The consultation regarding the future of the Radix Validator Subsidy has concluded.

The proposal, initiated by the community to reduce dependency on the Foundation and transition to a sustainable economic model, asked token holders to approve a tapered end to the validator subsidy.

The community has voted decisively to adopt the proposal.

With over 1 Billion XRD participating from 604 accounts, the plan to wind down the subsidy has passed.

The Results

Question: Do you approve the proposed Validator Subsidy Tapering Plan (Phase 1 & 2), ending in June 2026?

• Yes (Approve Plan): 740,665,521 XRD (71.6%)
• No (maintain the current subsidy ($500/mo) until either the Foundation transitions activity to a Community Entity, or the community accepts an alternative proposal.): 293,876,457 XRD (28.4%)

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Total Participation: 1,034,541,978 XRD

Token holders have signalled their support to the transition from a Foundation-subsidized model to a fee-driven market.

This approach is designed to protect the treasury and provide validators with a defined runway to adjust their operations, avoiding an abrupt hard stop.

Implementation Schedule

Per the approved proposal, the Validator Subsidy will now follow this schedule:

Phase 1: Foundation Administered (Transition)

• February: Subsidy capped at 400k XRD or $350 USD (whichever is lower).
• March: Subsidy capped at 400k XRD or $200 USD (whichever is lower).
• Objective: These payments provide stability while capping treasury outflows during the handover period.

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Phase 2: Community Administered (Tapering)

• April & May: Subsidy reduced to $100 USD (paid in XRD).
• Mechanism: Administration of these payments will transfer to the new Community Entity.

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Phase 3: Conclusion

• June 2026: The subsidy is scheduled to end.
• Backstop: If a new Community Entity is not operational, or if a performance enforcement mechanism ("Jailing") is not in place, the community retains the option to hold a further vote on next steps.

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Impact on Validators: Planning Your Strategy

This vote confirms a shift in the network's economic model. Validators should now plan fee structures assuming the subsidy will reach zero by June.

This transition period is your window to communicate changes to your delegators. We recommend the following steps:

1. Adjust Your Business Model Many nodes have already started adjusting their validator fees to reduce reliance on the subsidy. Higher validator fees will now become standard practice to cover infrastructure costs. You can adjust your validator fee using the methods here, or by following the full guide here.
2. Promote Your Node Active community engagement is the best way to attract new stake. By marketing your reliability and contributions, you can increase your stake weight, which in turn increases the XRD generated by your fees.
3. Responsible Sunsetting (If Applicable) If you decide that operating a node is no longer viable for you, we thank you for your service to the network. However, it is critical that you follow the standard unregistering procedure.
   
   1. Do not simply turn off your server. A node that is "Registered" but "Offline" slows down consensus for the entire network.
   2. You must "Unregister" first. This removes you from the consensus set gracefully, ensuring the network continues to run at full speed.
   3. You can unregister your validator in an orderly way using this function. Alternatively, here is a full guide.

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Impact on Stakers: A Time for Active Management

At all times, it is important to ensure you are staking to multiple nodes that have high uptime and standing. These nodes directly operate the consensus on the Radix network, and “good staking” generally recommends distributing stake across at least 3 nodes which each have less than 3% of total stake. A full guide on choosing validators to stake to is here: https://learn.radixdlt.com/article/how-should-i-choose-validators-to-stake-to 

During this tapering period, we recommend performing a staking health check to make sure the network remains optimized.

1. Check for "Zombie" Nodes With the subsidy ending, some validators may go offline. If you stake to a node that goes offline, you stop earning rewards, and that node slows down the network.
   
   1. Action: Check the dashboard. If a validator has high "Missed Proposals" or offline, redelegate your stake immediately to an active node.
2. Watch for Fee Changes Validators may adjust their fees to cover costs. This is healthy for the network, but you should be aware of where your XRD is allocated.
   
   1. Action: Look for announcements from your validators regarding their plans for the post-subsidy era and consider moving stake to nodes that have a sustainable plan to cover the costs of running and maintaining a performant validator.
3. Support the Next Generation Consider allocating a portion of your stake to high-performance validators just outside the Top 100. While they may not offer rewards immediately, having a "bench" of ready-to-go nodes is vital for network resilience. If a Top 100 node unregisters, these are the nodes that will step up to replace them.

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