Migrate Stride to opt-in PSS

Hub Proposals Parameter Change
21

Thank you for bringing this proposal forward. We see the migration of Stride to an opt-in / PSS model as a positive and necessary step. It respects validator autonomy, avoids placing unsustainable obligations on Hub validators.

At the same time, we would like to highlight the importance of conducting a delegation program review. The validator set has changed significantly since the first round of Stride’s delegation program, and the current allocations through the LSM are now outdated. A reassessment would ensure that the validator distribution reflects today’s landscape and aligns with Stride’s decentralization and performance goals.

With this additional step considered as a natural follow-up, we are broadly supportive of the proposal and see it as an opportunity to both strengthen Stride and reinforce its role within the broader Cosmos Hub ecosystem.

3 Likes
22

Why off-topic discussions keep being discussed? This proposal is about PSS. The overhead was really high to select the current Stride liquid staking validator set and there were already two rounds of selection done by Stride not only one as you incorrectly suggested, it involved reviewing measurable metrics for all validators that applied and contributions, then multiple governance proposals on both Stride and the Cosmos Hub to select and approve the reviewers as well as to approve the validators with the highest scores. All the validators selected are still in the active set and kept the top uptime, governance participation and other metrics. Validators who were not selected shouldn’t use topics such as PSS here as an opportunity to trying negotiating other topics, please stay on topic and focus on the discussion here about PSS migration

23

Thanks for your support. Agreed we should do a delegation review soon.

3 Likes
24

This is now onchain

1 Like
25

I’ll be voting No on Proposal #1012, not because I’m against Stride evolving, but because of how this is being done.

By directing all Stride-related fees to just seven validators, the proposal effectively reshapes incentives across the entire Cosmos Hub. Even if it’s not intentional, it financially motivates delegators to move their stake toward those same validators to chase higher rewards. That’s not sustainable decentralization, it’s economic consolidation.

We’ve already seen how power tends to snowball around the most visible validators, and this structure accelerates that trend. What’s worse is that control over this configuration moves from on-chain Hub governance to a small multisig, removing the collective oversight that made ICS valuable in the first place.

Stride can absolutely leave ICS if that’s what they need, but it shouldn’t come at the cost of further centralizing power in the hands of a few. This proposal erodes the shared-value model that was supposed to define the Hub and replaces it with a selective payout system. That’s why my vote is No.

26

By directing all Stride-related fees to just seven validators, the proposal effectively reshapes incentives across the entire Cosmos Hub. Even if it’s not intentional, it financially motivates delegators to move their stake toward those same validators to chase higher rewards. That’s not sustainable decentralization, it’s economic consolidation.

This isn’t what’s being proposed. Only 15% of rewards go to the 7 validators. 85% is still used to buyback and burn STRD. Further - how those validators share rewards with their delegators is up to them, if they choose to do so at all. The fees pale in comparison to ATOM staking rewards, and validator commission rates still dominate. Validator brand, commission rates, and ATOM staking rewards shape the Hub - not STRD rewards to these 7 validators.

What’s worse is that control over this configuration moves from on-chain Hub governance to a small multisig, removing the collective oversight that made ICS valuable in the first place.

…

Stride can absolutely leave ICS if that’s what they need, but it shouldn’t come at the cost of further centralizing power in the hands of a few.

It’s true that the proposed setup is more centralized than ICS. But Cosmos Labs has told us that they’re phasing out ICS, so we have to start offboarding.

There’s a separate discussion to be had around how Stride delegates its ATOM on the Hub - internally we’ve been discussing re-running the delegation program, or moving to “copy staking”, like Stride does on Osmosis / Celestia. This would make it so Stride mirrors the stake weight of the Hub natively. But that’s a discussion for a separate post…

27

Thank you for clarifying some of the numbers, I understand that only 15% of Stride rewards go to the 7 validators and that 85% is burned. But for me, this isn’t about the exact percentages; it’s about the structure and the precedent it sets.

Even a small exclusive reward channel still centralizes influence around a handful of already dominant validators, reinforcing their brand and visibility while further shrinking opportunities for smaller ones. The optics of that matter just as much as the economics.

I also understand ICS is being sunset, but “offboarding” shouldn’t mean replacing collective Hub oversight with a closed multisig. We can design sustainable alternatives without compromising on decentralization.

And on the point about Stride’s delegation program, that’s exactly why this discussion matters. Stride already holds significant influence on the Hub, and decisions like this amplify it. I’m not against progress, but we should make sure we’re not trading long-term fairness for short-term simplicity.

28

Copy Staking is the worst idea, it is destroying decentralization by design.

Why would you increase VP of top validators proportionally to their already massive VP? It makes no sense.

1 Like
29

Hey all - some purely logistic stuff here:

The new owner address in this first prop (1012) is a Stride address, which will not be recognized by the Hub, so this prop as-is is expected to fail on-chain even if it passes. All of us who reviewed the prop missed this - the new owner address just wasn’t on my radar to double-check and test.

And then…the same incorrect file was used to submit a new prop (1013) - human error.

