HIP-30: Validator Network Optimization and Token Emission Reduction

A soft cap is what is currently in place and Binance obliterated it.

I think a soft and hard cap are both needed. A soft cap that diminishes rewards to larger validators and incentivizes delegators to stake elsewhere in order to improve stake distribution of the network. A hard cap that prevents a validator like Binance from completely ignoring the soft cap.


100% agree - this thread is so all over the place that it’s unclear what we’re even discussing. HIP-30 proposed cutting staking rewards in HALF, yet we’re continuing the 5 year long debate on key caps, which is basically just a distraction at this point.

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we haven’t discussed that yet, but afaik, it was supposed to be a bundle with HIP30-3 hence 200. What I could see happening if we go with only HIP30-2, is the other suggestion, same sharding config as today but with 2 shards and hence 500 slots.

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Thank you for the extensive input from the community regarding HIP-30. We understand the concerns and questions that have been raised, and we will address them as thoroughly as possible.

  • HIP-30-1 and HIP-30-2 are going to be scheduled for a snapshot vote, and we understand the importance of these changes for both efficiency and the recovery process. We acknowledge that the entire 220 million emission tokens will be directed towards recovery efforts, as it is crucial for the network to make its users whole after the bridge hack.

  • Regarding HIP-30-3 and HIP-30-4, we appreciate the concerns and ideas shared by the community. We understand that the reduction of staking rewards might impact both validators and delegators. We are considering the feedback and will work towards refining the proposal to address these concerns.

  • Abolishing the 6% of keys per validator per shard is not included in this HIP, as we aim to focus on the current concerns regarding network performance and recovery efforts. However, we are open to discussing this further and potentially incorporating it into future proposals if needed.

  • We recognize the importance of maintaining a secure and decentralized network, and the HIP aims to strike a balance between efficiency and decentralization. We acknowledge the concerns about the potential impact on rewards for delegators, and we will ensure that the proposal takes this into account.

  • We understand that the reduction in rewards might discourage staking and affect the network’s security. We are actively exploring ways to mitigate these concerns while maintaining a sustainable ecosystem. This includes considering a higher minimum validator commission fee and evaluating the potential impact on the community.

  • The Harmony Foundation plans to redeligate to support new validators that bring value to the ecosystem. This will help maintain decentralization and encourage healthy competition among validators.

  • We acknowledge that the community should have a say in the recovery process and the use of recovery funds. We will work towards involving the community in these discussions and providing transparency in our actions.

  • We understand that the current recovery process has faced scrutiny, and we are committed to improving it. We will engage with the community to address concerns and work together to create a more secure and robust ecosystem.

In conclusion, we appreciate the feedback and concerns raised by the community. We will continue to refine the proposal, taking into account the valuable input we have received. Our primary goal is to create a secure, decentralized, and sustainable network, and we believe that with the support of the community, we can achieve this.

It’s evident that there are several aspects that need to be addressed and discussed further to find an optimal solution. Let me try to summarize the key concerns and potential directions for addressing them:

  • Reducing the number of shards and optimizing node performance: It seems that there’s a general consensus on reducing the number of shards to two for now and potentially expanding it in the future if the need arises.

  • Long-term sustainability and reduced token emission rate: There are concerns about the transparency of treasury management and how the funds will be spent. A more detailed plan for fund allocation and community involvement in decision-making may help alleviate some of these concerns.

  • Balancing validator rewards and encouraging healthy competition: The idea of limiting BLS keys per validator per shard has been discussed, as well as removing EPoS altogether. However, there are concerns about the implications of such changes on validator earnings and potential market effects. A more refined proposal for adjusting key cap limits or modifying EPoS bounds is needed.

  • Ensuring fairness in validator selection and preventing concentration of power: Suggestions have been made for setting a cap on the percentage of total network stake a single validator can hold or implementing penalties for exceeding this cap. Further discussions are needed to find a reasonable balance that promotes decentralization without creating unintended consequences.

  • Recovery effort governance: The community has expressed concerns about the lack of DAO involvement in the recovery process. Including DAO governance in the recovery effort can help promote transparency and community engagement.

