Proposal to Increase Active Validator Set from 180 to 200: Fostering Inclusivity, Enhancing ICS Participation, and Lowering Entry Barriers

Change log • 2023-09-12 Created initial post Summary As the launchpad of the Inter-Blockchain Communication (IBC) ecosystem, the Cosmos Hub has continually evolved through the governance of its active community. Currently, the active validator set stands at 180, with a minimum delegation of 78,430 ATOM—valued at approximately $505,089 USD. This proposal seeks to expand the active validator set to 200. Details With the existing minimum delegation requirement of 78,430 ATOM, many potential validators—including Secure Secrets, which has been in and out of the active set—are being deterred from consistent participation in the Cosmos Hub’s governance and other activities. Proposed Solution We propose to expand the active validator set from 180 to 200 for the following reasons: • Enable more Validator communities integration : Increasing the set to 200 would allow validators like Secure Secrets to stay in the active set, further enabling our integration plans with consumer chains and bring these communities like ShadeProtocol closer to the hub. • Enhanced ICS Chain Participation : A larger validator set would mean more providers and partners participating in ICS…

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Hi there,

As the submitter of the last proposal on increasing the active set, when doing the last time we decided to expand it not by 20 places, but by a smaller amount (5) as doing bigger changes, especially during the ICS adoption, may lead to unforeseen consequences.
Currently 200th validator has 736 ATOMs staked, so raising the active set by that much would drop the barrier required to be an active validator to almost zero compared to what we have now, and given that some of the inactive set validators can be abandoned so they’d go to jail less than 1 day after the proposal passes (and if it passes) it would drop even lower than 736 ATOMs.

I am not sure whether expanding the active set is a good idea (not that I am against it, I just do not know how it would influence the active set, so I do not have a strong opinion here), but seems like expanding it by 20 places at once can lead to something totally unexpected. Can you justify why do you propose that big change and not something smaller?

IMO going with some smaller values (like 5) would make it more safe (185th validator right now has 28,243 ATOMs staked), what do you think?

Hello,

• As far as min requirements for being in active set. We have usually seen the minimum increases over time to be in active set even after a set increase is proposed.
• We still have more than ~350,000 ATOM waiting to be in active set over the next 15 spots.
• We at Secure Secrets are currently sitting 188 spot so are trying to be in active spot as well and one of the reason for our proposal.

I would be ok with doing a proposal for 10 new spots as well but i think a better solution is for 20 more spots.

Wouldnt this increase overhead costs of the network significantly (10%+) at a time when sell pressure already outweighs buy pressure? Perhaps the increase of overhead costs of the network would be exponential with each additional validator since they would need to spin up ICS chains as well.

What exactly is solved by this increase? You state “being deterred from consistent participation in the Cosmos Hub’s governance” however stakers are still allowed to vote on chain and people are allowed to participate in governance chats.

I personally believe chaiins should be reducing overhead costs and reducing validator set sizes, rather than increase them. This seems like an attempt to get yourself into the validator set rather than an argument for why this is healthy for the ecosystem.

Currently, the top 45 verification nodes of cosmos hub account for 80% of the stake.

Adding 20 more verification nodes will not improve the decentralization of the cosmos hub, but will increase the operating costs of subsequent nodes.

Therefore, I personally do not recommend adding verification nodes to Cosmos hub.

My opinion is that increasing the active set to 200 won’t achieve any of the desired goals set forth above.

As it stands currently, most of the stake is concentrated as mentioned in the replies here. Secondly, distributing the ATOM further across more validators would just bite into the economic sustainability of some validators.

Most validators lose or barely break even in the current economic conditions we are seeing.

I would say we wait until a future date when we see the sustainability results of ICS to make a better-informed decision.

Hi there,

I believe that a lot of other validators are in the sidelines. Meaning you can’t count on the actual values as a drop in requirements will bring more interested validators who may not be validating at the moment.

I do agree that 736 is not much but in contrast to freak12techno i think requirements will be greater than 736 $atom. As the competition for the last places increase the requirements will go higher even if a few validators get jailed.

I agree that it will most likely be not 736 ATOMs, but way more and this number would only increase, 736 is how much 200th validator has now. This happened before, it was the same case with the last active set expansion, when if I’m not mistaken the last validator had around 20k ATOMs staked, and now the threshold is around 70k ATOMs. My point is that it would drop drastically and it’s unpredictable with that big active set expansion how exactly would it influence it.

