HIP-30: Validator Network Optimization and Token Emission Reduction

referring to:

“220 million tokens will be allocated to ecosystem development, which includes recovery efforts.”

That would allocate ~4.3 MIL USD worth of $ONE…
but because of the large questions about how it gets managed/issued/allocated/protected…

I believe this is too large a topic to add to this HIP, without having to add so much detail around how it would be used as to make this HIP much harder to pass.

This is especially a large and sensitive discussion because Harmony has a history of executive orders funding things which the community outspokenly did not believe was wise to do so…

While I can agree that if we’re reducing the funds given to validators, that the amount we reduce it should be relevant to funds we allocate for other things… like ecosystem development, and in our case Recovery.

I would ask that this section is removed from HIP-30 so that it would be uniformly better received

To help clean up the HIP and then to bring this topic to another more detailed action plan/HIP.

1 Like

Keep in mind, the funds “given to validators” are the total staking rewards which will be cut in half.

Validators don’t get 441 million a year, their delegators do.


@Casey, why would abolishing the 6% of keys per validator per shard not be part of this HIP?

Why not have this HIP override that previous HIP (HIP-16 I think?)?

1 key per validator per shard. Period. No loopholes.

Currently elected community validators need to remain elected. But all of the validators with zero contact info available and no community engagement/responsiveness can go away for all I care.

As for the 441 million ONE, I would probably be supportive of a 20-25% reduction, but not much more.


This is what i had said :

Looks like it’s going in the right direction.

ChatGPT has entered the chat :joy::joy:

This proposal is different and would be an addition!

1 Like

The first 220m would go exclusively to recovery. The goal is 100% would go into recovery until the ecosystem is made right from the bridge hack.



HIP30-1 A 50% reduction seems excessive because it will affect the APR to delegators big time
HIP30-2 sure
HIP30-3 this mean a big cut in the validators?
HIP30-4: only 1 BLS/validator/shard? or 1 BLS key?

Big validators are still forced to divide their stake with multiple BLS keys taking the slots anyway and paying a lot more for hardware resources, this makes everything worst.

Just 1 BLS key per validator will open a lot more slots for different validators isn’t that better?


I think the key problem that is being overlooked is that it is not the validators earning these rewards. It is the delegates. A reduction in this reward emission will discourage and reduce the amount being staked and put additional sell pressure for $ONE. Investors are doubtful already in our reorganization tactics(too many hits and misses), a large un delegation and depreciating $one will hurt the network.

This will not do well with the retail investor. The 8-9% return Harmony is rewarding its stakers is not above industry standards and not even competitive with chains of our size. I still believe that funds needed for the core operation need to be sought somewhere that doesn’t discourage our delegates or validators. This is what has kept us going post-hack and brought stability to $ONE.


If it is theoretically possible, then it is probable that a 51% attempt will be made

Really great to see feedback taken on board with this proposal.

Block rewards are distributed by stake, so unless you foresee the total network stake reducing along with the number of validators I don’t understand how you’ve made the calculation that rewards will not be reduced.

Could you explain this further please with examples?

Like many other active validators I rely on my delegators for whom I earn rewards. I don’t get those rewards all to myself, I just take a modest 5% cut as an operator fee on top of my own staking rewards. This means if this proposal passes and my validator doesn’t make the cut for election, my delegators choose a new validator or they simply stop staking if it no longer seems worth it.

We only have ~40% total network stake right now so what is the minimum stake percentage you think is required to keep Harmony secure?

Yes - Having at least two shards is important for protocol development. All 4 shards are not necessary.

Undecided - I’m not sold on reducing available slots for a slight reduction in block time. With proposal 4 we might find not all slots are taken so perhaps we could review this as a separate proposal later?

Yes - I believe this is how EPoS should be implemented. It’ll pave the way for random re-sharding of validators and it requires significant additional resources are added to support the network as validator stake grows. Should help reduce stake centralisation and increase network resilience.


The problem here is the community has had no say in the recovery process or what the recovery funds are used for.

It would be helpful if we could have a community decided recovery process with actual governance.

