Introduction

What is Terra 2.0 ?

Terra (LUNA) 2.0 is the newest iteration of cryptocurrency on the Terra blockchain. In May 2022, the Terra blockchain experienced a hard fork prompted by founder Do Kwon and voted on by the community. This created the new Terra 2.0, with a new cryptocurrency, dubbed LUNA or LUNA2, while the original blockchain and coin took on the moniker LUNA Classic or LUNC. Both blockchains still exist and operate separately, which can cause confusion for new investors. The old token was renamed terra classic (LUNC), and while the original Cosmos chain will continue to operate, the option to mint or burn coins will be disabled. The new blockchain was launched on 28 May 2022. (Read More…)

Validators

Validators, much like miners in a Proof-of-Work(PoW) network, are network nodes that operate in Proof of Stake (PoS) blockchains, also validating transaction blocks to the blockchain.

Validators are miners of the Terra blockchain. They are responsible for securing the Terra blockchain and ensuring its accuracy. Validators run programs called full nodes that allow them to verify every transaction made on the Terra network. Validators propose blocks, vote on their validity, and add each new block to the chain in exchange for staking rewards for transaction fees. Users can stake their Luna to validators in exchange for staking rewards. Validators also play an important role in the governance of the Terra protocol.

Dashboard Introduction & Methodology

In this dashboard, You can see an analysis of Terra validators based on their calculated ==Eclipse Score==, a metric which represents Terra validators based on their performance, delegated $LUNA & their behavior in participating in Terra governance.

What is Eclipse Score & How It Is Being Measured?

a Validator’s Eclipse Score, is an easy-to-use metric that introduce the effectiveness of the validator in representing its delegators via voting. It is calculated by dividing the percentage of votes attended by the validator, by the percentage of total votes in the validation time period, and then dividing the result by the percentage of total delegation received by the validator.

An high Eclipse Score shows that the validator is effectively representing their delegators via voting. on the other hand, a Low Eclipse Score says us that the validator is not effectively-representing their delegators via voting.

Eclipse Score is calculated by 2 major & 1 minor metrics for each validator. These 2 Metrics are:

1- Delegated $LUNA To The Validator (And Its Ratio To The Total Staked $LUNA)

2- Number of Participated Proposals By Validator (And Its Ratio To The Total Executed Proposals in Terra Governance)

Moreover, I have calculated the age of each validator (the difference between first & last delegate action on it) in order to perform a fair comparison between them and their Eclipse Score.

The Eclipse Score is calculated by dividing the ratio of participated proposals in Terra by Validator / The Ratio of It’s Active Days in Terra Delegation Ecosystem and then dividing the result to the ratio of total delegated $LUNA to the validator.

There are currently 129 validators on Terra chain (See Full List & Ranking Here).

So, In the first part and based on the above metrics, you will see a ranking table of validators including effective metrics on their Eclipse Score as well as their final calculated Score. By looking into this table, you can identify the best and worst effective representor validators (those who are effectively/non-effectively representing their delegators via voting on proposals).

In the second part, You can see an analysis of top 5 best and also top 5 worst validators based on their calculated Eclipse Score in first part.

The main tables that I have used for this bounty are Flipside’s terra.core.ez_staking (for calculating the delegated $LUNA) and terra.core.fact_governance_votes (in order to analyze governance voting activity).

In order to identify top validator with the highest staked $LUNA in them, I have subtracted the Undelegated $LUNA from their Delegated + Redelegated $LUNA in them. There are two separate addresses for each validator. one is the actual Validator_Address which contains ‘valoper’ in its strings. another one is Account Address which the validator uses it in order to vote on proposals. So, for analyzing the voting behavior of validators, we should identify the validators’ account address and sync them with the wallet address of the voter on proposal.

I have Excluded the validator ‘Zeus Staking’ from the results (despite it has the highest Eclipse Score based on the above methodology BECAUSE IT’S CURRENT SITUATION IS JAILED.

==A validator is jailed when they make liveness or Byzantine fault, when a validator is jailed, it will no longer be considered as an active validator until they are un-jailed. In the unfortunate situation of losing too much rating score, a validator will be jailed, which means that they will be taken out of the shards, they will not participate in consensus, and thus they will not earn any more rewards.==

So, based on the mentioned methodology, the validator ‘Active Nodes’ has by far the highest Eclipse Score among other validators in Terra chain. This means this validator is the most effective-representor of its delegators via its voting activity on Terra proposals. (as mentioned above, I have excluded Zeus Staking validator from the results because its current situation was Jailed).

The interesting thing is that this top best validator (and also the majority of top-ranked validators based on their Eclipse Score) have not a signigifcant amount of delegated $LUNA into them(very low to the extent that they have less than 1% share of total delegated $LUNA in all Terra validators) but they have an high participation ratio in Terra proposals. (the top validator (Active Nodes) has participated in more than 82% of executed proposals in Terra governance). So, existing the high values of $LUNA staked in validators is not a proof that those validators have also high participation in governance.

