Validator Responsibility and Retention of a Fair Market

  • Block proposers are capable of responsibly deciding or manipulating the network’s next block
  • Tendermint cannot determine the fairness or existence of censorship of the proposed blocks
  • This can result in a market that is disadvantageous to general users, allowing abuse, and exploitation of users’ assets
  • The Foundation must be responsible for making decisions that negate these attack vectors and present resolution to these observations

Possible actions that jeopardize a fair market

  • Censorship is the unintentional / intentional removal or omission of certain/all transaction within a block
  1. This abuse revokes the users’ rights to a timely commitment to transactions and the biased transaction handling results in unfair market circumstances
  2. Crescent also encompasses unintentional operational configuration of validators that results in a statistical difference in transaction list in a proposed block compared to other public nodes
  • Private Transaction Broadcasting is when a block proposer broadcasts transactions directly to private nodes rather than public nodes
  1. These transactions are likely to have much more possibility over those of others to be in the next block (100% if block is accepted)
  2. A difference in broadcasting environment is detrimental to the retention of a fair market for all users

The Guardian Overwatch

  • Validators are advised to peer with these nodes to pass over transactions within their mempools
  • Repetitive and significant differences for certain validators’ proposed blocks can provide statistical evidence of potential transaction censorship, both malicious and unintentional
  • When the negative impact on market integrity and users is analyzed, the community can decide the necessity of and appropriate consequences to be imposed on the validator

Facing the consequences

  • The validator will be warned and obliged to provide statistics for explanation
  • A consultation with the Foundation will be done to resolve the issue
  • If the issue is not solved even through acknowledgement and consultation, the validator will be determined to be a risk our principle of providing a fair market for users, resulting in a governance proposal to exclude them from the Liquid Staking Validator group

Integrity through transparency

  • The validator scanner will be open sourced, allowing any community member to view and verify the investigation algorithm
  • In the near future, real-time information from the validator scanner can be viewed on a upcoming website that shares validator activity and statistics

And Beyond

  • This feature allows users to encrypt transactions before broadcasting, so block proposers cannot view the transaction content prior to block proposal
  • The transaction content is unveiled after a threshold of validators agree, which negates selective censorship



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