Dear Cosmos hub validators, Stakers and community members,
Last week the ICF announced the conclusion of their Delegation cycle 2 validator selection ICF Delegations Program: Meet the Validators (Cycle 2) | by Interchain | The Interchain Foundation | Nov, 2023 | Medium. This is based on the criteria and proposal originally voiced here: ICF Delegations Policy v2.0 - #20 by ZoltanAtom
We and many other validators with many contributions were awarded with a high points rank and thereby a high delegation. There is just one problem, a point cap based on VP ranking.
Although we agree that promoting decentralisation like this is helpful, the problem with the cap is that it INCLUDES tokens staked in delegations cycle 1. Let me illustrate with an example.
Lavender.Five Nodes Posted many contributions for the delegation Cycle 1 and were awarded 430k ATOM in delegations moving them up from rank ~ 110 to 65. After half a year of additional contributions the community awarded them with another 10 spots being at rank ~55 right now. Our total delegation of 880k ATOM is now being considered for the voting power Cap. In cycle 2 we are again rewarded with a relatively high point total for a potential of 165k ATOM delegation, However this is reduced by half because of the Voting power Cap. We will lose 430k Delegations, and then gain 80k putting us at roughly spot ~110.
Meanwhile teams that didnt apply or were less fortunate in cycle 1 (for example Keplr - nothing against them just an example) are moving from place ~75 → 50 because of their delegation. This is because they are not being Capped based on VP gained from previous ICF delegations.
So all this process of Capping points is really doing is pushing out some validators of the upper 60 ranks and putting others in.
To put it bluntly, we would have been better off if we did NOT apply to Cycle 1 (as it only counted for 6 months) and then got the full amount for Cycle 2 - as it will stay with us for a full year. These kinds of Loopholes should not exist in a well designed delegation program and disincentivize contributors like us to really put in significant effort.
We propose the ICF Re-calculates their delegations with a point cap but EXCLUDES all delegations made by them in Cycle 1.
We solicited feedback from other validators and many in the top 25 of contributions felt very similar, they are being punished for contributing consistently in both last and this period. Its demotivating and will only create further friction between the ICF and the validator community.
ICF representatives asked us to email this feedback and create a forum post, we have done both and hope it can still be considered although it looks unlikely.
Gijs - Ertemann