Thanks for feedback everyone. A few points i wanted to address with the comments made above. • @freak12techno : Regarding the number of slots opening, this isn’t a new concept. We’ve previously proposed increasing the number of sets, with up to 25 slots being made available. A past example of such a proposal can be found here: Mintscan Proposal #54 . The impact of this was significant, with all validator roles being filled within a few months of the proposal’s activation. • @whitemarlin : Your point about hardware costs is debatable. While it’s true that there are upfront costs associated with running the network, many validators waiting to enter the active set are already incurring these costs. When the active set expands, they start earning ATOMs from their existing delegations. Importantly, the network’s inflation rate remains the same, so the overall payout doesn’t change—only the distribution does. One could argue that the ATOMs earned by new validators would be sold to cover hardware costs, but these are expenses they’re already bearing. Therefore, I don’t view this as a significant issue. • @jagachu : This proposal isn’t aimed at improving decentralization but…

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I agree with these statements. I understand active validators want to maintain status quo. As inactive validators want an opportunity to get in.

I believe there are many competent validators in the sidelines waiting for an oportunity. In some case with a net positive validator business and securing the hub isn’t going to change that.

how many validators are opting out validation of Neutron and Stride?

as long as we have this “issue”, increasing the validator set would be counter productive.

Just like the last prop that passed, not a good time to increase the validator set.

It currently makes no sense as most bottom validators already are opt-out.

I don’t see how it brings any benefits to our current situation.

The way I see it, you are just trying to lower the requirements to be validator so that Secure Secrets can be ‘permanently’ in the active set but this won’t help the purposely built dynamic for bottom validators.

IIRC on the past prop, the barrier of entry was 120K ish ATOMS. Since it’s now 80K I don’t see the need to do anything about it.
Makes even less sense when you see that kind of thread https://forum.cosmos.network/t/consumer-chain-on-boarding-and-centralization-chorus-one-research/

How many of these validators are prepared or plan to support Consumer Chains through Replicated Security?

I don’t think there is ATOM sitting on the sidelines waiting for these validators to join the network but do think there’s a reasonably low probability that some of the existing ATOM staked would be re-delegated to these new validators, should they join.

Musical chairs only helps increase decentralization of the Hub active validator set if the current delegations are staked to the top 45 nodes. Do we have any indication this is a valid assumption (that the stake will be redelegated from 1 of the top 45 validators) and do we have any sense of how much we expect to be redelegated?

Can someone verify if 180th ranked validator is making $40k a year?

79,138 ATOM w 7% commission of 18.77% APY gives 5539 ATOM income a year.

whitemarlin:

Wouldn’t this increase overhead costs of the network significantly (10%+) at a time when sell pressure already outweighs buy pressure? Perhaps the increase of overhead costs of the network would be exponential with each additional validator since they would need to spin up ICS chains as well.

Just a question, these validators currently in the inactive set have the infrastructure and running the nodes, they have expenses. How we will increase the network cost by making them active?

As of my understanding cosmos does not care about the validtaors sustainability. To me, this argument does not make any sense.

Also, this does not mean I am in favor of expanding the set by 20 slots.

As the demands and costs associated with securing the hub increase along with Atom’s market cap, it’s only natural that the threshold for new validators tightens. Continuously opening the hub to an influx of new validators could inadvertently compromise the network’s stability by diluting the set with potentially less-quality validators that struggle to maintain operational costs. The fact that it is hard for new vals to join the set isn’t a flaw but rather a testament to the hub’s security. It’s a delicate balance between inclusivity and ensuring the highest standards of network security.

waqarmmirza:

As of my understanding cosmos does not care about the validtaors sustainability.

some bad faith here, isn’t it?

just need 5 five minutes to find topics/research right on this forum trying to brainstorm around potential solutions.

No, that’s my version of truth.

I have been here for over a year, and dozens of discussions/essays on the topic, but you tell me what’s the conclusion? Funding prop gets passed in weeks and validator sustainability is an issue for backburner.

• Fav RS-Chain (stride) just selected again only 32/180 validators to stake their Atom while free-riding on the ICS with negligible revenue share. They can make a very simple formula to support all the small validators (delegating 25K each with the bottom validator) to offset the costs. But they didn’t. And no one will speak because everyone with a voice got into the delegation program.

• Neutron is running for 6 months or so, and again no income for validators running the node (the brightest excuse is to soft-opt-out) . Do we have a solution for it?

I see only ICF, actually trying to help the smaller validators with its improved delegation program and points for running ICS nodes.

Now you tell me honestly do you think it is all a good scenario for validtaors?

i think it’s quite a difficult topic that can’t be solved in 2 days.

btw validators are not children and should at first build their business in a way they are sustainable.

anyway saying “coSmOS dOEsn’T cARE” solves nothing.

Yes, not 2 days but not 2 years also.

they actually care less by not expediting the process of finding the solution and I can’t even say?

What are the priorities? making fun of people who point out the problems?

tom:

“coSmOS dOEsn’T cARE”

who are “they” in the first place? where is your on-chain proposal to make the valset effectively sustainable? i thought we were in an open space where anyone could propose things and see what the community decides.

anyway nevermind, that’s off topic, and i guess we’re in an ideological impasse there.

