"ATOM ONE" Constitution Proposal

Thanks for your post Jae, your points re governance driven funding and the ICF are well taken. I totally agree that the ICF should take lead in funding any ecosystem bootstrapping, and assumed this was not possible because the ICF had run out of funding, but per your note this is not the case. My question continues to be, why hasn’t the ICF published an audited asset report of late? The last update that I could find is from June 2021, with assets totaling just over $500 million. This amount seems like more than enough for bootstrapping DAO experimentation.

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I think that the way that inflation was discussed in the whitepaper was very unclear.

Thus, I’m in support of a one-time issuance of 69,420,808 atoms into the treasury.

I am also in support of a minimal hub, to the degree that I’d like to write it over the next few days. Gaia’s code has become a little unuly for minimalism, with a good example of that being the defunct exchange code that must linger because LP’d tokens have been sent all over IBC.

Atom 2.0 isn’t minimal. Here are the risks as I understand them:

  • technical complexity is increased
  • there is a chance that the mev related stuff sells out the hub to mevoors. There are safeguards to this but it’s worth mentioning.
  • the issuance thing is and always will be a gamble

Jae I had the same reaction that you did to the wp. (specifically the changes to inflation – it is a vast wp and I need to get my head around your specific ls concerns still)

I felt that the section on new issuance wasn’t clear at all. Also, after speaking with some of the paper’s authors, I think it is well intentioned.

Your concerns about the hub competing with other cosmos chains are super legit. I think that we should try and get something about that that into the charter.

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Hello everyone! I’m glad to see this forum and see everyone’s discussion on COSMOS. I am a member of the Chinese community, please forgive my poor English, I use google translate, although I still don’t know how to express my inner thoughts, but I still want to say a few words.
Background: The cosmos project was released early, and compared to the current L2 project, it lacks funding. However, through a long period of practice, it has been proved that the advantages of the cosmos network have been reflected. I personally think that cosmos is also L2.
ATOM is similar to ETH
EVMOS+OSMOSIS+Gravity bridge+NFT+…Similar to OP (=zk=Arbitrum=…)
As you can see, cosmos is more like modular, so he is flexible. In the future, if zk is also introduced into cosmos (for example: zkEVMOS), if there is a problem with a certain project, it will not affect others, or the impact will be very small.
However, for so many years, Atom lacks the ability to capture value and lacks an anchor in the cosmos ecosystem. It has the same status as ETH. Although ETH is converted to POS, it still cannot expand rapidly, so there is L2. Therefore, the same cosmos 2.0 is proposed, I am very optimistic about it, thank you for your dedication to cosmos.
From Bitcoin to today, everyone is constantly exploring, and many models are also being explored. I hope that everyone can compare the existing models of other projects in many aspects, how can we take the essence and remove the dross, innovation belongs to us model. Grasp the main contradiction of the problem and grasp the main aspect of the contradiction.
cosmos is different from OP/zk/arb… They have a lot of venture capital institutions and have enough money, but we have enough advanced concepts, and our mechanism allows us to join forces, such as: EVMOS+OSMOSIS+ Gravity bridge+NFT+… Everyone should help each other, and at the same time, bind everyone together through atom.
I will continue to pay attention and learn with you. I will say this first.

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Non sequitur.

Some specific questions regarding that ADR:

4.1: “A larger exemption factor allows more tokenized shares to be issued for a smaller amount of exempt delegations.” → shouldn’t this say that a larger exception factor allows more tokenized shares to be issued for a LARGER amount of excempt delegations? Why smaller?

4.2: “This design allows the chain to force an amount of self-delegation by validators participating in liquid staking schemes.” → how does it force any amount of self-delegation?

4.3: “It provides a pathway to security under non-exponential issuance policies in the baseline staking module.” → why wouldn’t this work with exponential issuance?

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:saluting_face: :vulcan_salute:

Indeed I’d like to explain it a little bit, in my opinion the biggest feeling of the atom 2.0 paper is that well after reading it I kind of felt that it obfuscated increases to inflation I think a lot of other people felt that way as well and for a minute I was kind of upset about it and then I realized it had a pretty easy solution, one could literally just mint them all in one batch and then what you get is clarity that section in particular suffered from a lack of clarity.

Also the number itself was intended to be a little bit of a non sequitur, here’s how it came about:

  • my friend worked out this:

see how in year one 56,253,799 hits the treasury?

Simply minting at upgrade height is much easier and it strips the wp of fairly needless math – and – big perk – it becomes clearer. Community members shouldn’t need to put together docs on the numbers and piece them together by guesswork, but that’s the current state of the wp.

why 69,420,808?

