[ARCHIVE] Signaling proposal - Onboarding, managing, offboarding the AEZ

Hub Proposals Signaling/Text
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Change log

  • 2024-06-25 Final post and archive
  • 2024-04-18 Created initial post

UPDATE

Due to the move from Full set Security to partial set security and then ICS2 and permissionless on- and offboarding of consumer chains (CHIPs Discussion phase: Permissionless ICS), we consider the original proposal to have lost part of its purpose.

We still think that some of the steps developped here have an added value: Particularly we think that consumer chains wanting to join the ICS should stick to the principles guiding the AEZ and should from themselves produce clear and transparent information layed out in the steps detailled below:

What is the chain proposing, what are they bringing to AEZ? How do they imagine conflict resolution to work to prevent worst case scenarios of being kicked out of the AEZ?

We think incumbent chains should present these information before making the step to ask for a Chain ID.

Summary

This signaling proposal has two objectives:

  1. Accelerate the discussion on a standard workflow in the AEZ.
  2. If the different pieces of the proposed workflow find large support: Kickoff the creation of such standard workflow.

The proposed steps are based on the results of the Cosmos Citizens’ Assembly (see here and here) improved by discussions with stakeholders of the AEZ.

The proposal here applies for Full set security, not for partial set security.

Details

Principles guiding the AEZ

Purpose and utility: Producer and consumer chains should be aligned in their purpose and there should be value, utility, or a common goods dimension to creating a new chain. It should provide a real-world application. If something is of central importance to the AEZ, it should be considered (LSDs, NFTs, Dex).

Economic incentives: The balance between the cost of security and return on investment for validators should be long-term positive. There should be a clear value (monetary or other) in return for ATOM stakers. The AEZ should prefer to use ATOM for operations.

Moral alignment: There should be an alignment. It should be for the benefit of the majority and not only the minority and support the vision of the ecosystem.

Tokenomics compatibility: This compatibility should be ensured to avoid inflationary pressure and the risk of overwhelming ATOM.

Technical alignment: The technical ability of teams should be strongly assessed, their technical alignment with the rest of the hub can be looser in order to support innovative technical designs without tight restriction.

Understandability: This principle refers to the fact that the onboarding, management, and offboarding process should be easy to understand. Understandability also refers to the fact that the solutions proposed by the chains need to be easy to understand for the cosmonauts (purpose / how the solution intends to solve something).

Onboarding

Overall Principles

These principles should be the same for new chains (not yet built) and existing chains (already working, just connecting to AEZ), while making space for a differentiated concrete process on some aspects like tokenomics, or alignment.

Phase 1: Request to Join AEZ: Purpose and value proposition

The following questions have multiple acceptable answers, and they should be addressed in the first template to support Cosmonauts’ understanding of the proposal:

  1. What is the AppChain, its purpose, its value proposition, and its motivation to join AEZ?
  2. Why is the project viable for all parties involved?
  3. How does the chain consider the added value of AEZ for its security?
  4. Why the chain proposes to join the AEZ as an appchain, rather than deploying a smart contract to an existing smart contract chain within the AEZ, which might help reduce some infrastructure and validator costs?
  5. How will the chain benefit from the AEZ?
  6. How can it be beneficial for the Hub, the validators, and the chain? (example: ComposableFi)
  7. What are the possible conflicts? How does the chain propose to resolve them?

Milestone: template filled and published in the Cosmos Forum in the category: AEZ with the namer [INITIAL ONBOARDING PROPOSAL].

Phase 2: Motivation and value discussions

Following the first template proposal, the chain and the community should enter in a series of AMAs and community sessions (the candidate chain community and Atom community). The candidate chain should clearly provide a summary of the discussions, issue resolution, and a report outlining the changes made to the original proposal.

Milestone: template improved on the Cosmos Forum in the category: AEZ with the namer [IMPROVED ONBOARDING PROPOSAL].

