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# System prepended metadata

title: Cosmos Decentralization Proposal

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# Cosmos Decentralization Proposal

### Cosmos Hub Proposal #xx:

> Are Validators charging a Low Commission (5% or Below) and with High Self-Delegation Harmful for the Decentralisation of the Cosmos Hub?

1. Factors increasing the centralisation of the Cosmos Hub

    - Centralised exchanges: their total stake is expected to keep increasing

    - Low commission: Over 34% of the stake has a fee of 5% or less
        Of the top 2/3 of stake over 29% is at a fee of 5% or below, the total stake with low commission is expected to increase

    - High self-delegation: this is expected to remain stable

2. Factors increasing the decentralisation of the Cosmos hub:

    - ICF & Tendermint delegation (but over 10 validators selected are jailed): this is expected to remain stable

    - Dokia Capital decreased its self-delegation: this is expected to remain stable

    - Increasing the number of validators: not expected to work if their stake is very low, and also there is a maximum number of validators in the Cosmos Hub

3. Solution to increase or maintain the current decentralisation of the Cosmos Hub:

    - Validators with a fee of 5% or below, especially those in the 1/3 or 2/3 top stake, increase their fee
    **Risk** : after increasing the fee there is no redelegation. However, it will likely at least help to avoid them accumulating quickly more stake

    - Large self-delegation decreased and distributed
    **Risk** : low since it is expected they will follow Dokia Capital example to support decentralisation

4. Conclusion
    The efforts of ICF, Tendermint and Dokia Capital are very positive and setting an example, but unfortunately they won’t increase decentralisation further beyond their accumulated rewards

    Increasing the number of validators won’t likely be a solution for decentralisation if their total stake is negligible

    There is a high risk that more centralised exchanges and large validators with low fee concentrate further the stake centralising the Cosmos Hub

    Overall, there are clear risk factors to increase the centralisation of the Cosmos hub outweighing the decentralisation efforts, and there is no clear solution to increase the decentralisation except if large validators increase their fee or distribute better their high self-delegation

    Ensuring and maintaining the decentralisation of the Cosmos hub is even more important with the upcoming IBC Stargate upgrade and the shared security
 
# Voting

- If you agree with the above conclusions and you think that large validators with a fee below 5% should increase their commission and also distribute better their high self-delegation to increase or at least maintain the decentralisation of the Cosmos hub then vote YES.

- If you disagree vote NO.