69 - nice
420 - :jamaica:
808 - :loud_sound: - after the musical instrument

Here’s the tweet thread: https://twitter.com/gadikian/status/1577112480559804416?s=20

The other saying that doing it all in one batch can due to improve the clarity of the proposal overall is that we could have that one batch and then remodel the mathematics about the 100 million per month which I think includes the current level of inflation-- that section of the paper still isn’t fully clear even to me. So I don’t know if you saw any of my tweets on the matter but basically:

  • before learning how the inflation works because a friend of mine modeled it, I was highly supportive, I think there are good concepts in 2.0.
  • After learning about the inflation changes I kind of freaked out a little bit and actually kind of felt rug pulled in terms of supporting it at all.
  • then I talked to several people about the inflation characteristics because many people were telling me that I was simply wrong but I still felt rug pulled
  • what I didn’t realize was that treasury funds aren’t dilutive when they’re in the treasury, they’re dilutive when they exit the treasury and if they bring returns and enhance protocol onwned liquidity then the dilution is canceled out.
  • so I came full circle but then I realized that 2.0 shouldn’t pass and its current form if I can read the section on inflation changes and not get it very very few people can get it and it means we found a bug

further food for thought

  • 2.0 isn’t a minimal hub
  • the social coordination features on the allocator are :fire:
  • I’m pretty sure that the driving force behind 2.0 is to attempt to leave inflation behind and I really like that
  • more complexity means more risk
  • the inflation add some more risk too, and we need to express it in a way that people can understand or it’s probably not a very good idea at all
  • I can really only vote yes on what I can understand and promote a yes on what I can understand so what I’d like to do

my current understanding on liquid staking

the impact on security ought to be nil, because the underlying atoms can be slashed. I do have some questions about what happens to liquid staked atoms when they hit – for example, osmosis though. Is a slash just reflected in the price of the liquid staked asset?

I am not sure that liquid staked atoms that are transmitted to osmosis can be slashed, though I’d like ton get feedback on that.

update

I don’t want a billion dollars in a standard sdk multisig.

I may have misunderstood the wp.

I withdraw support and encourage others to veto until the chain of custody is clear in the whitepaper. Gov can veto the group, not the SendTx from the multisig wallet. Also, one of the reasons given for not updating the ICF delegations was the inability to do multisig transactions and I get it, it is legit hard.

I do not want community members in harms way.

How’s that for a non sequitur?

https://twitter.com/gadikian/status/1577522325783707649?s=20&t=vKxAFa-kfs75tFQV_Cr4NQ

NB: all the upsides I mentioned still exist but we should not take north korea risk with the treasury.

NB: where is the paper source code?

The paper is written latex, a document compiler. The paper is not open source, only the binary has been released.

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There are 2 topics about governance. I posted my thoughts on the Community Council on the Charter topic. Full text below:

The WP set a long term roadmap for the development of the Hub while the Charter role is to make sure the implementation is done with a certain standard of decentralization, ethics and accountability that protects $ATOM holders.

This is why it is crucial for the ATOM community to put sufficient mindshare and thinking into the charter.

I’ve taken some time to review work from one of the most brilliant minds in the Cosmos for governance related matters: @sacha. There are some nuggets out there that I can’t recommend enough. Before interacting with this topic, I invite everyone to get familiar with his thinking so here are a few resources to consider:

There is a lot to cover so I’ll only discuss in this post the soon to be established Community Council, which should be the backbone for governance on the Cosmos Hub for the time being and until a full Cosmos Assembly is formed.

The ATOM 2.0 paper requires us to develop new mental models for governance. The WP is ambitious and its implementation will be challenging, requiring novel governance foundations.

The WP suggests the creation of multiple Councils. The sum of those Councils will form the future Cosmos Assembly.

My suggestion is to adopt a progressive, measured approach when forming those Councils. To initiate this work, I believe the first governance piece we need to establish is the Community Council.

This Council will represent the interests of the ATOM community at large. The Community Council can be used as a platform and launchpad to form the other Cosmos Councils until there are enough Councils to justify the creation of the higher order Cosmos Assembly. Less is more. As such, the Cosmos Council should be representative enough of the ATOM holders.

