CHIPs Discussion Phase: Minimum Commission as a Function of Voting Power

One concern of the ATOM community is the concentration of voting power present on the active validator set. Recently, there have been some discussions and proposals like imposing a tax on voting power . We present an alternative method (at a high level) to discourage concentration that is also more robust against Sybil attacks. Here’s a summary of the benefits: • Encourages a decrease in voting power concentration. • Shields small validators from intense competition with larger validators. • Does not hinder the ability of small validators to compete. • Mitigates Sybil attacks. High-level Description: The proposal suggests implementing a minimum commission that increases with the validator’s voting power. As an example, the minimum commission rates could be set at 0% for the last 33% of voting power, 5% for the intermediate range, and 10% for the first 33%. Other potential designs, such as considering self-stakes similar to the tax proposal, a more granular function, or a commission greater than 0% for the last 33%, could be explored in future discussions. The specific parameters of the function are deferred for further consideration, emphasizing the high-level…

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so force users to pay top validators more until they exit through the LSM?

Implementing minimum fee tiers is an intriguing concept on paper; however, we harbor reservations regarding its potential impact on stake distribution, primarily for two reasons: • The first concern is tied to the low capital turnover within the active set. The share of redelegations in relation to the overall staked amount is minimal. Furthermore, the stake distribution has shown little change over the years, as evidenced by the chart below: image 1840×810 65.8 KB Despite the addition of new validators to the active set, the vote power has remained consistently unchanged among the top 15 validators. • The second concern revolves around the prevailing wallets that continue to exhibit validators sorted by their existing vote power, contributing to a self-reinforcing phenomenon. Many users, lacking a full understanding of stake distribution, often make random selections from the top-listed choices. This behavior is reflected in the fact that most Google search clicks are concentrated on the top-listed links. Users tend to perceive the top validators as safer, perpetuating a false notion. To address this decentralization challenge, the sorting mechanism needs a…

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Many thanks for your comment!!

Probably the low capital turnover within the active vals set can likely be attributed to the absence of a policy to encourage a migration from larger validators to smaller ones. Other aspects as switching costs may also play a role.

I agree that many users make random selection of the top-listed choices. Using quality-drive metrics may help in all this dynamic. I just wonder whether such measures would effectively support smaller validators.

In any case, there should be more discussion and innovation to address concentration.

This is only possible by building on the already deeply entrenched top 15.

If it was built from the beginning, then this is simply impossible, unfair mechanism

I think the voting delegation of the validator set should be cancelled!

Or slowly change the voting weight in a multi-stage manner

Reduce voting weight by 25% to 20% to 15%

Or 0%

Or modifications with a proposal approval rate of 40%

Based on the average number of people who voted in the past, what percentage should be lowered?