Phase 3: Second “request to join” template: Tech and financial analysis

Following the first round of discussion, the chain prepares a more detailed proposal adding the following bricks:

  1. Finance analysis: What is the tokenomics modeling, is it fair on competition? (Imagine Archway wants to join, but Neutron is already on it and has a similar offer), how to justify competitiveness?
  2. Tech analysis: Is anything missing in terms of tech? Is it secure for the hub to host? What happens if a chain secured by the hub is down?
  3. Offboarding Methods: What are the metrics that will be monitored after onboarding? What will be the metrics that will trigger concerns? What is the worst-case scenario and how to handle/mitigate it?

Beyond this document, the chain should run a Simulation: The chain should simulate the state of the AEZ for validator & community before and after onboarding through the testnet program.

Milestone: template improved on the Cosmos Forum in the category: AEZ with the namer [FULL ONBOARDING PROPOSAL].

Phase 4: Forum Proposal and AEZ Review

Once the full proposal is ready, the candidate chain should enter a final phase of community review holding AMAs, and community sessions. This process allows the chain to revise the forum proposal and write the final formal proposal.

Milestone: Final proposal on the Cosmos Forum in the category: AEZ with the namer [FINAL ONBOARDING PROPOSAL].

Phase 5: Onchain vote

Once the chain feels that the proposal is mature enough, it should publish it as a full Governance Proposal and go to an onchain vote.

Milestone: Final proposal onchain.

Phase 6: Governance proposal follow-up

If the proposal passes, the chain moves to the technical onboarding and the management process. If the proposal fails, the process can loop back to phase 4 for improvements and further discussion.

Managing Chains

Overall Principles

The goal during management is to ensure accountability and trust. The following dimensions are part of the management process: Economic performance, technical performance, contractual performance (making sure that the “contract” covering the chain’s technical roadmap and commitments is respected), and governance.

Not all chains can be described by the same metrics so a degree of flexibility is needed.

Monitoring of economic metrics

The economic metrics have to be adapted to the nature of the chain (e.g. defi vs smart contract). They encompass the following dimensions: Transaction volume, TVL, Active wallets, # contracts deployed, on-chain activity, Integration with other ecosystems, codebase, userbase, and revenue for Validators.

The economic performance will be monitored in terms of the price of the token of the partner chain in relation to the ATOM token. This would allow monitoring if the chain is underperforming or overperforming the Hub in relative terms rather than in absolute terms.

Monitoring of qualitative metrics

The second dimension of monitoring aims at capturing a more qualitative set of criteria: Chain performance, reputation, respect of the Roadmap, open source code, Level of nurturing and mentoring from the AEZ to the consumer chains, and Fit into the community.

Monitoring of technical metrics

In that domain, two key metrics are central: first a monitoring of possible known vulnerabilities in the chain binaries, and secondly, if the safety of 1 chain could affect the safety of the hub itself.

Tools for monitoring

Monitoring relies on 4 tools:

  1. An AEZ explorer, like mintscan to see AEZ chain metrics: This would allow to follow the revenue, and the treasury management
  2. A report every 3 months: This report should cover all dimensions of monitoring: economics, technical, qualitative and focus on risk management.
  3. A regular review of the advancements, for example during Cosmoverse. This review should allow validators to have an input on performance and be part of the review.
  4. A Review SubDAO focusing on analysing those metrics and publishing them.

The monitoring should aim at ensuring good governance. It should allow chains to follow the evolution of the AEZ.

Offboarding and conflict resolution

Because there has been no experience with offboarding yet, this part of the proposal is focusing on forecasting reasons, on both sides, for a split. Then it outlays the general principles and approach that should be followed.

Why would a chain leave?

The chain becomes bigger than Cosmos: Much of the value that the AEZ provides is the scale of security work and the size of the token holdings. For a small chain, the size of the treasury protects against attacks. If a partner chain becomes bigger than Cosmos Hub, then it may no longer need the security.

The economics are no longer beneficial: Either because the chain has not achieved enough revenue, or because the costs of AEZ make the chain not profitable, the economic conditions cannot sustain the relationship.

The chain has found a better option: A better ecosystem, or one with a different technology or direction that the chain prefers.

The chain sees AEZ as not delivering on their commitments: Even if the relationship provides value, they may believe that they are being taken advantage of, they are not getting the growth they expected from joining AEZ, or AEZ made commitments that they are not fulfilling.

The chain is no longer aligned with the AEZ vision: They may have had a change of vision, or they see AEZ heading in a direction they don’t agree with. Or they may believe the conditions are too restrictive and they want sovereignty.

