Mint & Burn Episode 48: The Validator Commons (live) w. Ellie Rennie, Eric Alston, and Kelsie Nabben

This episode delves into the complexities of blockchain governance, focusing on the Validator Commons and its implications for web three ecosystems.

1. Blockchain governance is evolving towards more complex structures such as the Validator Commons to address issues in decentralized ecosystems.
2. Validator Commons is an initiative to enhance transparency and effectiveness in blockchain governance.
3. The role of validator service providers is critical, but also raises questions about power concentration and governance integrity.
4. There is a tension between decentralization and the need for effective governance mechanisms which sometimes centralize power.
5. Blockchain governance resembles political systems, with Validator Commons likened to a political party aiming to represent collective interests within the ecosystem.

1. Introduction and Overview

Ellie Rennie and Eric Alston provide an introduction to their work and the main themes of the episode. They discuss the origins and purpose of the Validator Commons. Ellie Rennie: "Validator Commons came about due to concerns about governance in proof of stake blockchains." Eric Alston: "I study governance, especially digital governance on distributed networks."

2. Detailed Analysis of Validator Commons

Discussion on the specifics of the Validator Commons, including its challenges and objectives. Ellie Rennie: "Validator Commons is trying to address problems identified by validators themselves." Kelsie Nabben: "Validators are crucial for the operation of distributed computing infrastructure."

3. Implications and Challenges

Exploration of broader governance issues within blockchain systems and potential solutions proposed by Validator Commons. Eric Alston: "Subgroups within large systems often emerge due to heterogeneity of interests." Ellie Rennie: "We need effective governance to ensure the long-term viability of blockchains."

1. Engage with blockchain governance actively to understand its impact on the technology's future.
2. Consider the role of validator service providers and their influence on the ecosystem.
3. Explore the governance structures of different blockchains to find the best fit for your needs.
4. Participate in or support initiatives like Validator Commons that aim to improve blockchain governance.
5. Stay informed about the developments in blockchain governance to make educated decisions about your investments or involvement.

In this episode, we discuss ‘The Validator Commons’, an initiative that was started via Metagov.org to create a space for blockchain validators to coordinate and cooperate in their role as operators and governors of public blockchains. This exciting conversation covers some of the dynamics, challenges, and controversies of blockchain validators - a little understood but incredibly important aspect of blockchain governance. This episode was recorded live at the ‘What’s Governing Web3?’ conference in Melbourne in December, 2022.

People

Ellie Rennie, Eric Alston, Kelsie Nabben

Companies

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Books

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Guest Name(s):

Ellie Rennie, Eric Alston

Content Warnings:

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Ellie Rennie

Thank you.

So I should say that there are two podcasts being recorded today. This is the first Mintenburn, which is produced out of the RMIT blockchain innovation hub and hosted by the wonderful Kelsey Nabin, who you just heard from. So, hello and welcome to Minton Burn, the academic analysis of blockchain and other technologies in the decentralized digital economy. I'm your host, and we are tuning in for our first live episode from the RMIT University Capital Theatre to bring you expert guests and test frontier ideas. Ellie Renny and Eric Elston, thank you for joining us today.

Thank you, Kelsey. Let's give them a round of applause.

Kelsey Nabben

So, for those that don't know, or perhaps weren't here this morning, can you give us a brief introduction to each of yourselves, perhaps starting with Ellie, and then we'll go into what on earth is the validated Commons and how it relates to what's governing web three. Yes, I'm Ellie Rennie. I'm a professor at RMIT University. I work across the blockchain Innovation Hub and the Digital Ethnography Research center, as well as the Arc center for Automated Decision making in society. And my work is broadly at the moment, focused on the social outcomes of web three, or blockchain technologies.

Ellie Rennie

Prior to that, a lot of my work was around digital inclusion. Also. Really great to be here. Eric Alston. I'm a scholar in residence in the finance division at the University of Colorado Boulder.