As a proof & example, the validator “All Nodes” , the top Terra validator which have the highest $LUNA delegated and also has the higehst voting power in Terra governance, have participated in almost 50% of executed proposals in Terra chain and is on rank #68 based on its Eclipse Score. So, despite having high delegated $LUNA, this validator is not well-representing its delegators via voting in Governance.

Also, we can see that there is not any strong correlation between number of participated proposals (or number of executed votes on them) vs the delegated $LUNA in them on the scatter charts which is another proof to the fact that I have mentioned above.

Moreover, on the table and also bubble charts (which their color represents the validators’ Active Days in Terra) we can see that majority of Terra validators were active in most number of days.

On the above charts and screenshots, We can see the top 5 best and also top 5 worst Terra validators based on their calculated Eclipse Score via the above methodlogy.

Part 2: Top 5 Best & Worst Terra Validators Based On Their Eclipse Score

Part 1: Validators & Their Eclipse Score

On the above charts, we can see the number of delegators and also delegated $LUNA into the top 5 best and also top 5 worst Terra validators (by their Eclipse Score), Total & Over-time. As we see, the validator Terra-Firma (the second valdiator with the highest eclipse score) has the highest number of delegators among other top-rated validators on Terra with total 240 unique delegators. On the other hand, the validator StakeBin (3rd worst validator in Terra) has the most number of delegators with 140 unique wallets.

The validator Legend.X (as the 5th validator with the highest Eclipse Score) has the highest amount of staked $LUNa among other top validators and we can see its main activity was during November 2022 (around FTX collapse). the average volume of delegations on this validator is also way more than other validators and the main reason behind the high staked $LUNA in this validator is because of Redelegates to it.

On the other hand, the validator Goliath (as the second validator with the lowest Eclipe Score) has the highest Delegated and also Undelegated $LUNA among other low-rated Terra validators. the average volume of delegations on this validator is also way more than other validators and the main reason behind the high staked $LUNA in this validator is because of Redelegates to it.

Totally, the highest peak of activity of these validators was during the first weeks of their launch on Terra governance (late-May ~ early July, the timespan when Terra 2.0 was recently launched) and we can see low activity of delegation actions on them during the other weeks on the chart.

On the left chart, we can see the stats about Validators participation in Terra proposals.

Active Nodes (as the validator with the highest Eclipse Score) has the highest participation ratio among other top-rated Terra validators and the majority of its votes choices were NoWithVeto and Abstain.

On the other hand, the validator Terradactyl has the best participation ratio among other lower-rated Terra validators and the majority of its votes on Proposals was also NoWithVeto & YES.

On the above charts, we can see that September - December 2022 was the highest peak of these validators’ participation in Terra proposals.

Moreover, we can see Active Nodes has by far the highest participation in executed proposals on Terra among other top-rated validators.

But on the top 5 worst validators, the competion between 3 validators is so close and we can see high participation on all 3 of them on Terra proposals over time.

On the above charts, I have analyzed the executed votes by voters who have delegated their $LUNA into a validator who have also voted on the same proposal to see are their vote-choice equal or not (for example, if they both vote YES on proposal they have equal votes and if delegator votes NO but validator votes YES, they have UnQeual Votes on that proposal).

As we see, Terra-Firma is the validator which have the highest unequal votes with its delegators among the top 5 best Terra validators (based on their Eclipse Score).

Among the top 5 worst, the validators Goliath and Un Fuego have the highest number of unequal votes with their voters on a proposal.

Totally, we can see the majority of cast votes by both group of validators are equal to the vote choices of majority of voters’ choice on Terra proposals.

Summary & Conclusion

• Based on the above analysis, an high amount of staked $LUNA in validators is not a proof that those validators will effectively represent their delegators via voting activity in Terra governance. We have seen that the highest Eclipse Score on Terra belong to the validators who have very low amount of delegated $LUNA but have participated in majority of executed proposals on Terra governance.
• The validator “Active Node” seems to be the best representor of its delegators in Terra governance.
• The top Terra validator (All Nodes) with the highest amount of staked $LUNA was on the rank #68 of validators based on their Eclipse Score because it has only participated in 50% of executed proposals in Terra governance and is not effectively representing its delegators in Governance.
• We have not seen a significant difference between delegations’ behavior and also voting activity of top 5 best and top 5 worst validators (based on their calculated Eclispe Score) in Terra chain. The main difference was the amount of $LUNA staked and also number of participated proposals & executed votes on Terra chain.

Discord: Ali3N#8546 Twitter: Alik_110 Email: Alik110.72@Gmail.com

On the left chart, we can see there are 2 validators on each group (top 5 best and top 5 worst) that have changed their vote on Terra proposals.

Among the best validators, we can see the Terra-Firma & Mr.K have changed their votes on 2 proposals.

among the worst valdiators, we can see Stakebin has the highest vote-switching behavior (changed its vote on 4 proposals) and the validator Kk validator has changed its vote on only 1 validator.

So, we can kinda say there is almost equal vote-switching activity on both group of validators.