Liquid Staking with Stride - stDYDX Validator set expansion Cohort 3

dYdX Chain
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We’re excited to announce the third expansion of the stDYDX validator set - and its a big one!

To accommodate the anticipated increase in staked DYDX tokens from the recently passed community staking proposal, Stride is adding 9 new validators to the stDYDX set, bringing the total number of validators to which Stride delegates to 26 (43% of the dYdX active set).

Validators selected as part of this cohort include a diverse range of contributors from across the dYdX active set. From titans of validation infrastructure to smaller, community-oriented content creators, the latest cohort includes validators representative of Stride’s commitment to be a positive force for decentralization of the dYdX chain.

Stride’s Validator Selection Process

As set out in a previous post , Stride is effectuating a phased rollout of delegations to validators on the dYdX Chain. Stride initially launched with 10 validators in order to minimize the likelihood of a selected validator falling out of the rapidly changing dYdX active set. Additionally, Stride committed to periodically add additional validators to the set 3-4 at a time until Stride’s traditional 32 validator active set was reached.

As with the initial 10 validators, subsequent validators are chosen according to factors that are most important to the health of the protocol. These factors were inspired heavily by the dYdX Foundation’s published guidelines on best practices for dYdX validators and stakers . The recently published MEV Committee Validator Guidelines have also been taken into account. As additional community guidelines for best practices are released by various ecosystem participants, Stride will continue to adapt the delegation model to align closely with the community’s criteria.

A few non-exclusive examples of factors taken into account include:

  • The validators’ respective contributions to dYdX in testnet and mainnet so far, including node and infrastructure operation, testing, maintenance, bug reporting, engineering contributions, dashboard and tooling maintenance, content creation, and more.
  • Validator operations and security, to the extent that this is easily discoverable using publicly available means.
  • Position in the active set. Because 33% of vote power is currently concentrated in the top 3 validators, no stake will be added to the top 33% of vote power until such time as stake weight distribution across the set improves
  • Node performance and latency.
  • Governance participation.

This model helps ensure minimum downtime for a validator to which Stride delegates and ensures maximum alignment with the dYdX’s protocol’s needs. Stride wishes to be a strong decentralizing force for the dYdX chain, and the validator selection process reflects those goals.

Validator Selection - Cohort 3

Stride has selected 9 validators to join the set as part of this cohort. They are:

With the inclusion of these 9 validators, the total set of 26 validators is as follows:

  • Imperator
  • Polkachu
  • Kingnodes
  • PRO Delegators
  • Crosnest
  • Strangelove
  • Cryptocrew x Defi Dojo
  • Enigma
  • ECO Stake
  • Smart Stake
  • Lavender.Five nodes
  • Kiln
  • Meria
  • Cosmostation
  • Silk Nodes
  • Informal Systems
  • Provalidator
  • Stakecito
  • Coinhall
  • Coinage x DAIC
  • Dora Factory
  • Blockdaemon
  • Chorus One
  • Allnodes
  • Nodes.guru
  • Crypto Learning Club

Next Steps

Stride will begin the process of adding the above validators to the set in the coming days. Validators should note that due to redelegation limits coded into the Cosmos SDK it may take up to 2 weeks to notice changes in your delegations as a result of this expansion.

The community staking proposal is a testament to the dYdX community’s confidence in Stride as a force for decentralization of vote power and enhancement of economic security for the dYdX Chain. As the stake weight distribution of the chain changes with time, Stride will continue to monitor delegations to ensure that the community’s confidence is not misplaced.

Onwards and upwards!

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And I like it, keep it up by maintaining the quality of the selection of the most committed validators in the ecosystem.

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It’s good that we see much bigger validator list than before. Good step to further decentralization

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I have examined the list of validators that you have added, their involvement in the community, their participation in proposal voting, and I cannot understand why BlockDaemon is included and StableLab is not.

I suggest removing any political aspect and simply evaluating both validators in accordance with the postfrom the Foundation to which you refer.

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Winnie from Stakecito here!

