TL/DR: Regen Foundation will delay its August 5mm c-REGEN delegation from the Community Staking DAO allocation in order to allow adequate time for community governance to upgrade the delegation strategy in light of the expanded validator set.
Project Update
To recap: Regen Ledger, a Cosmos-based blockchain for ecological contracts, launched mainnet on April 15th of this year. Regen Foundation is responsible for distributing approximately 30% of the token supply to community stakeholders supporting our mission of ecological regeneration—such as farmers, researchers, engineers, indigenous nations, and rights of nature projects. (As an aside, we’re actively hiring for a Program Officer for the enDAOment process, as well as a Governance Lead.) In the interim, as we get these DAOs up and going, the Foundation is responsible for managing this pool in the best interest of the network. After a community process, we determined that approximately 83% of this allocation should be staked, and staked in a fashion to optimize for stake decentralization (both for the sake of security, as well as validator economics), while also still allowing new validators to make it into the set.
Over the past three month, we’ve successfully delegated just shy of 15mm c-REGEN across forty-six of the fifty validators in the active set (excluding the top validators so as not to contribute to stake centralization). You can see an analysis of token distribution with and without these delegations here. Although the Foundation can’t directly reduce stake centralization amongst the top few validators when measured as a percent of the total token supply (aside from refraining from delegating, which we’ve done), we have successfully decentralized stake as calculated as a percentage of stake tokens. Our biggest impact has been in the fees that validators in the bottom three quarters of the set are receiving—on average, our delegations have doubled commission revenues for these validators. Additionally, these delegations have resulted in a reordering of the validator set by voting power in favor of validators with lower commission.
Solicitation of Public Comment
Voting is currently underway for an expansion of the validator set from 50 to 75 validators, with a strong likelihood that this resolution will pass tomorrow.
How should the Foundation upgrade its CSDAO Delegation policy to accommodate this expanded validator set? There has already been discussion on this topic on various forums (Discord, Twitter, and the Regen Forum primarily). There’s isn’t yet community consensus.
There are three most likely pathways:
- Option 1—Regen Foundation keeps its delegation policy as is, and doesn’t delegate to the new validators. Those arguing in favor of this pathway have pointed out that all of our initial 50 validators have been with Regen Network since before $REGEN was worth anything, and have proven themselves as committed community members. We will know less about many of the incoming validators.
- Option 2—Regen Foundation expands its delegation policy to include the new validators in the set. Advocates of this pathway have argued that it would be unfair for the Foundation not to include these new validators in its delegation strategy. A more extreme version of this pathway would be to do some relegation to compensate for the fact that new validators have been left out of the first three rounds of delegations.
- Option 3—the sky is the limit! We could integrate new factors into our algorithm, or incentivize specific community or network contributions (IBC relayers, additional block explorer support, methodology development, etc.). One caveat here is that, if the proposal entails significant engineering work to accomplish, it would further delay the delegation schedule past September resumption.
Schedule and Avenues for Engagement
You can find a Regen Forum discussion for this topic here. If you have comments or suggestions, this would be the first place I suggest you add them!
We will be hosting an AMA on Regen’s Discord (tentatively scheduled for 11:00am Eastern on Thursday the 19th).
Public comment will close on August 31st, Regen Foundation will integrate public input, and we’ll announce our new delegation strategy during the first weeks of September.