Eliminate validator representation of delegators

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  • YYYY-MM-DD Created initial post

Summary

Eliminate validator representation of delegators

Details

Eliminate validator representation of delegators

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Governance votes

The following items summarize the voting options and what it means for this proposal:

YES - eliminate validator representation of delegators
NO - take no action
NO WITH VETO - A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance. If the number of ‘NoWithVeto’ votes is greater than a third of total votes, the proposal is rejected and the deposits are burned.
ABSTAIN - You wish to contribute to quorum but you formally decline to vote either for or against the proposal.

1 Like

Hi @jacobgadikian,

Thanks for starting this discussion. While this proposal seems to align with my long-held views on governance in Cosmos chains, I believe your rather empty post doesn’t fully capture its potential. However, since it can spark a valuable conversation, I’d like to share my perspective on this topic.

Understanding Voting Power

First, let’s differentiate between two types of voting power: Consensus Voting Power and Governance Voting Power.

In the initial stages of Cosmos SDK, developers envisioned aligning these two powers. They created a governance module where:

  1. Delegated stake from stakers contributes to both Consensus and Governance Voting Power.
  2. Inactive validators lose all voting power.

A key difference however is that stakers can override delegated voting power by directly voting on governance proposals. This approach seemed reasonable as on-chain governance systems were still new with few successful examples.

Time for a Change?

There are reasons to believe a change might be beneficial. While some stakers choose validators based on governance alignment, many prioritize:

  • Security: Staking with larger validators for perceived security benefits.
  • Reward Optimization: Choosing validators based on commission rates or additional rewards.
  • Brand Recognition: Staking with familiar names like exchanges, influencers, wallets, etc.

This leads to a voting power distribution that doesn’t reflect user alignment with their validator. Additionally, the current system has drawbacks:

  1. Staking with an inactive validator might indicate a strong preference for their voice to be heard. However, their votes are currently not counted.
  2. Staking with a validator jailed (e.g. for uptime) just before a proposal’s end block disqualifies all staker votes for that proposal, even if the validator unjails shortly after.

When Do We Need Validators’ Votes?

Currently, validators’ amplified voting power (through stakers) is seen as beneficial because they might be “more enlightened” and understand the chain better than individual stakers. Additionally, their votes are necessary to reach quorum (although the topic of adjusting quorum can be discussed as well).

However, not all proposals require this. Proposals like recent proposals 920 to 922 aimed at community elections didn’t need to reach quorum. In such cases, one could argue that validators’ personal opinions are no more valid than those of individual stakers. Without a need for quorum, such proposals could function solely with validators not inheriting stakers’ voting power.

Potential Solutions

Some advocate for forcing validators to use weighted voting based on staker votes, similar to what Crosnest validator does for specific proposals. While this amplifies staker votes, it risks users choosing validators based on the highest amplification ratio (most total VP compared to voters’ VP) to maximize their influence per staked unit (e.g. ATOM on Cosmos Hub).

My proposal is twofold:

  1. Remove liquid staking providers’ governance voting power. Liquid staking providers already influence consensus voting power, increasing validator rewards. While Quicksilver aims to offer qATOM holders the ability to signal intent, it introduces additional complexities and might not represent all users, as only those who actively signal their intent are included (and their preference is amplified).
  2. Introduce a Representative Layer:
  • Anyone can become a Representative : This system allows anyone to register on-chain as a “representative” who focuses on governance matters.
  • Delegation with Intent : Stakers can choose representatives they trust and delegate a portion of their voting power to each one. This percentage of voting power assigned is called “intent.”
  • A cascading Voting hierarchy :
    • In cases where the staker hasn’t voted, their delegated voting power is used by the representatives they chose.
    • Ultimately, a staker’s vote has the highest priority, followed by the representative’s vote, and lastly, the validator’s vote (if neither the staker nor the representative has voted).

This allows for dynamic voting power as staking fluctuates. Here’s why it could be a workable solution:

  • No immediate disruption: Upon upgrade, validators retain their current voting power.
  • Political actors can register: Once live, individuals with a governance focus can register as representatives.
  • Stakers can delegate: Stakers can choose who they delegate their voting power to, hopefully with the help of wallets.

The Benefits of Representatives

This system separates delegating to validators (for staking) from delegating to representatives (for governance), allowing users to choose based on both validator performance and representative governance expertise. Additionally, it promotes:

  • Dynamic Voting Power: Voting power adjusts as staking increases or decreases.
  • Community-Driven Governance: Representatives, potentially DAOs, could specialize in specific areas and openly communicate their votes.

Challenges and Next Steps

  • Rewarding Representatives: Finding a fair and sustainable method is crucial.
  • User Adoption: Encouraging users to select representatives through wallets and building trust in the system will take time.

Conclusion

This proposal aims to spark further discussion about establishing more user-friendly and representative governance in Cosmos chains. It’s a long-term vision, but continued exploration can lead us to what I call the “Governance End Game”.

Note: You can find my initial work on this concept on Github

7 Likes

until delegator capital is protected from validators, how will ATOM attract governance participants for any of this to be relevant?

cosmos validators have repeatedly demonstrated a disreguard for on-chain property rights across numerous chains. prop88 on the hub arbitrarily increased taxes on delegator rewards 5x and pooled the seized funds for validators to later spend on themselves.

prop16 on juno seized funds from a validator and it has yet to recover its reputation. It seems safe to say the same for ATOM following prop88.

there is no reason to think validators wont think of some new reason they need to double taxes tomorrow. so until delegator capital is protected from validators, you might as well stick to fiat

Hi Arlai, we already discuss about this so I will try to resume :slight_smile:

about your proposal,

I totally agree about the fact that wallets of liquid staking and team delegation should be removed from the equation,

You want to separate the consensus power (security) and governance power (politics), It will take a lot of time to generate a real separation of the 2 powers.

At least at the beginning, most of the validators will opt-in as governors, because we are looking for recognition, politics in an influence game and we have to take care about how this politic is made.

Governors will not have to run hardware and are not mandatory involved in technics to evaluate the smart-contracts or code upgrades. they will must be in team with multiple talents to cover all the aspects of the role.

You propose to make the change in 2 time, with a first step keeping the validator power in case no governors vote. I think if this kind of modification have to be made, it should be made in 1 time.

Now my personal opinion,

Create 2 different kind of staking,

  • staking for security (consensus) where you receive rewards from the inflation like it’s done right now, this doesn’t change anything

  • staking for politics (governance) where you give you power to express you opinion. In this model, the incentive are still to be found, but the governor remuneration could be taken on the gov proposal deposit.

The 2 staking will be separated, if the remuneration is taken on the proposal deposit, the “governor set” is self-limited and proposals will need to gather enough support to be pushed in voting period, the deposit does not return.

Another aspect we discuss together was about the UI on the dashboards (mintcan, keplr, ping…)
the problem is often the proposal presentation already display a tally, this have an influence effect to people who are voting “like the majority”
Maybe the tally should be hidden before the end of the vote

2 Likes