Regarding the responsibilities of the Community Council, I thought of the following aspects (non exhaustive list):

  • Lead to completion the governance aspect of the ATOM 2.0 vision that ends with the launch of critical Cosmos Councils & the Cosmos Assembly (final step)
  • Enforce public accountability, notably with other Cosmos Councils that will be created further down the road
  • Create a framework for managing the Treasury Pool
  • Act as a bridge to the broader ATOM community.
  • Reduce the information gap and facilitate access to information by making it digestible.
  • Create and maintain reporting on various Hub entities: state of decentralization, work being done in other Cosmos Hub Councils, product feedback.

The composition of the Community Council is as important as its mandate. A few suggestions:

  1. It should be representative enough of the entire ATOM community. As such, it should include a basket of: core developers & validators + regular ATOM holders
  2. It should be large enough to avoid excessive centralization and cartelization. I don’t have an exact idea about the number of members, maybe somewhere between 7 and 11 members. Less than 7 encourages centralization while more than 11 makes effective governance challenging
  3. It should NOT be pro bono. Working for free encourages dubious behavior and conflicts of interest.
  4. It should be funded separately from the other Cosmos Councils to avoid competing for the same resources, which again favors dubious behaviors
  5. Members should NOT figure on other Cosmos Hub Councils

Thank you for reading. Looking forward to engaging with other members of the community.

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… continuing from point 5 above …

  1. We want to incentivize 2/3 to be bonded. - responding to the below comments:

6.a: Keeping 2/3 of ATOMs bonded is good.

6.a.0: Not everyone should focus on mastering blockchains or crypto-economics.

6.a.1: Staked ATOMs, being more like shares rather than money, separates the users into the cryptoeconomic/PoS aware, and the general population (laymen, or “grandma”). This allows the ATOM distribution to remain more intelligent than the general population. This in turn allows ATOM to represent a differentiated stakeholder class that can best steer its function, BFT-PoS, ICS, and IBC.

6.a.1.A: Without it, it is like letting the Apple computer company make business decisions based on the collective intelligence of its customers, rather than the specialized class of founders, stakeholders, and employees. Apple would have never been created under a communist regime, it was made possible by private self-selection and private equity. If you had asked people what they wanted before cars were invented, they would have said faster horses.

6.a.1.B: This is also why we should encourage the slashing of airdropped tokens based on governance votes, ala prop69 independence-day. This keeps ATOM stakers accountable for their votes, just as we should slash them for malicious consensus votes.

6.a.2: Removing this goal is akin to attempting to make ATOM money, which is intended for use by the general population, not any differentiated class. If ATOM were to become money, it would either force laymen to making staking decisions, unless we remove the 2/3 bonding requirement.

6.a.2.A: The market cap of “money” will always be significantly greater than the capital that can intelligently making staking decisions (unless we go with the WEF model of “you will own nothing”).

6.a.2.B: If laymen make decisions (governance or delegation), the decisions will be worse for the competency of the hub, AND they would be committing to an environment of slashing where they have no competency.

6.a.2.C: If the 2/3 bonding requirement were removed, any conspiracy of whales can easily take over the decision making of the hub. This will only guarantee that capital will take it over.

6.a.2.D: 1/3 of unbonded tokens is sufficient to establish a liquid market of ATOMs, while 1/3 is also the threshold for Byzantine voting power for partially synchronous consensus systems. Thus it is arguably the most natural factor to keep bonded.

6.b: Inflation is really a proxy for punishing non-bonding. It is more simple to inflate tokens and reward them to stakers, than it is to reduce the balance of non-stakers both from a computational and UX point of view.

6.c: The minimum inflation bound of 6% could be removed to allow natural deflation.

6.c.1 The 20% upper bound is needed for safety.

6.c.2 The minimum inflation rate was put in place for two reasons: one, to force the concept of an inflationary token as separate from deflationary/maximalist tokens (this clearly hasn’t succeeded as well as I had hoped, but maybe this ATOM ONE & ATOM2.0 conversation is accelerating it). Two, to ensure that validators can be bootstrapped by capital, to ensure that some level of transfer of ownership happens toward the validator operators.

6.c.3 The minimum bound after bootstrapping isn’t strictly necessary after bootstrapping the validators.

6.c.4 With a full ICS implementation and thus more transaction volume, there will be more incentives just from transaction fees for ATOM holders to stake beyond the ATOM inflation mechanism. So we may even see, naturally, the inflation rate to go down close to zero, or even negative(!!) to peg the bonded token ratio at 2/3. In short, removing the minimum inflation bound allows inflation to naturally decrease toward zero (or below) as the network grows and the functionality of the hub matures.

  1. Continuation inflation with tax-cap is better.

7.a: Inflation came be granted as deemed necessary. There is no need to pre-commit to inflation up front.

