Decreasing the number of keys Allowed

Hello Everyone!

I simply wanted to address directly the concept of decreasing the number of keys allowed per validator.

I think the harmony team is doing a fantastic job at staying on top of this topic and seeking community feedback, this is exactly the kind of initiative that will result in the best possible solutions and I applaud the efforts.

An Increased number of slots is a fine Idea. On its own it will likely have little impact on the diversity of the validators we see today.

A Slot Cap however can have the desired effect of increasing diversity, however it may also unwanted repercussions, as those that can afford it will see this as a minor inconvenience to overcome, with enormous upside potential.

This cap will disproportionately impacts those that are community staking vs self staking.

A self staking entity with complete control over the stake it obtains, (e.g. an exchange, large investment fund, etc.) can simply open a new validator to operate more keys. A community validator has the insurmountable burden of: 1.Educating its community 2.Balancing community stake across multiple nodes, and 3. Proper maintaining this more complex and costly system. This provides a significant advantage to those that are self staking, and further provides less competition to those that do.

As a result of whats listed above, we may experience a scenario where the most efficient stakers are these large self stakers over communities. (% return is based on BLS key efficiency and self stakers will now be at the top of that list rather than the bottom) which may in-turn lead to more community staking to the already large self stakers.

Although I do understand the principal of a BLS key cap on the efforts to improve the diversity of the network, if not carefully monitored it may cause the opposite effect in the future.

Some examples of solutions that have worked on other blockchains:

  • Lower the per key reward by some factor, and provide this factor directly to validators that meet a specific set of criteria (SEE IOST: uses a model to provide 3 tiers of grants, from a proportion of node rewards to those that provide community educational, development and other functions)
  • Decrease the number of Slots; This sounds unintuitive, however think of how stones / Sand fills a jar, Large stones will leave more gaps (to be filled by smaller grains) This will in-fact lower the number of Keys a validator can run, and increase the Jump between Validators creating more disparity in the amount Staked with each associated BLS…

I’ve put together a model for this and is really more of a discussion point than anything else.

I look forward to the dialogue and I trust the Harmony Team will find the best solution for the community.

See A Simulation for discussion purposes at: https://docs.google.com/spreadsheets/d/17HfJmld05BXeFXjDd9-BYsfFomV6bdwIagEQYkLFIa0/edit?usp=sharing

*Please note, this model does not take into account the competition of the existing validators after the minimum BLS bid is reached. This is meant to be a discussion point rather than an definitive answer for demonstration purposes only. Please feel free to add to this document or other, its free for public use.

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Thanks Juliun, good insights on the community validators vs self-stake validators. Could you explain the model you provided? It looks interesting, but I’m not clear on what it represents.

Nick

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This is why I don’t work in Marketing, Haha.

Essentially I took the state of the network based on SmartStakes data. I took a look at the Theoretical Optimized nodes based on this. So if you had 30MM ONE staked to you, and the minimum was 10MM your optimized position would be 3 keys. Like wise 6 keys if the minimum was 5MM.

If you take this data and Plot the Maximum number of Slots that all validators (active or not) could occupy today, you find that Fully optimized they would occupy the following:

At 4MM per BLS, 50 Validators could occupy 552 Slots (more than 320 so fully occupy the network)

At 10MM per BLS 49 Validators could occupy 282 Slots (leaving 38 Slots Open to competition amongst small validators)

At 15MM per BLS 36 Validators could only occupy 218 Slots (leaving 102 Slots Open to Competition amongst Small Validators)

Like in my example above, Large stakes become a burden with fewer slots actually, making the gaps between the “stones” larger and more varied for potentially very small candidates to occupy. vs a lower BLS average makes it possible for large validators to be more efficient.

Simply Put, 30MM
Over 4 keys is 7.5MM
Over 3 Keys is 10 MM
Over 2 Keys is 15 MM

The gaps between the keys is larger the more you’re required to operate and a 30MM validator cannot operate at 8MM… or 12… so whey they drop to a new key down it makes a massive space for smaller validators in the higher up in bid stake they have to offer

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