The key takeaway from this discussion is that there are several aspects of the proposal that need to be reevaluated and refined to strike a balance between network optimization, sustainability, and community involvement. It’s crucial to continue this conversation and collaboratively work towards a proposal that addresses the concerns raised by the community.


HIP-30 Update

HIP-30 aims to drive network efficiency and transaction finality, expedite recovery and application development, and create the framework for sustainable growth and broader governance participation.

This update integrates community feedback, setting a trajectory to improve network utilization further. Additionally, this proposal advances our ambitious objective of achieving 1-second finality, accelerates the resolution of depegged assets, and establishes a foundation for community-driven use cases and ecosystem expansion.

This effort marks the beginning of a new and improved era of Harmony, promoting sustainable growth and greater network effectiveness. We continue to value everyone’s ongoing support and input as we collaboratively navigate this path.

Why HIP-30: Drive Network Efficiency and Application Utility

Our vision for network utilization revolves around two key aspects: efficiency and practical use.

Technological improvements that streamline operations and boost network performance, as demonstrated in our proposal’s ambitious goal of achieving 1-second finality, bring with them unparalleled efficiency.

Network utilization is equally about putting our network to practical use through carefully selected use cases. This is where the community plays a vital role. To facilitate this process, the governance structures within the Emission DAO, developed in collaboration with the community during the first year after the network upgrade, will ensure that emission funds are directed toward the selection and development of these use cases.

By implementing HIP-30, we optimize for both efficiency and application, resulting in a technologically advanced, community-driven network.

Details of HIP-30

HIP30-1: Splitting the annual token emissions between staking and ecosystem development. Keeping the token emission for staking proportional to the number of nodes on the network.

HIP30-2: Reducing the number of shards from 4 to 2.

HIP30-3: Decreasing the total number of nodes from 250 to 200 for Shard 1 for faster finality and actively developing towards 1-second finality.

HIP30-4: Limiting each node to 1 BLS key. Upon reviewing feedback and community input we have decided to omit HIP30-4 from the proposal.

HIP30-1: Splitting the annual token emissions between staking and ecosystem development.

The proposed emission split is proportional to the number of nodes on the network. The current 441.5 million ONEs emission is allocated for 1000 nodes. With the proposed 450 total nodes, it would equate to 45% of 1000 nodes, and thus the proposed emissions to staking would be 45% of the 441.5 million, which is 198.675m ONEs.


  • HIP-30 Snapshot Vote
  • HIP-30 Pass
  • HIP-30 Hard Fork Implementation with Updated Emissions
  • Start of 242.825m ONE Allocation Towards Recovery
  • Development of Governance Structures With Community
  • Development of Emission DAO
  • End of first 242.825m ONE Allocation
  • Emission DAO Guides Future Emission Allocations

Initial Allocation: All of the ecosystem split (242.825M ONE) will go towards recovery. These funds will be distributed in the form of burning and redemption of de-pegged assets. The burning and redemption of depegged assets will operate in a manner similar to what is currently being done with recovery partners. The specifics of how the ecosystem split will be utilized towards these efforts are detailed below.

Modulo has utilized a sliding scale variable return rate to push for the highest burn efficiency. Recovery1 is working on reducing bot interactions and focusing on pre-hack wallets with a whitelist of pre-hack addresses. Tranquil continues with its market buy and burn method. They will continue to take feedback to best serve the community. At our current recovery contributions, we estimate that substantially all depegged assets could be removed in around 91 months.

Outcome: With the proposed emission split of HIP-30, we estimate that substantially all depegged assets could possibly be removed within 18 months under the current process. Timelines may change depending on any number of factors related to user participation in recovery and general market conditions. Other potential allocation splits such as the 10%-90% allocation from the original post could lead to an even quicker recovery process.

Governance: During the initial allocation, where the ecosystem split will go towards recovery, governance plans will be proposed and created in collaboration with the community to clearly define the process for handling and allocating the ecosystem split in subsequent years. If a proper governance structure is not put in place by the time the first 242.825m ONE has been allocated, future allocation will continue to go towards recovery.