The Stride team has submitted a NEW proposal with the correct Cosmos Hub-side new owner address. Hypha has double-checked and reviewed all the addresses:

  • Consumer ID is correct - Stride’s consumer id is 1
  • Old owner address is correct - it’s the gov module
  • New address is correct - it’s a Cosmos address and Stride confirms they control it
  • Validator allowlist addresses are correct - they’re the valcon addresses of the 7 validators named in this proposal text
  • Validator set cap is correct - 7 is the correct number of validators
  • Top N value is correct - it’s changing to 0
  • Validator power cap is correct - it’s set to 1, which will force all validators to have equal weight

I would advise validators to vote on all proposals - I think they ought to hit quorum and refund the deposit because they are asking real questions and shouldn’t be penalized by having the deposit burned.

Thanks for understanding, everyone, and sorry for the hassle.

Here is the test result from a local testnet where we ran the prop with the Stride owner address, as proof:


 {
  "proposal": {
    "id": "4",
    "messages": [
      {
        "type": "/interchain_security.ccv.provider.v1.MsgUpdateConsumer",
        "value": {
          "owner": "cosmos10d07y265gmmuvt4z0w9aw880jnsr700j6zn9kn",
          "consumer_id": "0",
          "new_owner_address": "stride1fduug6m38gyuqt3wcgc2kcgr9nnte0n7ssn27e",
          "power_shaping_parameters": {
            "validators_power_cap": 1,
            "validator_set_cap": 3,
            "allowlist": [
              "cosmosvalcons1f6430p7tn2hv3h3snmxz4kljxeqj4azg0dhp6n",
              "cosmosvalcons1sp0ahp480h9w4myxqx5937lycqs9ze9qlur85n",
              "cosmosvalcons1v4pecuplsfp5sh39vfwpzg5e2x84mvfa8hgghx"
            ]
          }
        }
      }
    ],
    "status": "PROPOSAL_STATUS_FAILED",
    "final_tally_result": {
      "yes_count": "102000000",
      "abstain_count": "0",
      "no_count": "0",
      "no_with_veto_count": "0"
    },
    "submit_time": "2025-10-08T16:12:27.035764988Z",
    "deposit_end_time": "2025-10-08T16:13:27.035764988Z",
    "total_deposit": [
      {
        "denom": "uatom",
        "amount": "1000000000"
      }
    ],
    "voting_start_time": "2025-10-08T16:12:27.035764988Z",
    "voting_end_time": "2025-10-08T16:12:57.035764988Z",
    "metadata": "ipfs://CID",
    "title": "Switch to opt-in",
    "summary": "Update power shaping parameters and transfer ownership",
    "proposer": "cosmos1r5v5srda7xfth3hn2s26txvrcrntldjumt8mhl",
    "failed_reason": "invalid new owner address stride1fduug6m38gyuqt3wcgc2kcgr9nnte0n7ssn27e: invalid new owner address"
  }
}
30

@Stride Recently it seems Stride undelegated all ATOM without any previous announcement either here in the forum or X. Is this just temporary to move to the PoA chain and after the delegations will be restored?

31

Edit: after some research it seems that without any announcement or transparency in the Cosmos hub forum or anywhere apart from the Stride forums the following happened:

-In 2023 Stride carried out an extensive selection process over several months with governance proposals on both Stride and the Cosmos hub, this was done to select a very reliable and robust set for the liquid staked ATOM

-Because of the key mission of Stride is to support decentralization they had four different selection groups based on the 25% VP quartiles with competition within each group

-Drop announced they will wind down in 2025/26 and Stride failed to discuss with them to bring their ATOM to Stride

-Quietly in the Stride forum some ‘automated’ set selection proposal was presented, covering not only Stride chains with negligable AUM but also the Cosmos hub, their only chain left with significant AUM. This proposal suggested that the bottom 5% should be ineligible, but it seems the last time they checked mintscan was in 2024, because back then the bottom 5% was maybe the bottom 20 validators or so, but currently the bottom 5% is validators from 77-200, and then from the eligible validators they only choose 32 with the HIGHEST VP, so not only Stride fails with this to support decentralization but actually they are contributing to more centralization! On top of this, instead of having a reliable set of validators selected through an extensive process that took months, now this was replaced with a random bunch of already large validators

-According to https://analytics.smartstake.io/cosmos/lsm : the centralization is even more than I thought because they don’t delegate equally but delegate much more to the large validators around 17-20th, this makes it even worse. Moreover some validators in the bottom 5% got delegations which seems to show ‘rules’ are not respected when delegating to family&friends. It seems also there are delegations to top 5 validators, and several validators with ‘shutting down’ written in their moniker are also receiving delegation

33

I believe there is an opportunity to improve validator decentralization. A Hub-native liquid staking implementation could be designed to distribute stake more broadly and more equitably across the validator set, helping avoid excessive concentration and ensuring that liquid staking contributes positively to the long-term health of the network.

This is not a criticism of Stride or the work its team has done. Rather, it is a reflection on where critical interchain infrastructure should ideally reside. As liquid staking continues to grow, I think there is a strong argument that the Cosmos Hub should either integrate this functionality directly or replicate the core value proposition itself, especially for stATOM.