Decentralizing Power: Governance & the Active Set (Part 2)

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    Staked OSMO holders are eligible to vote on governance proposals. When a user bonds OSMO to a validator to receive staking rewards and in turn obtain voting power. Validators never have ownership of the bonded OSMO. Delegating, bonding, and staking generally refer to the same process.

    \n Governance is identified as a critical piece of the Osmosis ecosystem by their team, citing that the rate at which Osmosis will be adding new features will rely on the active participation of the community in passing protocol upgrades. In this spirit, Osmosis is self‐described as being "designed such that the most efficient solution is reachable through the process of experimentation and rapid iteration by leveraging the wisdom of the crowd."

    Any OSMO holder can participate directly in Osmosis governance via the Osmosis app or CLI, and any OSMO holder may submit a new governance proposal by submitting a small deposit which functions to prevent spam. Delegators inherit the vote of the validator they are delegated to unless the delegator actively submits a vote themselves, which overrides their inherited vote.()

    The voting period is currently a fixed 14-day period. During the voting period, participants may select a vote of either 'Yes', 'No', 'Abstain', or 'NoWithVeto'. Voters may change their vote at any time before the voting period ends.

    Based on Cosmos hub, Voting power, whether backing a vote of 'Yes', 'Abstain', 'No', or 'NoWithVeto', counts toward quorum. Quorum is required for the outcome of a governance proposal vote to be considered valid and for deposit contributors to recover their deposit amounts. If the proposal vote does not reach quorum (ie. less than 40% of the network's voting power is participating) within 14 days, any deposit amounts will be burned and the proposal outcome will not be considered to be valid.

    In this bounty, we were asked to answer to these questions:

    • Analyze the participation of the new validators on the governance proposals after the active set increases.
    • Did new validators vote more or less than the original top 66% of validators? Did time play a factor?
    • Analyze changes in governance participation t+30,+60,+90 days after these proposals.

    Proposal 196 was open between April 8th to May 15th.

    Proposal 337 was open between Sep 28 to Oct 8th.

    Proposal 114 was open between Dec 30th to Jan 9th.

    Based on above charts, proposal 196 had, by far, the highest count of voters.

    Count of voters in proposal 337 was about half of voters for pros. 196. Also, the voting power of voters in pros 196 was about twice more than the voting power of voters in pros. 337.

    All the three proposals were passed with ‘YES’.

    Proposal 337 had the highest share of voters to ‘YES‘.

    Proposal 114 had the highest share of voters to ‘NO‘ and ‘ABSTAIN‘.

    In the next part you can see the voting power of each validator in each month:

    Total voting power of validators in Oct was more than the total voting power of validators in other months.

    Except the decrease in March and April 2022, as the months passed, the total voting power of Osmosis validators increased.

    ‘osmoval…0y4’ was the validator that had the highest vote power in total.

    In the next ranks, ‘osmoval…agt’ and ‘osmoval…fya’ had the highest voting power during time.

    So, in the next 3 months after proposal 114, total number of validator decreased.

    In the next months after the proposals 337 and 196 total number of validators increased.

    ==So, in the next 30, 60 and 90 days after proposal 114 and 196 total voting power of validators increased. in the next 30 days after proposal 337, total voting power decresed.==

    In the next part, I will show the count of new validators in each month:

    From 17 months that the validators got activated, in only 7 months number of new validators was more than 10 in each month.

    Sep with 2 new validators, had the least count of new validators.

    June 2021, Jan 2022 and April 2022 with 107, 32 and 23 new validators, had the highest count of new validators respectively.

    Count of new validators in Oct grew 7 times in comparison with the previous month.

    In total, 281 new validators joined Osmosis.

    ==In the next 30 and 60 days after proposal 114, number of new validators decreased. But in the next 90 days, number of new validators inceased.==

    ==In the next 30 days after proposal 337, number of new validators decreased.==

    ==In the next 30 and 60 days after proposal 196, number of new validators increased. But in the next 90 days, number of new validators deceased.==

    The Nakamoto coefficient measures decentralization and represents the minimum number of nodes required to disrupt the blockchain's network. A high Nakamoto coefficient means that a blockchain is more decentralized. a Nakamoto score describes the minimum amount of effort it would take to disrupt any given blockchain. A high coefficient means that a blockchain is harder to disrupt, because it’s more decentralized. Meanwhile, a low coefficient means that a system is heavily centralized, and has a high risk of disruption.

    Based on the above chart, in the closing day of ==proposal 114==, nakamoto coefficient was 7. in the next 30 and 60 days later, it was still 7. 60 days later it was 7 again and 90 days after closing this proposal, it decreased to 6.

    Based on the above chart, in the closing day of ==proposal 337==, nakamoto coefficient was 7. in the next 30 it increased to 8.

    Based on the above chart, in the closing day of ==proposal 196==, nakamoto coefficient was 7. in the next 30 and 60 days later, it increased to 8. 90 days later it increased to 9.

    ==The highest increase in the nakamoto coefficient was between proposal 196 to proposal 337 and this means that in this period, blockchain was in its most decentralized mode.==

    ==The highest decrease in the nakamoto coefficient was between proposal 114 to proposal 196 and this means that in this period, blockchain was in its most centralized mode.==

    This Shows that during time, the voting power of validators decreased(except some spikes like Aug 15th and Oct 17th ) and this makes governance votings more decentralized.(So, YES, TIME IS A FACTOR)

    First week of Nov and mid of June were the weeks that had the highest average validator vote by the week of its validators that joined Osmosis.

    Last weeks of 2021, activity of new validators decreased sharply.

    In the first 3 months of 2022, new validators were more active.

    Based on the above chart, in the next 30 days after closing ==proposal 114==, average validator vote by the week of its validators that joined Osmosis, increased. In next 60 days, this parameter decreased and in the next 90 days after this proposal it increased.

    Based on the above chart, in the next 30 days after closing ==proposal 337==, average validator vote by the week of its validators that joined Osmosis, increased.

    Based on the above chart, in the next 30 days after closing ==proposal 196==, average validator vote by the week of its validators that joined Osmosis, increased. In next 60 days, this parameter increased and in the next 90 days after this proposal it decreased.