Soft opt out

app/consumer-democracy/app.go

@@ -503,6 +503,7 @@ func New(
 	// CanWithdrawInvariant invariant.
 	// NOTE: staking module is required if HistoricalEntries param > 0
 	// NOTE: capability module's beginblocker must come before any modules using capabilities (e.g. IBC)
+	// NOTE: the soft opt-out requires that the consumer module's beginblocker comes after the slashing module's beginblocker
 	app.MM.SetOrderBeginBlockers(
 		// upgrades should be run first
 		upgradetypes.ModuleName,

app/consumer/app.go

@@ -441,6 +441,7 @@ func New(
 	// NOTE: Capability module must occur first so that it can initialize any capabilities
 	// so that other modules that want to create or claim capabilities afterwards in InitChain
 	// can do so safely.
+	// NOTE: the soft opt-out requires that the consumer module's beginblocker comes after the slashing module's beginblocker
 	app.MM.SetOrderInitGenesis(
 		capabilitytypes.ModuleName,
 		authtypes.ModuleName,

proto/interchain_security/ccv/consumer/v1/consumer.proto

@@ -52,6 +52,11 @@ message Params {
   // which should be smaller than that of the provider in general.
   google.protobuf.Duration unbonding_period = 9
       [(gogoproto.nullable) = false, (gogoproto.stdduration) = true];
+
+  // The threshold for the percentage of validators at the bottom of the set who
+  // can opt out of running the consumer chain without being punished. For example, a
+  // value of 0.05 means that the validators in the bottom 5% of the set can opt out
+  string soft_opt_out_threshold = 10;
 }
 
 // LastTransmissionBlockHeight is the last time validator holding

tests/difference/core/driver/setup.go

@@ -513,6 +513,7 @@ func (b *Builder) createConsumerGenesis(client *ibctmtypes.ClientState) *consume
 		consumertypes.DefaultConsumerRedistributeFrac,
 		consumertypes.DefaultHistoricalEntries,
 		b.initState.UnbondingC,
+		"0", // disable soft opt-out
 	)
 	return consumertypes.NewInitialGenesisState(client, providerConsState, valUpdates, params)
 }

tests/difference/core/model/src/model.ts

@@ -478,6 +478,50 @@ class CCVProvider {
       return;
     }
 
+    //
+    // Soft opt out logic
+    //
+
+    // Sort token powers from lowest to highest
+    const tokens = this.m.staking.tokens;
+    const sortedTokens = Object.values(tokens).sort((a, b) => a - b);
+
+    // Get total power (token is 1:1 to power)
+    let totalPower = 0;
+    sortedTokens.forEach((token, _) => {
+      totalPower += token;
+    });
+
+    let smallestNonOptOutPower = -1;
+
+    // Soft opt out threshold is set as 0 as for now soft opt-out is disabled. 
+    // See createConsumerGenesis() in diff test setup.go
+    const softOptOutThreshold = 0;
+
+    if (softOptOutThreshold == 0) {
+      smallestNonOptOutPower = 0
+    } else {
+      // get power of the smallest validator that cannot soft opt out
+      let powerSum = 0;
+
+      for (let i = 0; i < sortedTokens.length; i++) {
+        powerSum += sortedTokens[i];
+        if (powerSum / totalPower > softOptOutThreshold) {
+          smallestNonOptOutPower = sortedTokens[i];
+          break;
+        }
+      }
+    }
+
+    if (smallestNonOptOutPower == -1) {
+      throw new Error('control flow should not reach here');
+    }
+
+    if (this.m.staking.tokens[data.val] < smallestNonOptOutPower) {
+      // soft opt out if validator power is smaller than smallest power which needs to be up
+      return;
+    }
+
     this.m.events.push(Event.RECEIVE_DOWNTIME_SLASH_REQUEST);
 
 

testutil/crypto/crypto.go

@@ -47,6 +47,15 @@ func NewCryptoIdentityFromIntSeed(i int) *CryptoIdentity {
 	return NewCryptoIdentityFromBytesSeed(seed)
 }
 
