Since the launch of Open Staking, there has been a gradual decrease in the number of unique validators elected on the Harmony network. We are concerned about this trend because it runs counter to our goal of creating a decentralized network. This proposal is the first step we can take to gradually counter this issue.
On the one hand, it is still early days in our protocol and some consolidation is to be expected. You don’t become decentralized overnight. On the other hand, this is a critical window for validators to build a track record and attract stake. For these reasons we cannot act too drastically too quickly, but we also must be aware of the time-sensitive nature of this issue.
Thanks to everyone who contributed to the open staking improvement proposal thread. Your ideas and feedback have been important in informing the best ways to solve this problem. So far we’ve already taken some actions to support smaller validators in the following ways:
- Undelegation delay has now been changed to 0 epochs instead of 7
- Validators are now sorted by uptime on the staking dashboard
- On the ‘Next Election’ tab of the analytics page we show all validators instead of only top 320
This is a good start but it is likely not enough. We are considering the following more significant change and would like your feedback. Here’s the proposal:
- Increase the number of slots from 320 to 640
- Increasing the number of slots will decrease the median stake and allow validators with fewer tokens to get elected
- We will perform the increase in two batches of 160 each
- This will give new validators time to ramp up and market themselves to attract stake
- Increasing in batches enables us to assess any potential negative effects on the network such as latency increase due to larger committee size
This change should roughly cut the median stake in half, allowing more smaller validators to make the cutoff. While this should increase unique validator count, we realize that simply doubling the number of slots will not double the number of validators. We can only know the impact of this change when we’ve made it and had time for it to play out. That said, it should only help smaller validators.
The change of increasing the number of external nodes was already planned, so this only pushes the timeline forward. Eventually all 1000 nodes will be external. Please note that despite this change, Harmony’s internal nodes will retain 68% of the voting power for the safety of the network. We will release voting power for full decentralization once we have implemented last security features such as resharding and our randomness beacon.
Please share your thoughts and feedback on this proposal below. We know this could be a considerable change and we want to have community support before going ahead. We will host a follow up call this week to discuss in more detail. Before we make any changes, we will describe the specifics we have agreed upon in a blog post. We expect we can execute these changes over the following two weeks.