1/ Its time to have an honest discussion about the effects of increasing the validator set in #Cosmos chains.
Let's talk Centralization!
$OSMO $JUNO and $STARS holders, may find this shocking.
If you're a Cosmonaut, this is for you 🧵
2/ I asked YOU if increasing the validator set led to decentralization of the ecosystem...
A resounding 68% said YES!
Many of you were thoughtful enough to comment and add to the discussion.
Let's dig into the numbers!
3/ We will focus on 2 variables:
The #Nakamoto Coefficient which is:
👉The number of nodes needed to slow down or disrupt the blockchain from operating.
Kurtosis which is:
👉The distribution of voting power of the network
4/ This is the changes over time of @osmosiszone after each validator set increase.
Notice a slight drop and then spike.
Superfluid staking was noted as it increased centralization of the network.
5/ Nakamoto Coefficient for @osmosiszone
👉 6 nodes
👉 46.9% $OSMO Staked
6/ @JunoNetwork 3 Set Increases since Genesis
When Prop 5 was passed Kurtosis of Voting power was 11
It now sits at 26.
7/ Nakamoto Coefficient for @JunoNetwork
👉8 nodes
👉70% $JUNO staked
8/ @StargazeZone 3 Set increases since Genesis
Stargaze voting power DISTRIBUTION has remained largely unchained through the validator increases since its inception.
9/ Nakamoto Coefficient for @StargazeZone
👉 10 Nodes
👉 40.5% $STARS staked
Decentralization has gone up while distribution ratio has remained the same. 🤯
10/ Clearly the outlier here is @StargazeZone
Not only increasing its Nakamoto Index. 🔥
While maintaining the concentration of voting power. (Kurtosis)
This means, their Validator set increases did not directly impact mid tier validators.
But rather the top ones ✨🔭
11/ Increases in the validator set do not directly lead to a decentralized network.
As the numbers suggest, increasing the validator set leads to a higher Kurtosis number over time.
12/ What can the ecosystems do?
Update the UI to foster education on the importance of decentralization
@TeamKujira has the right idea...
13/ Take action in the form of Proposals to foster decentralization.
Increasing the Validator set alone, fails to address the growing issue, of POS networks face.
Decentralization is the responsibility of all stakeholders.⚛️
14/ Thank you for reading!
I hope you've found this thread insightful.
Follow me @Flowslikeosmo if you would like to see more related content.
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