[Discussion] enabling transfer of delegation ownership

Hub Proposals Proposal Ideas
1

In Berlin hackatom, B-Harvest implemented an interesting new msg type called msgchangedelegator.

Basically it enables any delegator to transfer his/her fraction of delegation to anyone. It can be explained as a “send” method of “delegation”

Both ownership and responsibility are also transferred to the delegation receiver, hence the security of the entire network does not change in a whole.

I expect staking derivatives product will be landed to our network no matter community like it or not, with bunch of complex decentralized mechanisms to make it work.

If it is inevitable future, why don’t we just allow transfer of delegation ownership in the core protocol to simply open the gate of various creative expansion of delegation ownership de-fi using the feature? With this new feature we dont need to work around for implementing staking derivatives. To put this in the protocol is the most direct way.

Of course it raises serious security concerns because delegators will have easy way to escape the responsibility of delegation before 21 days.

We want to start this hot debatable topic with our implemented feature at…

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2

I agree that staking derivatives are probably bound to happen, but I see no reason to make it easier to happen. Such financial derivatives would essentially benefit traders and whales, while bringing new security issues. Not to mention the risk of market manipulation from whales that have a lot of delegated Atoms.

3

I think real market should include whales. Market without whales is not representing whole economy. Easier to be manipulated without whales’ delegated atoms

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4

Could such a function allow large validators to collude by combining delegations and censoring the rest of the validator set?

5

@Gavin I am not sure how you mean “combining delegations”. Censoring by cartelling is already possible without this function.

But related to centralization, this function might lead to an additional disadvantage to delegate to small power validators because it will have relatively small secondary delegation market when delegator wants to liquidate his delegation. It is definitely one of the worst side-effect, and it makes us very hesitated to apply this function on the hub.