Validators.. The Cancer of Cosmos?

[Tagu]

Three words that come to my mind when I think of validators: cancer, gangrene and viruses.

Cosmos, the internet of jeeters.

Validators are largely responsible for the slow draining of all the blockchains in the Cosmos. They receive a free allocation, delegations from holders, delegations from the foundation. Stake, claim and sell indefinitely. They don’t care about security and are only active when it comes to pushing proposals to: extract value, set a minimum commission, receive incentives for themselves, allocate money to their friends and redirect the rewards of holders to the community pool to extract more money.

Cosmos has about 107 blockchains right now and probably 90% of them have no viable business model, huge inflation, few users, and also they share more or less the same validators. In an ideal world, validators should have evaluated the business of each chains and refused to validate the ones that were not viable. The reality is that they take the airdrop and validate all the chains, regardless of the economic viability, just to extract value. Defeating the sole purpose of ATOM which is to provide security and liquidity.

Just look at the list of Atom validators, then go to any Cosmos chain and look at their list of validators: spoiler alert, they are all the same. This explains why ALL Cosmos chains have the same chart… a slow rug.

I won’t even talk about corruption, or the fact that they take the voting power of all delegators for their own benefit. Fragmentation of users and liquidity. We need to find a way to stop all of this.

An easy fix could be that all validators from those useless chains shut down their validator all together, forcing the chain to either redeploy with a smaller set and inflation parameters with PSS or simply as a Dapps or a protocol. But no… why would they do that ? They would loose their precious rewards to dump. So they will not.

[Cordtus]

Ineresting… Great insight, and an even better realistic solution.

[Tagu]

Yes like you’re 9 words reply are any better. Why even responding at all if it’s for not addressing any concerns or give zero argument trying to prove me wrong ?

Can you at least explain why validators are validating chains with sub 300 users MONTLY ? Why those chains even exist in the first place if there is zero business ?

[David_Crosnest]

Hi, thanks to post on the forum.

@Tagu

validators should have evaluated the business of each chains and refused to validate the ones that were not viable.

As validators, we often question if we should or shouldn’t join a chain.
You mention the fact that some chains have less than 300 users monthly and are still validated.

Maybe at the early times of the project, the chain had a real potential and could deliver a new experience to users.

Maybe some chains didn’t fully delivered for now. You highlight SEDA which is a very good example and didn’t yet delivered his main product after the token migration from Ethereum to Cosmos.

@Tagu

They receive a free allocation, delegations from holders, delegations from the foundation. Stake, claim and sell indefinitely.

I seems to forgot a things.
Validators are, or should be, professional peoples working to provide the best infrastructure in order to keep decentralized project running safelly and efficiently.
Most of the validators doesn’t seel most of the commissions, and i they do, it is to be able to pay the costly inrastructure they are running.
If we take a commission on the rewards, it is to be able to keep a sustainable activity.

@Tagu

An easy fix could be that all validators from those useless chains shut down their validator all together, forcing the chain to either redeploy with a smaller set and inflation parameters with PSS or simply as a Dapps or a protocol.

As validators we have a moral contract with our delegators. they placed their trust by delegating and we cannot simply say “ok, thanks for the fish and good bye”.
Stop validating a chains need a good communication to be sure peoples who doesn’t look every days to their position are not left on an inactive validator.

[Syed]

I’ve been checking out Polkadot’s OpenGov recently. I think their curve-based Support and Approval concepts are very interesting and likely can be ported over. Even the concept of “Vote with Conviction” - i.e. lockup your votes if you really believe in this, is quite interesting.

Check out: OpenGov | Polkadot or a proper deep-dive here

[Tagu]

Hello David , thank you for your reply

@David_Crosnest

Maybe some chains didn’t fully delivered for now. You highlight SEDA which is a very good example and didn’t yet delivered his main product after the token migration from Ethereum to Cosmos.

I’m agree at the beginning of their life, chains cannot have many users… → unless they successfully attracted users through testnet and incentives. But my point still stands, I look map of zone again and this time up to 1000 users monthly, which is still low for a full fledge chain, and there is 36 chains bellow that numbers… 36% of the entire Cosmos is micro chains with very low, if any, economic viability. And we could easely go up to 5000 to actually show some community and users engagement, which is then, 65% of the Cosmos being gosht chains; This is hurting all of us, by fragmenting the ecosystem into new dead chains every few weeks or so. It is the responsibility of Validators. Who els if not?

@David_Crosnest

Most of the validators doesn’t seel most of the commissions, and i they do, it is to be able to pay the costly infrastructure they are running.

What about lame proposals to allocate millions of dollars for useless stuff and they all vote yes ? They only participate when it benefits them (money wise). We try to pretend Validators are some good heart and altruist people who just want to provide good infrastructures for the love of Cosmos. No, some are good people, many are here for the money and we can clearly see that.