The chain may feel unable to resolve conflict: Politics. Conflicts of interest, disagreements with the community.

Why would AEZ want to remove a chain?

The economics are no longer beneficial: Either because of low adoption and activity, the chain’s performance, or because the cost structure is not making the chain profitable for Cosmos to support. The chain is putting the AEZ at a greater risk than its “value” for the community / AEZ members.

The chain is no longer aligned with the AEZ vision: The chain is heading in a direction AEZ doesn’t agree with or is creating unnecessary conflict in the community, or violates an agreed upon Code of Conduct.

AEZ sees the chain abusing the ecosystem: If the chain is being predatory or parasitic on other chains in the ecosystem, or if they created a conflict of interest.

AEZ sees technical or security issues: Technical issues could be unmet goals or unexpected difficulties in meeting the roadmap. Security issues might be the extraction of value due to exploits from the partner chain.

What principles should drive resolving conflict in AEZ?

Clear onboarding agreements and effective monitoring will resolve many concerns without ending in offboarding. The general principles we see are:

  1. Clear & visible boundaries: the onboarding proposal should have clear goals and boundaries set.
  2. Ongoing communication: Regular check-ins should monitor satisfaction, and there should be regular meetings that would prevent conflicts from escalating. All parties should remain available for conversations.
  3. Small spaces for resolution: When complex issues arise, such as technical issues and evolutions of the roadmap and prioritization in both teams, the conversation should be held in a smaller group. The AEZ should establish a council with other AEZ members, or a group in charge of dispute resolution, to avoid having “too many cooks in the kitchen”. Only then hold a governance vote.
  4. Thought, not emotion: discussions about conflict remain professional, using expert opinions and concrete evidence.
  5. Good skills and methods: AEZ should develop templates for resolution, and practice non-violent communication.

Forum post link

Governance votes

The following items summarize the voting options and what it means for this proposal:

YES -
NO -
NO WITH VETO - A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance. If the number of ‘NoWithVeto’ votes is greater than a third of total votes, the proposal is rejected and the deposits are burned.
ABSTAIN - You wish to contribute to quorum but you formally decline to vote either for or against the proposal.

5 Likes
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Does partial set security change any of the phases / workflows outlined here?

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QUESTIONS:

  1. Is this signaling prop another Mission Publiques/RnDao initiative? If no, can you identify key principals that will be central to accelerating discussions and such?

  2. In the event this signaling prop passes, how much in funding will your group be seeking? I’m assuming your services for advancing conversations on AEZ are not free.

  3. If you are interested in seeking imminent funding, is your intention to apply for another AADAO grant, or will you be submitting a funding proposal on the hub?

  4. Last year, you submitted a successful grant application to AADAO as operators of Mission Publiques/RnDao. However, your funding was discontinued by AADAO in Q4 2023. What were the reason/s AADAO cited for discontinuation?

  5. You shared the Citizens Assembly final report on the Forum and Cosmonaut HQ Telegram.
    Your report had little to no engagement from the community. This being the case, how are you qualified to steward ongoing conversations given your team’s apparent challenges with community engagement?

  6. Did you receive any feedback from AADAO re Citizens Assemblies final report in private channels? If so, what was their assessment of the work your team produced?

  7. To what extent were you able to execute on creating “sortition” based assemblies as per your attributes your approved AADAO grant application?

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Respectfully, I’m not reading all that.

Please provide a preview “tl:dr” summary at the beginning of it.
If it sounds interesting or valuable enough that I want to read the rest, congratulations.

If not, it’s probably a crap idea anyway, and then none of us need to waste our time.

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Hello @Cosmos_Nanny,
thanks for the questions. Here are some answers:

  1. Is this signaling prop another Mission Publiques/RnDao initiative? If no, can you identify key principals that will be central to accelerating discussions and such?

This is not a proposal from Missions Publiques/RnDAO. It is the product of the pilot of Citizens’ Assembly. In order to finish the process and land it, we asked the group if we should transform the final set of recommendations they came up with into a signaling proposal. The group of participants said yes, and this is why we publish this signaling proposal. In this case I would see Missions Publiques/RnDAO as stewards of the output of the Assembly.

