January 5, 2023

Enhancing Network Decentralization and Integrity With Validator Performance Framework

Validators are network participants who lock up native tokens in the system and operate block producer nodes in order to help run the network. Enhancing their ability to self-regulate network participation is a key aspect of furthering decentralization.

The community is taking an important step toward that goal by providing a framework for understanding how validators are performing against an objective standard, an implementation of the community approved proposal known as PIP-4.

The evaluation will assist the community to identify the best and worst-performing validators across key metrics and help offboard low performing validators to ensure the structural integrity and security of the network. Transparency will also help foster an environment of continuous improvement and a more engaged community overall.

Framework Overview

One additional column -- Health Status -- was added to the Validators List as part of the new framework as shown in the image below.

The Health Status is a color code indicating the degree of validator well-being relative to the Performance Benchmark. Hovering the mouse over the colored dots will provide more detailed information about the current validator status:

Green: validator is healthy relative to the Performance Benchmark
Orange: validator is served a Notice of Grace Period 1 to improve performance
Red: validator is served a Notice of Deficiency with an extended grace period (Grace Period 2)
Black: validator is served the Final Notice and will be offboarded as a validator and its stake will be unbonded

The main goal of this solution is to make more clearly visible critical performance information with the validator as their state changes with each checkpoint.

The notice of Grace Period 1 (GP 1) is issued to a validator if their performance (percentage of checkpoints signed) for the monitoring period of the last 700 checkpoints (or ~14 days) drops below the Performance Benchmark. In such a case, the validator must take action to improve their performance during the grace period of the following 700 checkpoints.

If the validator fails to bring their Performance Index (PI) above the Performance Benchmark (PB) during the initial grace period, a Notice of Deficiency (NOD), also known as Grace Period 2 (GP 2), is issued as a final warning for the validator to take necessary steps to improve performance within the additional grace period of the next 700 checkpoints. Failure to improve leads to a Final Notice (FN), or black alert, which initiates a forced exit by unbonding the validator's stake. To ensure accurate and appropriate action is taken, it’s important to note that the process is not automated as outlined in PIP-4.

If the flagged validator's PI improves above the PB, a Release Notice is made available, restoring the validator's health status to green.

For an instant health check, the validator dashboard displays a live Performance Index calculated at every new checkpoint along with the current Health Status. Important messages around the validators’ health statuses are sent to the validators as notifications. Additionally, users can see a history of all notices sent to specific validators by navigating to the Public Notices Page to help gauge past validator performance.