[Signaling Proposal]
Validator Set Reduction & Commission Cap Increase on Archway
Summary
This post is intended to initiate discussion around two proposed validator set changes on Archway:
- Reducing the active validator set to 20–25 validators
- Raising the validator commission cap from 10% to 20%
These changes are proposed to address growing concerns around validator attrition and the long-term economic sustainability of operating a validator on Archway.
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Context & Motivation
The current economics of validating on Archway present significant challenges, particularly for smaller operators and those contributing above and beyond basic block production. Factors such as a relatively decreasing token price, low staking APR due to controlled inflation, and capped commissions have created a high operational burden for validator operators.
Several active validators have signaled concerns about these conditions being unsustainable, which can put the health of the network at risk, especially if value-add validators (e.g., relayers, RPC providers, and ecosystem contributors) are forced to exit due to financial constraints.
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Proposal Objectives
The primary goals of these proposed changes are:
- Economic Sustainability: Allow active validators to earn more sustainable rewards through increased commission flexibility.
- Value Alignment: Better support validators who provide critical infrastructure such as IBC relayers, high-quality RPCs, and engage with the community, by concentrating stake.
- Reduced Operational Risk: A smaller set reduces network overhead and allows for better coordination and performance monitoring.
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Proposed Changes
Validator Set Reduction
- Reduce the active validator set to 20 or 25 validators. This would concentrate stake and rewards among the most engaged and value-aligned operators, lower the baseline costs of security for the network and help prevent validator churn.
Commission Cap Increase
- Raise the maximum allowable validator commission rate from 10% to 20% for those receiving delegations, providing top-performing validators with more flexibility to recoup operating costs and reinvest in infrastructure, community support, or relaying services.
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Open Questions for Discussion
- What mechanisms should be considered to assess validator contributions beyond uptime (e.g., relaying, RPC endpoints, governance participation)?
- How should delegation incentives or foundation support accompany the validator set reduction to mitigate centralization risks?
- What potential impacts, positive or negative, could this have on validator decentralization and community trust?
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Conclusion
This signaling proposal seeks community input on whether these changes align with the long-term sustainability goals of Archway. Feedback from validators, delegators, and contributors is encouraged to help refine and shape any future governance proposals.
We welcome all perspectives and data to ensure any adjustments serve the broader health of the network.