feat: dynamic min authority count

state-chain/cf-integration-tests/src/funding.rs

@@ -243,8 +243,8 @@ fn can_calculate_account_apy() {
 #[test]
 fn apy_can_be_above_100_percent() {
 	const EPOCH_BLOCKS: u32 = 1_000;
-	const MAX_AUTHORITIES: u32 = 1;
-	const NUM_BACKUPS: u32 = 1;
+	const MAX_AUTHORITIES: u32 = 2;
+	const NUM_BACKUPS: u32 = 2;
 	super::genesis::default()
 		.blocks_per_epoch(EPOCH_BLOCKS)
 		.max_authorities(MAX_AUTHORITIES)
@@ -266,10 +266,11 @@ fn apy_can_be_above_100_percent() {
 
 			// APY rate of > 100% can be calculated correctly.
 			let total = Flip::balance(&validator);
-			let reward = Emissions::current_authority_emission_per_block() * YEAR as u128;
+			let reward = Emissions::current_authority_emission_per_block() * YEAR as u128 /
+				MAX_AUTHORITIES as u128;
 			let apy_basis_point =
 				FixedU64::from_rational(reward, total).checked_mul_int(10_000u32).unwrap();
-			assert_eq!(apy_basis_point, 242_543_802u32);
+			assert_eq!(apy_basis_point, 241_377_726u32);
 			assert_eq!(calculate_account_apy(&validator), Some(apy_basis_point));
 		});
 }

state-chain/cf-integration-tests/src/mock_runtime.rs

@@ -42,7 +42,10 @@ use crate::{
 	threshold_signing::{EthKeyComponents, KeyUtils},
 	GENESIS_KEY_SEED,
 };
-use cf_primitives::{AccountRole, AuthorityCount, BlockNumber, FlipBalance, GENESIS_EPOCH};
+use cf_primitives::{
+	AccountRole, AuthorityCount, BlockNumber, FlipBalance, DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
+	GENESIS_EPOCH,
+};
 
 pub struct ExtBuilder {
 	pub genesis_accounts: Vec<(AccountId, AccountRole, FlipBalance)>,
@@ -163,6 +166,7 @@ impl ExtBuilder {
 				min_size: self.min_authorities,
 				max_size: self.max_authorities,
 				max_expansion: self.max_authorities,
+				max_authority_set_contraction_percentage: DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
 			},
 			ethereum_vault: EthereumVaultConfig {
 				vault_key: Some(ethereum_vault_key),

state-chain/node/src/chain_spec.rs

@@ -2,7 +2,10 @@ use cf_chains::{
 	dot::{PolkadotAccountId, PolkadotHash},
 	ChainState,
 };
-use cf_primitives::{chains::assets, AccountRole, AssetAmount, AuthorityCount, NetworkEnvironment};
+use cf_primitives::{
+	chains::assets, AccountRole, AssetAmount, AuthorityCount, NetworkEnvironment,
+	DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
+};
 
 use cf_chains::{
 	btc::{BitcoinFeeInfo, BitcoinTrackedData},
@@ -231,6 +234,7 @@ pub fn inner_cf_development_config(
 				testnet::SNOW_WHITE_SR25519.into(),
 				1,
 				devnet::MAX_AUTHORITIES,
+				DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
 				EnvironmentConfig {
 					flip_token_address: flip_token_address.into(),
 					eth_usdc_address: eth_usdc_address.into(),
@@ -358,6 +362,7 @@ macro_rules! network_spec {
 							SNOW_WHITE_SR25519.into(),
 							MIN_AUTHORITIES,
 							MAX_AUTHORITIES,
+							DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
 							EnvironmentConfig {
 								flip_token_address: flip_token_address.into(),
 								eth_usdc_address: eth_usdc_address.into(),
@@ -428,6 +433,7 @@ fn testnet_genesis(
 	root_key: AccountId,
 	min_authorities: AuthorityCount,
 	max_authorities: AuthorityCount,
+	max_authority_set_contraction_percentage: Percent,
 	config_set: EnvironmentConfig,
 	eth_init_agg_key: [u8; 33],
 	ethereum_deployment_block: u64,
@@ -556,6 +562,7 @@ fn testnet_genesis(
 			min_size: min_authorities,
 			max_size: max_authorities,
 			max_expansion: max_authorities,
+			max_authority_set_contraction_percentage,
 		},
 		session: SessionConfig {
 			keys: initial_authorities

state-chain/pallets/cf-validator/src/lib.rs

@@ -17,7 +17,10 @@ mod migrations;
 mod rotation_state;
 pub use auction_resolver::*;
 