7.b: The notion that a proposal to significantly inflate ATOMs “one time” is fundamentally flawed. ATOM3.0 would inflate more and promise even more deflation, and so on. The only thing that this narrative will prove is that the hub is in denial, like a drug addict promising to quit by going out with a big bang.

7.c: There is barely any understanding of the need for a constitution, of structured governance powered by naunced UX, of differentiated proposal types, or even any mechanism to prevent pork-barrel corruption of proposals. The governance system of the hub is as of yet too minimal.

7.d: In 3 years we might approach the size of Ethereum today, and even after there will be more exponentially more talent that will be joining the system, and exponentially more development to be done.

7.e: The maximum inflation of staking is already up to 20%. By raising the tax to 50%, there can be up to 10% (non-compounded) inflation that can go toward the treasury. The amount of inflation going to treasury can be limited by setting a cap on the tax rate. This can all be done with no changes to the existing ATOM tokenomics, and simply by setting additional limitations on tax by constitution. This avoids the pitfall of 7.b as well, avoiding uncertainty which will reduce demand for an indefinite period of time.

7.f: Private capital doesn’t need the hub treasury to function; rather private capital is in competition with the hub.

  1. Nothing prevents the hub/ATOM/ecosystem from creating additional deflationary tokens.

8.a: As previously mentioned, any PHOTON/BETA token can simply be air-dropped to ATOM holders, and have special status on the hub as the deflationary fee token, complementing the ATOM. Existing ATOM holders would benefit from such an air-drop, while also benefiting from the differentiation as per point 6.

8.b: Allowing premissionless ATOM-derived deflationary tokens allows for more deflationary token experiments.

8.b.1: For example, one could create a deflationary token airdropped onto both ATOM and ETH, or ATOM and BTC, or all three.

8.b.2: Gno.land GNOTs will be primarily air-dropped to ATOM holders to demonstrate this approach, leading by example, but there are numerous other projects too.

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Removal of the notion that any inflation authorized will be counter-balanced by less inflation in the future, which is obviously untrue.

The amendment of governance procedures first described in plain English in the form of a constitution (much to be implemented in code later) which requires proposals to be well factored, to prevent pork-barrel clauses (and consequently corruption), and the assurance of conservatism in its evolution by not making too many experiments at once. A well functioning hub should naturally not require bleeding edge innovations on the hub itself.

The usage of said constitution to set limits on inflation and treasury, such as by requiring a higher threshold (2/3) to vote in favor of any inflation, and the requirement that those inflated tokens are allocated for a specific purpose and managed by an accountable DAO system; and in the future, by setting limits also on the tax rate.

Also see 6.c:

Combined with the idea to remove the minimum bound inflation rate of 6% (but keeping the 20% upper bound for safety), I think makes for a good compromise. The minimum inflation rate was put in place for two reasons: one, to force the concept of an inflationary token as separate from deflationary/maximalist tokens (this clearly hasn’t succeeded as well as I had hoped, but maybe this ATOM ONE & ATOM2.0 conversation is accelerating it). Two, to ensure that validators can be bootstrapped by capital, to ensure that some level of transfer of ownership happens toward the validator operators.

It isn’t strictly necessary (and in retrospect I think I would rather consider a flattening factor for validator rewards to allow large validators to subsidize smaller ones for decentralization.) Furthermore, with a full ICS implementation and thus more transaction volume, there will be more incentives just from transaction fees for ATOM holders to stake beyond the ATOM inflation mechanism. So we may even see, naturally, the inflation rate to go down close to zero, or even negative(!!) to peg the bonded token ratio at 2/3. In short, removing the minimum inflation bound allows inflation to naturally decrease toward zero (or below) as the network grows and the functionality of the hub matures.

These are just points already made above. Here is another one:

  1. Preserve the principle of “skin-in-the-game”.

The modification of the governance system to allow those who vote YES to collectively pay for any donations toward any treasury DAO. If the argument is that there will be significant return on investment by incurring a self-imposed inflation tax, then voters should feel comfortable donating their own funds toward that purpose and reaping any investment rewards. Preserve the principle of “skin in the game”; just as validator slashing only slashes those delegations toward that validator, allow ATOM holders to contribute their funds by their own investment thesis.

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See my point 9 above, which requires no centralized planning at all.

We have not seen any model that has proven to incentivize development without sacrificing accountability; we have hardly any DAOs in usage besides bare minimal governance, and even the ICF is still not transparent.