Eric Elston

Most broadly, I study governance. But within that broad bucket, I in particular focus on the emergence of economic institutions on historical frontiers, generalizable lessons from constitutional design practice, as well as, increasingly, digital governance, especially that applied to distributed networks. So, Ellie, you're an Australian Research Council future fellow with a five year funded project entitled cooperation through Code. How did you end up becoming kind of one of the core team members or founders of the validator Commons? And what is that?

Kelsey Nabben

Sure. So, when I first decided to start researching in this area, I was interested in the concept of cooperation. Most of us, I think, back in 2018 when I proposed this research, were talking and thinking about blockchain in terms of trustless technology. And so the focus was very much on this idea of trust. But what I was interested in is that really what it is, is a system for coordinating, for scaling human coordination, without the need for these intermediaries, of course.

Ellie Rennie

Well, supposedly we will get to that. But I suppose the hypothesis was that this is not just about trust. If it's about cooperation, the things that enable us to cooperate are not necessarily trust. It can be information needs. It can be standards, it can be administrative systems and infrastructures.

So I was interested in the extent to which this technology enabled coordination and cooperation in particular, and how I suppose these external factors or current ways of doing might be conflicting with that, or making it hard for that coordination or cooperation through code. To me, and I'm going to refer to something Eric has said, actually, which is, I think that when we think about the protocol layer, layer one of public blockchains, it's the constitutional layer, and I'm sure he will talk more about that today. For me, I think we really need to understand what is going on at the layer one protocol level, and then what kinds of rules and governance is forming on top or around or because of that. And validator Commons came about because I'm involved, as is Eric and you, Kelsey. In fact, in a decentralized research network called Metagov, which is run by Joshua Tan, who works out of Stanford Civil Society lab and doing PhD at Oxford University, may have wrapped it up now, but was at the time, and he was approached by a couple of people from a validator service provider, and I'll define that in a moment, who were concerned about governance in layer one, proof of stake blockchains.

And what they were concerned about is that the design of these protocols were flawed in the sense that they were supposed to be kind of distributing power to people who own tokens to participate in decision making. But the way that that was done wasn't necessarily working out in reality for a range of reasons, which we can get to. But that's how I came to look at and be involved in validator commons. I should say that I've also been studying in my own ethnographic research, the experience and role of validators in Ethereum, which is now a proof of stake blockchain. It is quite different to the validator service providers that I'll be talking about today, but does have some of the same issues.

Kelsey Nabben

Yeah. So potentially, just for the sake of the audience and any listeners to this recording. So, validators are essential to the operation of distributed computing infrastructure. They help run the consensus mechanism. And so in the bitcoin blockchain, which was the first example of kind of a fully functional peer to peer decentralized blockchain, it occurs through a consensus mechanism called proof of work that requires people to run mining hardware, so run kind of a computer thing, server with software on it and expend electricity to participate in that process.

And then a bunch of blockchains, including Ethereum, the second largest by market cap have transitioned to this idea of proof of stake. So instead of running the electricity hardware thing, you put up capital in the native cryptocurrency. So you stake it. You lock up that capital to participate. Yes, but with many other large blockchain ecosystems, such as the cosmos ecosystem, the requirements to participate in securing the blockchain as a validator are quite high.

Ellie Rennie

So although it's possible to run an Ethereum node and be a validator from home, literally with just a little nook piece of hardware in your cupboard and 32 Ethereum as your stake with other blockchains, it's a much higher entry requirement. And that entry requirement can be, say, the number of tokens that need to be staked for you to be in the validator set. That then is rewarded for good behavior for securing the blockchain in the form of cryptocurrency. Or it might be that the actual hardware that is required is expensive and requires a lot of expertise to run. So how those particular blockchains, let's take the cosmos ecosystem as an example.

How they have designed themselves to work is that, say, I am a token holder of Atom for Cosmos Hub. And there are many different cosmos chains, Agoric, Juno, many, many of them.

If you're a token holder, you can delegate your tokens to what's called a validator service provider who will then stake them and run that. And you can participate in securing the blockchain. Your tokens are effectively locked. But with that process, you can, through these validator service providers, maintain custody, although it's locked away until you choose to unstake it. But in the process, unless you exercise your vote, your vote defaults to that validator service provider.

