CIP-3: Min Commission Rate Param #3
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Since this is your first pull request, we kindly remind you to check out CIP-1 for guidance.
Co-authored-by: Dev Ojha <[email protected]>
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I wonder if also adding an option for 0 commission that disallowed delegation altogether might be an attractive option for validators like Paradigm + exchanges for tax/accounting reasons. |
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| ## Open Questions | ||
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| 1. If the minimum commission rate param is increased by governance, what should be done for the validator's whose existing commission rate is lower than the new minimum? Should they all be automatically increased to the new minimum? Or should they be grandfathered in at the old commission rate? |
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I'm in favor of the first option. I think it's also a good use case of the new governance hooks 👍
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I'm also in favor to automatically increase the commission to meet the minimum.
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Given that governance is a somewhat lengthly process right now, operators and businesses should have ample time to adjust any of their legal operations to account for this. So it should be OK to automatically update them.
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I support the automatic increase too.
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An alternate take, that I'd prefer less than just eventually implementing parameter update functions, is to have excess commission go to the community pool. E.g. if the minimum gets set to 5%, and a validator only has 3% commission set, the remaining 2% goes to the community pool. I don't think this is needed as an interrim solution, but it is an option. |
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Hey, is there a forum topic / discussion anywhere for folks to weigh in on this? Or would it be better to comment here directly? |
Definitely welcome to comment here. |
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Thanks Sunny! This looks pretty straight forward and great, and there seems to be widespread support, but would you mind using the cip template for completeness please ?
| In the cosmos-sdk's staking module, validators are allowed to set their commission rate, that gets charged on all rewards accrued to their delegations. Currently, a validator can set this to any value between 0% and 100%. | ||
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| It has been seen in practice that this often leads to validators undercutting each other to provide the lowest commission rate to attract delegators, creating a "race to 0" on commission rates. This leads operating validators to be an unprofitable enterprise for many validators, which had a potentially negative impact on the security of the network. | ||
| Cosmos hub governance in the past has overwhelmingly also indicated that it finds 0% commission rates harmful to the success of the network. See cosmos hub proposal 12 (https://www.mintscan.io/cosmos/proposals/12) |
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| Cosmos hub governance in the past has overwhelmingly also indicated that it finds 0% commission rates harmful to the success of the network. See cosmos hub proposal 12 (https://www.mintscan.io/cosmos/proposals/12) | |
| Cosmos hub governance in the past has overwhelmingly also indicated that it finds 0% commission rates harmful to the success of the network. See cosmos hub [proposal 12](https://www.mintscan.io/cosmos/proposals/12) |
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I would like to ask, what will happen to validators who's max commission rate is greater then the new minimum commission? Does the max rate get automatically increased too or we have to export genesis and edit manually? |
You mean if their maximum rate is lower than the consensus enforced minimum? |
Yup |
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So i guess there isn't any contingency for if a validator's maximum rate being lower than the consensus enforced minimum? |
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@Terra854 great point, we would also need to increase their max commission rates the new global minimum |
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