[KGP-4] Permissionless Klaytn

Summary of the proposal

Change the Klaytn network structure to be permissionless for anyone to become a validator

Current structure of the Klaytn network

The current Klaytn network is architected to offer scalability and immediate finality (Please see the diagram below) .

  • Endpoint Node (EN) proves the validity of blocks, offers APIs to users and allows them to create transactions. Anyone can operate EN.
  • Consensus Node(CN) generates(proposes) and validates blocks while Proxy Node(PN) protects CN from external attacks and propagates blocks to ENs transactions to CNs.
  • In order to become a Core Cell Operator(CCO) that runs CN and PN, you need to join the Governance Council (GC) as a member. GC members engage in policy making.

The Klaytn team will seek to improve the consensus algorithm based on the outcome of tireless research to allow the participation of more validators as much as possible without compromising the performance of the Klaytn network. .


To change the Klaytn structure for validators’ participation to be permissionless

  • The proposal allows any nodes that fulfill certain requirements to participate in the consensus process without others’ permission. In other words, anyone can become a CCO, and it enables anyone to operate all types of nodes, such as EN, CN and PN.

Expected Effect

  • Anyone can participate in the consensus process and get rewards according to their contribution to the process, which increases the engagement of ecosystem participants and moves closer to decentralization.
  • The value of assets staked in the network will rise, which increases the cost for chain attacks and eventually strstabilityengthens network security.

Future Plan (If this proposal is approved)

  • The Klaytn team to submit to KIP a proposal including detailed tech specification and plan to modify the consensus algorithm
    • Need to set the requirements for a validator(minimum staking amount), the share of rewards, penalties(slashing), etc. to increase the participation of new validators while ensuring the chain
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As a Klaytn validator, we oppose the suggestion of the permissionless system and we believe that other validators will share a similar opinion.

We would like to discuss the following points before the voting process:
ポIdeas that do not harm existing validators, such as changes to the maximum number of nodes, epoch, reward design, etc. (clarity needed)
ポIf increasing the amount of staking is the goal, adopting the DPoS (delegate proof of stake) should be considered.
ポPros and cons of each entity based on a concrete plan.

We agree with ideas to improve the ecosystem, however, the Klaytn community has already forced us to change the staking limit and to make additional contributions this year. This change will purely decrease validators’ revenue (if not, please let us know the reason) and we believe that it will affect the trust with the governance council.

We look forward to hearing the comments of other validators.
Thank you.

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Hi @gumi
Thank you for your input on our suggestion. Let me briefly respond to your message.

  1. More details of the permissionless structure will be shared with the GC Members for further discussions. At this stage, we just want to know your opinion on the permissionless structure. Before adopting a new block generation structure, we will go through another vote to listen to your opinion on the new structure.
  2. As you mentioned, adopting DPoS can be an option for us. DPoS is also based on a permissionless structure, so we will not exclude that idea. You can also suggest other structures.

As a member of Klaytn GC, Hankyung Media Group understands with the purpose of the agenda to improve the Klaytn ecosystem in a better direction. However, we do not think it will be easy to vote on this agenda with only the contents explained in the proposal.

The main point of this agenda is to fundamentally change Klaytn’s DPoS system, which has been in existence since the time when Klaytn’s initial white paper was created. All participants in the Klaytn ecosystem, including investors, GC members, projects, and partners will be greatly affected by our vote.

We would like to say that the information given to us is too little or unclear, despite this crucial vote ahead. Prior to proceeding with voting for this significant system changes, we believe that specific information on the following issues should be presented first.

(1) A specific action plan is needed: How Kakao will support Klaytn after decentralization.

Decentralization does not necessarily guarantee the success of a blockchain platform. There are too many blockchain projects that have been hastily attempted to decentralize in the absence of a key player with a clear vision to lead the business, and then disappeared.

Klaytn has been known for years as a blockchain operated by Kakao Group, the largest IT company in Korea. All Klaytn ecosystem participants, including our GC members, investors, partners, and projects, participated in the ecosystem in anticipation of synergy with Kakao Group.

However, this agenda, ‘change to a permissionless network’, or so-called ‘high degree of decentralization’, is a movement in the opposite direction from what the existing Klaytn ecosystem participants expected, including us.

This agenda only contains content about ‘decentralization’. There are no considerations about business. Many GCs are confused by this. We hope that the intention and plan for ‘decentralization’ must be clear.

