What does that mean though? What would that look like?
What is “perfect competition”? Is the current system “perfect”? Is that even a realistic and achievable goal?
Who is competing in this “competition”?
I don’t know exactly what your answers are, so I may be off base with my following remarks, but I don’t think there is “perfect competition” at the moment. Would/Should perfect competition mean perfect fairness amongst all validators? Would it remain fair no matter how long they’ve been a validator on the network? And no matter how many or few delegations they have? That’s more along the lines of what I would consider perfect competition
I wouldn’t consider the current “competition” fair or perfect. Larger and older validators inherently have a significant advantage. Much of that is/was earned. However, much of it was simply the product of circumstance, not competition
The competition shouldn’t be between validators for delegations. It should be between validators and the decentralization/security/operation of the network. There are currently hundreds of eligible validators who can all competently run a node. Does it do the network any benefit by making entrance to election as difficult as it currently is?
If “perfect competition” were the objective, why do some of the largest validators have max delegations set to 2 billion? How is that even a thing?
@TrickLuhDaKidz Perfect competition is a free market principle where there’s a large number of buyers and large number of sellers selling identical products with no influence over what price they charge, ie. commodities. The validator economy isn’t an exact perfect market, but it’s very close to one. My main point was that all validators should have an equal chance to compete for delegators. New validators have the advantage of being able to charge a 0% fee which gives them a better chance to compete. There’s a lot of ways a validator can earn the trust of delegators and grow their stake to where they’re comfortably elected. Many validators didn’t grow their stake amount by luck or chance. Most of us earned it through time, effort and dedication to the network.
Theoretical economics isn’t my forte. But I agree that new validators being able to charge 0% fees is an example of imperfect competition and not perfect competition
However, I don’t think the validator economy is close to a perfect competition. I took the following principles from Investopedia.com, and I don’t think Harmony’s validator economy follows any of them:
Market share does not influence price
Companies are able to enter or exit without barrier
Buyers have perfect or full information
From my vantage point, it is very much an imperfect competition: “For instance, imperfect competition involves companies competing for market share, high barriers to entry, and buyers lacking complete information on a product or service.”
Not sure if you follow much of what we’ve wrote in the forum, but we’ve always been an advocate for the community validators. We’ve supported max delegations, key caps, credit system to provide higher ER to smaller validators and those who use less keys, 0% commission for new validators, wider upper/lower bound range, validator bootstrap initiative, etc. Lately it seems that validators with higher stake counts are unfairly targeted by newer or unelected validators.
Validator.ONE is an independent node without any exchange or Harmony stake. We grew our node by engaging with the Harmony community and encouraging them to move their ONE off the exchanges. We weren’t an early adopter as we weren’t elected until the year after staking launched. Since implementing the 5% minimum fee, our node has lost 80 million in total stake with much of it going to smaller validators.
We’re not asking for your pity, but we just want to make it clear that larger validators can be allies and we’re not here to collude and perform hostile takeovers of the network. If there is a proposal our validator doesn’t support, its because we believe it’ll put indepedent community validators of all sizes at a disadvantage compared to those validators with significant self-stake or exchange stake.
What we want to see is more attention placed on traditional staking than defi or exchange staking. If the goal is to simply shift delegators from one elected validator to another, we won’t ever achieve higher levels of decentralization. We need to attract new delegators and grow our total network stake back to 45%+ from the 38.8% it is now.
I have no interest in “targeting” independent validators
I was, however, stating my observation that Harmony’s validator ecosystem is anything but a “perfect competition”. The inequities and flaws within the system are what I want addressed. And I think for Harmony to continue to grow and succeed, they must to be addressed
That you feel small and unelected validators are targeting larger validators supports it being an imperfect competition due to competition for market share. Conversely, smaller and unelected validators are faced with high barriers to entry that are exacerbated by the BLS key bidding process (the purpose of this discussion thread)
As an aside: Can someone explain to me why keys are “dropped” immediately following each election? What purpose does that serve? Is that how it was intended to work?
Having more total ONE staked - and staked to small and new validators - would certainly help with decentralization. And it’s something that needs to be looked at. But it seems like a difficult issue to tackle; one that will require a more long term strategy (how do you create a large-scale change in people’s behavior like that?). There are other improvements that can be implemented via the community and governance voting that would likely have a more immediate impact. And these more achievable strategies should be pursued prior to tackling larger issues that may have less of a chance at succeeding
I’m interested in the reason why keys are dropped immediately following an epoch also. Noticed it last Epoch and the chart looked like a cliff to flat water with everyone in the 10k range being eligible for the next election.
Assuming it’s a kind of restart for validators, insuring they get elected in a worst case scenario if they were unable to alter their key count again during that epoch.
It isnt hush hush. The epoch changes are causing problems due to validators deleting part of the harmony database to save space. The database has grown too fast and some validators can’t upgrade or can’t afford to upgrade. At the epoch if enough validators delete part of their database the shard fails to reach consensus at the start of the epoch. This results in missing blocks and some can even stop signing entirely. When a validator fails below 66% signing rate, they are deemed ineligible for election. As validators reach the 66% signing rate, they can become eligible again.
At the beginning of an epoch combined with the large amount of missing blocks means that a lot of unelected validators are labeled as elected. Slowly as validators meet the 66% threshold the minimum to be elected will rise and the unelected will then be unelected again for the next epoch.