So until such a model is proven, it’s all just wishful thinking. Once the cookie jar exists, it will certainly create a proportional incentive for it to be taken by politics and memetic warfare.

This is just another way to say that one wants the treasury allocation to be greater than would be reasonable if decided in the future when the funds are actually needed. It’s a perfectly rational position for one positioned to benefit from the hub’s treasury, but not necessarily one aligned with ATOM holders.

The thing that is most needed and needs to be proven over years is merely briefly mentioned.

Occam’s razor. My original failure to understand that no independently managed entity can succeed in its altruistic mandate without an active higher authority, such as the hub itself. Otherwise I have no weffing idea.

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By your own logic, a fork of the ATOM distribution to create a new ATOM2 hub will outcompete the hub, and it suffers not from existential threats should the experiment fail. This is the power of mitosis or cell division over self mutation; it allows diversification and minimizes the risk of extinction. To the ATOM holder there would be no downsides.

First the constitution and working councils should prove themselves to be accountable and efficient. Then, we can implement what I described above on how to enable responsible budget without creating an initial ludicrously large inflation to treasury. Namely, see points 7.e and 9. Anything else only increases issuance uncertainty, not decreases it, as per my original post and point 7.b.

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Thanks @jaekwon for brought this up. Although building and launching interchain security is what we were waiting for several years, I believe we should carefully investigate what are in the suggested package, not to agree on something we don’t quite well understood or fully discussed well.

Seperation of the Proposal

  • ATOM 2.0 vision and 70M minting is very loosely related each other
  • There exists no clear plans how to decide and manage this huge newly minted Atoms
  • Developing ATOM 2.0 itself costs way much less than 70M Atoms
    (It can be well developed from 2% tax, if we hire the right people.)

Staking Reward Inflation ≠ Minting on Treasury

  • Inflation on staking rewards are not identical with minting on treasury.
  • Atom stakers are not dilluted by higher staking rewards(because they also receive the inflation), but hugely dilluted by minting on treasury account.(because they cannot financially benefit from new supply)
  • Result on Atom holders are completely different.
  • Hence it should be seen as pre-mining new Atoms to treasury account.

Careful Migration to DAO

  • Although I appreciate all the effort from AiB, ICF and related parties to bring Cosmos-SDK and Tendermint Core as now, I personally don’t think the journey of ATOM for last three years haven’t been very successful.
  • From the not very successful history, the Atom community should be very careful at creating another huge ATOM fund with lots of power on it. There exists high chance that the organization will not very successful again.
  • Migrating to DAO is even more difficult, considering all the complexity of governance and lots of conflict of interests and politics existing within Cosmos VIPs.
  • Hence, I am fully agreeing with the step by step, slow approach towards the migration. We don’t want to give 70M Atom of power to some group at once right now.

Conclusion(Suggestion)

  • ATOM 2.0 Vision and related feature development should be fully separated from DAO migration topic. We shouldn’t allow interleaving this massive minting within ATOM2.0 proposal.
  • More careful and prepared DAO migration should be suggested, with step by step financial execution.
  • I believe DAO committee should be formed with people more than half “not” coming from existing Cosmos VIPs, to prevent centralization of inner circle, minimize conflict of interests, and mostly reduce drama. I believe diversified group of leaders for each Cosmos blockchains with most independent political position will fit better for this job.
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Thank you for your thorough responses on both inflation and issuance Jae. Appreciated and thought provoking.

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There’s an issue with new users only being able to post once. I’ve created cosmoshub@googlegroups.com where we can use email or web to continue discussions.

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Draft of ATOM ONE constitution: https://github.com/tendermint/atom_one ; Call for contributions (by PR and issues); Disclaimer, I only worked on this for 3 hours, this is very rough. It’s a good time to contribute.

The notion that ATOM is a “memecoin” ignores the obvious and original business model for the hub – token transfer fees. Bitcoin and Ethereum gas transaction fees are in the 10s/100s of millions, and we haven’t even gotten to VISA scale yet. ATOM is not money, it’s VISA shares, and FED shares. It’s an alternative to the status quo that Bitcoin originally wanted to be, but more. Well, imagine what kind of social manipulation we must be under, to be pursuing such a dream.

Best part is we’ve done most of the work already. With minimal ICS the simple-transfer-zones are already more or less done. We’re 90% done with massive scale MVP, and after that scaling will be relatively easy. AND this ATOM1 hub is a minimal hub that zones will want to use.

Don’t lose focus!