So we end up with a situation where these companies, some of which have many, many millions of dollars on the line and we don't necessarily know where all the other capital is coming from, they can have significant voting power. And I think even more problematically, which was one of the things identified to myself and Josh at the very beginning, was that there are also, of course, means of staking and participating in proof of stake through custodial validators. So, for instance, Coinbase, the exchange will allow you to stake, say, your atom tokens through them or whatever tokens it might be for that particular blockchain. But you actually could not exercise your vote because you don't have custody over it. You're not connected to a wallet that enables you to participate in decision making.

So what is happening in that case that we have found is that those services, those exchanges, will not vote at all. Whether they should or not, it's actually really hard to say, but that can also mean that you might not reach quorum because they might hold a significant share of the tokens, because a lot of people might just choose to go through them, because that's the easiest way to do it. So we end up with a kind of issue there around participation and attention. But there were many, many issues that were kind of raised to us at the commencement of the validator commons, which we wanted to try to work through. It could be things such as how do validator service providers stay on top of all the governance decisions that could be occurring across, say, if they're validating for ten different proof of stake blockchains, how do we as delegators know how they're going to vote?

What kinds of, kind of pre voting deliberation is occurring that might help those validators make a decision on behalf of their delegators about which way to vote, and then a whole series of more technical issues around. What kinds of dashboards do we need, what types of just even, I would say, transparency around where the stake that these validators are holding has come from. For instance, if it's come from a particular venture capitalist, should there be some kind of proof or attestation or whatever that enables us to know that that's the case? And the whole point of this technology, of course, is that these things should be legible and transparent and we should be able to keep track of all this. But it's a very, very new and emergent system.

So the work of the validator Commons is largely to try and address these problems that validators themselves identified. So we started a process which occurred over many, many months, where we would meet regularly with a group, a smaller group. I think there were kind of five that showed up regularly of these large validator service providers weekly to work through what they thought good governance is, what kinds of issues they saw in the ecosystems, and what it would mean for them to come together and try and address this problem, which I think is kind of where these issues around cooperation versus collusion come in. Yeah, so, fascinating. So you have this very technical system, very infrastructure heavy, very capital intensive, and then you end up with five people on a regular call to discuss governance around all these kind of meta questions and day to day operations for the.

We have grown to 50 or something now, though. Yeah, but it's around the operations. It's much, much kind of broader public infrastructure. So, Eric, you attended one of the initial actual, what was an in person meeting at the outset of the validator Commons, what was your impression? Walking in, I guess, from your perspective, and maybe some of those lenses around the kind of governing the constitutional rules, the technical upgrades of these systems, but through a room of people that had to sit around and have these kinds of conversations.

Eric Elston

So a couple of initial impressions surrounded one, the high degree of specialization and ultimately capital intensity of these processes, meaning that one smaller group was exercising decisions that had consequences for a much larger group of network users. And that harkens back to a point I was making earlier about specialization leading to concentrations of influence. The second was just the recognition that derives directly from heterogeneity of interest within groups means it's also emergent within human social ordering when an organization scales to a sufficient size or complexity, that subgroups begin to formalize their definition internally. And so for me, it was certainly inevitable that if you have an organization that hits that scale or complexity of interactional processes which it is governing or facilitating, that you are likely to see different subgroups emerge as a function of heterogeneity of interest within the system. The third recognition was, it was correct to call what they were doing a political party, and that was the nomenclature used when they were originally organizing the validator commons.

But it's not as if political parties are beloved, especially in cryptocurrency communities that are trying to exit to some extent from the political infrastructures that currently govern them. And so I think the term political party is laden, but it's nonetheless apt to describe what was occurring. And so the point I made at this initial Commons was, it's wrong to characterize your subgroup formation within a complex organization. As we represent everyone within this group, you're coordinating a set of sufficiently shared interests to where I think it's important to recognize that and recognize the interests that are motivating you to do so. But to claim that your decisions are representative of a larger group is ignoring those who are not present at the table, often for very voluntary reasons.

