According to github:
“// The ValidatorBondFactor dictates the cap on the liquid shares
// for a validator - determined as a multiple to their validator bond
// (e.g. ValidatorBondShares = 1000, BondFactor = 250 → LiquidSharesCap: 250,000)
ValidatorBondFactor = 250
// GlobalLiquidStakingCap represents the percentage cap on
// the portion of a validator’s stake that can be liquid
ValidatorLiquidStakingCap = 50 // 50%
// GlobalLiquidStakingCap represents the percentage cap on
// the portion of a chain’s total stake can be liquid
GlobalLiquidStakingCap = 25 // 25%”
The 25% global cap and the 250 bond factor were mentioned and discussed during the signaling proposal 790. However, this 50% cap on individual validators wasn’t discussed before. So by introducing this cap you are basically setting in stone the current centralization of the Cosmos Hub. Let’s say a small validator contributes a lot and can receive large delegations from liquid staking providers, now because of this cap not possible since can only receive 50% of their current staked ATOM. A cap should be introduced for the larger validators so the centralization doesn’t increase further, not a cap on the small validators also making it even more challenging to improve decentralization. Or this cap refers to currently staked ATOM being directly liquid staked without the unbonding period, not delegations from liquid staking providers? @mmulji @mpoke