Observatory

Validator Conduct

Validator conduct is assessed based on several metrics, including block signing, governance participation, software version, self-delegation, and validator commission. For instance, block signing score is derived from the number of blocks missed by a validator, while governance participation score is computed based on the proportion of proposals that the validator has voted on. The software version score measures the upgrade discipline of the validator, penalizing older versions of software. Self-delegation score indicates the validator’s risk-taking with their own funds, and the validator commission score proposes a reasonable range of commissions for effective operation.

Contribution to Decentralization

Decentralization contribution is assessed based on several metrics, including software client, country concentration, autonomous system, and Internet/Compute Service Provider. For example, country concentration metric is a key indicator of regulatory risk, while the software client metric actively promotes software client decentralization. The autonomous system metric considers the set of IP routing prefixes under the control of one or more network operators, and the Internet/Compute Service Provider metric considers the risk associated with commercial entities providing internet and cloud services.

The Observatory Service

Observatory has built a monitoring service that initially focuses on Cosmos blockchains and regularly scans their validator networks to compute a series of scores for each validator and summary scores at the network level. In addition to displaying current scores, the Observatory leverages the framework to provide guidance on which steps help improve or reduce validator health. Since validator health is connected to the overall network health, each validator gets feedback on how they are affecting the network health and how they can best improve it.

Limitations and Future Directions

While the Observatory provides a comprehensive analysis of blockchain network health, it acknowledges certain limitations. For instance, it currently uses monikers to match validators to their nodes, which is an imperfect scheme. Also, the use of indirect architectures may obscure the location of the actual validator node, which could prevent the effective computation of a location score. Despite these limitations, the Observatory continues to evolve and improve its methodologies and aims to provide visibility into risks affecting blockchain networks and guidance to reduce these risks.