Hey Awa,
thank you for this thread and the resources you provide. Staking Facilities is in full support of this proposal.
First of all, consensus key rotation is a much needed feature that especially allows bakers to increase their OPsec (for example by migrating from a legacy cli keyfile to a key secured by an HSM / that can be imported into an HSM). The current implementation without rotation rather disincentivizes increasing your OPsec because moving your baker to another key would mean that you potentially lose your customers.
In regards to the question if the consensus key should be spendable, I first want to say that if I remember correctly, Adrian told me in a conversation that they will be spendable in the first implementation and would only be updated to non-spendable in a future upgrade if the community approves.
But that part aside, I would really like to see some separation of concerns here, meaning I would want to see consensus keys to be not spendable. Arguments that bakers will run less secure nodes because of this are in my opinion incorrect. A Ledger Nano S costs as of today 59€ including VAT & shipping.
That makes a Ledger cheaper than the risk of double signing and losing your deposits even on a single endorsement bond (64XTZ as of today are worth ~150€). Hackers still have the incentive to create a double bake by getting 50% of your slashed XTZ by including the accusation in their following block. It just requires a bit more timing.
So why should the consensus key not be spendable? Well, while I said that hackers still have the incentive to create a double sign if no protection is in place (like a double sign protection in a HSM), the difference for me are people with physical access to the HSM. That could be employees in the staking company (who probably also have access to the ledgers pin in case they need to restart it) or people working in the data center.
Those people have no interest in double signing you / or even can’t because of double sign protection, but they could still steal funds from you if they have access to the running ledger.
PVSS keys will not see any real impact right now, but they open up much potential for future improvements on the protocol. Activating them now gives bakers enough time to get familiar with the concept and add them to their SG1 account so that they are ready when the time comes.
Florian from Staking Facilities