After Initial Completion: Once 242.825M ONE have been allocated towards recovery, the upcoming allocation of funds will be determined with community support per governance structures created during the first allocation. This governing body will be able to allocate percentages of the ecosystem split towards continuing recovery, reward stakers, or provide funding for new proposals.

HIP30-2: Reducing the number of shards from 4 to 2

Consolidating the network from 4 shards to 2 will streamline network operations, enhance efficiency, and still maintain the possibility of cross-shard communication in the future. This change will result in lower network latency and reduced communication overhead, translating to faster transaction processing.

We are currently underutilizing our network shards. The reduction from 4 shards to 2 will result in a more efficient network. The transition will decrease the amount of external slots from 900 → 405, and internal from 100 → 45. Thus, bringing the total slots available down from 1000 → 450. In order to maintain the same emission structure following the shard reduction, the ONE per block will be changed accordingly.

HIP30-3: Decreasing the total number of nodes from 250 to 200 for Shard 1 for faster finality and actively developing towards 1-second finality.

Reducing the number of nodes will bring unprecedented optimization to the network as a result of the previously mentioned decrease in the number of required message exchanges and limiting communication overhead. With 200 nodes in Shard 1, we would be able to work on faster finality towards 1-second finality.

The approach towards achieving 1-second finality involves decreasing the consensus latency by reducing the number of communication rounds between nodes in the shard. By doing so, the network can process and confirm transactions faster, improving overall network performance and user experience.

Shard 0: 250 nodes, 2-second finality.

Shard 1: 200 nodes, accelerating development towards 1-second finality.

The discrepancy in the number of nodes between Shard 0 and Shard 1 is part of the ongoing active development. Shard 0 maintains the current infrastructure while the adjustments are trialed and optimized on Shard 1. The reduced node count on Shard 1 allows the team to experiment with faster finality without impacting the whole network’s stability.

The number of slots and keys per shard will follow the current 6% key limit per shard. Assuming an even split of internal nodes, the Shard 0 limit would remain the same, 225 and 13, respectively. The Shard 1 limit would be reduced to 180 and 10. The reduction of shards, therefore, reduces the max key per validator from 52 → 23. More rewards will be allocated across Shard 0 to ensure an efficiency balance.

Achieving 1-second finality could bring significant benefits, including supporting higher transaction volumes, faster smart contract execution, and an overall smoother user experience. These improvements could increase Harmony’s competitiveness, especially for decentralized finance and other high-volume applications.


HIP-30 is proposed to bolster network efficiency, expedite transaction finality, quicken recovery, and foster long-term community-driven ecosystem development. The ultimate objective is to build the foundation for a network that is highly utilized with the efficient allocation of funds to achieve sustainable development and growth.


I love all of this. Zero complaints. Thanks for listening to the community :pray: :blue_heart: I’m :100: bullish for ONEs future. Also love the idea of this new DAO. :fist_right::fist_left:

Ok…so. By removing the blskey limit from the proposal how we could NOT expect thst the network will sit in the hands of a handfull validators? 495 slots available. Big ones will have keys in both shards. The limit will be 23 keys. 22 validators are enough to wipe out the rest, and we have way more than 22 validators in this position. Sorry. Can’t agree with that. Where is the decentralization? The goals are clear. But the means are still foggy. As i see it, either you approve the whole pack of changes or Can’t approve at all. Just doing some changes and ignoring the necessary changes to make it work would couse more trouble than solve it.


Will HIP-30 be voted as a package? Or will each proposal have its own vote? @theo1

Agreed. I’d like to see the simulation run. I’m worried about decentralization as well. The ecosystem will gravitate toward the most capitalistic and profitable distribution, unless rules are in place. Every industry without guard rails falls to greedy players. Banking, energy, mortgage, etc. There needs to be guard rails in place to prevent large players from grabbing the bulk of the slots. Please show us how post–HIP-30 life would look, given the current validator landscape.

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So if the same number of coins are staked as now, we’ll have half the rewards? ~4.5% APY - is that right? I mean for the average staker.

I’m halfway through building a new staking application and this would be somewhat bad timing.


I asked the question the other day and it’s a single vote for the package.


Without further key restrictions this looks like a disaster for the network and validator community.

