Several members of the LUNA community have called out new validators for raising their commissions without telling their delegators or following proper protocol.
PFC, Lavender.Five, and Red Herring, LUNA validators, have called out new validators to raise commission levels from 0% to 20% without informing their delegators. According to Larry, a Delphi Digital developer, LUNA validators can earn up to $192k per year after receiving the 2.5M LUNA genesis delegator attribution.
Increased commission without notice
Red Herring cited two validators, KingSuper and Autism Staking, as having recently increased their commission. On June 4, they tweeted:
“KingSuper had 0% commission and attracted lots of people to redelegate to them. A few days ago, they decided to increase their commission from 0% to 10% without informing the community/their delegators.”
The increase in commission will have increased King Super's monthly return from $0 to $63,434 per month. Red Herring then highlighted Autism Staking:
“Similarly, they increased their commission from 10% to 20% without informing the community/their delegators (no website or chat/social media platform). Just a protonmail email address.”
Several validator nodes
Aside from the validators increasing commission without informing their communities, Red Herring also identified three other validators for unethical behavior: "Luna Whale, Lunatic Validator, and Long Live Luna." Red Herring described the configuration of each of the three validators and noted the following similarities:
- No logo
- Generic Luna related names
- 20% commission
- Max commission change rate of 20%
- No website/social media presence/email contact
Red Herring then examined the on-chain data for each validator's wallet. After collecting the tokens, each wallet transferred its commissions to the same wallet, "terra1hm4w," and then to a final wallet, "terra1kl6e." These validators' LUNA does not have a vesting schedule. The validators have taken advantage of the LUNA token genesis distribution to set up multiple validators.
“They exploited the large genesis delegation to earn huge commission without contributing to the community.”
The final wallet was identified as belonging to Kraken, implying that the validator is exerting sustained selling pressure on the price of LUNA via tokens delegated to them at random during LUNA's rebirth.
Validators react
According to King Super, it "strongly opposed the 0% commission argument and wanted to start the chain with non-0% floor commission, so that there are no commission wars." King Super also claimed that he "only set to 0% to compete with other 0% validators." When CryptoSlate contacted King Super for comment, he responded, "I validate other cosmos networks and terra was re-launching so I thought I would try to add some value there too."
At the moment, it is unknown what value King Super has added. He has since retracted some statements, saying, "Perhaps I should never have set it to 20%, but one thing was clear: after the recent LUNA collapse, we couldn't run our validator at 0% and it had to be increased."
“We increased it to 10% on request of “CapriciousSage | Ceres Ventures” because it was leading to skewed Voting power… The recent increase to 20% was to just cover the losses we incurred”
PFC, another validator who was also involved in Luna Classic and the votes to restart the chain, responded to USA GAG:
“We increased it to 10% on request of “CapriciousSage | Ceres Ventures” because it was leading to skewed Voting power… The recent increase to 20% was to just cover the losses we incurred”
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