In particular, it would be better if you suggest a specific action plan for how the Kakao Group (or Klaytn Foundation) will lead this business after decentralization.

(2) A specific plan is needed to ensure that Klaytn’s new validation method does not harm the existing validators

If Klaytn turns into a permissionless network, more validators will emerge. As a result, the node reward of existing GCs will inevitably decrease.

GCs, including us, are already struggling with the sharp drop in Klay prices. Since we are under these circumstances, a more detailed explanation is needed on how increasing the number of validators can help GCs and create a positive effect.

If this agenda has a negative impact on existing GCs as we expected, a separate solution would have to be given. We would like to say that it is difficult to vote on this agenda without suggesting a solution about this.

We would be grateful if the Klaytn Foundation could reply to the above. We look forward to hearing from other GC members too.

Thank you.

Hankyung Media Group


Thank you for your message. We understand that Klaytn would like that validators’ participation to be permissionless. We would like to hear the objective of this plan and future options that Klaytn has in mind.

  • What is your true objective of this proposal? Do you want to increase the total staking amount?

  • How will you differentiate GC validators and others?

    • Voting power
    • Minimum staking amount
    • Give benefits such as:
      • GC validators can receive delegation from others, but other validators can stake only their-own tokens.

Dear @gumi @San_Hankyung
Thank you for your input. Please see my response to your questions below:

  1. Klaytn team has always emphasized that Klaytn will be “gradually” decentralized since the Klaytn Mainnet has launched. The objective of the proposal is to fulfill our promise to the Klaytn community.

  2. Klaytn has been operated by Klaytn GC Members, not by a certain GC Member. Of course, Kakao is our GC Member with a large stake in the Klaytn ecosystem, and there have been continued efforts to make synergy with Kakao. Permissionless Klaytn does not mean there would be any change in this collaborative relationship. Our GC Members will continue to contribute to Klaytn as the biggest stakeholders.

  3. At this moment, we cannot suggest a specific action plan. To design a proper permissionless structure, Klaytn should pour a huge amount of resources. Before pouring our resources into designing a new structure, we want to understand whether a majority of our GC Members agree on the new direction. After securing your agreement on the overall direction, we will design the detailed structures and bring them on the table for your decisions. We understand your concern about the lack of a concrete action plan. We would like to emphasize that the vote is not the end of discussions on the permissionless structure of Klaytn, but the start of the discussion.

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We are positive about the proposal of gradually decentralizing the network.
But this is a conditional yes, so we abstain from this vote.

Originally, the Gini coefficient was scheduled to be abolished in the 4th quarter of 2022, but it seems to have been delayed to the 1st quarter of next year.
If the Gini coefficient is abolished, the rewards for increasing staking will become clearer, so decentralization will not be bad.
If the previously passed proposal is actually reflected in the mainnet and additional plan to guarantee a little more reward for GCs comes out, it would be better to discuss the direction of decentralization after that.



The proposal was approved by the Klaytn Governance Council (GC) through the vote on 5-16 December 2022. 18 Members participated in the vote, 9 agreed, 3 disagreed, and 6 abstained.

  • Agreed: Wemade, Krosslab, Netmarble, Kakao Corp, Kracker Labs, Ground X, Jump-Everstake, FSN, SKnetworks
  • Disagreed: Gumi, Ahnlab Blockchain Company, POST VOYAGER
  • Abstained: Swapscanner, Maekyung Media Group, NEOPLY, LG Electronics, VNG/Verichains, Korea Economic Daily

Sygnum is generally supportive of opening networks to promote decentralization, as unhindered access to protocols is important. As a node operator we have vested interest in seeing Klaytn succeed and expand, and we think it is important to vote from the perspective of what is the best for the network.

However, there are several concerns regarding this proposal that would prevent us from supporting it at the current moment. Additional information by the Klatyn team would be helpful here:

• Transition plan from current validation system to new permissionless is currently unclear
• Staking method of the new permissionless system (DPoS, etc) is currently undefined, but is a core component of the new validation setup that is key to make a decision
• Economic incentives for validators in the permissionless state are unclear, which puts network security at risk
• Technical tradeoffs in speed, reliability, etc of making Klaytn permissionless are unclear and might endanger the predominant use cases of Klaytn
• More information on required resources and an approximate timeline for such a change

We do not expect a fully fleshed solution yet, as this would be a second step, but would require a high-level analysis before making an informed and fair decision.

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