47 Parameter change: lower minimum proposal deposit amount

Proposal 47

Summary

The current deposit amount of 512 ATOMs prohibits valuable governance activity from small holders or those with most of their ATOM staked. We propose lowering the requirement to 64 ATOMS.

Objectives

  1. Enable community members with good ideas but little capital to participate in governance and request resources from the community pool treasury.
  2. Improve the governance UX for holders who keep most of their ATOM staked.
  3. Increase utilisation of treasury (currently 666,457 ATOM, approximately $14 MM USD, at time of writing).
  4. Accelerate Cosmos Hub development and growth.

Background

Current deposit is 512 ATOMs (approximately $10k USD today). The ATOM price when the community treasury was activated (2019-05-03) was $4.99 (source: CoinMarketCap), meaning the total required deposit to submit a proposal was $2,555. Today, most proposers must coordinate with large ATOM holders to request additional funds in order to meet the minimum deposit requirements. This also applies to large ATOM holders who want to be active in governance but do not have enough liquid ATOM to meet the deposit requirements, as staked ATOM cannot be used to post deposits.

Proposers

Federico Kunze Küllmer (Tharsis) and Sam Hart (Interchain).

Credit to Gavin Birch (Figment Networks) and the Cosmos Governance Working Group (GWG) for initiating a recent conversation that motivated this proposal.

Proposed Parameter Change

Change the minimum proposal deposit requirement from 512 ATOMs (aprox. $10,000 USD) to 64 ATOMs (aprox. $1,300 USD).

Note: Parameters are denominated in micro-ATOMs, as described in the governance parameter list.

Risks

This change makes it easier to submit spam proposals.

While this is true, in order to fully mitigate spam the Cosmos Hub must increase the minimum deposit required for proposal submission.

By increasing the number of submissions, voter participation or the level of consideration given to each proposal may decrease.

We believe this is a justifiable trade-off for promoting more community-driven initiatives and enthusiasm for advancing Cosmos. As we lower the barrier to entry for governance participation, we invite community members to take this opportunity to enact more effective and efficient governance practices. The upcoming Groups, Authz, and Interchain Accounts modules will provide powerful abstractions to this end.

Alternatives

Wait for the Cosmos Hub to adopt proposed changes to the Governance module for variable deposit amounts, quorum thresholds, and voting periods.

These initiatives should not be mutually exclusive. While research and development of these features is ongoing, the Cosmos Hub will benefit from this parameter change today, as well as the precedent it sets for self-improving governance.

Since the ATOM price fluctuates with respect to USD, make proposal thresholds reference a stable price oracle

This is an interesting design space, however it becomes more plausible if and when the Cosmos Hub adds a decentralized exchange that can be used to produce a reference rate. Lowering the proposal threshold is a temporary solution that will help in the short-term.

Governance Votes

The following items summarise the voting options and what it means for this proposal.

  • YES : You approve the parameter change proposal to decrease the governance proposal deposit requirements from 512 to 64 ATOMs.
  • NO : You disapprove of the parameter change in its current form (please indicate in the Cosmos Forum why this is the case).
  • NO WITH VETO : You are strongly opposed to this change and will exit the network if passed.
  • ABSTAIN : You are impartial to the outcome of the proposal.

12 Likes

Very excited to vote for this.

4 Likes

Great proposal! Atom has increased alot since the start and it makes sense to lower the deposit amount.

2 Likes

Makes a lot of sense given the price changes. I think with the more active governance we’ve been seeing and improvements in communication, lowering the threshold and managing appropriate submissions won’t be too big of an issue.

Thanks for getting this up!

Strong support for this. Curious why there’s 14M atom worth of votes for NoWithVeto - anyone who voted this way care to weigh in ?

1 Like

I just want to emphasize that NoWithVeto exists in the governance as explicit representation of the fact that 1/3 validators can always censor txs to prevent a proposal from passing. So voting NoWithVeto effectively means “I would collude with other validators to censor txs to stop this proposal”.

If +1/3 vote NoWithVeto, the deposits also get burned, which makes governance seem even more risky and inaccessible.

The crowdfunding mechanism for deposits is great, but the risk of losing deposits from not getting quorum or from getting NoWithVeto is very real and a major deterrent to pushing proposals through. Those of us who have pushed proposals through know from experience from taking this risk.

It’s one thing to vote No on this proposal if you think the current set of risks are acceptable (but if you’ve never made a proposal or a deposit, you don’t really know :wink: ) but it sends quite another message to vote NoWithVeto.

Not to mention this proposal resets the USD cost of governance proposals (and the associated risk) back to where it was ~1 year ago and gives us plenty of breathing room for more ATOM price appreciation.

We have a lot of governance activity ahead of us. We need to make it more, not less, accessible.

2 Likes

Making the deposit amount to a level affordable is a realization of fairness.

Strongly support the proposal and voted for yes happily!!

We also support this proposal - if we end up getting inundated with spam or low quality proposals (like Terra), it’s easy to undo.

Meanwhile, it will remove an unnecessary barrier for governance participation.

We did not have a spam proposal issue when Cosmos was at <1$.

The high-stakes veto by Chorus seems unnecessary since the proposal itself is perfectly valid - nobody should lose their deposit over a non-malicious proposal.

1 Like

Looks like Chorus switched their vote to No. Thanks!

Another possibility here if the vote does not pass (or if we need to increase the deposit again) is for a community spend proposal of a few k ATOMs to a multisig whose job is to support deposits for good proposals. That might give the best of all worlds and help alleviate the deposit burden using the Hub’s own funds!

3 Likes

This is also a good idea.

I wonder if the wording of the proposal triggered the 14M atom holder(s).
IMO , the “will exit network” part of the proposal seemed unnecessary.

There is nothing stopping them from voting no with veto , but still continue staying on the network.
Maybe this is their way of saying that?

Another far fetched theory would be an entity or group of entities from an adversarial chain accumulating atoms to disrupt the cosmos network ?

can someone help. excuse for encroaching here.