+// GenMultipleCryptoIds generates and returns multiple CryptoIdentities from a starting int seed.
+func GenMultipleCryptoIds(num int, fromIntSeed int) []*CryptoIdentity {
+	ids := make([]*CryptoIdentity, num)
+	for i := 0; i < num; i++ {
+		ids[i] = NewCryptoIdentityFromIntSeed(fromIntSeed + i)
+	}
+	return ids
+}
+
 func (v *CryptoIdentity) TMValidator(power int64) *tmtypes.Validator {
 	return tmtypes.NewValidator(v.TMCryptoPubKey(), power)
 }

x/ccv/consumer/keeper/params.go

@@ -21,6 +21,7 @@ func (k Keeper) GetParams(ctx sdk.Context) types.Params {
 		k.GetConsumerRedistributionFrac(ctx),
 		k.GetHistoricalEntries(ctx),
 		k.GetUnbondingPeriod(ctx),
+		k.GetSoftOptOutThreshold(ctx),
 	)
 }
 
@@ -106,3 +107,11 @@ func (k Keeper) GetUnbondingPeriod(ctx sdk.Context) time.Duration {
 	k.paramStore.Get(ctx, types.KeyConsumerUnbondingPeriod, &period)
 	return period
 }
+
+// GetSoftOptOutThreshold returns the percentage of validators at the bottom of the set
+// that can opt out of running the consumer chain
+func (k Keeper) GetSoftOptOutThreshold(ctx sdk.Context) string {
+	var str string
+	k.paramStore.Get(ctx, types.KeySoftOptOutThreshold, &str)
+	return str
+}

x/ccv/consumer/keeper/params_test.go

@@ -26,14 +26,15 @@ func TestParams(t *testing.T) {
 		types.DefaultConsumerRedistributeFrac,
 		types.DefaultHistoricalEntries,
 		types.DefaultConsumerUnbondingPeriod,
+		types.DefaultSoftOptOutThreshold,
 	) // these are the default params, IBC suite independently sets enabled=true
 
 	params := consumerKeeper.GetParams(ctx)
 	require.Equal(t, expParams, params)
 
 	newParams := types.NewParams(false, 1000,
 		"channel-2", "cosmos19pe9pg5dv9k5fzgzmsrgnw9rl9asf7ddwhu7lm",
-		7*24*time.Hour, 25*time.Hour, "0.5", 500, 24*21*time.Hour)
+		7*24*time.Hour, 25*time.Hour, "0.5", 500, 24*21*time.Hour, "0.05")
 	consumerKeeper.SetParams(ctx, newParams)
 	params = consumerKeeper.GetParams(ctx)
 	require.Equal(t, newParams, params)

x/ccv/consumer/keeper/soft_opt_out.go

@@ -0,0 +1,74 @@
+package keeper
+
+import (
+	"encoding/binary"
+	"sort"
+
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	"github.com/cosmos/interchain-security/x/ccv/consumer/types"
+)
+
+// SetSmallestNonOptOutPower sets the smallest validator power that cannot soft opt out.
+func (k Keeper) SetSmallestNonOptOutPower(ctx sdk.Context, power uint64) {
+	store := ctx.KVStore(k.storeKey)
+	store.Set(types.SmallestNonOptOutPowerKey(), sdk.Uint64ToBigEndian(power))
+}
+
+// UpdateSmallestNonOptOutPower updates the smallest validator power that cannot soft opt out.
+// This is the smallest validator power such that the sum of the power of all validators with a lower power
+// is less than [SoftOptOutThreshold] of the total power of all validators.
+func (k Keeper) UpdateSmallestNonOptOutPower(ctx sdk.Context) {
+	// get soft opt-out threshold
+	optOutThreshold := sdk.MustNewDecFromStr(k.GetSoftOptOutThreshold(ctx))
+	if optOutThreshold.IsZero() {
+		// If the SoftOptOutThreshold is zero, then soft opt-out is disable.
+		// Setting the smallest non-opt-out power to zero, fixes the diff-testing
+		// when soft opt-out is disable.
+		k.SetSmallestNonOptOutPower(ctx, uint64(0))
+		return
+	}
+
+	// get all validators
+	valset := k.GetAllCCValidator(ctx)
+
+	// Valset should only be empty for hacky tests. Log error in case this ever happens in prod.
+	if len(valset) == 0 {
+		k.Logger(ctx).Error("UpdateSoftOptOutThresholdPower called with empty validator set")
+		return
+	}
+
+	// sort validators by power ascending
+	sort.SliceStable(valset, func(i, j int) bool {
+		return valset[i].Power < valset[j].Power
+	})
+
+	// get total power in set
+	totalPower := sdk.ZeroDec()
+	for _, val := range valset {
+		totalPower = totalPower.Add(sdk.NewDecFromInt(sdk.NewInt(val.Power)))
+	}
+
+	// get power of the smallest validator that cannot soft opt out
+	powerSum := sdk.ZeroDec()
+	for _, val := range valset {
+		powerSum = powerSum.Add(sdk.NewDecFromInt(sdk.NewInt(val.Power)))
+		// if powerSum / totalPower > SoftOptOutThreshold
+		if powerSum.Quo(totalPower).GT(optOutThreshold) {
+			// set smallest non opt out power
+			k.SetSmallestNonOptOutPower(ctx, uint64(val.Power))
+			k.Logger(ctx).Info("smallest non opt out power updated", "power", val.Power)
+			return
+		}
+	}
+	panic("UpdateSoftOptOutThresholdPower should not reach this point. Incorrect logic!")
+}
+
+// GetSmallestNonOptOutPower returns the smallest validator power that cannot soft opt out.
+func (k Keeper) GetSmallestNonOptOutPower(ctx sdk.Context) int64 {
+	store := ctx.KVStore(k.storeKey)
+	bz := store.Get(types.SmallestNonOptOutPowerKey())
+	if bz == nil {
+		return 0
+	}
+	return int64(binary.BigEndian.Uint64(bz))
+}