This proposal have mutliple points I disagree:

• The number of openning slot is too high,
• If I understand well, this proposal is open by a waiting validator who already failed to stay in the active set. This looks more like an attempt to keep itself in the active set.
• We are integrating ICS and new ICS release will come, it’s not the right time to change the active set
• The cosmoshub already suffer of centralisation. the cosmoshub can works with only TOP25 validators. I would like to have a strong power decentralisation before to increase active set again

That’s about 1000 ATOM income per year and not 5539.

We need to increase spots let’s do this

I was against expanding to 180…and I’m definitely against expanding to 200.

Expanding the set while still allowing the bottom X% to not be forced to validate consumer chains is ridiculous mental gymnastics.

The Hub’s business model was always to be a shared security provider. If you want to be a Hub validator, you should be expected to support all consumer chains leveraging RS.

For the love of God do not expand the set right now.

I get the sense that many VaaS team in Cosmoverse is not too comfortable with this proposal. Perhaps it will still go through as the top 25 validators voting for it.

Thank you everyone for your insightful feedback. @ephemeral_25 , @David_Crosnest : We’re working on a proposal to join the active set. In my view, the only people who would be interested in such a proposal are those aiming to be part of that active set. Any barrier to entry should serve an economic function for the hub, rather than being arbitrarily set at 120k ATOM or 80k ATOM. @ZacCheah : The situation resembles a tug-of-war game, where existing active validators, especially those at the bottom, may oppose the proposal to avoid losing delegations. There are other critical factors contributing to the hub’s growth that should be prioritized. General Points : The only options for joining the active set currently are either waiting for the entry barrier to change or receiving a large single-party delegation. Concerns about centralization are valid but separate from the issues this proposal aims to address. @effortcapital : I’ve been following your work closely and appreciate your contributions. Your point about AEZ not being mandatory for chain participation is crucial. While we at Secure Secrets aim to support all AEZ chains, it’s a commitment we can make only in this…

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Going to make a short comment. Its a yes from our side. Yes, validators, such as ourselves are in deep shmud right now, but increasing the set allows the free market to attract those who will want to do it at their will, hence, very simple → increase decentralization a little

lets put up a prop been knocked out 5 times and floor is almost 100k atoms again

velvetmilkman:

I don’t think there is ATOM sitting on the sidelines waiting for these validators to join the network but do think there’s a reasonably low probability that some of the existing ATOM staked would be re-delegated to these new validators, should they join.

Agree with this sentiment. There is no need to expand the validator set.

Lee_Berman:

lets put up a prop been knocked out 5 times and floor is almost 100k atoms again

You could, but I would vote no.

I would like to i am waiting for some more push on this front before pushing this on chain.

Also like I mentioned I am waiting for some other proposals on chain as per @effortcapital other ATOM economic reasons.

The only reason for this proposal to pass or even be discussed is that 180 is a crappy number. 200 is a better number. I suppose if there’s a secondary reason, I was thinking about it the other day and I mean what we should really be trying for is a large, stake decentralized, geographically decentralized validator set.

New validators do need to understand, however, it’s unlikely they will be in profit, even remotely, especially if the inflation reduction passes.

However, I do understand the appeal starting in a financial loss, and working toward gain while earning skills.

New validators do need to understand, however, it’s unlikely they will be in profit, even remotely, especially if the inflation reduction passes.

Just to state a perspective from the bottom of the active set here: there are validators willing to join and running their nodes despite being inactive (Crypto Dungeon is a good one, for instance), and the same happened last time, so even with the financial loss there’s a strong desire for new validators to join. I am unsure about how many such validators we have though and whether increasing the active set by 20 spots would fill all of the new positions and if we would end up in a situation where there’s not enough validators to cover for the active set spots (unlikely I guess, but still). Increasing it by that much should drastically drop the entrance level and the amount of ATOMs required to be bonded to be active validator.

One more thing that it’s sometimes not about the profit, but about the status: if a validator claims they validate The Hub, that kinda increases their reputation a bit rather than if they validate some niche chains.

I don’t know if the bottom 5% of current validator sets would agree with this. First, the rewards made are barely enough for them, and if we expand the validator sets, it means they would not be in the bottom 5% anymore (if soft opt-out is implemented), and they would need to run the nodes for ICS chains = additional cost.

they would stay in the bottom 5% as its by total atoms staked unless they grow significantly

For me its currently a NO.

We have been discussing for months on how to support small validators with rising costs. Expanding the set would only further complicate funding and increase expenses for delegators. Additionally, I am skeptical that adding more spots would truly enhance decentralization.

I sympathize with those eager to join the active set but find themselves unable to do so. I hope they will make it through ICF delegation.

I don’t think that we can count on the ICF for much of anything, including validator evaluation.

I would have been entirely against this, but there is no other place to learn how to operate the other than the hub itself.

Provided that validators understand that they are likely to make losses, why not?