Just wanted to say thanks to @Stride for considering us for the stDYDX validator set expansion! This is a commendable step towards further decentralization and we’re honoured to be a part of this cohort :pray:

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It seems BlockDaemon joined the active set of dYdX v4 around a week ago, they have 0% governance participation and one of the worst performance and uptime so their selection is quite concerning indeed.

Moreover, other selected validators such as Strangelove was recently jailed, has a low governance participation and also a bad uptime and performance. Other selected validators are also at the bottom in terms of performance and uptime. In contrast, several validators with top uptime, governance participation and many community and technical contributions to dYdX v4 for several years are still not selected. In fact, many validators that are part of the Stride set for the Cosmos Hub and other networks, meaning they have already passed the selection process, are still not selected for stDYDX.

Who is selecting the validators for stDYDX and what is the specific criteria and points system for the selection? Given the upcoming proposal of 20M DYDX for stDYDX from the community pool it seems that more transparency about the selection process of the stDYDX validator set is critically important.

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Hello, I’m eguegu from Crypto Learning Club. (It’s my first post!)

I am deeply honored to be selected for this round of @stride

Being a validator for dYdX requires particularly high standards for maintaining uptime, and we are always in search of the optimal infrastructure.

We are newcomers who started our validator operation at the beginning of March, but we have focused on marketing in Japan and managed to get 300,000 dYdX delegated to us in less than a month.

We have launched our Validator purely because we want to support dYdX from Japan😊

So far we wrote articles about dYdX on our platform, and conducted interviews with @Hisashi ( dydx Foundation Asia Business Development) on our YouTube channel.

dYdX have a particularly large number of Japanese traders, so we are committed to focusing our efforts on activities within the Japanese market in many perspectives!

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Thanks for sharing your contributions to dYdX. How many youtube videos you did focused on dYdX? In your youtube channel it seems there is only one recent video? Also, how many articles you released covering dYdX? If you were selected based on dYdX educational content and joining the active set just less than a month ago it is concerning that other long-term dYdX content creators like ourselves were not selected yet @stride @charles. We have been covering dYdX in our youtube channel with dozens of videos, blogpost articles and twitter threads since mid 2022 for almost two years now. We have a very strong Japanese community also and some community members even translated some of our articles to japanese. Also, in terms of reach, our youtube channel has more followers 1.31k versus 1.25k in your channel. Also, you have 258 videos and 70k total views meaning around 270 views per video, we have in contrast 51 videos but 32.3k views so around 630 views per video. Moreover, in almost all of our videos we have covered dYdX including many in-depth technical educational content, several of the episodes were shared by the @dYdXFoundation. Moreover we helped a lot during the mainnet launch in October 2023 and even found some bug in explorers regarding the display of the different dYdX v4 commissions that was leading delegators to confusion, we reported this to @Josh_E_Wa and it was later fixed in the explorers. We have also discussed with @dimitar and @valentin several ideas for additional infrastructure support of dYdX v4 and advised in topics such as validator sustainability.

In terms of the infrastructure and performance, our infrastructure is based also on Tokyo, bare metal, unlimited bandwidth. We have the 9th best uptime in the last 30 days in dYdX v4 and the 8th best uptime in the last 90 days, while you are 42th out of 60 in terms of uptime: https://twitter.com/CosmicValidator/status/1773986658246885452

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Guys, do you realize what is happening right now? You are starting to compete in achievements in order to secure a delegation from the community treasury. In my opinion, Stride, as a commercial project, can delegate to whomever it wants, but there’s a significant nuance: if Stride receives 20M dydx from the community treasury, the entire validator selection process must be systematic and transparent (a certain uptime, a specific percentage of participation in votes, social contributions according to some metrics, documented experience in validating other networks). These are just the factors that come to my mind at the moment. These criteria should be defined by the community.

Currently, everything is reduced to who has “closer access to the body.” Certain personal relationships with one or another stakeholder and so on.

In my view, this is unacceptable for a decentralized protocol and poses significant risks for governance.

