Hi All,
Thought it would be good to address some of the concerns we’ve seen and provide a bit more context on where Informal is
A major motivating purpose of Hydro is to address what has become an unaccountable mess of PoL proposals to the Hub’s CP. There are 4 of them outstanding already (>2M ATOM worth), no one seems to track them, they pay no direct rewards back to the Hub, they’re painful to deal with on a one-off basis, and there’s more coming. The goal of Hydro is to create a proper platform for managing that instead. There seems to be general alignment behind that goal and a Hydro style solution. If you think that’s misguided, or if you think there’s a better solution or if the original problem is misidentified, we’d be eager to hear why.
It’s definitely true that the funds for Hydro should come from the existing PoL outstanding. Our feeling was that this will be a bit complicated and take time, and we thought folks might want to see Hydro proven out more before rerouting those funds. But we definitely agree all of those funds should be clawed back and rerouted through Hydro, and have been saying as much the whole time. We can certainly work up a proposal for how to claw them back in advance in order to fund hydro. Perhaps we can claw back half of it (~1M ATOM), use that to seed Hydro instead of a new CP ask, and clawback the rest over time.
As for the stATOM component, since stATOM is a major use of ATOM in DeFi, and a major target of existing PoL props, we thought it made sense. Plus, Stride is a consumer chain of the Hub, and one of the key value propositions of ICS is that if you bet on the Hub the Hub will bet on you in return - this is a powerful capability that distinguishes the Hub from other shared security providers and should not be lost. In any case, our plan (as we’ve written) was to add support for other LSTs as well, but there’s more complexity in doing so, and since we’ve also gotten feedback on the importance of getting to market faster, we thought it was a reasonable approach to start with stATOM. But it’s something that could absolutely be changed, we could just not include the stATOM bucket to start with and go with 100% ATOM bucket while we work on the code to support LSM shares directly and/or other LSTs. No problem. There seems to be widespread support for this and we support it too. The post from Stride itself above captures this well.
As for Informal x Stride conflict, Informal never invested directly in Stride. We hold less than 30k STRD, which we primarily received from auditing them. It’s normal practice for us to receive some tokens as part of an audit. Beyond that we earn some small rewards from being a validator, which is public info. I can’t comment for others but I do not own much STRD personally beyond what I receive from staking. Frankly I feel underallocated in that regard ;). In any case if we remove the stATOM bucket, this becomes less relevant, but wanted to clarify anyways.
As for the committee and their conflicts, we wanted people with expertise in specific roles, as articulated clearly in the prop, and that will inevitably come with certain conflicts with top DeFi-related projects in Cosmos. We should include some basic guidelines for managing conflicts. The goal of the committee is accountability, similar to Informal/Hypha’s prop 839 committee and to AADAOs committee. As Hydro is getting started, and especially until the Valence integrations are ready, the committee will have more responsibility, but the goal is to reduce their responsibility to minimal oversight. Hub governance can always change it. Perhaps it would be valuable to add/change some members, for instance people from Drop/Kujira to balance Stride/Osmosis. If there are particular people that would be great for particular roles on the committee, and those people are willing to do the job without pay to start, it would be great to hear recommendations.
Now for a bit more context on Informal. Informal is currently funded for Hub work by prop839, along with Hypha. The primary mandate of that prop for Informal was R&D and maintenance. However, we have received consistent feedback from our oversight committee that our R&D/maintenance is great but that they expect more BD leadership from us. So we have been trying to take that feedback into account. Our effort around Hydro is part of that. Since we have not really been resourced for Hub BD, we are aware that there is a lot to improve on that front, and we are working to do so. You can read more about this in our recent Q2 report.
The prop839 funding was for a total of $5.7M (plus 100k ATOM in discretionary bonuses). 4.5M of that 5.7M is for Informal’s work, and the remaining $1.2M is for Hypha. We have been publishing detailed quarterly reports of the use of those funds. There is typically a surplus (ie. we don’t use all of it), and this surplus is returned to the community pool. See for instance the report on Q2 finances and the $71k + 3k ATOM to be returned to the CP this quarter.
For more on Informal, see our recent post on the org’s evolution and funding. Our 2024 budget with the ICF is 5.5M and covers CometBFT, Hermes, and ibc-rs. Our 2024 budget with the Hub is 4.5M. Together, a pessimistic estimate is this will be about 2/3 of the company’s 2024 revenue. Optimistically it will be half. The rest of our business is growing steadily, especially since we stopped throttling it (we put a lot of business growth on hold in ‘21/’22 to support Cosmos in a difficult time). We are happy to continue working on the Hub and on core cosmos public goods for the ICF. We are also happy to not. We’d love to see other teams step up to take these projects forward as well.
We will work on a set of edits to the Hydro proposal to address the substantial feedback. Always appreciate the level of engagement around Hub topics, it’s clear how much people care about the Hub. Let’s try to keep it courteous and professional and keep building this thing out together.
Cheers.