Addressing Misleading Practices by Melea Validator: Proposed Penalties and Community Actions

Hub Proposals Proposal Ideas
1

Dear Cosmos Hub Community,

Following the ongoing discussion regarding Melea’s misleading claims of 0% commission, despite the protocol-enforced 5% minimum, it is crucial that we now shift our focus toward actionable steps. The evidence presented in the previous forum post clearly shows that Melea has been falsely advertising their commission rate for nearly nine months, misleading countless delegators and undermining the integrity of our validator ecosystem.

Proposed Penalties for Melea Validator

To maintain the trust and transparency that are foundational to the Cosmos Hub and surrounding Interchain, we propose the following penalties for Melea Validator:

1. Temporary Suspension from Voting on Network Proposals:

  • Melea should be barred from participating in governance votes for a period of one year. This will ensure that they cannot influence key decisions while under scrutiny for deceptive practices.

2. Financial Penalty: 100% Tax on Staking Rewards:

  • A 100% tax should be levied on all staking rewards accumulated by Melea during the period of dishonesty. This tax would be applied retroactively for each month that Melea falsely claimed a 0% commission, which currently amounts to nine months. The taxed rewards should be redirected to the community pool to support network growth and decentralization efforts.

3. Public Apology and Rectification:

  • Melea must issue a public apology to the Cosmos Hub community and update their validator moniker to reflect accurate commission rates immediately.

4. Possible Tombstoning For Failure to Comply With The Above

  • While Melea has clearly violated community trust by falsely advertising a 0% commission, we must ask ourselves whether this action warrants a penalty as severe as tombstoning. And, if this penalty is even possible.

Community Actions to Prevent Future Misconduct

To prevent similar instances of deception in the future, we would like to engage the community and ATOM Accelerator DAO to discuss the following community-driven actions:

1. Ban all advertising and promotional content from on-chain monikers. On-chain monikers should be limited to validator name only.
2. Validator Transparency Index:

  • Develop a community-maintained index that ranks validators based on their transparency, honesty, performance and community involvement. Enhanced on-chain reporting could show that validators found to be misleading delegators will have their ratings lowered, discouraging delegators from staking with them.

3. Delegator Education Campaign:

  • Launch an educational campaign to inform delegators about how to compare and select validators, to make informed decisions when choosing where to stake their tokens.

4. Enlist the wallet providers and their teams to implement strategies to improve decentralization.

  • No longer display validators with the highest total stake at the top of the list in-wallet. This is creating further centralization. We propose wallet providers randomize the lists and even display validators with the lowest total stake first and in descending order.
  • Incorporate the transparency index discussed above.

We believe these penalties and actions are necessary to protect our ecosystem from further harm caused by deceptive validators like Melea. We encourage all community members to participate in this discussion and provide feedback on these proposed measures.

Let’s work together to ensure that Cosmos Hub remains a transparent, decentralized, and trustworthy network.

Thank you for your continued engagement.

Sincerely,

The Atlas Staking Team
@Govmos @BlocksUnited @freak12techno @FHZ @Quentin @Cosmos_Nanny @jtremback

2 Likes
3

Although this idea has some good intentions it leaves a bad precedents that might make some unforeseen concequences.

Banning validators from voting: it leaves space to ban validators for good or bad reasons. Besides I checked i think they voted only on one proposal acording to smart stake analytics dashboard. So this prop won’t do much here to block the validator for voting.

Financial penalties: this one is the most dangerous one IMO. It requires a lot of energy to achieve this. Code would need to be implemented and tested before it could reach mainnet. And I think devs should focus their attention to the develop of the Network instead focusing all attention how to execute this action on-chain.

Tombstone validator: unless there was a direct attack to the chain itself (example spam the network, write malicious smart contract, adding malicious code to the main repo etc.). At worst they deceived their stakers which I agree it is malicious indeed but what is next course when prop like this passes?

It leaves precedents that might get abused. So unless they harmed network directly (which they haven’t) i think this is too harsh. If I remember Gadikan did in a past like a signaling proposal for Allnodes where he wanted to turn their intention to hosting validator nodes for others (can’t remember on which chain gov prop was placed). We could do something similar stating misleading practices.

As for other points:
Banning promotional material: i dont know about this one. I kinda agree but some people sometimes place REStake or comething like auto-compound by their moniker. I could see this being implemented on explorers and any app but directly on chain I dont see how would this be implemented and regulated.

Only smart stake dashboard has some kind of validator tracking. To some small extent I think staking-explorer.com also has some info but nothing much. This feature would be needed to be implemented on some frontend.

