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11 Days Validating on Kusama: First Impressions & Emerging Power Dynamics

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It has been 11 days since we joined the active validator set for Kusama, and I wanted to share some initial thoughts on the experience in case this is helpful to other validators, nominators, or other participants thinking about engaging with Kusama or Polkadot.

The first impression to convey is that interest in Kusama and Polkadot is high. Currently there are 140 validators that have signaled their intent to validate. Since Kusama switched from PoA to PoS thus switching block production from a limited set of Web3 Foundation-run validators to a decentralized set of validators, the number of validator slots has incrementally increased from 20 to 50, 60, 75, and currently stands at 100. At no time have there been any empty slots and there are currently 40 validators waiting for an opportunity to validate.

This stands in contrast to many other projects that have struggled to recruit enough competent validators to launch their networks. This is a really good sign for Polkadot as they near their MainNet launch.

Parity Team Actively Addresses Bumps in the Road

The process of launching Kusama has and continues to flush out issues.

There have been several point releases: 0.6.7, 0.6.8, 0.6.9, including an issue with 0.6.8 that led to database corruption for some validators. There are performance issues actively being worked on now, which will undoubtedly lead to more releases. Some validators have been slashed or removed from the active set, either due to issues with the software or a failure to run nodes properly.

However, the number of issues has really been relatively small. In each case, the Parity team has been very responsive in diagnosing and fixing issues. All things considered, for a system as complex as Kusama, this has been a very smooth launch process.

Two Primary Types of Validators

The validators in the active set are ones that meet the minimum effective staked KSM levels needed to be in the top 100.

Many of these appear to be representing DOT holders who could claim KSM based on their DOT holdings and thus, have large bonded amounts. I’m inferring this from the fact that transfers are not yet enabled, so large positions would have to come from claimed KSM.

The other set of validators are those that are not existing DOT holders and received KSM grants from W3F to be able to validate. The grants were 10 KSM, so I’m assuming that many validators with bond amounts less than 10 KSM are likely in this bucket. Many of these validators have received nominations, presumably from W3F and possibly others, to get into the active set.

There hasn’t been enough time for validators to really start to market themselves to try to attract nominations. This will presumably start to happen as the Kusama launch process continues to unfold, transfers are enabled, and the validator limit is potentially raised further.

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NPoS Validator Strategies

While it is too early to tell what strategies validators will use to go to market, there is one notable strategy that has emerged: the “sprawl” strategy.

Cryptium Labs is currently running 19 of the 100 validators in the active set. This is far more than anyone else on the network at this time. In NPoS (Nominated Proof of Stake) this is not only allowed, but perhaps expected. Given the fact that validators are compensated a flat fee for their service, running as many validators as can get into the active set is an economically rational validator strategy.

However, for some, the realization that large players could occupy may of the available slots was disheartening. Here is an exchange from the Riot rooms (where most of the discussions are happening) that illustrates the sentiment:

Fredy from DragonStake started with:

@derfredy:matrix.org

I wonder how the core ( Gav Bill | W3F federico … ) feel about the current adrianbrink | Cryptium Labs sybil attack.

Once we enable the TXs, the whole slots table could be filled with just 2 or 3 independent validators teams. Any concern?

Adrian from Cryptium Labs was quick to respond:

adrianbrink | Cryptium Labs

[snip…] public blockchains need to be designed so that they are secure against rational actors. Security based on altruism isn’t going to last long.
Btw, I’m not suggesting that Polkadot consensus is insecure. Maybe there needs to be more education about it though

And finally from Gavin:

Gav

i think it’s reasonable for w3f to use its KSM to keep the validator community pluralistic.

[snip…]

w3f has its funds;
w3f should act in whatever way it feels is best for the network;
having an active validator community with well-dispersed knowledge is good for kusama;
w3f should use some of its funds to help keep lesser staked validators of high reputation engaged.

This short exchange cuts right to the heart of some of the interesting ideas and dynamics around NPoS and how it will play out. Some good questions that this exchange raises: Will the NPoS design ultimately favor a smaller set of larger validators occupying multiple slots, or will it drive greater validator diversity? Is there such a thing as economically rational behavior that conforms to the protocol, but that nevertheless should be sanctioned or discouraged by social norms and convention?

NPoS is meant to be an improvement over standard DPoS in networks like Cosmos or Tezos. Its design does appear to be intended to discourage or prevent the concentration of stake behind any one validator, as doing this would lead to less staking returns for rationally-motivated nominators.

It is also meaningfully different from standard DPoS (Delegated Proof of Stake) because it has a separation between political power and validator services. This could guard against scenarios where, for example, validators are run for free to gather political power, as appears to be the case with the largest Cosmos validator. Many feel this leads to a weaker validator set, as it becomes difficult to fund legitimate validator businesses.

But if validator power can still be expressed in NPOS by allowing organizations or entities to have more than one — or perhaps dozens — of validators, it seems that some of the decentralization benefit of NPoS may not be as great as many believed would be the case.

I sympathize with Fredy from DragonStake’s point of view that the health of the network is greater with a more diverse set of validators, and that smaller validators shouldn’t have to rely on the goodwill of the W3F to have a shot at making it into the active set. And while W3F’s commitment to validator diversity is admirable, I also agree with Adrian from Cryptium Labs that what happens on these platforms is largely determined by the actions of rational economic actors playing by the rules codified in the protocol. Even if you have a set of social norms you try to enforce in your community, the permissionless nature of these systems means that someone can always come along and ignore your community and norms and do anything that the protocol allows.

It is always hard to predict how these systems will play out. But it seems likely that larger and better-established validator companies will pursue a Cryptium-style strategy on Polkadot. We may not see this yet, as they don’t want to tip their hand or take on the infrastructure expense on Kusama where the opportunity for profit is not possible. It will be interesting to see if, in the end, there is more or less validator diversity in Polkadot with NPoS versus Cosmos, Tezos, and other networks employing the simpler DPoS mechanism.

Decentralized Networks Are Magic

In the end, what has happened over the last 10 days demonstrates the magic of these new decentralized platforms. Probably something on the order of 100 organizations or people from different backgrounds, locations, skills all came to the table with complicated setups of software and infrastructure to help launch and support a network.

This network is something larger than any one participant could have created and wouldn’t be possible without the contributions of all of the participants. I can think of no better example of the power of platforms like Polkadot to organize people and activity in ways that weren’t previously possible, to allow anyone to join, to compensate the participants for their contributions, and to create something emergent and higher order as a result.

Keep an eye out as transfers will be enabled on Kusama soon, and I expect further shifts of stake and in the active validator set once that happens. Also feel free to leave me feedback on Riot if you agree (or disagree) with anything in this post: @mechanicalwatch:matrix.org.

Interested in staking with PureStake on Kusama? Nominate this address:

GhoRyTGK583sJec8aSiyyJCsP2PQXJ2RK7iPGUjLtuX8XCn

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