The Control of The Cosmos, protecting the hub from centralization

Tendermint Byzantine fault tolerance has been a revolutionary step forward in the decentralization of money and finance by the simple nature that it allowed more participation than just proof of work ledgers. Cosmos changed history upon genesis, but we still have a long way to go to manifest further decentralization, as well as proper incentive structures for stake holders. There is a veneer of decentralization among the Cosmos Hub, as 15 validators control the deterministic outcome for stake holders. All though we cannot discount the revolutionary aspects of Cosmos, we also cannot accept stagflation of virtues which act as pillars to the ethos of the crypto currency ecosystem. The quest to further decentralize the ledger and bring incentives for stake holders has just begun.

Governance centralization through the validator monopoly
There is growing disdain among the Cosmos about the centralization of governance. Cosmos stake holders should be forward thinking and see what the SEC is hinting at by targeting large stake pools run by centralized exchanges, such as Coinbase and Kraken. A large validator with majority stake is no different from an exchange, at the end of the day transactions are being processed. This set up emulates bloatware which reduces positive incentives for stake holders, the life and blood of the ledger. Validators are the only sovereign in the Cosmos, they get to control chains without holding any tokens. Those without stake, control the outcome of stakeholders. A capital structure which has led to lopsided incentives, validators not owning tokens reinforces the argument of ATOM being a security as their work directly benefits tokenholders.

Incentives are broken
Ledgers are not just analog technological slacks, they are socio-technological slacks, which must have the proper incentives to create human behavior that is positive for the economic system and stake holders. As discussed above, validators have increasingly centralized control over the determinism of the entire Cosmos ecosystem, by artifact of their ability to control governance. No one can verify if the validators determinism is aligned with Atom stake holders. Often, validators do not even hold Atoms and are thus gamified into soft power attacks against the network via anti antithetical incentives created by other networks which utilize the Atom infrastructure. This is dysfunctional, and forces validators to engage in politics and soft civil wars vs providing productive capital for the network, such as infrastructure. This set up also incentives bad actors, who prefer to engage in populism, vs empiricist who prefer to build and fine tune their software, coding, and engineering skills.

Community pool is getting pillaged, the unsustainable plenty.
The ICF rejected its initial mandate and its now directing all teams that it was supposed to fund via the community pool. Funds are getting disbursed with no accountability, paid upfront and without check and balances or ability to stop the initiative. Is the role of the hub to fund common infrastructure, without asking for anything in return? Are these 15 validators meeting and having steak dinners together and deciding how to pillage the highest amount? One favor for another favor. We do not think validators are better at governance then developers or Atom stake holders. Since the beginning of the year, stake holders are getting close to 1m ATOM worth of demands from various entities. There is no accountability or oversight; “just “send ‘x’ amount to this multisig and we promise to provide services”.

Governance votes

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

YES - If you think the cosmos hub should re evaluate the role of validators in governance
NO - if you think the hub governance is fine as is
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.

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Ok, so what is the proposed solution to this that we would be voting on?

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Our goal is to start the discussion within the cosmos community, and see if the problem is worth addressing in the first place, and brainstorm with the community on possible solutions.

You discuss here and then you make choices on the hub.

At least, that’s the norm.

I am a fan of freeform governance but I’d likely:

  • Vote no on the prop if it is just to discuss
  • Be happy to discuss here

My tldr on this topic is that validators choose nothing; stakers choose validators.

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In all honesty I dont think a signalling prop is a bad thing. I think its a great idea to discuss things here, then have a signalling prop such as this onchain, as any off chain discussions do NOT represent the chain fully

by definition stakers must choose a validator. As a consiquence of the inability of stakers to withhold voting rights, voting validators choose roughly everything…the CP tax, CP spends, base txn fees, implementing the LSM to centralize VP to top validators by selling LSD delegations at 250delegations:1validator bond, etc.