  1. In the event this signaling prop passes, how much in funding will your group be seeking? I’m assuming your services for advancing conversations on AEZ are not free.

In the event it passes I don’t see a role for us. The further discussion on onboarding, managing, offboarding the AEZ would be up to the community and I see the role of the Assembly and our role as organizers of this assembly as concluded.

A different question is: If the prop passes and there is a demand to support a deliberative process to implement/precise/discuss in more depth parts of the workflow, why not using a similar process? But it’s independent.

  1. If you are interested in seeking imminent funding, is your intention to apply for another AADAO grant, or will you be submitting a funding proposal on the hub?

This is a good question. My feeling at the moment is the following: I am still convinced that deliberative processes have a key role to play in the future of decentralized governance. So yes, my intention is to learn from this first experience and propose a better second iteration. This new iteration would demand some funding at some point. It would also demand to restart the discussion on a relevant topic and timeline. But it seems too soon to exactly understand what financial architecture that could have. Maybe also a Cosmos chain would like to test it for itself and pay for it.

  1. Last year, you submitted a successful grant application to AADAO as operators of Mission Publiques/RnDao. However, your funding was discontinued by AADAO in Q4 2023. What were the reason/s AADAO cited for discontinuation?

I can only refer to the official post: ATOM ACCELERATOR DAO TRANSPARENCY REPORT 4 | by Atom Accelerator | Medium See point 7.

The assessment from their part was: “AADAO has decided to discontinue its funding for the Mission Publiques/RnDAO led project ‘Cosmozens Research Pilot Program’. The project team was unable to complete the milestone related to publishing its methodolgy to select participants into sortitions in a reasonable timeframe, and there was a general lack of community support, which were both factors”.

At the time we contested the decision as we were in the middle of the implementation, and decided to pursue the project even without the second part of the grant, but we asked for the possibility of a retrospective review. This point was part of the report: “The team has asked AADAO for a retrospective review, after they complete their project, which AADAO has agreed to perform for them as a courtesy”. After the end of the onchain vote and the publication of our final report, we will activate this ask to AADAO.

  1. You shared the Citizens Assembly final report on the Forum and Cosmonaut HQ Telegram.
    Your report had little to no engagement from the community. This being the case, how are you qualified to steward ongoing conversations given your team’s apparent challenges with community engagement?

This is a good question. How could we work together to improve this? Could we organize a joint event / moment to discuss the content of the proposal? I would like to stress that I still see our role as facilitator and not stakeholder of the discussion on AEZ.

  1. Did you receive any feedback from AADAO re Citizens Assemblies final report in private channels? If so, what was their assessment of the work your team produced?

The general feedback we received from different stakeholders in the ecosystem is good and we were encouraged to finish the arc of the process by taking this step of publishing the signaling proposal.

Independently from those feedbacks, I see this step as important for the pilot process. The outcome of both the discussion around the signaling proposal and the results of the onchain vote will bring valuable lessons for the future on the question of the role of structured deliberative processes in decentralized governance.

  1. To what extent were you able to execute on creating “sortition” based assemblies as per your attributes your approved AADAO grant application?

I think the best answers are in the interim report on the process. We didn’t manage to get an onchain sortition process, we worked with a mix of application+sampling+diversity. We consider this a good first step as part of the pilot. But we consider that there is still a lot to improve to reach the objective of a high quality sortition.

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TL;DR: This signaling proposal outlines a framework for integrating, managing, and potentially removing chains within the AEZ. It aims to establish standardized processes based on discussions and principles such as economic incentives, moral alignment, and technical compatibility. The onboarding process involves multiple phases including initial proposals, community discussions, technical and financial analyses, and culminates in an on-chain vote. Management involves monitoring economic, technical, and qualitative metrics to ensure chains align with AEZ goals. Offboarding, though not yet experienced, is considered for chains that outgrow or diverge from AEZ’s objectives. The proposal emphasizes clear communication and conflict resolution throughout.

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My recording from the discussion of the group was that it doesn’t. I will circle back with the participants and let you know

1 Like
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Alright, so it’s something that could be done passively through some clever metrics and dashboards.

Thanks.