x/ccv/consumer/keeper/soft_opt_out_test.go

@@ -0,0 +1,118 @@
+package keeper_test
+
+import (
+	"testing"
+
+	"github.com/cosmos/interchain-security/testutil/crypto"
+	testkeeper "github.com/cosmos/interchain-security/testutil/keeper"
+	"github.com/cosmos/interchain-security/x/ccv/consumer/types"
+	"github.com/stretchr/testify/require"
+	tmtypes "github.com/tendermint/tendermint/types"
+)
+
+// Tests that UpdateSmallestNonOptOutPower updates the smallest validator power that cannot soft opt out.
+// Soft opt out allows the bottom [SoftOptOutThreshold] portion of validators in the set to opt out.
+// UpdateSmallestNonOptOutPower should update the smallest validator power that cannot opt out.
+func TestUpdateSmallestNonOptOutPower(t *testing.T) {
+	cIds := crypto.GenMultipleCryptoIds(7, 682934679238)
+
+	testCases := []struct {
+		name string
+		// soft opt out threshold set as param
+		optOutThresh string
+		// validators to set in store
+		validators []*tmtypes.Validator
+		// expected smallest power of validator which cannot opt out
+		expSmallestNonOptOutValPower int64
+	}{
+		{
+			name:         "One",
+			optOutThresh: "0.05",
+			validators: []*tmtypes.Validator{
+				tmtypes.NewValidator(cIds[0].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[1].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[2].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[3].TMCryptoPubKey(), 3),
+				tmtypes.NewValidator(cIds[4].TMCryptoPubKey(), 49),
+				tmtypes.NewValidator(cIds[5].TMCryptoPubKey(), 51),
+			},
+			// 107 total power, validator with 3 power passes 0.05 threshold (6 / 107 = 0.056) and cannot opt out
+			expSmallestNonOptOutValPower: 3,
+		},
+		{
+			name:         "One in different order",
+			optOutThresh: "0.05",
+			validators: []*tmtypes.Validator{
+				tmtypes.NewValidator(cIds[0].TMCryptoPubKey(), 3),
+				tmtypes.NewValidator(cIds[1].TMCryptoPubKey(), 51),
+				tmtypes.NewValidator(cIds[2].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[3].TMCryptoPubKey(), 49),
+				tmtypes.NewValidator(cIds[4].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[5].TMCryptoPubKey(), 1),
+			},
+			// Same result as first test case, just confirms order of validators doesn't matter
+			expSmallestNonOptOutValPower: 3,
+		},
+		{
+			name:         "Two",
+			optOutThresh: "0.05",
+			validators: []*tmtypes.Validator{
+				tmtypes.NewValidator(cIds[0].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[1].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[2].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[3].TMCryptoPubKey(), 3),
+				tmtypes.NewValidator(cIds[4].TMCryptoPubKey(), 500),
+			},
+			// 506 total power, validator with 500 passes 0.05 threshold and cannot opt out
+			expSmallestNonOptOutValPower: 500,
+		},
+		{
+			name:         "Three",
+			optOutThresh: "0.199999",
+			validators: []*tmtypes.Validator{
+				tmtypes.NewValidator(cIds[0].TMCryptoPubKey(), 54),
+				tmtypes.NewValidator(cIds[1].TMCryptoPubKey(), 53),
