Proposals for altering the maximum voting power (4736/4737)

[Disclaimer I belong to the PFC validator team. We have our own biases]

Summary
There are two signaling proposals on chain at the moment to help guide the development team on what stakers believe is a good maximum amount that a validator should have.

The are text proposals, and as such will not actually have any effect on the chain operations, but we hope the dev-team will take the outcome as guidance to what people want.

Motivation
One of the main reasons staking was stopped on the LUNC chain was the concern that with the depeg a few large individuals could just purchase LUNC for cents on the dollar, and then do nefarious things to the detriment of other LUNC holders.

my go-to example is here is ‘let’s vote to send ALL the community pool to ourselves’.

Once the 0.5.22 codebase was enabled, we saw something very similar to what people feared. The majority of voting power is in the hands of a very small amount of people.

IF someone wanted to today, they could simply bring down the 2 of the top 3 validators (potentially just drive a truck through datacenter), and the chain would halt.

not very de-centralized.

Now it’s not that dire, I’m sure the top 3 validators have great operations, and are not bad actors.
but the whole point is we shouldn’t have to rely on that.

I don’t like to have to put my trust in random anonymous persona’s to do the right thing.

Hence the proposals to lower the voting power.

PROS

  • better de-centralization

CONS

  • it will sort itself out in a month or so once newer validators can enter

  • requires a code change

  • can’t a single person just create multiple validators and achieve the same result

How to vote

  • if you believe the current status-quo is good.
    vote NO on both.

  • if you think 10% is great
    vote YES on the 10%, and ignore (or vote NO) on the 5% one.

  • if you think either is good
    vote YES on both.

  • if you think this is a complete and utter waste of your time.
    vote VETO on both.

8 Likes

Hi @petes-fan-club ,

I am wondering what percentage you ran at through these last few months of the depeg, and how it worked for you as a validator (in terms of enough funds to cover costs and then still remain an incentive for validators from a business model perspective)? I know that many of the validators have been sensitive to the financial crash, and some (and maybe more than I realize) have mentioned innocently in passing they have run at a loss during this time to keep the network up, so I mean to ask this as an honest question just so I understand the implications from a validators perspective (and I hope that others will realize the answer you, or any other validator, give is meant to reflect the honest business side, so we know how to help keep it at least competitive enough incentive wise for validators to keep validating, and your answer is not meant for anything else). If you prefer not to answer, I understand as well.

Thank you so much for opening this space so we have a better idea of the implications. I really appreciate it very much. I hope you have a great day today :slight_smile:

Oops… I guess I forgot to put in, that my question is also centered on how you see total voting power affecting those things :slight_smile:

since terra started, PFC has been hovering between 0.5 & 1% voting power.
When Terra de-pegged, I believe it went up to 3%.

pre-depeg, it made enough to cover costs…
Last week it made ~1.5m Lunc (1% voting power @ 5% commission), and thankfully Lunc’s recent price rise made that profitable, but not enough to buy a lambo.

I don’t think people running at 0.25% or lower are profitable at the moment (people ranked under 20), but maybe they run cheaper than I do.

3 Likes

I dont agree with 5 or 10%

  • it will eventually force people to delegate in unwanted validators (their prefered already maxed)
  • decentralization doesnt mean i should be forced to vote on a validator that doesnt communicate,doesnt care,doesnt ask their delegators opinion.
  • like said above around 10% of validators fulfill delegators requirements
  • less then 10% of supply is staked if 50% was delegated this would be a none issue since others would have delegations
  • anyone can have 100 validators and 1% delegation would still put them at 100% its the delegators responsibility to delegate appropriately
  • i wouldnt mind 13-15% but i wouldnt like to see people not delegating because prefered validator is already maxed
2 Likes

Hi @petes-fan-club ,

That was really helpful, Thank You.

I know that the 20% current cap was designed as a preventative security measure, and that the lower that number goes the more validators it may require to reach the 2/3 voting power on the chain for consensus block signing. There is also a point though were that number going low enough can also cut into the ability to incentivize validating (and therefore may cut the incentive to validate), and so can cut into some validators’ (not all) business model. It seems that one of the incentives for validators in Proof of Stake was that they had the ability for growth (so the lower that number goes it may stop incentivizing for certain validators once they reach that cap)(and weighing that against the security and further distribution of voting power among validators). There may be other factors such as selmo_TV mentioned as well, but just focusing on it from a validator perspective to shape my question below.

So, the preventative security cap is one lever that can effect (at least some) validators. It seems that commission is another lever that can be utilized to help incentivize validation to an appropriate level (although comes with a discouragement for staking by delegators to the degree it raises). The third lever is the reward parameters that deal with fees determining how much is available for validation.

From your view, as a validator, do you see the consensus voting cap being that much of an issue on the bearing of having a healthy network by having an appropriate level of incentive for validators, or in your experience will the cap on consensus voting power not make much of a difference (and the other two levers are really the area that the validator themselves and the governance community can use to make it attractive enough for people to be able to validate)? I mean this as an honest question and with sincerity (so we know how to keep things healthy for the network).

Thank you again so much - I hope you have an awesome rest of your weekend :slight_smile:

1 Like

I think you pointed to it yourself. It will sort itself in a month or two. Why address it now when there is so much on the table?

3 Likes

My only comment here is please do not rush proposals. Please give the community time to discuss and digest them. Thank you!

