KysenPool agreed with Proposal 12
Are Validators Charging 0% Commission Harmful to the Success of the Cosmos Hub?
KysenPool believes that node operators shouldn’t charge a zero commission perpetually. We voted YES on Cosmos Hub 2’s Governance Proposal 12.
In the vote, our memo says
“KysenPool.io agrees 0% validator commission rates will be unhealthy in the long run”
The vote was cast positively to signal our opinion that a 0% commission practice from other node operators will be unhealthy as validators may end of competing on commissions to attract anonymous ATOM delegators.
Why did we Vote YES?
Allowing prolonged zero-percentage commissions will be harmful. This could lead to unhealthy competition where validators will continue lowering commission rates to attract delegators, creating a deadly negative spiral in economic rewards. If that happens:
- validators will benefit only if they run nodes with self-delegated tokens, defeating the purpose of the “delegated” part of DPoS
- validators who attempts to attract delegations only will then run on fumes as they gain near zero rewards (1 ATOM minimum to host a validator) while the network is still new with very little transactions
- validators won’t have many incentives to attract skilled knowledge worker nor can they afford to run enterprise-grade servers — creating risk exposures to the security of the Cosmos Hub network
- existing validators may walk away from being node operators of Cosmos Hub, failing the experiment and causing a ripple effect on other upcoming PoS networks
Our vote is recorded into the blockchain’s transaction history, visible in the link below (courtesy of Figment Network’s Hubble):
The Cosmos Hub community will have to be irrationally exuberant to imagine the network will attract new validators in the future to join in when Cosmos seeks to expand the number of validators in the future. We hope that this signaling attempt shows that community feels that there’s a lot of truth in discouraging, maybe even imposing a penalty to validators that run a 0% commission node for too long, or at all. The floor could be raised to some economically sensible rate, such as between 5 to 10%
We hope the core validators and developers of Cosmos hear this and moves towards this direction.
PROPOSAL DESCRIPTION
This governance proposal is intended to act purely as a signalling proposal. Throughout this history of the Cosmos Hub, there has been much debate about the impact that validators charging 0% commission has on the Cosmos Hub, particularly with respect to the decentralization of the Cosmos Hub and the sustainability for validator operations.
Discussion around this topic has taken place in many places including numerous threads on the Cosmos Forum, public Telegram channels, and in-person meetups. Because this has been one of the primary discussion points in off-chain Cosmos governance discussions, we believe it is important to get a signal on the matter from the on-chain governance process of the Cosmos Hub.
There have been past discussions on the Cosmos Forum about placing an in-protocol restriction on validators from charging 0% commission. forum.cosmos.network
This proposal is NOT proposing a protocol-enforced minimum. It is merely a signalling proposal to query the viewpoint of the bonded Atom holders as a whole.
We encourage people to discuss the question behind this governance proposal in the associated Cosmos Hub forum post here: forum.cosmos.network
Also, for voters who believe that 0% commission rates are harmful to the network, we encourage optionally sharing your belief on what a healthy minimum commission rate for the network using the memo field of their vote transaction on this governance proposal or linking to a longer written explanation such as a Forum or blog post.
The question on this proposal is “Are validators charging 0% commission harmful to the success of the Cosmos Hub?”. A Yes vote is stating that they ARE harmful to the network’s success, and a No vote is a statement that they are NOT harmful.
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