In the Cosmos Hub, the total number of active validators is currently capped at 100, ordered by total delegated Atoms. This number was originally proposed in the Cosmos whitepaper section titled “Limitations on the Number of Validators” (https://github.com/cosmos/cosmos/blob/master/WHITEPAPER.md#limitations-on-the-number-of-validators). This number was chosen as a relatively conservative estimate, as at the time of writing, it was unclear how many widely distributed nodes Tendermint consensus could scale to over the public internet.
However, since then, we have seen empirically through the running of the Game of Stakes incentivized testnet that Tendermint Core with Gaia state machine can operate with over 180 validators at reasonable average block times of <7 seconds. At the time of submission of this proposal, the minimum delegation to become a top 100 validator is ____ Atoms, a fairly high barrier to entry for new validators looking to enter the active validator set. The tradeoff to higher number of validators is that the size of commits becomes ~25% larger due to more precommits being included, increasing the network and storage costs for nodes. This, however can be resolved in the future with the integration of aggregate signatures.
In the Cosmos whitepaper, it states that the number of validators on the Hub will increase at a rate of 13% a year until it hits a cap of 300 validators. We propose scrapping this mechanism and instead increasing the max validators to 125 validators in the next chain upgrade with no further planned increases. Future increases to the validator set size will be originated through governance.
EDIT: This proposal was changed from an initial proposed increase to 150 to an increase to 125.