+				tmtypes.NewValidator(cIds[2].TMCryptoPubKey(), 52),
+				tmtypes.NewValidator(cIds[3].TMCryptoPubKey(), 51),
+				tmtypes.NewValidator(cIds[4].TMCryptoPubKey(), 50),
+				tmtypes.NewValidator(cIds[5].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[6].TMCryptoPubKey(), 1),
+			},
+			// 262 total power, (50 + 1 + 1) / 262 ~= 0.19, validator with 51 passes 0.199999 threshold and cannot opt out
+			expSmallestNonOptOutValPower: 51,
+		},
+		{
+			name:         "soft opt-out disabled",
+			optOutThresh: "0",
+			validators: []*tmtypes.Validator{
+				tmtypes.NewValidator(cIds[0].TMCryptoPubKey(), 54),
+				tmtypes.NewValidator(cIds[1].TMCryptoPubKey(), 53),
+				tmtypes.NewValidator(cIds[2].TMCryptoPubKey(), 52),
+				tmtypes.NewValidator(cIds[3].TMCryptoPubKey(), 51),
+				tmtypes.NewValidator(cIds[4].TMCryptoPubKey(), 50),
+				tmtypes.NewValidator(cIds[5].TMCryptoPubKey(), 1),
+				tmtypes.NewValidator(cIds[6].TMCryptoPubKey(), 1),
+			},
+			expSmallestNonOptOutValPower: 0,
+		},
+	}
+
+	for _, tc := range testCases {
+		t.Run(tc.name, func(t *testing.T) {
+			consumerKeeper, ctx, ctrl, _ := testkeeper.GetConsumerKeeperAndCtx(t, testkeeper.NewInMemKeeperParams(t))
+			moduleParams := types.DefaultParams()
+			moduleParams.SoftOptOutThreshold = tc.optOutThresh
+			consumerKeeper.SetParams(ctx, moduleParams)
+			defer ctrl.Finish()
+
+			// set validators in store
+			SetCCValidators(t, consumerKeeper, ctx, tc.validators)
+
+			// update smallest power of validator which cannot opt out
+			consumerKeeper.UpdateSmallestNonOptOutPower(ctx)
+
+			// expect smallest power of validator which cannot opt out to be updated
+			require.Equal(t, tc.expSmallestNonOptOutValPower, consumerKeeper.GetSmallestNonOptOutPower(ctx))
+		})
+	}
+}

x/ccv/consumer/keeper/validators.go

@@ -107,6 +107,18 @@ func (k Keeper) Slash(ctx sdk.Context, addr sdk.ConsAddress, infractionHeight, p
 		return
 	}
 
+	// if this is a downtime infraction and the validator is allowed to
+	// soft opt out, do not queue a slash packet
+	if infraction == stakingtypes.Downtime {
+		if power < k.GetSmallestNonOptOutPower(ctx) {
+			// soft opt out
+			k.Logger(ctx).Debug("soft opt out",
+				"validator", addr,
+				"power", power,
+			)
+			return
+		}
+	}
 	// get VSC ID for infraction height
 	vscID := k.GetHeightValsetUpdateID(ctx, uint64(infractionHeight))
 

x/ccv/consumer/module.go

@@ -149,6 +149,9 @@ func (AppModule) ConsensusVersion() uint64 { return 1 }
 // Set the VSC ID for the subsequent block to the same value as the current block
 // Panic if the provider's channel was established and then closed
 func (am AppModule) BeginBlock(ctx sdk.Context, req abci.RequestBeginBlock) {
+	// Update smallest validator power that cannot opt out.
+	am.keeper.UpdateSmallestNonOptOutPower(ctx)
+
 	channelID, found := am.keeper.GetProviderChannel(ctx)
 	if found && am.keeper.IsChannelClosed(ctx, channelID) {
 		// The CCV channel was established, but it was then closed;