-use cf_primitives::{AuthorityCount, EpochIndex, NodeCFEVersions, SemVer, FLIPPERINOS_PER_FLIP};
+use cf_primitives::{
+	AuthorityCount, EpochIndex, NodeCFEVersions, SemVer, DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
+	FLIPPERINOS_PER_FLIP,
+};
 
 use cf_traits::{
 	impl_pallet_safe_mode, offence_reporting::OffenceReporter, AsyncResult, AuthoritiesCfeVersions,
@@ -62,6 +65,7 @@ pub enum PalletConfigUpdate {
 	AuthoritySetMinSize { min_size: AuthorityCount },
 	AuctionParameters { parameters: SetSizeParameters },
 	MinimumReportedCfeVersion { version: SemVer },
+	MaxAuthoritySetContractionPercentage { percentage: Percent },
 }
 
 type RuntimeRotationState<T> =
@@ -286,6 +290,13 @@ pub mod pallet {
 	#[pallet::getter(fn minimum_reported_cfe_version)]
 	pub(super) type MinimumReportedCfeVersion<T: Config> = StorageValue<_, SemVer, ValueQuery>;
 
+	/// Determines the maximum allowed reduction of authority set size in percents between two
+	/// consecutive epochs.
+	#[pallet::storage]
+	#[pallet::getter(fn max_authority_set_contraction_percentage)]
+	pub(super) type MaxAuthoritySetContractionPercentage<T: Config> =
+		StorageValue<_, Percent, ValueQuery>;
+
 	#[pallet::event]
 	#[pallet::generate_deposit(pub (super) fn deposit_event)]
 	pub enum Event<T: Config> {
@@ -533,6 +544,9 @@ pub mod pallet {
 				PalletConfigUpdate::MinimumReportedCfeVersion { version } => {
 					MinimumReportedCfeVersion::<T>::put(version);
 				},
+				PalletConfigUpdate::MaxAuthoritySetContractionPercentage { percentage } => {
+					MaxAuthoritySetContractionPercentage::<T>::put(percentage);
+				},
 			}
 
 			Self::deposit_event(Event::PalletConfigUpdated { update });
@@ -780,6 +794,7 @@ pub mod pallet {
 		pub min_size: AuthorityCount,
 		pub max_size: AuthorityCount,
 		pub max_expansion: AuthorityCount,
+		pub max_authority_set_contraction_percentage: Percent,
 	}
 
 	impl<T: Config> Default for GenesisConfig<T> {
@@ -796,6 +811,7 @@ pub mod pallet {
 				min_size: 3,
 				max_size: 15,
 				max_expansion: 5,
+				max_authority_set_contraction_percentage: DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
 			}
 		}
 	}
@@ -811,6 +827,9 @@ pub mod pallet {
 			BackupRewardNodePercentage::<T>::set(self.backup_reward_node_percentage);
 			AuthoritySetMinSize::<T>::set(self.authority_set_min_size);
 			VanityNames::<T>::put(&self.genesis_vanity_names);
+			MaxAuthoritySetContractionPercentage::<T>::set(
+				self.max_authority_set_contraction_percentage,
+			);
 
 			CurrentEpoch::<T>::set(GENESIS_EPOCH);
 