Maybe they would have less costs if they weren’t running 85 different chains and would only focus on a few good products instead.

@David_Crosnest

Stop validating a chains need a good communication to be sure peoples who doesn’t look every days to their position are not left on an inactive validator.

I’m fully agree with that, and we have seen some example, like Mars, shutting down their app-chains to become a protocol running on Neutron and Osmosis. I’m not seeing any communication from Validators and other chains to move forward in that direction, zero. If it does take time to shut down a validator, then better hurry and start doing it now and not wait any longer. By the time they do, we may have 20 new chains, with 80% being useless.

I’m curious, @David_Crosnest , with your words, how would you explain the obvious slow rug on 99% of all cosmos chains that we have seen for the past years ?

Hey @Syed , always a pleasure !

Are you reffering to a model where Validators do not take delegators power vote? If yes, I’m agree and think we need to move to this direction, or at the minimum, put some hard quadratic systems that nerf significally delegated stake in governance. I remember seeing some discussion going this way last year, but it went silent ever since.

Also, do you think Validators would vote yes on a proposal where they loose governance power ? I could very well see them just vetoed the prop lol

[David_Crosnest]

@Tagu

What about lame proposals to allocate millions of dollars for useless stuff and they all vote yes ? They only participate when it benefits them (money wise). We try to pretend Validators are some good heart and altruist people who just want to provide good infrastructures for the love of Cosmos.

I agree with you some proposals are just waste of money.
Many validators are using bot to vote on the proposals, and yes, this is bad.

But for many chains, the governance participation is taken into account for foundations delegations. And without this delegations, you loose a lot of chance to maintain your validator in the set i you are not a big company or a youtuber.

on another hand, in a general way, if the chain teams ask to vote on a proposal, may validators just vote YES without review. this is bad a well.
It is the same with delegators, many are just looking at the trend and follow it (if the graph is green, why does I need to vote NO ?)

At Crosnest, on very disscussed proposals, we are using weighted-vote based on the delegators vote. if 10% abstain, 40% vote yes and 50% vote no, we will weight our vote with the same values.

@Tagu

I’m fully agree with that, and we have seen some example, like Mars, shutting down their app-chains to become a protocol running on Neutron and Osmosis.
I’m not seeing any communication from Validators and other chains to move forward in that direction, zero.

Mars should have been a smart-contract since day one. The chain was only a governance stuff and the governance was applied on the contract of-chain.
But moving in this direction need the team to follow. A chains does not mandatory need to have full set of validators so validators can leave a set if they want.
But again, if the validator want to do it clean, it take a lot of time and communications.

@Tagu

I’m curious, @David_Crosnest , with your words, how would you explain the obvious slow rug on 99% of all cosmos chains that we have seen for the past years ?

maybe the fact we were in bear market ? maybe the fact many project are not market-fit ? not only on Cosmos, How many token follow the same trend on Ethereum and Binance Smart Chain ?

@Tagu

Are you reffering to a model where Validators do not take delegators power vote?

It is the model of GovGen

@Tagu

Also, do you think Validators would vote yes on a proposal where they loose governance power ? I could very well see them just vetoed the prop lol

You know that validators vote only with non-used voting power by the delegators. if all the delegators vote, the validator will only vote with it’s self-bond.

[NikoDoesCosmos]

Some validators such as GeoStaking, CrosNest, CosmosRescue, and many others I’ll refrain from listing have been incredible. I’ve actively been working as a community manager in the space for about 3 years now and I can confidently say that they’re some of the most experienced, sophisticated and educated contributors. However your point still stands - some are just leeches. I suppose this is somewhat expected and natural as in any ecosystem there are top performers and there’s “everyone else” to put it bluntly. I’ve often wondered if there’s a need to introduce more sophistication at the level of the SDK.

Potential features such as: Val specific inflation derived multipliers for top tier contributions. Instead of paying uniform block rewards, the chain could incorporate a secondary factor (based on metrics or chain contributions). For instance, if a validator is running the IBC relayer essential for your chain, they get a small multiplier in block rewards. If they maintain full archival nodes or supply oracles, they get additional compensation, etc and a community voted “x-factor” like indicator for cases like CosmosRescue which are just a tremendous security asset on top of being a responsible validator.

In general the gist of what I’m trying to say is that there’s nuance. Blindly hating on validators isn’t optimal. Blindly believing that since they’re validators they’re some god send highly aligned impeccably ethical contributors also isn’t optimal. When it comes to validators - analyzing on the level of the validator as opposed to as a whole is preferable.

[Syed]

@Tagu

Are you reffering to a model where Validators do not take delegators power vote? If yes, I’m agree and think we need to move to this direction, or at the minimum, put some hard quadratic systems that nerf significally delegated stake in governance. I remember seeing some discussion going this way last year, but it went silent ever since.