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I’m on your side this time, jae, and hope the light of principle shines into the cosmos

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Hey All,

Here are my overall thoughts on ATOM 2.0 and where the community should go from here.

  1. The entire WP should not be voted on in its entirety. There are way too many moving parts, and I agree with Jae’s sentiment that DAO governance controls are not mature enough to handle such a large treasury. While other ecosystems outside of Cosmos have launched $500M+ ecosystem development funds, those funds are raised by private capital and this past cycle has shown that they have led to little value to the communities they serve, even with good intentions.

  2. My prior experience has been in Business and Resource Planning dealing with multi-billion dollar and multi-year infrastructure capital plans, and there is definitely some lessons learned from corporate governance and accountability. Corporations go through yearly reviews of future 1yr, 5yr, and 10yr plans and earmark funds for projects with some estimates that have varying degrees of accuracy depending on how far out the project is. This is something, in my opinion, every DAO in the crypto space is lacking. Typically you see a large pot of money sitting in DAO treasuries that are then tapped into based on proposals reactively coming to the community to vote on with not enough time to truly flesh out. While I dont think the Cosmos Hub needs a 5-yr plan due to the fast moving nature of this space, I do think the community absolutely needs at least a 1yr plan (for now, eventually 3yr+ as this process matures) on what treasury funds should be spent on and how much each project should be (+/- 10% accuracy - this can change, but an accuracy threshold should be baked into the Constitution). Maybe the ICF takes ownership of additional funding for projects that cost beyond the estimate + accuracy threshold. This puts onus on the ICF to hold these project accountable on behalf of ATOM holders from a scheduling and cost perspective since they will also have skin in the game to pay for any overages beyond the estimated amount.

  3. Interchain Allocator + Scheduler should be voted on and passed. The Cosmos Hub is the ideal coordinator to take advantage of cross-chain MEV, and the ATOM is the ideal reserve currency of a multi-chain world especially with Hub minimalism being a key differentiator from other PoS chains. The Hub needs to monetize its position in the Interchain, and I think at this point one could easily argue its even time for the Hub to compete without giving up its Hub minimalism vision. The Hub has given so much to the Cosmos eco, and besides early ATOM holders, the Hub itself has not received anything in return.

  4. I dont think large capital is necessarily waiting for a concrete monetary policy for the Hub with a known inflation schedule. In my opinion, large capital allocators are waiting for the Hub to accrue value through Interchain Security so it can quantify the market opportunity. I actually think they would rather a known bottoms-up yearly budget that the Hub could mint directly into the treasury at the end of every year to spend on future projects. Eventually, a % of revenue from Interchain Security, Scheduler, Allocator (and any additional future cash flows) should go into the treasury to fund growth opportunities without the need for inflation.

  5. Please no more forks or tokens. This is the last thing the Hub needs imo and adds more social and economic complexity (look at Rune’s Endgame Proposal with MakerDAO, as an example, which plans on creating more tokens to incentivize better DAO coordination. IMO it is very complex without clear benefits. Lets work within the confines of the ATOM).

Looking forward to seeing how the conversation goes from here!

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:fire::fire::fire::fire::fire::fire::fire:

Great point.

Thank you for your perspective.

There’s so much that the ICF could fund by simply picking what a DAO proposes in this way (without any additional inflation since the ICF already has funds); and then it can internally hire the people responsible for managing disbursement as suggested by the DAO, or pick employees/contractors to interface with DAO elected members. Basically even if the ICF can’t donate funds to a DAO, surely there are ways to interface with a DAO that keeps the ICF in the ultimate seat of veto, while the community benefits from full transparency.

But it is also true that there are activities that regulators would not approve of.

Pretty much all the proposals in the ATOM2 paper can be implemented on top of ATOM1 (see github link above for draft) on the PHOTON token on separate zones implemented permissionlessly. The Allocator service zone could be implemented by anyone and secured by ICS, and use PHOTONs as the counterparty token in AMMs. The Scheduler likewise can be implemented permissionlessly and use PHOTONs as payment token. Zones can choose to use whatever scheduling or allocation system they want. ATOM1 allows governance to approve of inflation of PHOTONs for any particular purpose such as this.

The main benefit of allowing permissionless implementation of the allocator and scheduler is that it allows competition of implementation. For example, there are alternative ways to implement the Scheduler that is different than ABCI++; it can be implemented as an extension to ABCI to allow Tendermint to allocate different priority mempools for different transaction types. This isn’t what is proposed in ABCI++ but IMO the first step to solving pay-for-priority. We don’t have to solve this by commitee, we can let the free market decide what solution is actually preferred.