Some kind of educational program could work but I don’t think it would have much effect. Most of the people stake withbsome of the validators they already stake or are in top 20. Still it might be worth to try it out.

As for wallet providers i think Leap wallet has this integrated. Keplr and some other explorer do not have randomised lists of validator durring delegation process. So I agree thos feature should be implemented.

4

As I stated before in a previous thread, I don’t like the idea of adding the on-chain code for tax penalties, or something similar - that adds extra complexity from the maintenance/development point of view, as @Kamikaza731 stated above, and also this is an abuse vector - imagine if a well-known team decides to make a proposal to punish some okay validator for disliking them, they probably can convince the community to vote in favour. I also don’t like slashing/tombstoning a validator for the same reasons.

I do agree though that raising awareness, changes in wallets/explorers on how these validators are being displayed and basically public shaming/calling them out is okay.

Also as I stated in the previous threat, such behaviour is not illegal (so it should not be treated as breaking the law by punishment or something), but immoral (so it can get treated same way as immoral actions are treated - by public shaming, calling out etc.)

5

All great points. If Melea continues to lie and steal, what do you suggest?

6

Yep, Leap and Trust wallet randomize validators, which is great. I wish Keplr and Cosmostation would do the same.

All of your points are valid and make sense. What do you suggest?

7

We appreciate the proactive approach taken to move forward with concrete actions following the previous discussion phase in this forum (link to the topic here). To provide a TL;DR on the challenges highlighted in the earlier discussion, our perspective leaned toward the necessity of a broader governance reform, ideally leading to a constitution for the Hub. Such a document would establish guidelines for validator naming practices and outline enforceable actions against non-compliant entities.

We also find Melea’s actions to be problematic and believe they should not go unaddressed. While creating this constitution would require significant coordination and time, we feel that immediate, actionable steps should also be proposed to the community to define acceptable practices for validator naming. These initial actions could serve as the foundation for a future governance framework constitution.

Proposed Rules:

To clarify our position on this matter, we propose the following principles to define an “acceptable range” for validator naming:

  • Validators should use the ASCII character set exclusively (non-standard symbols and special characters would be non-compliant).
  • Validator names should not be used for marketing purposes, such as promoting external content, links, or incentives aimed at attracting delegators.
  • Financial incentives should not be advertised through validator names (stakedrops, airdrops, fee rebates, lotteries, etc.) . Validators are welcome to promote these through other channels, such as social media or websites, but not through the validator name itself.

Proposed Sanctions:

Violations of these rules should come with penalties. We aim to refine our suggestions based on the author’s initial post, as follows:

We find this solution technically challenging, as it would likely require updates to the governance module, adding further dependencies. Therefore, we suggest passing on this option.

We support imposing financial penalties on non-compliant validators but feel that an on-chain tax would be complex to implement. Instead, we propose utilizing “jail-time” as a primary enforcement mechanism. Jail-time is an existing tool designed for handling governance-related violations and would not require additional module updates.

Proposed Approach:

  1. Misbehaving validators should receive a formal notice via a forum post, allowing 14 days for them to respond and present a defense.
  2. After this period, an on-chain proposal can be submitted, detailing the broken rules, proposed penalty, and linking to the forum discussion.
  3. Repeated infractions should incur increased jail-time, with extreme cases potentially resulting in tombstoning (permanent jail-time).
  4. If a validator attempts to evade penalties by spinning up a new entity, stake slashing could apply to enforce financial consequences.

For more details on jail-time, please refer to the Cosmos documentation: Slashing Overview | Cosmos SDK

Regarding complementary proposals, such as a validator transparency index or a delegator education campaign, we view these as supportive measures. However, we emphasize that jail-time, paired with a clear and fair set of rules, is the optimal approach.

Proposed Plan:

We propose splitting this initiative into two votes: the first to define the rules, followed by a second to enforce penalties on non-compliant validators. After a 14-day forum post listing non-compliant actors, validators would have sufficient time to modify their names to comply. For the specific case of Melea, whose long-term non-compliance is evident, we recommend a separate vote to apply a retroactive penalty. This could involve a set jail-time period, after which Melea would be permitted to rejoin consensus if they comply with the rules. Repeated violations would lead to progressively longer jail-time, culminating in tombstoning if they continue to disregard compliance.

Thank you for reading.
Govmos.
pro-delegators-sign

1 Like
8

Can echo many, not all, of the sentiments made by those who responded here.

Though it is painful to see a validator abusing their honorable role, all of this will be mitigated through a working constitution, where we should pool our mental resources into focusing on collectively.

If only we followed someone’s lead RE this earlier, but I digress.