Hey Jae,
I’ll try and break down your observations below.
-
Why an ICF donation to the on chain DAO is challenging/won’t work?
-
Demand for the ICF supported set of public goods like Tendermint, the Cosmos SDK and IBC has never been higher. Reducing funding for these projects starves them of engineering resources they need at a critical time. With the TAB, we are organizing and accelerating the technical evolution. We are working on getting more funding from the ecosystem for these public goods through the Cosmos Builders Foundation.
-
The ICF is a heavily regulated Swiss Stiftung. My understanding is that donating a significant amount of the endowment to the on chain DAO would run into significant regulatory headwinds that make it untenable. Given that the Hub needs working capital now for the imminent launch of interchain security and that returns of that capital need to be controlled by ATOM holders, the white papers issuance plan seems like approximately the only alternative. When legal entities are required, they should be independent of the ICF and legally accountable to ATOM holders and the Council hierarchy.
-
-
I want to really focus on the conceptual framework of the Treasury. We expect the dilution of ATOM holders from the Treasury issuance to be minimal over the long term because we expect the value of new assets in the Treasury to exceed the opportunity cost of the ATOMs that were distributed. But the rate of release of liquid ATOMs need not be comparably as fast as to be meaningful compared to staking issuance in next 3 years.
-
The best opportunities for ATOM holders to grow the Treasury are likely going to be in the next 3 years because of the inflection point we observe in Cosmos network adoption. We observe a lot of private capital being deployed on this thesis. We have an exceptionally strong cohort of founders building in Cosmos right now.
-
Interchain security is going very well. I don’t see any short term pressure for a VM on the Hub. Jehan’s tweet was very off script. I’m aligned with you on technical vision. We’ve envisioned doing the scheduler and allocator logic as consumer chains. No VMs on the Hub in the next 2 years. My only reason for hesitating longer scales is that we might need for a VM in the IBC Client eventually either for non-tendermint consensus or verifying light clients for fraud proof supporting clients.
-
The white paper requires a charter before the Councils can start to function. Your ideas are a potential starting point for the charter. The charter could also cap the total number of ATOMs to be distributed to a number consistent with your goals.
“Treasury DAOs should be judged based on how accountable and functional they are; “real” people should hold roles (1 person max 1 role) including possibly 1,2,3 executive roles, and be fired by the DAO’s oversight committee (or hub gov) for failing their job description.”
-
Liquid Staking. The ADR is ready is available here: cosmos-sdk/adr-061-liquid-staking.md at main · cosmos/cosmos-sdk · GitHub
-
Bias towards forking. We observe that airdropped tokens quickly evolve into their own sovereign community and do not remain ATOM aligned. Ie. If the tokenomic design of ATOM 2.0 is actually superior to ATOM, it will outcompete ATOM and draw mindshare away from ATOM. We’ve already seen this with both OSMO and JUNO. An intended goal of ATOM 2.0 is to not repeat this. ATOM stakers should decide if they want to continue the pattern where the most exciting tokenomics in Cosmos are not in ATOM.
-
On demand issuance. We could achieve adequate funding via on demand mints but we think that there is a large amount of capital waiting for ATOM to have a more predictable issuance policy. Between the minting in the white paper and the constraints in the charter, a potential ATOM holder can then define a worse case circulating supply with precision and speculate how much lower it could be.
Respectfully, Zaki