The example I used there was OPEC, to its members is a very powerful and effective coordination body. But those subject to oil prices that OPEC defines to a great extent, consider it a collusive body that's extracting rents from market consumers of oil the world round. And so every subgroup pursuing its own interests is likely to be viewed, at least on some margins, as collusive with respect to the set of interests that they're not representing when they're organizing within the larger organization. Yeah. Okay, so that event was the launch of the validator Commons.

Ellie Rennie

And it took place in Austin, Texas, at the time of consensus this year, in May, I believe. And it was an interesting room, because in that room we had these founding members of the validator Commons and some other validators who were interested to hear and join. Then there were a bunch of core developers and people from blockchain foundations. So I'm talking the founders of the Cosmos ecosystem of Juno Sifchain, of many other, mostly cosmos blockchain ecosystems there. And they were very much taken aback by this initiative.

I don't think they're opposed to it, but they had an expression of shock on their face and in their voices, I think you'll remember. And my, I suppose, throwaway line at the time was that these core developers, these extremely smart people, had designed these blockchain systems to be resilient in conditions of adversity and under attack. But they did not foresee conditions of cooperation, which is what was occurring in that room on that day. And so what we had, and I think we have a situation where they have designed a system, and they have designed it so that these validator service providers are essential for the running of the blockchains and making them secure. And I think it's important to point out that these validator service providers have, and this came out through these discussions, they have a real interest in the longevity and long term survival of these blockchains in a way that someone who's just delegating might not.

So you can say this is not democratic, because not everybody is voting all the time, or whatever, or there are these kind of intermediaries in the middle, or whatever it might be, or parties, but in fact, they bring the expertise, they bring the attention to the proposals and the maintenance, and they were wanting to get it right. And what was really fascinating is they said overtly that the thing about blockchains is that governance is not just cooperative, it's competitive, and that ultimately, it is the blockchains that have the best governance that will win. And in the case of validator service providers, hopefully, it's those that believe in good governance and that are willing to participate in processes to uphold it, that will attract the most stake and the most delegators coming to them, and therefore profit. So the economic incentives are still very much part of this. And that's by intention.

That is absolutely how the system was for Teddy and others, Dan Huang and many others in the room and who are involved in these conversations, the kind of insight that I was drawing from this as an ethnographer, they see blockchains as these sovereigns and they see governance as competitive, and they think that it's important for good governance to be able to, or those who are going to uphold good governance to be able to distinguish themselves. And that you could say, we could just have an industry association that does that. But they wanted to make room for those that don't see it that way or do it that way. And for me, I kind of very much came round to this idea of the validator Commons describing itself as a political party, because then as a delegator, you can make a choice. You can say, I'm going to delegate to the people who do it this way, or I'm going to delegate to the people who just want to give me NFT incentives or the highest aapy on my stake or whatever it might be.

So it's a competitive system. And I'm super interested to hear Eric's thoughts around that. The idea of competition, and particularly a defining characteristic of these systems, is that it is easy to exit. It's not easy to exit the country, the nation that you live in as a sovereign state, but it is easy to exit a blockchain and to sell your tokens and to go and participate in one that you think is now doing it better. I'm sure a lot of people left eos, for instance, and I know a company here in Australia that left eos and went to Ethereum for very good reasons.

So, Eric, how do you think about this? Yeah, so I alluded to the fact that political parties, probably rightly, in many contexts, get a bad name. And so using that term is itself laden. But I do think the emergent nature of specialized representation of subgroup interests within complex organizations is a testament to the efficiencies of that. But that runs directly up against contexts where members don't have the ability to exit at low cost.

Eric Elston

How easy would it be for any one of you to become a United States citizen? Not impossible, but very costly, and probably a many, many years long process involving hundreds of thousands, possibly millions of your own dollars just to make that exit possible. That means groups that represent you within a system that has very high exit costs can extract a lot of rents as a result of that. And to me, that's a direct reason why political parties get a bad name. They wield massive influence within the systems that they govern, partially because of their representative influence.