Perhaps instead of simply making bot runners and recovery partners richer by burning useless assets, the community would rather the recovery effort was directed towards bad debt on Aave/Tranquil and used for liquidity for the new bridge tokens?


Finally, it has come to the correct decision-making process aka open governance - appreciate that much @Casey

I wish you be more precise with the proposal written and break down the necessary information, that made you think it's the correct approach to the future of harmony

Blockquote Harmony Q3 Off-Site: the 80-year story

Token Emission Reduction

By decreasing the annual token emission from 441 million to 221 million for staking, we aim to create a more sustainable ecosystem with a balanced supply and demand, fostering long-term growth and stability. Additionally, another 220 million tokens will be allocated to ecosystem development, which includes recovery efforts. This reduction in token emission for staking will not negatively affect validator rewards, as the overall rewards per validator will increase due to the decrease in nodes. This approach ensures that validators continue to benefit from the changes while maintaining a healthy ecosystem for Harmony’s long-term success.

I don't see any possible way to say YES to this proposal before you will not be able to present a specific tokenomics plan for this part of the rewards by answering at least these questions:

How much reward allocation will be spent on recovery efforts?
How much reward allocation will be spent on ecosystem growth - What is the exact plan for ecosystem growth?
Who and how is going to manage that rewards? (we have an example of centralised management for Horison’s keys)

FYI: After publishing the tokenomics in 2020 the rewards do not belong to the team anymore. They belong to the open community participating in open staking in roles of Validators and Delegators only.

Saying them that “We’d like to reduce reward twice sounds the same as telling you that your contract payment will be cut 2 times but your working hours and commitment stay the same”

1 Like

I wish you be more precise with the proposal written and break down the necessary information, that made you think it's the correct approach to the future of harmony

and increased rewards for each validator due to the decreased total number of nodes.

Are you really sure about that? I doubt that this statement is correct considering the actual number of validators elected with the current epoch state and the number of internal nodes per shard, about which you didn’t say at all. Especially when re-read your previous example calculation from the blog post below, that makes me think you didn’t find time to understand reward mech for staking in general (I mean validators and delegators, commission and distribution of rewards)

My 2 questions for this section are:

  1. How many internal nodes are staying per shard in case of 2 shards implementation?
  2. Will EPoS design stay the same
1 Like

What are the design for staking mechanics and a consensus mechanism in the case of 1 BLS key? Does it stay as known EPoS?

We need more discussions about how the recovery effort should continue.
Without a clear and secure plan of how the funds would be used for recovery @caseygardiner#0001
this seems like a bad idea to throw this idea into this HIP…

~4.3 million usd worth of $ONE could go a long way to boost development and the ecosystem on the network but from your reply it seems like it would all go to recovery… which is not ecosystem development.
The current recovery process is also facing great scrutiny from the community members which were involved as being ran by those whom appear to have self interests or less interest than is needed. As well as the community at large.
Not to mention there is not currently adequate oversight as to how things progress; to a point where community developers are leaving the network because of how it’s being ran.
The current method is acting to extract value from the network and our ecosystem rather than securing and building a better future and strong ecosystem…

I agree that removing the unpegged assets is essential but without a clear path for how you/the core team would spend/protect the funds aside from saying it’s for recovery, I would urge everyone vote against this measure for the sake of the future of the network.
Unless this point is removed until the recovery process can be corrected.


I can support the rest of this proposal… it’s hard but i understand.

Having the remaining validators fight it out over whom will get enough rewards to stay in profit (ideally)…
is what it is…
it’s trustless and easily verified by code and requires no humans deciding where to put money…

THIS does raise the question of what happens to the internal “leader nodes” which harmony operates?
we’re going from 1000 nodes (250 on each ) and harmony operates 100 leader nodes, and we’ll be going to 200 nodes (100 on each) and how many nodes will harmony be operating as Leaders?

Will there be any plan of action for attempting to support validators which DO provide ecosystem development for harmony?

frankly, Our Validator would likely not have enough stake to survive this proposal… but honestly it’s be operating at a loss for a long time… as have most validators…

1 Like

At this point, HIP-30 should be removed from this since it’s still in the planning stages and more details are required.

