MIP 11 - Automatic Priority Fee Distribution

[POSTHUMAN]

@jhb10c

This proposal introduces a protocol-level mechanism to automatically distribute priority fees to delegators. Currently, priority fees are credited directly to a validator’s beneficiary address; this proposal redirects those fees into the validator’s staking pool at the end of every block.

We are seeking input on the following:

• Third-Party Impact: How this change affects custom “Liquid Staking” or delegation wrappers that may currently rely on manual fee-sharing or direct block.coinbase monitoring.
• Proposer Incentives: Does moving priority fees entirely to the pool affect proposer behavior or MEV strategies in a way that requires additional mitigation?

Regarding the redirection of priority fees: These fees have traditionally served as a primary buffer for validators to offset the high operational and hardware costs required to maintain 10k TPS. If these fees are moved entirely to the pool, have we considered whether the default commission rates on inflationary rewards will be sufficient to cover these costs, or will this necessitate a global shift toward higher validator commissions to maintain operational viability?