Dudley Flavored POS

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This conversation seems to be worth its own thread, and should rightly delve a bit into economics, politics and tech.

Basically, I’m in agreement on this. Also, I think that the hub is too far gone down its current path in order to be modified to suit this model, and that’s OK because if we’re being realistic, the strategic imperative for the cosmos hub is the deployment of interchain security. ICS is likely to boost the value of the atom and therefore allow it to secure even more projects, and be more and more sustainable as time goes on. This is a virtuous cycle, and so I want to preface all this by saying that this is not really a conversation about truth of steak on the hub but instead how we can do better in the future in cosmos. This is one of the great things about cosmos, we have that kind of flexibility.

  • Validators use the network as a user would

This point is a little bit unclear, but let’s say that maybe it’s referring to the fact that there really is no good for interface. Currently validator’s use the command line for almost everything and there aren’t great choices to get around this. I like to say that probably work being done on the telescope project funded by osmosis may be able to offer some relief in the user interface and user experience department. Otherwise I would need to ask Rick what he means here.

  • All validators directly fund software development

This is great! However, I think that this point would naturally entail a bunch of questions about what constitutes funding software and mapping of funds earned by validation to software output. I don’t think that’s done much in cosmos right now, and I think that it most certainly should be. Then there are the questions of capital efficiency…

  • The range of wealth between the biggest and smallest validator is at most 10x (maybe smaller)

I don’t think that wealth is the correct measuring. Instead, I think that we should be measuring by VotePower, I guess what I’m claiming here is that the current VP->earnings mapping in cosmos is approximately correct. I also think that this item would entail smaller validator sets.

  • Some governance decisions are token weighted, while other are one-validator-one-vote, for minority protection purposes.

This works for me. However, what if we sort of threw out minority protection purposes and instead looked at it from a purely technical standpoint, from a purely technical standpoint, things like will you run this upcoming consumer chain, are naturally one validator one vote. Also, I might be missing some context on the minority protection that Rick is describing. So Rick if you have any other comments on the minority protection aspect, please do chime in.

  • There is a relatively small common pool that’s used to fund marketing, development, etc. Most of these validators do on their own.

I think that Mr. Joe Dirtay made a powerful argument against large gov pools recently:

https://twitter.com/BTCjoedirtay/status/1543770630872412160?s=20&t=gtFmHqC-1YmI3o-yjnq62A

But my counterpoint to this is greed. What I’m saying is that read could produce great results here, and encourage the efficient use of capital. It’s possible that we should stop thinking about this as a tax precisely. It’s either that, or he is correct and we need to have a think on governance and funding in cosmos.

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  • Validators use the network as a user would

I think of Validators as a collection of service providers, I simply mean they should also consume the service they provide. For example, if the top 6 valiators on Osmosis were also the top 3 traders and top 3 liquidity providers.

  • The range of wealth between the biggest and smallest validator is at most 10x (maybe smaller)

This is related to a number of things:

  • Voting power
  • Block Production
  • Block Rewards (but not fees)

Basically, we want a PoA system but with scalable punishment for bad behavior and a signal to users regarding bad behavior. (I also believe we should be designing systems such that when validators fail to provide a service, such as failing to meet some timing requirement, the harmed parties should be paid by that given validator from their stake, this is out of scope, but I’m mentioning it for completeness.) I’m trying to describe a system where it’s clear who has what power and why.

  • Some governance decisions are token weighted, while other are one-validator-one-vote, for minority protection purposes.

I’m referring to the legal concept of Minority Shareholder Protection (Minority Shareholder Rights Archives - Business Divorce in NJ) I’m not a lawyer this isn’t legal advice, but we need something similar in blockchains because with just BFT, minorities are absolutely harmed, and if we don’t provide these protections in protocol, we are giving folks a lever to apply legal recourse to a chain. I also happen to think such protections are ethically the right thing to do.

  • There is a relatively small common pool that’s used to fund marketing, development, etc. Most of these validators do on their own.

This is mostly just to resolve bickering and yes, self-dealing. (It’s also worth being explicit in saying that what would qualify as self-dealing in the US today is so common in the blockchain space and expected, that a term other than self-dealing should be used for that behavior, I’m talking about the unethical form above.)

We need to be more comfortable with slashing, various forms of demurrage, and fixed supply tokens. Constant minting is obviously a problem in real life, and it’s normally solved by issuing a new currency, I believe we can do better.

Finally, I think delegation is generally a bad idea and should have been only a short term stopgap to satisfy investors, not a ubiquitous mechanism, it really skews the system in odd ways. It would better if users earned by providing service or with out-of-protocol agreements with service providers, basically as explicitly passive investors. Having passive investors at the protocol level, is inelegant.

I’m putting this theory into practice with the new chain I’m working on, you can learn more about it at laconic.com

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I think Proof of Engagement (PoE) by the TGrade team is the solution (cc: @ethanfrey ).

Over the time I’m having more appreciation in the design of Proof of Engagement. It’s not that easy any more to be a validator in PoE system, it’s more challenging: takes both responsibility and contribution into the account.
Recommended read: Delegators or no Delegators? Which path does Tgrade follow? | by Martin Worner | TgradeFinance | Medium

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Yes, it’s a similar idea.

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The interchain foundation pays for this kind of behavior.

Then, the interchain foundation claims that codes of conduct are there to protect me.

The second half of this Twitter space concerns this matter.

Will have an edited version shortly.

Rick is an ICF grant recipient.

Here’s the report we produced at Notional, our delegators funded this work.

https://www.notion.so/ICF-Delegation-Report-b4b8c62295564990800fb1226d585e4b

that is all. Everyone have a nice day.