Chainflow's Take on Replicated Security

Introduction

Chainflow joined the Cosmos community in 2017. Over the years, we've been fortunate to witness — first-hand, as a Cosmos Hub validator — the evolution of the Hub network and the broader Cosmos community.

Interchain Security (ICS) introduces new ways for Cosmos chains to share security features, like validator sets. The first ICS feature has been officially renamed to Replicated Security. With the introduction of Cosmos Hub governance Proposal 187, the community can finally decide how Replicated Security will make its way to the Interchain.

We see the benefits of Replicated Security and recognize that it can become a key competitive advantage for the Cosmos Hub. From the beginning, recruiting a competent validator set has required significant resources from networks wanting to launch in the Cosmos. ICS greatly reduces this barrier to entry.

Core Concerns

The adoption of Replicated Security raises issues we feel need to be addressed before moving forward:

1. Reduce opportunities for new validator operators, concentrating power in the existing Cosmos Hub validator set.
2. Raise operational costs for validator operators, shrinking already-thin margins across the board.
3. Eliminate choice for Cosmos Hub validator operators, forcing them to support new chains that may not align with their values.

At the core of these issues is the requirement that all Cosmos Hub validators must validate on every Replicated Security consumer chain, without the ability to opt-out on an individual chain basis.

More Chains, More Validators

Over the years, the number of non-Hub chains has grown considerably. Since each new chain has needed to build its own validator set, many validators who weren't able to enter the Hub's fixed validator set (currently limited to just 175 active validators) have been able to validate on non-Hub chains and gain a foothold in the Cosmos ecosystem.

Replicated Security will make it such that new Cosmos chains no longer need to build their own validator sets; instead, they can become consumers of the security offered by the Cosmos Hub's validator set. As a result, the responsibilities of — and the power yielded by — the Hub's validators will grow, likely further entrenching the power dynamics already in place.

For up-and-coming validator operators, Replicated Security may result in fewer new validator sets to join, and fewer opportunities to break into the Cosmos Hub's validator set.

More Chains, More Resources, More Money

Replicated Security, as constructed in Prop 187, requires Cosmos Hub validators to validate on every consumer chain that launches. The more networks an operator supports, the more servers, tooling, and human attention they need. These requirements translate into higher CAPEX and OPEX costs — yet many validators already operate at a loss.

These factors combine to increase the obstacles that validators face to becoming profitable. This is particularly concerning for smaller, independent validators, who have operated historically on thin margins and typically contribute an outsized amount of value back to the chains they support.

No Values, More Problems

At Chainflow, we put our principles before profit. One important way we reflect our values is by very carefully selecting the networks we support. We don't work with projects whose values don't feel like they have the potential to align with ours over the long term.

While we hope that each consumer chain that launches is values-aligned, the Hub's governance history, combined with the continued "Web3" shift toward a money-first focus, leads us to believe that we'll likely not align with every consumer chain that launches. Having to validate on every consumer chain presents a significant risk to our values-aligned selection process.

Voting No, At Least for Now

Ultimately, we're voting "No" on Prop 187 due to this risk to our values. We believe that allowing validators to opt out of individual consumer chains is a critical second filter that the Cosmos needs. If a consumer chain passes a community governance vote yet can't get enough validators to support it, maybe it's a sign that the chain shouldn't launch.

If Replicated Security is implemented in its current form, we will use that as an opportunity to advocate strongly for chains we feel values-aligned with, while raising red flags for those we don't. We've been supporting the ecosystem since its earliest days, and we'll continue to support it, and the Cosmos Hub, regardless of the outcome of Prop 187.

Update (March 6th, 2023): After confirming that more than 2/3 of active Cosmos Hub validators must choose to validate new consumer chains for these chains to go live, we updated our vote on Prop 187 to "Abstain" to reflect that, while we still have open concerns about the specific implementation, we support the general direction of moving to Replicated Security.