This is indeed the market opportunity, over anything else that are more embellishments over the main course. Now with all the proposals and ideas in ATOM2, anyone can go off and implement them as new zones to be secured by ICS.

Please refer to my Twitter stream that I will paste here. https://twitter.com/jaekwon/status/1579787500263919617?s=20&t=OsO_E_c-GYWDPUF5OW03iA

1/ The notion that ATOM is a “memecoin” ignores the obvious and original business model for the hub – token transfer fees. Bitcoin and Ethereum gas transaction fees are in the 10s/100s of millions, and we haven’t even gotten to VISA scale yet. ATOM is not money, it’s VISA shares.

2/ And FED shares. It’s an alternative to the status quo that Bitcoin originally wanted to be, but more. Well, imagine what kind of social manipulation we must be under, to be pursuing such a dream.

3/ Best part is we’ve done most of the work already. With minimal ICS the simple-transfer-zones are already more or less done. We’re 90% done with massive scale MVP, and after that scaling will be relatively easy. AND this ATOM1 hub is a minimal hub that zones will want to use.

4/ The product market fit is already there. It’s simple, and we are already positioned for it. It is neutral to apps like http://gno.land and it is, as IBM’s CEO once said, the secret cash cow of IBC – transaction processing. The whole IBM/VISA/FED system is SECRET CASHCOW.

5/ Someone can find the years old interview where this was admitted. IBM’s whole mainframe business was about transaction processing. We sell blockchain transaction processing. Simple as.

6/ That’s why we were in discussions with IBM before, and why IBM got into the Hyperledger space. But they didn’t want to give up the power of tx processing to the people like Tendermint did. So thankfully we didn’t sell out, and we made Cosmos instead. Mainframe=FT, Tendermint=BFT.

7/ Cosmos is the VISA network built upon this decentralized BFT mainframe system. Always was, and should remain.

8/ New functionality can always be permissionlessly added on top of this base ATOM1 framework. The http://gno.land prop69 #exitdrop is a demonstration of value-add to the Cosmos Hub, as it will provide Gnolang smart contracts while IBC pegging to the Cosmos Hub for tokens.

9/ Using ICS, it should be possible to run new Gnolang VM powered zones secured by the Cosmos Hub, but also IBC connected to the http://gno.land chain for importing logic hosted on the http://Gno.land “github” (and paying gas fees & license fees to each).

With regards to why the ATOM token should should not be used as money, I refer back to all the points written above in this thread starting from the OP, namely the need for 2/3 bonding. The staking ratio today on Ethereum PoS is 12%. With massive adoption, unless we have complete laymen involved in staking, and with ETH becoming money, the stake ratio should fall even lower, perhaps even to <1%. At that point it becomes easy to coordinate a fund to take over the consensus process of the chain. PoW networks have two “tokens” the mining infrastructure (which can be bought or sold, and also is “inflationary”) and the coins themselves. This separation allows Bitcoin to become widely adopted without worrying about security vulnerabilties, because even the largest of whales cannot simply buy 1/2 of mining infrastructure. It isn’t a superfluid market, which makes it more secure.

I do see the “monification” of ATOM as per ATOM2.0 to be fundamentally flawed, for a chain whose main selling point is SECURITY. I believe ETH2.0 with its ETH staking is similarly flawed. I fear that we won’t realize it until it is too late. We can prevent future disasters.

(In biology, it’s the difference between Eukaryotic (cell nucleus) and Procaryotic (no nucleus) cells. Evolution has proven that multicellular (inter-cellular) systems like us are generally Eukaryotic. They both exist, but complexity demands more intracellular security.)

Imagine how easy it would be to create a fund and simply buy VISA… well not even buy, but simply bond the capital of the market cap of VISA, of $391B. That’s a lot of money, but if bonding that capital means one can take control over the financial system, people would lend their money in a heartbeat. But thankfully VISA shares are not money, and there are probably plenty of shareholders who don’t want to sell.

Once there are ATOMs and PHOTONs, and the hub finds good ways to incentive PHOTON usage, we will end up promoting PHOTON more than ATOMs, and the market cap of PHOTON will actually eclipse that of the market cap of ATOM. There’s much more money in circulation than the market cap of VISA/IBM/FED combined.

IMO to maximize ICS usage we want to incentivize the adoption of PHOTON, but not require it. Of course gno.land isn’t required to use PHOTONs on its own sovereign gno.land chain which is independent of ICS, but regarding gnolang VM zones that are secured purely by ICS, it is even acceptable for the PHOTON to be required, without condition, or for full economic benefits like discount on ICS security.

