On behalf of the PRO Delegators’ validator, we fully endorse the proposal to reallocate the previously deployed liquidity to the upcoming Hydro platform. We recognize the author’s concern that a direct claw-back could lead to inevitable negative side effects and, thus, support the proposed nuanced, intermediate solution to facilitate the transition. The Hydro committee will oversee the transition period and remain accountable until the funds are deployed in a fully trustless manner on the Hydro platform.
Some community members have consistently opposed the Hydro protocol, as highlighted by recent comments questioning the necessity of creating a liquidity auction platform altogether… However, we contend that the real illusion is what has been perceived as “free liquidity” from the Hub until now. Hydro offers a viable solution to this existing issue, acknowledging that liquidity allocation inherently carries risks, thus can’t be free. Taking funds from the community pool in the millions without rational compensation is unacceptable, and Hydro addresses this concern. The auction system is community-based, allowing everyone to participate. It is not a committee-driven platform; rather, the committee’s role is to monitor and report to the community.
The committee is specifically designed to address these challenges and provide guidance to community members interested in participating in Hydro. Regular users might lack the necessary technical and financial risk management knowledge. From our perspective, certain edge cases necessitate a committee. We have long advocated for creating a grant committee and have been vocal supporters of the @ATOMAcceleratorDAO . It is crucial to have a robust grant environment, requiring expertise and qualified reviewers to function effectively and avoid miscalculated use of community funds. We view liquidity allocation as another domain needing specialized and competent guidance due to its inherent complexities and risks.
One of the primary concerns raised by the community has been the inclusion of LSM shares. We are pleased to see that Hydro has addressed this by planning to include all LSM shares from the launch date. We commend this decision and appreciate the associated delay to ensure proper integration.
CONCLUSION:
It is important to remember that this proposal is not about debating the merits of the Hydro platform itself. Instead, it focuses on the support for transferring custody of the Cosmos Hub community pool’s previously approved PoL deployments to the Hydro committee. This transfer aims to facilitate a competitive bidding process as outlined in the Hydro litepaper. On behalf of the PRO Delegators’ validator, we express our full support for this initiative.
Many of the existing PoL beneficiaries have already expressed their acceptance of this transition, and we welcome their decision. The concept of “free liquidity” is a misconception; liquidity allocation always involves risk and should be managed carefully.
Thanks for reading,
Govmos.