The issues that were enumerated by @fossFORfreedom are observably driving a significant amount of negative sentiment within the ecosystem and repulsing participants considering entry into the ecosystem.

given validators very apparent control of governance and ability to arbitrarily add, remove, mint, and change any rule or parameter that benefits their bottom line, it seems like defining stakeholder’s rights would be good place to start a conversation that gets the cosmos past the aforementioned negative sentiment.

I asked GPT to help start such a conversation and it suggested here:

Right to Transparent Governance:
1.1 Delegators have the right to access transparent and up-to-date information about the governance process, including proposals, voting mechanisms, and changes to chain parameters.
1.2 Validators must provide clear and comprehensive documentation regarding their governance practices, decision-making processes, and how they handle community pool funds.

Right to Equal Voting:
2.1 Each delegator shall possess an equal voting right, regardless of the number of tokens delegated.
2.2 Validators are prohibited from aggregating delegators’ votes without explicit consent. Delegators must individually and directly participate in the governance process, ensuring their votes are not manipulated or influenced unfairly.

Protection against Validator Abuse:
3.1 Validators shall not alter chain parameters solely for their personal gain or advantage.
3.2 Validators are prohibited from allocating community pool funds to themselves or their affiliated entities without clear community consensus and approval.

Governance Transparency and Reporting:
4.1 Validators must regularly publish reports detailing the use of community pool funds, including the recipients, amounts, and justifications for each allocation.
4.2 Validators are required to disclose any conflicts of interest or potential biases that may impact their decision-making processes.
4.3 Independent audits or periodic reviews of validators’ governance practices should be conducted to ensure compliance with established rules and prevent abuse of power.

Mechanisms for Dispute Resolution:
5.1 A transparent and impartial dispute resolution mechanism shall be established to address grievances and allegations of validator misconduct.
5.2 Delegators should have the right to file complaints or report instances of abuse, and appropriate actions should be taken to investigate and address these concerns.

Education and Awareness:
6.1 Validators are encouraged to promote educational initiatives and awareness campaigns to inform delegators about their rights, governance processes, and potential risks associated with delegation.
6.2 The project development team should support the creation of educational materials, tutorials, and resources to empower delegators with the knowledge necessary to make informed decisions.

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I wish that you had informed chat GPT, that the obvious appropriate venue for dispute resolution in cosmos is edny

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very forward thinking of you. I think conflict resolution through social consensus is preferable, but I agree, it seems increasingly likely with any meaningful adoption that conflict resolution will eventually be relegated to the courts.

I apologize is sarcasm is not easily detected online, we have a perfectly good dispute resolution mechanism here on the cosmos hub.

There are some parties who do not believe that though, and they believe that EDNY is a perfectly good place to settle their beefs.

ETH the chain. 10000 Cosmos makes you eligible to be a validator. And no one is required to run hardware anymore. We decentralize the 175 validators into thousands whether they like it or not.

Yeah, 60 minutes to send IBC packet using Eth consensus. Sounds great.

yes we need to tackle this problem. And an on chain prop can be a good idea because at least it will make people acknowledge that the current system needs improvements.

fix a limit to the validators voting power

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Sorry. I was not being serious. I apologize for using the board improperly. I just don’t see any way of expanding decentralization unless some power that was given is voluntarily given up by groups that I don’t believe will ever or are seeking decentralization further than absolute bare minimum passible for smell test of average passer by.

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Jacob got me going. His fault. Lol

I think this proposal is misleading and therefore shouldnt go on chain.

Its not true that 15 validators control the outcome of governance proposals. That would only be the case if none of their delegators would overwrite their validators vote.
A lot of Delegators take an active part in votes which we can see from recent proposals (Prop 801 ~60k votes). It would be interesting though to analyze which percentage of vp comes from delegators and validators.

I understand the criticism of the community pool spending. I would love to see a seperate proposal that defines requirements and payment plans for community spending proposals.

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