ICF, the leader of the Decentralized Staking Defenders?
The responsibility and main pressing goal of the Interchain Foundation (ICF) is or should be ensuring the decentralization of the Cosmos Hub with a healthy, available and secure set of validators. While the ICF has already taken some good steps, a lot remains to be done.
Firstly, if the ICF doesn’t accelerate the delegation and support of smaller or new validators, or if the ICF doesn’t launch an in-house validator just to make sure the amount of atoms the ICF has don’t get diluted, the ICF will be losing power to support the decentralization of the Cosmos hub.
Also, nothing has been said about the rewards the ICF obtains from their delegations, are they being redelegated to compound the rewards? If not, again: why the ICF allows itself to keep getting their atoms diluted and lose power to help with decentralization?
Furthermore, given how crucial it is that the Cosmos hub is well decentralized to support the whole Cosmos ecosystem, the Community fund should also be used to support talented validators, ideas or ways to improve the decentralization.
The goal of the ICF is to support available, secure and honest smaller validators that try to also increase their delegation to support with decentralization.
However, one of the validators that received a large delegation from the ICF not only is not putting effort to get more delegation, but this validator quickly put a commission of 100%, earning over $15k/month (at current atom price) from the ICF. This is an abuse of the ICF and given that the ICF can redelegate at any time, I urge the ICF to stop delegating to this validator which has also written some reasoning in their web trying to convince people to delegate to them despite having a 100% commission fee which is absurd and unhealthy for the community.
I had call with this validator and also after reading their website, etc., this is the conclusion and findings:
- They claim to have costs in the thousands of dollars per month but they only have one server so this is definitely false
- 3 people working around the clock: false, in their website they still claim the only way to delegate is using gaiacli, which is not true and not updated
- Even with their “rebates” after several months their commission is still well over 50% while the average commission is around 10%
- They are ranked 63rd but have monthly revenues of top 20/top 15 validators
- They do misleading marketing saying if you delegate to them the value of your atoms increases and you help with decentralization
- They only redelegate their rewards to themselves
- They use ICF and Certus names to promote themselves
Currently this 100% commission validator is the 12th largest delegation from ICF at almost 230k atoms (above chainflow, 01node, DragonStake, etc.). It seems ICF didn’t take into account potential 100% commission in their algorithm? (because apparently this validator had the 100% commission since genesis).
No Commission Criteria · Issue #4 · interchainio/delegation
Not intended as an issue, but rather a question/suggestion: I would suggest a maximum commission in the delegation…
Why decentralization is so hard and wealth concentration so easy
- Maybe we could increase the slashing amount for the biggest validators? They would just split into smaller ones pushing many validators below the 100 line
- Some warnings could be shown to delegators? Most won’t really pay attention or care
- Put a longer unbonding period for large delegators? After exchanges and others allow trading of staked atoms this won’t really make a difference
- Exchanges are coming with 0% fee and allowing trading of staked atoms, the risk of voting power centralizing in the top exchanges is extremely high
- Maybe governance could help? The biggest validators won’t vote in favor of proposals that don’t benefit them
- Wait, validators and delegators will redelegate their rewards to help with decentralization right? Not really, except ION and maybe a few others, most are planning to redelegate all rewards to themselves to increase self-delegation and delegators are likely to stay and redelegate the rewards to the same validators
We need more transparency, communication, community polls, questions, activity, strategy, monitoring and smarter ways to keep and improve the decentralization of the Cosmos hub from the ICF
If you liked this article, learnt something and would like to support me for further research articles about the decentralization of Cosmos validators, this is the donation address: cosmos13hv2dqh8rys022gw8cq9m7k0qn5zc3tcyxyshm