There are several staking/delegating practices by the Harmony team which have raised questions within the community. I would like for Harmony to address the following issues.
According to Smartstake, there are at least two Harmony-controlled wallets. My questions pertain to “Harmony Wallet - 2”, which is staking 90.4 million ONE to 13 validators. Some of these validators are community validators that many within the Harmony ecosystem are familiar with. But a few of these validators raise some concerns.
Wallet 2 is staking 5 million ONE with MyCointainer.com2 validator. This validator has NEVER been elected. The 5 million ONE was originally staked with MyCointainer’s previous validator, MyCointainer[dot]com (no “2”), but transferred to the “new” validator during epochs 967-968. MyCointainer[dot]com’s first validator was last elected during epoch 708. In other words, Harmony has been staking 5 million ONE with validators who haven’t been elected in over 300 epochs (~8 months)!
That is nearly 300,000 ONE rewards (non-compounding) from staking that is lost. Why is Harmony throwing away funds? These are funds that could potentially be used to pay the VDAO Term 1 governors that Harmony refuses to fully pay, and/or pay other Harmony DAO governors that Harmony had frozen funding for.
Harmony Rocket is another validator that Wallet 2 stakes with. This validator has less than 4.3 million ONE delegated to them. However, they routinely abuse the BLS key feature of EPoS and have attempted multiple times to bid 4 and 5 keys. This behavior directly blocks other small validators from being elected. Harmony Rocket validator is only able to do this due to Harmony’s Wallet 2.
To make matters worse, Harmony Rocket sometimes bids so low that they become unelected (e.g., epochs 1006 and 1016). Other times they’ll bid too low and only have a portion of their requested keys allotted. This causes inconsistent and missed rewards.
Another Harmony Rocket issue: Back during epoch 999’s hard fork, where it was imperative for validators to monitor their nodes and ensure a smooth upgrade, Harmony Rocket bid on and was allotted 5 keys. But they only signed 0.19% of their blocks! How is a validator with this type of performance acceptable to Harmony when Harmony’s own funds are involved?
Of the 90.4 million ONE being staked from Wallet 2, 60 million of it is being staked with two Stake DAO validators. One of them has 50 million ONE from Wallet 2 and charges 100% commission. The other has 10 million ONE and charges 5% commission. I understand that Harmony entered a partnership with Stake DAO, where Harmony funded Stake DAO with $3 million USD. But I don’t see mention of staking 60 million ONE as part of that deal. Can Harmony explain why they are staking 60 million with Stake DAO and why the one validator charges 100%?
A majority of the validators Wallet 2 stakes with charge the minimum 5% commission fee. However, besides the one Stake DAO validator that charges 100%, there are two other validators that charge 10%, and one apiece that charges 8.99% and 6%. There doesn’t appear to be a standard that Wallet 2 follows in their staking choices.
Wallet 2 also does not claim their staking rewards. There is currently 5.3 million ONE in unclaimed rewards. Are these not funds that could/should be better utilized by the core Harmony team?
*How does Harmony determine which validator to stake with?
*How does Harmony determine how much to stake with each validator?
*Does a validator’s commission % factor into the determination?
*Does a validator’s sign rate/up time factor into the determination?
*Does a validator’s BLS key behavior factor into the determination?
*Can Harmony claim it’s staking rewards at regular intervals in order to either compound staking rewards or to put back into the ecosystem via other means?
*If these policies aren’t already in place, will they be put in place? If yes, when?
*Should the community be involved in determining these policies?
As a blockchain committed to “Radical Transparency”, this information should be explained. The policies that Harmony uses to determine their staking actions should be defined and available to the public.