So what's different about these networks? Ellie has already emphasized to me the two canonical components that make them so different, and I think, restrain the incentives of this sort of political party, if you want to call it that, of the validator commons. Exit costs are relatively low, and there are many competing organizations out there that offer similar opportunities. For those who are interested in participating in these systems, that is a direct check on the subversive governance incentives of those who control the equivalent of political parties in these systems. If they extract so many rents, eventually their product itself will be weakened relative to their competitors.

So to me, the first component is low exit cost and the ability of other networks to attract similar minded users. That's a direct check on these subversive incentives that can otherwise proliferate in political systems as we understand them. The second component is the levels of transparency that blockchain processes tend to have baked into them by design and tend to be demanded by network participants and users. So it's not just technical features, it is an underlying ethos of we want to understand the processes that are influencing our costly stake in these systems. To me, those two things together check in important ways the incentives of a group that I think is correctly likened to a political party.

In part because these networks are distributed, they constrain the sovereign to an important extent. And that means they are kind of like democratic orders in really interesting ways, including the way in which delegated proof of stake is actually a closer representation to modern political orders than actually direct voting. And so for me, low exit costs, high transparency of network processes means you don't get the special interest capture and the problems of dark money that give many political parties a bad name in this day. And I mean, I'm kind of interested in your thoughts, actually, Kelsey, as well. I know you've done some work on Lido, so with Ethereum, it's not on chain governance.

Ellie Rennie

So there's not the kind of same voting process. It's more akin to what filecoin has described. It's a proposal process. And in Ethereum and other systems, core developers and foundations do have a lot of power. They don't have any checks on that power necessarily, other than the nodes themselves.

So as someone running an ethereum node, I can decide not to implement an upgrade. That's kind of the extent of my power, other than if I decide to get involved in, say, the Ethereum magicians council or whatever it is. But I don't necessarily have the status or networks. I absolutely don't have the technical expertise to participate in that. So instead, as a home staker and node runner, I personally choose to participate in something called Dap node, which is a user interface that enables me to run an ethereum node without needing to do command line and the rest of it.

But then that kind of raises questions, and dapnode itself has had to face this, well, how decentralized are we and how do we do that kind of auditing function? Even in, I think, Ethereum, there are these kind of multiple, like they've tried to say, we are the most decentralized proof of stake blockchain and designed for that, and I think very successfully. But we need to be paying attention to all of these other entities within the system and their role. And of course Lido, which I just mentioned, which Kelsey has done more work on through block science than I have, but where you can be someone who has Ethereum but doesn't necessarily have 32 or wants to run a machine, so you can do what's called liquid staking, and your ethereum is pooled with other ethereums, which is then kind of put into a smart contract and staked on your behalf. So it still has a similar system.

And I know Lido went through a similar kind of crisis around a vote around should Lido be capped at 30% of all staked Ethereum? And they rejected that for good and bad reasons. So I actually want to throw this back to our wonderful host and say, do you see parallels in Ethereum or issues around proof of stake there? Yeah, there's some interesting and kind of similar themes to what you've discussed. So the CTO of Lido actually reached out after reading like a blog post on resilience and vulnerabilities that I had done, and as part of that desire to want to do good governance or have a functional adaptive system, and then also as part of the desire to want to signal that, I guess, as well.

Kelsey Nabben

And we ended up doing a sort of short, sharp kind of mapping exercise and vulnerabilities analysis of Lido Dow. And so it's an incredibly sophisticated thing, one of a kind thing. They're one of the first movers in this idea of liquid staking. And so they have this first mover advantage across a whole number of ecosystems, which is where that concern arises of if everyone is liquid staking via lido dao on Cosmos, Ethereum, Polkadot Solana, and any other kind of major blockchain ecosystems that emerge. There's this real kind of potential fragility there as well.

But part of what we found in the kind of attitudes of people we spoke to and what we observed was, again, this idea about what I just called sort of self infrastructuring, it's not decentralized because there's all this secondary economic sophistication and technical sophistication, but it's more decentralized than the alternative. And so they could self limit because they're scared of themselves having too much influence and power in other blockchain ecosystems. But Coinbase isn't going to self limit by taking the value that people have sitting on their coinbase accounts and then using that for potential influence across other ecosystems. Anyway, in the case of Lido, from their perspective, within that system, it was about being more decentralized than the other sort of mainstream, centralized alternatives. Yeah.

