Relevant: The Only Social Network Built On Trust

As of last Friday morning, an early demonstration of stake centralization in the Cosmos Network 👉 ~34% held by top 3, ~52% held by top 5, ~67% held by top 9. So basically 3 validators could shut the network down and 5 pretty much control it.

0

Reply

Share

chris-remus

52.6

@chris-remus • 5 Years Ago

...

As of last Friday morning, an early demonstration of stake centralization in the Cosmos Network 👉 ~34% held by top 3, ~52% held by top 5, ~67% held by top 9. So basically 3 validators could shut the network down and 5 pretty much control it.

0

...

Very curious about how this develops. I should probably know a little more about the Cosmos validator / delegator dynamics. Are there any incentives to stake on validators that are not in the top 5 / 9 list? Or is it actually more risky? Also did the Game of Stakes have anything to do with this scenario or was that about something else.

66

...

Very curious about how this develops. I should probably know a little more about the Cosmos validator / delegator dynamics. Are there any incentives to stake on validators that are not in the top 5 / 9 list? Or is it actually more risky? Also did the Game of Stakes have anything to do with this scenario or was that about something else.

66

@chris-remus • 5 Years Ago

...

The incentives depend on delegator motivations, as well as herd mentality. Regarding the former, those who feel decentralization is critical are motivated to prevent stake centralization. The latter is more of a path of least resistance. People see the big stakes at the top and interpret them as some type of social proof, then follow along and delegate to them too. These people tend to be some combination of being purely motivated by financial gain, somewhat uninformed and/or don’t have the interest to educate themselves on the selection criteria and consequences.

0

@chris-remus • 5 Years Ago

...

The incentives depend on delegator motivations, as well as herd mentality. Regarding the former, those who feel decentralization is critical are motivated to prevent stake centralization. The latter is more of a path of least resistance. People see the big stakes at the top and interpret them as some type of social proof, then follow along and delegate to them too. These people tend to be some combination of being purely motivated by financial gain, somewhat uninformed and/or don’t have the interest to educate themselves on the selection criteria and consequences.

0

...

Can the validators offer incentives to delegate to them? I like how in Livepeer they can set the % of inflation/mining rewards they get to keep. This also helps bring validator fees closer to actual costs of tuning one. Although longterm can still have a tend to centralization and benefit the few validators that can operate on a small margin.

1

...

Can the validators offer incentives to delegate to them? I like how in Livepeer they can set the % of inflation/mining rewards they get to keep. This also helps bring validator fees closer to actual costs of tuning one. Although longterm can still have a tend to centralization and benefit the few validators that can operate on a small margin.

1

@chris-remus • 5 Years Ago

...

Yes, we can compete on “price”. My sense is this creates a race to the bottom. It can cause validators to then make unsafe operational choices to cut costs. I do like Livepeer’s two-pronged approach. (I‘ve been an active transcoder since last August.) However, right now the fee share is deceptive, since no transcoding’s being done. So a transcoder could offer 100% fee share, while really offering nothing, since there are no fees to share 😉 I feel the “rounds missed” stat, added fairly recently, is even more interesting. Including it helps shift the perspective away from cost and toward performance.

0

@chris-remus • 5 Years Ago

...

Yes, we can compete on “price”. My sense is this creates a race to the bottom. It can cause validators to then make unsafe operational choices to cut costs. I do like Livepeer’s two-pronged approach. (I‘ve been an active transcoder since last August.) However, right now the fee share is deceptive, since no transcoding’s being done. So a transcoder could offer 100% fee share, while really offering nothing, since there are no fees to share 😉 I feel the “rounds missed” stat, added fairly recently, is even more interesting. Including it helps shift the perspective away from cost and toward performance.

0

Reply

Share

Jehan

@JTremback • 5 Years Ago

...

Atom holders are incentivized to delegate to validators who are unlikely to get slashed, and have low fees. It’s also probably best to diversify.

45

Reply

Share

Jehan

@JTremback • 5 Years Ago

...

Atom holders are incentivized to delegate to validators who are unlikely to get slashed, and have low fees. It’s also probably best to diversify.

45

...

So each validator can set their own transaction fees? Is that the only way they make money?

1

...

So each validator can set their own transaction fees? Is that the only way they make money?

1

@chris-remus • 5 Years Ago

...

Yes, however my sense is less-experienced delegators will tend to weigh fees heaviest in their decision, at least until delegators start to get slashed and some pain is felt. On a related note, there’s some interesting discussion going on right now about the price war some validators are trying to start. You can find my take on this here [https://twitter.com/cjremus/status/1109780521884753920?s=21](https://twitter.com/cjremus/status/1109780521884753920?s=21)

0

@chris-remus • 5 Years Ago

...

Yes, however my sense is less-experienced delegators will tend to weigh fees heaviest in their decision, at least until delegators start to get slashed and some pain is felt. On a related note, there’s some interesting discussion going on right now about the price war some validators are trying to start. You can find my take on this here [https://twitter.com/cjremus/status/1109780521884753920?s=21](https://twitter.com/cjremus/status/1109780521884753920?s=21)