Signaling Proposal: Reduce Validator Fees

Summary

I propose all validators on Secret Network reduce their fees in .secretd/config/app.toml to 0.0125uscrt from the default of 0.25uscrt. This will lead to cheaper transactions for all users.

The Problem

Secret Network is by far the most expensive network in the Tendermint/Cosmos ecosystem by an order of magnitude. This leads to higher fees paid by users, as well as costs associated with relaying. The original choice for gas fees was chosen early on as a means of mitigating DDoS attacks, and has not been updated since. With the growth of SCRT, these prices have become prohibitively expensive, even after Supernova.

Across the relayers, ~288 SCRT per day is being spent on transaction fees across ~1500 transactions, averaging 0.192 SCRT per transaction. At current prices, that’s $2400 per day to be split across 3 validators. That is drastically more than other networks, and IBC has only barely begun.

According to map of zones 0, the following amount of IBC transfers are occurring every day:

  • Osmosis: 30,000
  • Cosmos: 15,000
  • CRO: 12,000
  • Juno: 4,500
  • Terra: 3,000 (bearing in mind Terra newly has IBC enabled)
  • Secret: 1,500

If Secret Network achieves the abundantly reasonable metric of becoming equal with Juno at 4,500 transactions per day, 864 SCRT would be spent by relayers every day, or ~$6,900 USD.

Context

For context, the following are the default/recommended values for gas on other Tendermint networks:

  • Terra: 0.01133uluna
  • Cosmos: 0.0125uatom
  • Osmosis: 0.0uosmo
  • Juno: 0.01ujuno

Gas on Secret Network: 0.25uscrt

The following are values I’ve gathered by IBC relayers (per relayer*) on how much they’re spending per month on relaying:

  • Terra: ~200 LUNA per month, or ~$10,000 USD (per relayer)
  • Juna: ~120 JUNO per month, or ~$1,200 USD (per relayer)
  • Cosmos: ~150 ATOM per month, or ~$4,500 USD (per relayer)

At the current trajectory (at 1/3 the transactions of Juno), Secret IBC is looking at ~8640 SCRT or ~$72,000 USD per month (total, not per relayer. Per relayer, at this time, would be $24,000 USD each).

This is coming directly out of relayer pockets, not out of a community fund, or provided by teams such as SCRT Labs or Secret Foundation.

A validator with the average commission of 5% would need more than 6 millions tokens delegated to them in order to break even each month.

Risks

Lower Tx Fees Gathered by Validators

Lowering the cost of transactions would mean less profit for validators.

I don’t consider this a realistic risk when most profit is made via inflation at this time. In addition, the goodwill of low transaction fees will far outweigh the “cost” of lowering fees.

DDoS Risk

This is a more serious risk, but still one I consider moot in the face of the cost of transactions.

Benefits

The benefits would come in several forms:

  1. Goodwill from users for low transaction fees
  2. Lower cost for IBC usage, for both relayers and users

13 Likes

I have no issues with this. We can support lower fees.

As far as relayer costs come about i believe there were talks in cosmos about taking relayer fees from the end-user as part of the tx (including the relayer incentive fees). Maybe this should be pushed on the cosmos-sdk end of things.

4 Likes

Hey Dylan, would that directly translate into transactions and computations becoming 20x cheaper because the fees have been reduced 20x?

Yes, Keplr might need to change the defaults for most people to benefit from it though, but that’s a small change.

2 Likes

WhisperNode will support. Standing by for confirmation.

4 Likes

Yes, this is absolutely an end goal. However, it’s considered lower priority (and in my opinion they’re right) than creating a stable, effective product. In the mean time that means relayers have to eat the cost.

It’s very chain dependent on how this is handled. Some teams delegate to cover the cost, some are just given funding by the team (Osmo did this at the start).

Right now funding relayers is a complicated issue, as there’s trying to be a DAO created to cover relayer costs. This DAO is going to be made up of 7 people/entities that are intending to go for on-chain funding to cover the costs… but the DAO is in mid stages, definitely not ready for prime time.

However, this means relayers are “banded together” to not seek community funding as that’d undermine the DAO (as the DAO will be doing the exact same thing).

3 Likes

Yes, correct. The support team already deals with complaints about fees all day long as it is (especially with low fees rarely being accepted) - this is what I’m referencing when I say “goodwill from users”

2 Likes

Secret keeper 100% support this.

4 Likes

I’m all for it. 0.0125uscrt is what I’ve been set at for a long time anyway

2 Likes

As an update:

It appears the PR @assafmo put out on Osmosis has reduced our fees paid by relayers: Cheaper IBC deposit fees by assafmo · Pull Request #103 · osmosis-labs/osmosis-frontend · GitHub

Per the governance call, I’ll redo all the numbers and calculations on the 30th.

2 Likes

I support lowering the gas fees, I currently have mine set to 0.001uscrt based on some discussions i had with you about lowering the default gas fees a while back

1 Like

Completely agreed, also set my fees to 0.001 uscrt at the start of supernova.

1 Like

Update on pricing:

This is incomplete data, but the relayers have done several things to improve pricing:

  1. adjusted our node fees to 0, and validator fees to 0.0125
  2. change the default gas on the relayer
  3. adjusted IBC front end on Osmosis

which has led to drastically reduced fees.

Over the last week [0]:

  • 394.744851 SCRT was spent in relaying
  • 9696 transactions happened
  • Making the average tx cost 0.0407121339727723

The average cost per tx on day 1 was 0.192 SCRT per IBC transaction. Over the last 24 hours, with the updates made above, each tx is averaging 0.0043 SCRT.

One downside to this is it has led to several packets becoming stuck and requiring manual intervention (I believe 3 over the last week). This is obviously NOT ideal behavior, and would be remedied by reducing fees by more validators.

However, I consider reducing the fees as we have a resounding success.


[0]: this is incomplete data gathered by the relayers who responded to the request for their secret addresses to do the calculations

1 Like

agree and give full support

1 Like

I think its good to push this on chain

2 Likes

Reduced from 0.1uscrt to 0.0125uscrt

3 Likes

Reduced from 0.25uscrt to 0.0125uscrt. In or case, as I am sure it was with others, we just used the default settings provided/instructed.

2 Likes

Further update: there’s a discussion occurring in Juno to reduce all validator fees in the new mainnet to 0.01 or 0.001 as 0.025 has proven plenty stable.