So on Polka gov, the key differences to our gov for me are:

• Governance is split into different tracks. Say “Software Upgrade Track”, “Contract Launch”, “Small Spend”
• Depending on the track, the voting period and approval thresholds are different
• So Software Upgrades could have a voting period of 5 days, Contract Launch 30 days, etc
• Also, depending on the track, the support (quorum) and approval rate differ: e.g., Software Upgrade needs 90% quorum, with 90% supporting it. Whereas a “Small Spend” track of $500 funding prop could have a 30% quorum and a 50% support
• They also have a Curve-based approach to approval - i.e. if 99% of the network votes yes in the first hour, the prop could just pass within the hour (think security).
• But the thresholds go down based on a curve - e.g. Day 1, 99% need to vote in order to pass; Day 2, 80% need to have voted in order to pass, etc (i.e. we action props without waiting for large vals)
• But most importantly, you can delegate your voting power to “Experts” for each track - e.g. I’d probably delegate my voting power for Software Upgrades to the Hub Eng team, while my voting power for “Contract Launch” could go to whoever I think is a good judge of GTM plans (assuming contracts are apps, no point launching apps that won’t have traction).

Obviously, there are a lot of nuances, and they have built protections around a bunch of issues - defo recommend reading their docs.

[Winfred]

@Tagu

They don’t care about security and are only active when it comes to pushing proposals to: extract value, set a minimum commission, receive incentives for themselves, allocate money to their friends and redirect the rewards of holders to the community pool to extract more money.

Thank you for drafting this post as I think it may lead to some meaningful discussions. With that said, I would say this is a misrepresentation of the work that validators do - at least I can speak on behalf of Stakecito where we have made it our core mission to make information and education as accessible to the entire Cosmos as is possible with the limited human resources that we have.

Validators do do a lot of work behind the scenes to support infrastructure too, working closely with core teams. For us, it actually goes beyond doing just that, we invest in some of the networks we are active on, in addition to supporting networks wherever we can facilitate networking, user onboarding from our large community etc.

[viv]

@Tagu agree on most of points. most of validators bring no value to the ecosystem. it takes very little time to get one up and running, and with community allocations from the chain you get into the active set right away. another thing is that oftentimes to get the allocation from the chain devs you kinda agree to vote “yes” to any proposal that they push through…

@David_Crosnest

Most of the validators doesn’t seel most of the commissions, and i they do, it is to be able to pay the costly inrastructure they are running.

dude, it costs a couple hundred bucks a month to run a validator. when was the last time you checked hardware requirements for running a validator and the infra pricing?

[David_Crosnest]

@viv

when was the last time you checked hardware requirements for running a validator and the infra pricing?

Almost every month we have thousands of dollars’ worth of infrastructure to keep operational.
Gaia is not the higher requirement but could ask much more with increase of block rate and more cosmwasm contracts.
But as soon as we increase the number of chains we operate and achieve economies of scale, we can spend much less per channel for the same efficiency.

[viv]

@David_Crosnest

we have thousands of dollars’ worth of infrastructure to keep operational

I assume thats the total worth of your infra, not the monthly payment.

@David_Crosnest

but could ask much more

do you have any specific numbers in mind?

afaik you can get a server with 2x the requirements for any of the existing cosmos chains for $200 - $400 per month depending on where you get it.

[David_Crosnest]

@viv

I assume thats the total worth of your infra, not the monthly payment.

monthly, for all the chains we operate.

[viv]

@David_Crosnest

monthly, for all the chains we operate.

yeah, a few hundreds a month per chain surely adds up to a couple of thousands considering you operate on many chains. but you know, thats not much compared to what you make off $240m TVL, so it’s not like you’re against all odds to be profitable here

the point is that most of validators have no idea about the software they are running, no knowledge of the codebase of the underlying chain, etc. they just rent a server and cast a vote once in a while, being the top avenue for the value to leave the chain. thats the main reason why every single cosmos token inevitably goes to zero.

[David_Crosnest]

@viv

the point is that most of validators have no idea about the software they are running, no knowledge of the codebase of the underlying chain, etc.

I’m totally in line with you on this point

[btruax]

You’re onto something valuable here. Continue.

[jacobgadikian]

I’ve been checking out Polkadot’s OpenGov recently.

It’s good. better than ours even.

[jacobgadikian]

@Tagu

An easy fix could be that all validators from those useless chains shut down their validator all together, forcing the chain to either redeploy with a smaller set and inflation parameters with PSS or simply as a Dapps or a protocol. But no… why would they do that ? They would loose their precious rewards to dump. So they will not.

Eh overall I see this as a so-so analysis.

But the ideal model for Cosmos or anything doesn’t have validators. Every user validates.