Ellie Rennie

And I think these questions around decentralization, it's almost a kind of meme that blockchain is good because it's decentralized, and if it's not decentralized, it's bad. And for me, I feel like my experience in both Ethereum but also the validator Commons is that what's occurring is far more complex than that. And we need to be a bit wary of that discourse around, oh, but it's all centralized, because, in fact, expertise is really important and attention is important. I'll give the example of a Juno proposal. I'll give two examples, actually, from Juno, which happened during this time period, I'm talking about this year, where in one case, a vote went through which someone had just put in the wrong wallet address in the proposal.

And I think something, maybe it was like $30 million or something, was sent, maybe it was not that much, but a lot of money was sent to a wallet that no one controlled and was lost, essentially. And so there was a kind of moment where everyone said, oh, maybe we should have checked that. And the validators kind of passed that. And then another one where a whale, as in someone with a lot of tokens, was airdropped, another token in the cosmos ecosystem, and this was Juno. And the way that it occurred, it looked like they had deliberately tried to get more of the airdrop by having multiple wallets.

Right. Whether they did or not, I won't comment. And it was the kind of first instance of a blockchain deciding to confiscate funds from a particular individual.

Yeah, it was similar to the Dow hack in that respect, but they were taking it off. An individual so highly controversial, and.

Kelsey Nabben

Even. Though one is terribly controversial and challenging for people to make a call on that, versus one which is really banal and administrative and mundane, both of them need processes around, how do you actually arrive at the outcome that you want in this situation? So some of the things that the validator Commons will talk about is like, maybe we should be doing the auditing. Why should the auditing have to be core teams? Let's decentralize auditing and get that right, or even who's putting forward proposals, and that maybe they need to be taking more of a role in the development of blockchains themselves and determining their future, which, of course, core teams might not be so happy about.

Thank you for those comments. I don't know if we have microphone runners, but I wanted to make sure we open the floor just for one, maybe two questions if we have time. Is there anyone with questions? There's one here in the middle that raised their hand first. And while they're running, Ellie, to Eric's comment about these sort of having some of the features of more kind of potentially sort of democratic or political entities, I've heard you describe these as not necessarily democratic, but something else.

And I wonder if you can put more thought to.

Ellie Rennie

I mean, this comes to one of the things that we're working on at the moment. I'm thinking of them partly in terms of monetary democracy, John Keane's work around that, which we already have in society, a kind of world where there are various agencies that take on these kind of roles of decision making and keeping powers in check and all the rest of it. So that might be one way of thinking about it. One thing that we're doing which definitely fits that category is when we get enough valid aids. At the moment, we're only really piloting it because we don't have 50 members or something.

I think it's about 150 individuals. A kind of sortition process where we randomly select people from validator who work within validator companies and create validator juries, so that not everybody has to look at every proposal all the time, and those juries might assess both sides of it. Well, this is what we've been trialing, come up with a recommendation that the others can choose to adopt or reject. We're not quite sure what happens when, if they always get rejected, what that means for our membership, but just the idea that it takes away, I think, some of the challenges of doing governance, but ensuring that there is still a process there and that they know that, that due diligence has been done over a proposal to the audience. Well, thanks for excellent discussion.

D

Well, about delegated validation, basically. So I guess people usually participate in pools and validated delegation for lower risk. I guess you basically delegate the technical stuff to people who know what they're doing. I guess there is not enough incentive at the moment to run your own, even for actually large holders as well, because that carries basically larger risk of slashing basically, or making mistakes, which obviously is diluted by participating in pools where basically the risk is divided across members. So I wonder if the problem with delegated validation is motivation for individual validator, like basically running your own validators, and that's basically currently lacking or not.

