Thank you Ariel for proposing a practical solution to this problem which was discussed originally here.
At the moment there is no mechanism for Indexers to withdraw rewards without unstaking capital which is disruptive to Delegators, the Protocol and the Indexer. Consequently rewards are being accrued but not accessed. This has two effects:
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Starves Indexers of revenue to fund operations (that they have run from the start without any form of accessible reward)
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In a number of territories it incurs tax liabilities that could be difficult to meet if the market has a downturn before rewards are accessible
The result is that Indexers may be unable to afford to continue and in the extreme may incur tax bills greater than the income they can liquidate. From an Indexers perspective this erodes the encouragement to support and develop the Graph network. From a Delegators and Protocol perspective it potentially reduces decentralisation as Indexers struggle to stay afloat and only the wealthier Indexers survive. All parties are affected.
I can understand the concern from some Delegators that the liquidation of Indexer rewards may affect the market (price). Indeed they will - more so if the supply into the market is lumpy because of token-lock periods. Please don’t forget that Indexers are token holders too. They do not want to see adverse market consequences due to their actions. However we must not lose sight that the real driver of market price is usage. Usage which can only come from a healthy ecosystem in which all parties are appropriately rewarded.
In terms of implementation Koen’s suggestion of specifying a permanent address, that rewards are automatically withdrawn to, makes a lot of sense.
Starving Indexers of rewards was not intended and needs to be rectified urgently. For this to require an extensive build/test/approval process may be seen as excessive. If it is necessary then let us get on with it at pace and ensure that any governance processes that are absolutely required are pursued in parallel, so that the focus can rightly move to developing and growing the protocol.