@@ -1091,6 +1110,13 @@ impl<T: Config> Pallet<T> {
 	fn try_start_keygen(rotation_state: RuntimeRotationState<T>) {
 		let candidates = rotation_state.authority_candidates();
 		let SetSizeParameters { min_size, .. } = AuctionParameters::<T>::get();
+
+		let min_size = sp_std::cmp::max(
+			min_size,
+			(Percent::one().saturating_sub(MaxAuthoritySetContractionPercentage::<T>::get())) *
+				Self::current_authority_count(),
+		);
+
 		if (candidates.len() as u32) < min_size {
 			log::warn!(
 				target: "cf-validator",

state-chain/pallets/cf-validator/src/mock.rs

@@ -216,6 +216,7 @@ cf_test_utilities::impl_test_helpers! {
 			min_size: MIN_AUTHORITY_SIZE,
 			max_size: MAX_AUTHORITY_SIZE,
 			max_expansion: MAX_AUTHORITY_SET_EXPANSION,
+			max_authority_set_contraction_percentage: DEFAULT_MAX_AUTHORITY_SET_CONTRACTION,
 		},
 	},
 	||{

state-chain/pallets/cf-validator/src/tests.rs

@@ -737,7 +737,12 @@ const AUTHORITIES: Range<u64> = 0..10;
 
 lazy_static::lazy_static! {
 	/// How many candidates can fail without preventing us from re-trying keygen
-	static ref MAX_ALLOWED_KEYGEN_OFFENDERS: usize = CANDIDATES.count().checked_sub(MIN_AUTHORITY_SIZE as usize).unwrap();
+	static ref MAX_ALLOWED_KEYGEN_OFFENDERS: usize = {
+
+		let min_size = std::cmp::max(MIN_AUTHORITY_SIZE, (Percent::one() - DEFAULT_MAX_AUTHORITY_SET_CONTRACTION) * AUTHORITIES.count() as u32);
+
+		CANDIDATES.count().checked_sub(min_size as usize).unwrap()
+	};
 
 	/// How many current authorities can fail to leave enough healthy ones to handover the key
 	static ref MAX_ALLOWED_SHARING_OFFENDERS: usize = {
@@ -788,6 +793,29 @@ mod keygen {
 			assert_rotation_aborted();
 		});
 	}
+
+	#[test]
+	fn rotation_aborts_if_candidates_below_min_percentage() {
+		new_test_ext().execute_with(|| {
+			// Ban half of the candidates:
+			let failing_count = CANDIDATES.count() / 2;
+			let remaining_count = CANDIDATES.count() - failing_count;
+
+			// We still have enough candidates according to auction resolver parameters:
+			assert!(remaining_count > MIN_AUTHORITY_SIZE as usize);
+
+			// But the rotation should be aborted since authority count would drop too much
+			// compared to the previous set:
+			assert!(
+				remaining_count <
+					(Percent::one() - DEFAULT_MAX_AUTHORITY_SET_CONTRACTION) *
+						AUTHORITIES.count()
+			);
+
+			failed_keygen_with_offenders(CANDIDATES.take(failing_count));
+			assert_rotation_aborted();
+		});
+	}
 }
 
 #[cfg(test)]

state-chain/primitives/src/lib.rs

@@ -6,7 +6,7 @@
 use codec::{Decode, Encode, MaxEncodedLen};
 use frame_support::sp_runtime::{
 	traits::{IdentifyAccount, Verify},
-	MultiSignature, RuntimeDebug,
+	MultiSignature, Percent, RuntimeDebug,
 };
 use scale_info::TypeInfo;
 use semver::{Error, Version};
@@ -75,6 +75,10 @@ pub const SECONDS_PER_BLOCK: u64 = MILLISECONDS_PER_BLOCK / 1000;
 
 pub const STABLE_ASSET: Asset = Asset::Usdc;
 
+/// Determines the default (genesis) maximum allowed reduction of authority set size in
+/// between two consecutive epochs.
+pub const DEFAULT_MAX_AUTHORITY_SET_CONTRACTION: Percent = Percent::from_percent(30);
+
 // Polkadot extrinsics are uniquely identified by <block number>-<extrinsic index>
 // https://wiki.polkadot.network/docs/build-protocol-info
 #[derive(Clone, Encode, Decode, MaxEncodedLen, TypeInfo, Debug, PartialEq, Eq)]