The second question is why do we think that delegated validation is necessarily bad ish, especially that it is actually one of the types of democracy that we are actually currently delegating our decision making, basically, even choice of government, basically through other not everyone votes on everything, as we already know, that doesn't work anyway. Delegated validation might not necessarily be bad. Probably it comes back again to the motivation with basically, if the validator doesn't act in your incentive, would you change the validator or not? Probably not in most cases, yeah. I think you've identified a lot of really interesting things there.

Ellie Rennie

I don't necessarily think it's bad for some of the reasons. I think that delegation. Delegation is good if you know what you're delegating to, but we don't necessarily at the moment, which is partly what this is there to resolve. And if there can be ways to make it easy for those who do want to participate in governance but don't want to take on the risk, the infrastructure risk, including slashing, then we need to be able to do better for those people. Absolutely.

Kind of agree with your comments. I think the next area I really want to start delving into is probably around where ethereum is thinking and headed around light clients. The idea that you could run a node off your mobile phone and what that mean. One thing that's always really as someone who used to study digital inclusion, the fact that my validators might be taking up a terabyte of data a month, thank God for the MBN. Hey, what if you don't have unlimited broadband, or you don't kind of have constant electricity?

So how decentralized can we get? And is that a good thing? I don't have the answer to that yet, but I'm super interested in that conversation too. I just briefly add that bad relative to what? And so the reason we tend to have delegated decision making and political processes is, in addition to specialization reasons, polling everyone on every single political affair is inefficient.

Eric Elston

It would be incredibly costly of everyone's time. And many people don't care about the vast majority of political decisions being wrought over them. They care about a subset which hopefully their delegated representative represents them sufficiently on. But it's true in private sector contexts as well, which is there are benefits associated with risk diversification in investment, meaning I delegate my retirement accounts, on which my family depends in my future to many, many managers of investments because I couldn't possibly efficiently manage and oversee and participate in the governance processes of all of those different enterprises that a tiny slice of my value is allocated to. And so for me it's bad relative.

Is it bad relative to competing alternatives is the right question as opposed to is this a good or bad thing within this system? So that actually raises interesting questions about delegation occurring in daos, which happens in some, in the case of the Lido interviews we did. But that's something to revisit to the other gentleman with the microphone. Yes, I'm just curious. We've got concerns about centralization of power with validators, but then there's another thing that some folks are beginning to question, which is validators using Amazon Web services or other cloud hosting things, and that there may be centralization risk there.

E

And so I'm wondering if you have any thoughts as to first of the hurdle of the centralization around staking and stuff, but then the platforms that are used and then what decentralized cloud infrastructure might look like and are we ready to have that, and whose domain does that kind of fall in? Is it the validators themselves to sort that out, or how do we support that? I don't really know the question, but. That'S kind of, I know where you're getting at, actually. Chris Remus from Chainflow, one of the validators that we've been working with from the start, wrote a fascinating piece around decentralization.

Ellie Rennie

And one of the risks that he identified was that you can have situations where a large number of validator service providers are using the same data centers, for instance. So at that very practical hardware level, what happens if that goes down or if someone decides to create some kind of attack on that system somehow? So he was saying we also need to be ensuring and showing via all these incredible tools that we now have because of web three, that that's not occurring and giving people a choice not just about who they're delegating to, but who that person or company they're delegating to is choosing to use for their infrastructure, et cetera. Yeah, I've also seen some folks suggesting that when it comes to developer conferences, perhaps we shouldn't all centralize around developer conferences because you've got a whole concentration about folks in one area. Sorry, just sneak in an extra crank and then I'll hand over the mic.

E

Do you have any thoughts on time? When everyone was in Osaka for Devcon and there was a hurricane warning and everyone in Ethereum panicked? Know all the Ethereum core would be wiped out by a hurricane for the sake of time only. I will wrap it up here. So thank you to our panelists, our guests on Minton Burn, Ellie Renny and Eric Elston, and thank you for tuning in for this live recorded episode.

Kelsey Nabben

I'll add links to where you can find out more about the validator comments, anything that's been written about it. I know there's a blog post already and more on the way, I'm sure, as well as metagov on rmitblockchain IO. Thank you.

Do yeah.