Terra Docs: Governance: Proposals:

“Proposals start as ideas within the community on Terra’s Agora forum. After gaining support and feedback from the community, a proposer drafts and submits a proposal alongside an initial deposit.”

4 Likes

10 % is good, but not less. BUT firstly lets motivate investors to delegate. Do not rush proposals. We should firstly make staking rewads bigger to make more people to delegate

4 Likes

Change community pool fees from 50 % to 10 % and staking rewards from 35 % to 75 %. This is code you can put to the proposal. Your change would not affect existing delegations so you still have to wait until people delegate to other validators to lower top validators voting power btw.

[{
“subspace”: “distribution”,
“key”: “communitytax”,
“value”: “0.100000000000000000”
},
{
“subspace”: “distribution”,
“key”: “baseproposerreward”,
“value”: “0.030000000000000000”
},
{
“subspace”: “distribution”,
“key”: “bonusproposerreward”,
“value”: “0.120000000000000000”
}]

1 Like

I think that Instead of change again the maximum voting power, it can be useful to set the minimum fee for a validator let’s say at 10%, so that also small validator can compete with big one, now the 1st 2-3 validator by voting power have commission at ZERO, maybe they have money to run a validator node and not take any commission, but for a small one, how he can compete if he have to set zero as commission to let the investor looks at him?
So minimum fee at 10%, where from the investor side looks like zero, my men 10% fee as minimum is zero added fee from validator.
After this and after 2-3 month, we can check if something change, if not we can think to put a cap at 15% or 10% for maximum voting power.

3 Likes

Honestly, i don’t think it is the right time to lower the voting power as far as 5% for now. That would be a good proposition if the ecoysteme was already fully fixed but it is not the case curently. My concern is that there is not many true supporter of lunc within the actual set of validators. So what if we have to pass a important proposal and we don’t even pass quorum because only 5 validators vote with there 5%voting power? Personally i don’t want to go back at begging at certain validators just to do what they are supposed to do because they are just not real supporter of lunc. We had to do it not so long ago but never again. I understand the need for decentralisation but 5% is way to low, 10% could be an acceptable middle ground for me.
As stated by others, i would prefer to harmonize the commission fee (mini 5%fee) to incentive people to spread their delegation between multiple validators. Usualy, it is better to incentive people than to limit them.

5 Likes

These proposals should be on hold. Why two at the same time? Lunatics, if you have a twitter account, please let the other validators know that these proposals are up for vote.

@tolben To piggy-back on an idea you had earlier, what about an auto-trim mech? For example:

When Validator’s Max voting = 10%, Auto-increase Validator’s commission by “X” every “N” days until threshold is less than Max. Then allow Validator to manually set commission after a cooling period in “N” time.

The advantages of this would be validators would be inclined to profit, and users could not blame validators as it would 100% automated. Thus, users would also be wary, and may stay away from validators that are too close to the Max threshold knowing that their commissions would soon increase.

Although I prefer simplicity, the zero commission shell game should come to an end, or it least should be limited in time.

1 Like

@Joe_Smith amazing idea, but is it really needed? When we set 10 % maximum voting power, after that we set better staking rewards to lets say 75 % and make better rewards for validators from 15 % to 25 % (community pool 0 %) everything should be ok.

Pros
Better decentralization
Higher staking ratio, lower circulation cap
Smaller validators gets bigger rewards so they can lower commisions make them more competitive

Neg
No community pool rewards for new projects or coders they should buy lunc for their money and profit from holding and staking…

2 Likes

I’m in the camp, that we all need more time to discuss, and this is way too rushed. Also, 10% seems to be a fair middle-ground and @Guillaume_L brings up a valid point about active validators that have been very supportive of LUNC.

That said, too many changes at this stage could be dangerous. I see so many basic issues that need to be resolved before we can run with more complex ideas. Supportive, but at the same time will lean to cautious.

3 Likes

this is what people are saying.

my opinion is that this won’t work. while the top validators might lose a bit they will still be way over 10%.

3 Likes

why would i want to stay away from validators that support community proposals?

hard pass

1 Like

We should set our calendar reminders for this time next year to remind us to submit this proposal again, when Terra Classic has a supply of hopefully 10 billion, is spread out nicely, and has more value…

Right now the governing of Validators is too powerful to vote yes on limiting their power… Because far too many delegators don’t participate in governance and TC is so cheap and accumulable, those validators (who are great at profiting $) have that power! For them, it’s mostly about the :moneybag: and they use what they’ve gained in past attacks to stay in charge of new projects (the whale class)…

We need a variety of delegators (many decentralized holders) who all participate in governance to regulate the whales that destroy networks for financial gains. Remember this critical move likely against the same whales that attacked us before and left us here, near zero.

This proposal will help prevent future ‘whale attacks’. The coming tax-burn (to 10 billion) will stabilize TC’s supply and when met with the demand change its value. Hopefully soon we’ll find a permanent balance between USTC & TC and stabilize them both at a capped supply that only increases in value as demand grows!

:fire::fire::fire::fire:

4 Likes

Agree and disagree. If top-tier validators would honorably raise their commissions, this wouldn’t even or shouldn’t be a topic for conversation. Can’t have 2/3s of the vote with four validators. Hard pass, bus pass, or free pass, we still have an issue.

If all delegators vote, those validators only profit from the staking aspect…

2 Likes