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Hello @Cosmic_Validator ,

I understand your point, and we truly believe in the potential of dYdX, wanting to support it wholeheartedly without intending to compete with you.

Even if you present your advantages in comparison to others, ultimately, the decision is in the hands of the @stride team. Therefore, directly asking team members about their selection criteria would be the best approach.

This is merely my speculation, and I might be wrong, but I wonder if the mechanism you’ve introduced to rebate a portion of the commission might be perceived by the Stride team as malicious behavior towards the network.

Personally, I think the activities and uptime of Cosmic Validator should be highly valued, so it would be wise to promptly check the evaluation criteria with the Stride team.

Additionally, as @RealVovochka has pointed out, considering that 20M dYdX is contributed from the treasury to Stride, we also agree that there should be more transparency in Stride’s selection mechanism. Moreover, as a community, we should have discussed this before the proposal passed.

Given that the proposal has already been approved by the majority of validators , this is no longer just an issue for Stride or specific validators but a challenge for the entire community.

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Hello all dydx community I am ThomasHoang, Founder at TTT Capital.
Vietnam’s largest community validator, offering validation services, educational resources, and market penetration in the Vietnamese crypto market.

$27,023,672M crypto assets are staked with TTT’s non-custodial validators on over 20 blockchain networks, including Cosmos Hub, Injective, dYdX, Axelar
We are a community from Vietnam and we focus on developing education for Dydx in Vietnam.
We write many, many articles about dydx on Twitter (X)

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Hey everyone! As a participant in the validator selection process for Stride, I’m happy to give a little bit of context on some of the factors that go into validator selection.

Quick disclosure, I’m a Stride contributor.

As noted above, Stride takes various factors into account when making validator selections based on best practices guidelines published by various dYdX community stakeholders, with additional care taken to diversify stake across the active set to decentralize stake weight.

Several non-inclusive factors that go into the selection process are outlined in the original post, but it’s important to note that validator contributions are extremely nuanced. The way that any one validator contributes to the growth and success of dYdX will often differ drastically from the ways in which another validator does so.

Because of this, setting hard, inflexible criteria that validators must meet in order to receive delegations is often more exclusionary than being flexible with delegations. While I’m not going to go into specific detail on why every single one of the 26 validators was chosen, I’ll use Strangelove as an example because they were brought up as part of this discussion.

While it’s true that Strangelove has lower gov participation than some other Validators that were not selected, they run critical infrastructure for dYdX. Most notably, the CCTP relayer, without which dYdX could not operate. They are also core contributors to IBC and the Cosmos stack, and validate for dozens of chains in the ecosystem. It’s not an understatement to say that the Cosmos ecosystem, and the dYdX chain, would not be where it is today without their contributions.

Focusing solely on governance participation would not do justice to these efforts.

No matter how Stride (or any other delegation program) chooses to approach delegations, some really great validators will inevitably be excluded. I understand that certain validators who were not chosen may be upset. Just a few additional things to note here:

  • The dYdX Chain has a hard-coded minimum commission of 5%. To us, this is reflective of the protocol’s wishes that 5% be the minimum commission. As such, we see validators who attempt to circumvent this minimum by advertising 0% commission or offering commission rebates to delegators to be acting in opposition to the protocol’s wishes. It is of course a free-market, and Validators are free to conduct their business as they choose, but delegation programs should seek to delegate to validators that act in accordance with the wishes set out by the protocol in code.

  • This delegation program has not ended, there will be future validator additions, removals, and redelegations as the protocol’s needs change. Validators who were not selected in this round may still be chosen in subsequent rounds.

I hope this has helped add a bit of context to how Stride approaches delegations, and especially our thinking behind how setting a concrete, immovable set of criteria would ignore many of the offchain contributions made by many validators and end up doing more harm than good.

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I do believe that selecting a diverse set of validators is a very tedious and difficult task.

Would it be possible however to create an overview of the selected validators and make it transparent how they are selected and for which services / achievements? I think it would greatly reduce friction in a sense that it becomes clear what kind of choices have been made.

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Hi @RoboMcGobo do you have some updates? Thanks