get started by learning how to delegate to Node Operators here

About SubQuery

SubQuery Network is innovating web3 infrastructure with tools that empower builders to decentralise the future. Our fast, flexible, and open data indexer supercharges dApps on over 160 networks, enabling a user-focused web3 world. Soon, our Data Node will provide breakthroughs in the RPC industry, and deliver decentralisation without compromise. We pioneer the web3 revolution for visionaries and forward-thinkers. We’re not just a company — we’re a movement driving an inclusive and decentralised web3 era. Let’s shape the future of web3, together.

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