Adopt a Validator Set and Delegation Management Policy

DAO Governance Main DAO Proposals
1

The DAO recently ratified the following proposal to adopt a validator set and delegation management policy for the network’s validator set. The goal of this policy was to clarify the conditions for validators to onboard/offboard from the set, removing arbitrary decision making and improving transparency as much as possible.

I am reposting the policy as voted on by the DAO here to enable community feedback and iterations.

Introduction

This proposal seeks to formalize a validator set and delegation management policy to ensure the long-term performance, security, and decentralization of the Neutron network. It introduces transparent criteria for validator rotation based on objective performance metrics and establishes a consistent onboarding process for new operators.

Proposed Framework

This proposal introduces a two-part framework for managing Neutron’s validator set, after a one-month grace period post-Mercury upgrade to ensure the set and network have the time to fully stabilize. The specific threshold values are meant to be more lenient in this initial iteration, and may be adjusted by the DAO going forward, based on validator performance in production.

1. Validator Set Rotation Framework

Performance-Based Offboarding

A validator is considered for offboarding if any of the following is true:

  • Consecutive Performance: Received no rewards from x/revenue for two months in a row.
    • They are notified the first month, and core teams assist in trouble shooting any issues.
    • The second consecutive month, they are automatically flagged for rotation.
  • Intermittent Performance: Received no rewards from x/revenue for three months in a 6 months period.
    • They are notified the second month within a 6 month period (unless there are 4 months in-between the incidents)
    • The third missed month in a 6 month period, they are automatically flagged for rotation.
  • Tombstoning: Validator was tombstoned.

Downtime-Based Offboarding

A validator is considered for offboarding if any of the following is true:

  • Resumption latency: Failed to resume signing within 60 minutes of the first finalized block after a successful upgrade.
  • Precommit latency: Failed to begin precommitting within 2 hours of the distribution of correct upgrade instructions.

In both cases, the validators gets notified on the first occurrence, and marked for rotation on the second.

2. Validator Onboarding Process

To join the set and receive delegations from the DAO when a slot opens, validators must run both mainnet and testnet nodes. Eligible operators are prioritized by reverse order of mainnet voting power (e.g. highest voting power first). To maximize their chances of receiving DAO delegations, validators should seek to attract NTRN delegations to their validators.

Selected operators will receive a small delegation from the DAO. After demonstrating adequate performance for three months, they will receive a full delegation. If they fail to demonstrate adequate performance, the DAO will redelegate to the next operator in line.

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If Neutron truly aims for decentralization, it should treat the validator delegation program seriously and fairly. Now that Neutron has successfully launched as a sovereign mainnet, validators should be selected through a fair and transparent process. As previously mentioned(Mercury: Towards the Integrated Endgame - #8 by Coscoin), several of the 20 validators initially chosen by the Neutron team had poor performance during the ICS phase. In fact, within just a month—without any upgrades or emergencies—two validators (Provalidator and iqlusion) have already been jailed. This is deeply concerning.

Neutron DAO should take inspiration from Celestia’s validator delegation program, where all validators are given a fair opportunity. For example, in the first month of the program, validators could run a testnet, demonstrate their performance, and submit their contributions via a form. It should not be the case that only mainnet validators are eligible, especially when Neutron has already staked 8 million NTRN to the current set—effectively leaving no room for others.

We sincerely urge Neutron DAO to consider this matter carefully for the long-term health and decentralization of the Neutron network.