[DRAFT] Reduce Active Validator Set from 130 to 100
Type: Parameter Change Proposal
Module: x/staking
Parameter: MaxValidators
Proposed by: Phoenix Foundation
Summary
Terra currently maintains 130 validator slots, with only 105 of these positions actively filled at present. The bottom 30 validators in the set collectively hold 2% of staked LUNA. This proposal seeks to adjust the MaxValidators parameter to 100, aligning the network’s protocol with its current operational reality and optimizing for technical efficiency.
Current Network State
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Slot Utilization: 105 of the 130 available validator slots are currently bonded and active.
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Recent Stability: Approximately 22 validators were jailed following the v2.17.0 to v2.18.0 upgrade due to missed block signatures and remain offline.
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Stake Distribution: The bottom 30 validators (including those who were recently jailed in case they return) hold approximately 7.6M LUNA, ~2% of total stake, largely originating from genesis delegations.
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Overhead Costs: The network presently incurs the coordination overhead for 130 validators, including increased message rounds and heavier gossip traffic, without receiving additional security benefits in return.
Rationale for Reduction to 100
Technical Performance
CometBFT consensus efficiency is inversely proportional to validator count. Reducing the set size decreases prevote and precommit messages per round, leading to lower block latency and faster propagation. This would result in validators to consume less hardware and network resources.
Economic Alignment
Rewards that are currently distributed across inactive or low-engagement operators would be redirected toward validators with significant stake backing and proven uptime.
Operational Coordination
Managing network upgrades is significantly more streamlined with a smaller, more active set. Reducing the count to 100 facilitates faster alignment on upgrade windows and minimizes the risk of chain halts during maintenance.
Decentralization Impact
The reduction has been evaluated for centralization risks:
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Stake Retention: The top 100 validators already control 98% of total staked LUNA.
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Nakamoto Coefficient: Terra’s Nakamoto Coefficient remains stable at 7, one of the best in Cosmos, requiring 7 validators to collude to reach the 33% voting power threshold.
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Comparative Standing: This coefficient maintains Terra’s position as one of the more decentralized chains within the Cosmos ecosystem.
Ecosystem Benchmarking
A set size of 100 or fewer is most common among leading Cosmos SDK chains.
Implementation Plan
Parameter
MaxValidators
Current Value
130
Proposed Value
100
This change is a parameter adjustment and does not require a software upgrade. Upon the proposal passing, the change takes effect automatically. Validators ranked 101st and below by delegated stake will leave the active set and cease earning block rewards. They may re-enter the active set at any time by accumulating sufficient stake to reach the top 100.
Future Outlook
This reduction serves as an initial step in optimizing the validator set. Phoenix Foundation will continue to monitor network responsiveness and validator participation to determine if further adjustments are necessary in the future.
