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.
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.
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.
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.
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.
Here are my overall thoughts on ATOM 2.0 and where the community should go from here.
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.
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.
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.
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.
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!
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.
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.
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!
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)
Jae: thanks; first for all your work, words in general, and for this first Constitution Proposal. Though it had not passed by now, no doubt it is and will be more and more clear the need of a Constitution/Declaration of Will of the Cosmos Community to state a safe playground for real living people interacting in the virtual.
I would like to share two inputs. They are minimal… (not complicated), though necessarily resolute: they require to raise the bar for all actors conduct. I don’t know if they are feasible right now, maybe not (maybe we could find a surprise here)…, maybe now is the proper time, precisely because is still feasible -but personally have no doubt they would push towards the right direction: the true Cosmos vision for a new and healthy internet. If we -individually and as a community- can agree on this two minimal big changes, I strongly feel we’ll make a whole step in the direction of a responsible Hub’s governance coordination, and transparent, enduring DAO experimentation.
Rules:
DAOs are created for a specific task, or “mission”; then DISSOLVED.
No valoper address can vote on Governance.
The latter. Validators are a nuclear function of the consensus engine and for that sole reason they (teams and heads of teams validating blocks) should never confound the pure computational function they provide/execute with a political (party) persona. This easy confusion/political temptation seem to work as strongly (and in parallel with) as the economic one regarding ATOM as “money” token -the kind of confusion which feeds the “LFG/MOON” narratives- and, as long as many teams are still very vocal about decentralisation, the risk of cartelization is clearly there, and should be addressed and anticipated as soon as possible. (We don’t want to replicate a SPQR scenario… not just that we all know how it ends, but that we know by heart that’s an absolutely obsolete and delusive kind of aspiration -in complete ignorance of the times we are living.) This problem should be solved by default. We can grow steadily towards a healthy PoS ecosystem by facing a very fundamental logical issue: No man/woman can vote as a validator because validators are functions, not living people. Entities do not have voice (spirit); they cannot vote. This kind of awareness, capable of preserve the dignity and ensure the safe continuity in the virtual of our real living being would undoubtedly help to rise the bar of conduct immediately.
Whatever necessary in the initial phases of PoS in order to bootstrap even governance, now there is a strong and thriving community of stakers -believers in the project, with skin in the game- who, if Cosmonauts do value and manage to apply this change, will be no longer “delegators” (no more than regarding the computational function which initiates/completes the secure working of the chain)… but angel investors, with a more balanced saying within governance. So, this rule ensures the major one: Anyone can vote: with his/her own individual address/wallet -truly weighted (staked) tokens.
If participation in governance is considered to be too low at the beginning (but I’m not so sure about that, at all), by simply establishing a safe proportion between % of votes types (Yes/No with an entire month of voting period, or a 2/3 weeks of voting but with a mandatory period of a variable x amount of months of previous public discussions and published concerns/outcomes, for example) always accordingly with the level of the estimated possible systemic impact and general implications of the proposal that will be on chain (proportions can run from 6:4, 7:3 to 8:2, 9:1 and even 9.5:0.5/9.9:0.1 accordingly to an established parameter of systemic risks/course variation implicated), we can lower and even eliminate in time the Quorum threshold requisite (which functions as now, paradoxically and unwillingly, as a pure formal, artificial kind of “front-running” governance -even more in a “liquid” one as is the case here). Voting should not only be open for everyone with ATOM at stake (and not merely to every staked ATOM) but also not occluded by a misunderstood delegation process… (again: we should not confound the computational function which ensures with the validation one the secure working of the chain -the 2/3 at stake-, with the comfortable attitude of delegating our responsibility to learn, engage and vote in a tech that is actually moulding our future in the internet… and so, freeing validators from asking them for governance (/financial) advice…, this is a rising of the bar for actual “delegators”. Not that we can’t trust no one or each other -on the contrary-, but that the possibility is there for a truer, more clear and organic engagement in governance). I bellieve in time -the more important the proposal, the more relevant the voting process- the more each community member will engage, participate in voting and finally, be fairly heard -but now, equally balanced according to each personal weight, without any speculative concern about “being the voice” of other people, and so, in a fully decentralised way. This change in quorum may sound scary but I think it’s not the case if we calmly consider and manage the situation, and, equally important, if we want to make a firm step towards the sound goal of a fully decentralised and mature, consistent governance process.
This Governance feature enforces anonymity, encourages participation (no one will vote for you), and solves the problem of CEXes/institutional/corporate (entities) vs individual (real living beings) disproportional weight in the decision making. Plus, is a move towards the clarity of the original design: ATOM is not money, but a tool. A tool to make decisions together in the path of building a future worth living for our humanity. And, of course, ATOM is a very powerful one.
The former. Once the specific mission for which a specific DAO was created is accomplished -independently from the result/time expected for its outcome-, they are dissolved. This feature would solve by default the great issue of replicating the big bug of all old systems; simply by not creating the circumstance which enables its possibility: NOT creating institutions: charges: bureaucracy.
Blockchain tech, for the first time in history, allows and even incentivizes this kind of iteration, this agility and flexibility. Multiple DAOs (economical, political, legal, humanistic, artistic, historical, thematical research DAOs, and so on) can be created and set forth as delegations of Cosmonauts to accomplish specific missions decided by and within the community. All sprout from the bottom-up or, either way, obliging the best actors/ideas to be spoken in the open, and thus improving the know-how and what in free joined open groups and forums, and rising in general the awareness of the whole community…
My 2 sincere cents. Open of course to rectifications, suggestions and enlightenment in general. As you have already noticed, both come around a same concern: the “Representation” issue… which is at the core of the “old” problem and the “new” solution we must undertake; the kind of right and responsibility we must take under the one and only Law in the whole Cosmos: the one which speaks as written in the feedback from our own true Nature. I guess this is the Fork, from the wrong version of “progress”, that we are all searching for.
Interesting thought to remove the voting power from validators. It has upsides and downsides.
The first question would for me would be; is there enough participation from individuals to do this? It gives a serious risk of gaming governance, because it would become way easier to sway a proposal in your direction with the right investment.
I asked the same question in the chat for the validator commons ([PROPOSAL][DRAFT] Validator Commons: improving validator governance and leadership - #14 by LeonoorsCryptoman); what is the direction we need to take? What is our dream and end-goal as desired by the community? At this point in time true decentralized governance is something which is certainly not in one of the top spots of being desired imo. Making changes to how we do governance can be an option, but they need to be directed to solve a problem and not create a new one imo
