cherry pick: c33c5e7

x/staking/keeper/msg_server.go

@@ -178,6 +178,9 @@ func (k msgServer) EditValidator(ctx context.Context, msg *types.MsgEditValidato
 		if msg.CommissionRate.GT(math.LegacyOneDec()) || msg.CommissionRate.IsNegative() {
 			return nil, errorsmod.Wrap(sdkerrors.ErrInvalidRequest, "commission rate must be between 0 and 1 (inclusive)")
 		}
+		if msg.CommissionRate.LT(types.MinCommissionRate) {
+			return nil, errorsmod.Wrapf(types.ErrCommissionTooSmall, "minimum commission rate is %s", types.MinCommissionRate)
+		}
 
 		minCommissionRate, err := k.MinCommissionRate(ctx)
 		if err != nil {

x/staking/types/commission.go

@@ -52,6 +52,10 @@ func (cr CommissionRates) Validate() error {
 		// rate cannot be greater than the max rate
 		return ErrCommissionGTMaxRate
 
+	case cr.Rate.LT(MinCommissionRate):
+		// rate cannot be less than 2%
+		return ErrCommissionTooSmall
+
 	case cr.MaxChangeRate.IsNegative():
 		// change rate cannot be negative
 		return ErrCommissionChangeRateNegative

x/staking/types/errors.go

@@ -48,4 +48,5 @@ var (
 	ErrInvalidSigner                   = errors.Register(ModuleName, 43, "expected authority account as only signer for proposal message")
 	ErrBadRedelegationSrc              = errors.Register(ModuleName, 44, "redelegation source validator not found")
 	ErrNoUnbondingType                 = errors.Register(ModuleName, 45, "unbonding type not found")
+	ErrCommissionTooSmall              = errors.Register(ModuleName, 46, "commission rate too small")
 )

x/staking/types/params.go

@@ -31,8 +31,12 @@ const (
 	DefaultHistoricalEntries uint32 = 10000
 )
 
-// DefaultMinCommissionRate is set to 0%
-var DefaultMinCommissionRate = math.LegacyZeroDec()
+var (
+	// DefaultMinCommissionRate is set to 0%
+	DefaultMinCommissionRate = math.LegacyZeroDec()
+
+	MinCommissionRate = math.LegacyMustNewDecFromStr("0.02")
+)
 
 // NewParams creates a new Params instance
 func NewParams(unbondingTime time.Duration, maxValidators, maxEntries, historicalEntries uint32, bondDenom string, minCommissionRate math.LegacyDec) Params {