Increasing the Amount of Polkadot Nominator Pools

Nominator Pools are a new primitive to the Polkadot ecosystem that lowers the barrier of entry for stakers, and gives nominator pool operators the chance to curate a set of nominations for others as a service.

As of Nov 1st they've launched with a good amount of initial traction, reaching the initial limit of 64 pools within just ~4 days. The initial limit was proposed to try and limit any potential risk if there had been any bugs or issues with the launch. Given that everything has launched and been working smoothly, it's time to move forward with growing Nominator Pool adoption on Polkadot.

Nomination Pools are in a lot of ways the future of staking on Polkadot, as they give the benefits of lowering the amount of DOT needed to be an active nominator (which earns rewards), give stakers the potential to possibly optimize the tax implications of staking (and claim rewards in a manner more preferable to themselves), and delegate the burden of choosing which validators to nominate.

Nominator Pools are one of many technical advancements helping Polkadot scale with the growing community. More nominators joining Nominator Pools helps limit the number of individual entities that are considered in the Phragmen Election algorithm that determines the global view of how stake gets distributed throughout the entire network. More individual nominators shifting to Nominator Pools both lowers the computational cost required to determine how all this stake gets allocated, as well as lowers the minimums required for all participipants in the network to earn rewards.

This proposal is aimed at increasing the number of nominator pools from the current limit of 64 to 128.

The goal of increasing the amount of nominator pools is to encourage the creation of additional pools that are of high quality, and further encourage participants in the network to be pool participants instead of regular nominators.

Additionally, increasing the amount of possible nominators pools, one goal is to also encourage the community to increase the quality of potential pools by suggesting a few different themes for pool operators:

• a nominator pool that backs specific validators within certain sub-communities, DAOs, or collectives
• a nominator pool that backs validators that focus on decentralizing the network via having unique node locations and infrastructure
• a nominator pool that backs a group of validators within certain regulated jurisdictions
• a nominator pool that backs third party, independant validators that are newer to the ecosystem
• a nominator pool that backs specific parachain teams that run relay chain infrastructure

As with many new features launching in the Polkadot ecosystem, the rollout of functionality like nomination pools is limited at first to try to mitigate potential risk. Now that we've seen a healthy and successful launch of this feature, it's time to continue forward with growth and adoption.

Starting this as a disuccsion first before proposing on-chain to gather any feedback or considerations.