We shouldn’t have a 3rd governance vote with most of the details missing from the proposal on how it will be implemented, controlled and routed.

This plan needs to provide the transparency a decentralized network should deliver with proposals.

I highly doubt this is ready for a feasibility review or AMA.


Thank you for bringing this proposal to the forum for discussion, @Casey. Before diving too deep into the details of implementation, here is Validator.ONE’s initial comments on Harmony’s rationale behind HIP-30 with bold font representing text from Harmony’s original post and our comments below:

1. Enhancing network performance through sharding and node optimization.

Validator.ONE: We agree that 4 shards is unnecessary for now. 2 shards is optimal while keeping and enhancing the ability to efficiently scale to 4 shards (or more) at a time when necessary and after cross-shard technology has been further developed.

2. Ensuring long-term sustainability with a reduced token emission rate.

Validator.ONE: The concept of “long-term sustainability” is very subjective as it has been presented. We request that Harmony provide an estimation of the amount of ONE required to fund recovery efforts and how they plan to implement the remaining token emissions for ecosystem development. We tend to agree that all stakeholders, including validators and delegators, should contribute to recovery for the overall betterment of the ecosystem, but we’re less convinced that all stakeholders need to fund future ecosystem development.

We would prefer a more objective approach to token emissions be proposed where validators are expected to contribute X amount to recovery during a set timeframe with token emissions scheduled to return to its normal annual 441 million ONE when that amount has been reached. As Harmony responded above, they prefer majority of the token emissions go towards recovery, but don’t reference a specific amount that they consider necessary to achieve this goal.

As for token emissions for ecosystem development, we must vote No to spend token emissions for ecosystem development based on lack of information (no defined metrics or funding initiatives), economic and regulatory uncertainty (see recent SEC argument re: Bitrex/DASH on whether validators funding ecosystem development with block rewards triggers SEC security status), and Harmony’s reputation for poorly managing discretionary spending on ecosystem development (most notably DAOs, grants, events, Apes, RPC). Perhaps ecosystem development can be carved out as its own HIP, and validators can explore other ways to contribute whether via Validator/Developer DAO or a nonvoluntary or voluntary special assessment.

3. Increasing validator rewards by reducing the number of nodes and redistributing rewards.

Validator.ONE: We generally agree with this rationale and await Harmony’s response to the questions posed by other validators on how this will be achieved before commenting any further.

4. Encouraging new validators to join the ecosystem and fostering healthy competition.

Validator.ONE: Similar to our responses above, we generally agree with this rationale, however, it’s a subjective proposal and no data has been presented that demonstrates its past successes in encouraging new validators to join the ecosystem and fostering healthy competition, and how this would be achieved with theoretically less token emissions available for staking. In our experience validating on Harmony, we’ve seen several validators that have received Harmony Foundation delegations that either go silent yet continue collecting rewards or go inactive altogether (while keeping Harmony delegation for an unreasonable amount of time thereafter).

Other points to consider:

  1. 10% minimum commission fee: Raise minimum validator commission fee from 5% to 10% or higher to account for the 50% reduced emissions and reduced validator operational efficiency (1 server per key). This ensures that validators won’t be as negatively affected by the reduced emissions, thus helping maintain network stability and security.

  2. Consider how this negatively impacts staking benefits and its impact on the Harmony community. While ecosystem development is a laudable idea, there is no ecosystem without community and users. Harmony validators and delegators have remained a steady constant since network inception and through all its ups and downs, and we wouldn’t want to alienate those keeping the network together by saying others are more deserving of its rewards. As validators, especially community validators, we need to communicate this message to our delegators and it’s important for us that the message is well received.

We look forward to reading Harmony’s response to both ours and everyone else’s initial comments. This is an important discussion that must be had.


I still dun understand why the holders need to pay for mistake made by Harmony team and the root cause of the hack was also raised by the community before the hack was happened. It was the team who didn’t care to fix it and caused this password leak. At this point we are still not sure who was the person who leaked the password.

@Casey thank you for trying to fix this mess. I still think it should be the team’s job to sell it’s own treasury to fix it. If there is not enough treasury then find investors or white knight… if this still doesn’t work, then call the project off. Accept it, t’s a done deal.