I’d like to see some simulations but I’d be surprised if we have 40 validators after this change. Voting in favour would likely be suicide for my validator and all small validators would be wiped out overnight.

The emissions reduction still bothers me as the total network stake would need to be reduced down to 20% of circulating supply to get the same 8-9% APR. Network stake would drop dramatically when most of the current validators fail to get one of the limited remaining slots. What will happen to all this ONE? Some will change validators no doubt, but I’d expect a good proportion to be sold off.

Voting in favour of this proposal is voting for lower network stake and a much lower validator count. Decreased security, decreased network resilience and increase in centralisation.

It’s a no from me.

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Assuming internal keys are awarded block rewards, this plan will cut the return rate by 55%.

While it’s true each key will still get the same rewards, we’ll have 55% less keys.

Running some quick calculations this leaves us with 29-65 validators total depending on how heavy the big bois decide to sit.

Having only shard 0 and 1 will add a lot of monthly costs to being a validator having to run on shard 0 while you cut our delegators income by 55%. We currently don’t have a hard cap on keys at all per shard and they flex quite often, how would the code be updated to force keys to shard 0?

@theo1 do you have a roadmap of where we’re headed? The quarterly reviews are great but just like the first rule of Italian driving, “What’s behind us isn’t important!”.


It’s just me or anyone else has the same impression that the more is known about the expected scenario after this hip is implemented, the less it sounds like it will be the “walk in the park” that it was supposed/meant to be? :exploding_head:


Could we get someone from the team to fully break down how validator rewards work as of today?

@sophoah @theo1 @Casey


Aside from other concerns we have re: HIP-30, this part of the proposal is impossible for us to support. We can vote now on whether to fund recovery with block rewards, but we cant vote to have any block rewards after recovery is complete to be decided by an unknown governing body 2 years from now. After recovery efforts are complete, the rewards should go back to staking by default and we can hold another vote then to determine if validators agree that funding should go towards ecosystem development.

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Why would anyone agree to this?

With a current rewards rate of ~9.4%, the “proposed” rate would be ~4.2%? Sounds like a lot of users will simply leave Harmony altogether. Total network stake could plummet. Wouldn’t that make the network less secure?

Are you hoping that billions of ONE is unstaked in order to “readjust” the staking rewards back up towards the “current” ~9%? What is Harmony’s actual thought process here, because it makes no sense. Nobody is going to remain staked with a dead chain (effectively no defi, games, nfts, active wallets) like Harmony if they’re getting non-competitive staking rewards.

There will be a large sell pressure from stakers who leave, dropping the ONE coin price even further. Which will only be compounded by Harmony selling hundreds of millions ONE itself for recovery efforts.

Bad news bears.

I could agree to 20-25% of rewards being used for the recovery process. Beyond that specific use for only RECOVERY, Harmony would need to put up another HIP in the future with actual DETAILS on how the funds would be used for “ecosystem development” or whatever Harmony’s trying to PR it up as.

Ok. Everybody is fine with this.

I think everybody would be fine with this, too, if you hadn’t axed HIP30-4. As is, I don’t see how HIP30-3 works without HIP30-4. Or is Harmony’s intention to kill off the validator community on the network?

By removing this, how many (i.e., “few”) validators does Harmony project to have left standing once HIP30 is implemented? It feels like it would be devastating for the majority of currently elected validators. And the total chaos for users and stakers - which will assuredly ensue - will be a nightmare for Harmony. Though, I suppose Harmony is used to self-created nightmares by now.


This is also a concern I have. With the crypto market driving the price down right now, halving staking rewards and validator rewards is becoming even less attractive. I’d also like to know what harmony is ‘expected/anticipating’ to happen with stake levels if this were to pass. Also what is harmony’s goal with level of validators ? Is it 100+, 50, 20? I think to move forward it would be ideal to know Harmony’s level here and we can vote accordingly. Historically it’s always been pushed that more validators is better. A motion I only partially support as there is no point in 160 validators if only 10% are active. Having a large number of inactive validators in my eyes poses a risk in itself.

I also highly recommend splitting these into separate governance votes to get a higher chance of passing certain elements of this hip.

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where did you ask that? can’t find on the forum