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Hi @jaekwon ,
listened to your excellent interview on the interop-podcast. Loved your explanations for your concerns about liquid staking. I share this fears, but so far more on an intuitive level, because I’m not that well versed in the topic to frame them as detailed as you did. Really appreciated that.
One question regarding the 2-token-model remains for me, though. I believe it got touched upon in the episode, but I didn’t get your counter-argument. In the podcast and here in your last post you use the visa card shares/money analogy. What I don’t understand is, why this should provide more security in case of economical attacks.
In case atom succeeds, it becomes the main security set and photon the base money, you already mentioned that photons would outweigh the value of atom potentially. What would prohibit photon-whales to buy a critical mass of atom and dominate the hub in the same way it would be possible in a one-token-model? I get that it would be way easier, if the stake only is 12% or less, but if we guarantee a stake of over 66% wouldn’t it be way better if the worth of atom increased in the same way the worth of the major money increases? This would be the case in a one-token-model. Shouldn’t we anticipate in the long term that economical attacks will be the main attack-vector anyways, because if crypto goes mainstream, it will be the only method available to every field of expertise and not like the many attacks nowadays only to programmers?
On a sidenote: you mentioned the - I believe - rhetorical question, which nazi would embrace love and condemn hate. The answer is quite simple in my opinion: Every single one of them. I know it’s not fair to pinpoint one explicit point in a spontaneous interview, but I think this is important. In their core everyone of us believes to do the correct and a good think while acting in my opinion. What leads us away from the obvious “good” thing to do in my experience is not a fundamentally broken/evil personality or the influence of such entities, but the paradox of power. I believe, Sebastien touched this point in the interview when he mentioned that governments seem to naturally get pulled towards control and therefore more centralization. It’s a necessity for the preservation of power and people living to maintain this power will eventually subordinate everything to it, even if it’s in contradiction to the goals the accumulated this power for in the first place. That’s why I don’t need conspiracy theories to explain this phenomena and to be honest I believe them to be mostly useless for me as long as I don’t really professionally research them, because they are just distraction and easier explanation for the much more complex phenomena mentioned above. More complex, because it doesn’t give in the typical oversimplified good/bad-dichotomy. However, as long as we arrive at the same conclusion - decentralization of power is the most effective means to improve all interactions between humans beings - I’m really in line with a lot you propose for the cosmos. Sorry for abusing your thread for this. Looking forward to your input in the space in the future!

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One question regarding the 2-token-model remains for me, though. I believe it got touched upon in the episode, but I didn’t get your counter-argument. In the podcast and here in your last post you use the visa card shares/money analogy. What I don’t understand is, why this should provide more security in case of economical attacks.
In case atom succeeds, it becomes the main security set and photon the base money, you already mentioned that photons would outweigh the value of atom potentially. What would prohibit photon-whales to buy a critical mass of atom and dominate the hub in the same way it would be possible in a one-token-model? I get that it would be way easier, if the stake only is 12% or less, but if we guarantee a stake of over 66% wouldn’t it be way better if the worth of atom increased in the same way the worth of the major money increases? This would be the case in a one-token-model. Shouldn’t we anticipate in the long term that economical attacks will be the main attack-vector anyways, because if crypto goes mainstream, it will be the only method available to every field of expertise and not like the many attacks nowadays only to programmers?

Interesting point imo. But suppose 2/3 of the tokens are bonded anyway. In that case a whale could buy all the ATOM of the market, but still not have enough ATOM to halt the chain or influence any proposal. I think the key here remains that we need a security layer where never more than roughly 30% of the ATOM is liquid. We might even need to think about the liquid staking solutions being created now (Stride, QuickSilver amongst others) which are gaining traction and might cause a risk to this 2/3 non-influenceable amount of ATOM.

I am aware that the whale can also have a part of the 2/3 bonded supply. What might be an idea is to program the “Yes with veto” option which can be utilised in case of emergency. I mean, nowadays we can reject proposals if 1/3 or more votes “No with veto”. We don’t need a majority to vote that, but less.
Suppose we have the same option to get certain things done with a “Yes, with veto”. Then a minority might still be able to save the chain in case of a hostile take-over. (I know that this can also be abused, so not sure about how to be executed yet)

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Hi, I translate the consititution draft to Chinese. Maybe help to let more people know the content. If any misunderstanding, please tell me. Thank you

mirror.xyz/0xshushu.eth

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