Chainflow joined the Cosmos community in 2017. Since then, we've been fortunate to witness, first-hand as a Hub validator, the network's and community's evolution. Interchain Security (ICS) represents one of the biggest steps in the process to-date.
We recognize the benefits ICS brings to the network and realize it can be a key competitive advantage. We appreciate all the hard work that's been done through the years to get us this far.
From the beginning, recruiting a competent validator set has required significant resources from networks wanting to launch in the Cosmos. ICS greatly reduces this barrier to entry.
At the same time, its adoption poses a few concerns we feel need to be addressed. One of these concerns will prevent us from being able to vote affirmatively for ICS adoption, at least in its current state.
We're particularly concerned about the requirement for all hub validators to validate on every consumer chain, without an ability to opt-out on an individcual chain basis. The rest of this post explains why.
More Chains, More Validators
During the earliest testnets, the primary validator focus was on becoming a hub validator. Zaki reminded us from time to time that operating a validator on the hub wouldn't be the only opportunity for infrastructure operators.
Sine then, the number of non-hub chains has proliferated. In doing so, many validators who weren't able to enter the Hub set have been able to validate on non-hub chains.
This has introduced the community to many well-deserving validators who contribute significant value to the chains the operate on. Most, if not many, may have never been discoverd had the hub been the only way to support the Cosmos.
ICS will re-focus and amplify the responsibilities of hub validators, as well as power they yield. This set is largely set, as stake doesn't move around much. As a result, the number of networks available to validate on will shrink. As vocal advocates of the need to #KeepStakeDecentralized, this power shift gives us pause when considering whether to support ICS in its current state.
More Chains, More Resources, More Money
As stated in the introduction, ICS requires hub validators to validate on every consumer chain that launches. Naturally this requires the validator operators to spend more CAPEX and OPEX resources.
The greater number of networks the operator supports, they need more servers, tooling and human attention to manage their infrastructure well. These requirements translate into higher CAPEX and OPEX costs. Additionally, many validators operate at a loss, at least in the early days.
Furthermore, it's likely ICS will encourage a greater number of chains to launch. This in turn makes it likely that the associated percentage of successful chains will decrease.
All these factors combine to increase the risk validators face in becoming profitable or even breaking even. This is particularly concerning for smaller, independent validators, who have historically operated on thin margins.
These validators are critical to decentralizing networks. They typically contribute greater value back to the networks they support, when compared to exchanges, staking as a service providers and other large validator companies. Losing them would result in the loss of valuable contributors, while also delivering a severe and significant blow to the decentralization of the Cosmos.
No Values, More Problems
We put values before money at Chainflow. Our values focus heavily on the core tenets of the crypto revolution we're here to build the foundation for. In short, we're here to build a better future, one that's more fair, equitable and inclusive the current economy and power structure it upholds and enables. (Note to Luke: Link somewhere to our values post.)
Over the years, particularly as the "Web3" narrative takes hold, the percentage of people starting projects that hold similar values is decreasing. The "Web3" gold rush is on. This brings all types of speculators and others who are driven first and foremost by exiting and cashing out, following the typical VC, Silicon Valley playbook.
Chainflow picks and chooses the networks we support carefully. We don't support projects whose values we don't feel have the potential to align with our values over the long term. These values have proven, time and time again, to have helped us avoid a number of critical and high profile pitfalls crypto's experienced in recent times.
Having to validate on every consumer chain that passes a governance vote presents a significant risk to our values-aligned selection process. While we hope that each consumer chain that launches is values-aligned, past governance history participation, combined with the continued "Web3" shift toward a money-first focus, leads us to believe that we'll likely not align with each consumer chain that launches.
Voting No, At Least for Now
While the first two reasons give us pause, it's the values alignment risk that will ultimately cause us to vote No for ICS adoption in its current form.
We believe that allowing validators to opt-into indivdual chains is a critical second filter that the Cosmos needs. For example, if a consumer chain passes a community governance vote, yet can't get enough validators to support it, maybe it's a sign that the chain shouldn't launch.
From our own perspective, as explained above, voting "Yes" for the current implementation feels in conflict with our values. However, we do feel optimistic about Cosmos' future and will continue to support the network regardless of the ICS vote outcome.
If ICS passes in its current form, we will use that as an opportunity to advocate strongly for chains we feel values aligned with, while raising red flags for those we don't.
If ICS doesn't pass in its current form, we look forward to working with the community to refine the approach, to maximize the benefit to the network and community that ICS has the potential to provide.
P.S. If our values align with yours, please consider delegating to our Cosmos validator (<-LINK) to support our work.