In view of recent events in the Cosmos ecosystem, and in particular the community reactions to proposal 836 on the Community Pool fund for an amount of 44,000 $ATOM, I hereby propose a new funding approach.
ATOM PRICE FOR MATHS: 6-7$
Problems
Community pools have often been controversial in the past. Many community members around me believe that some funding has been aberrant, others have been arranged with validators.
Problem number 1: A priori project funding is given in $ATOM
Even though I believe, and I hope the other builders do too, that the $ATOM token will regain strength against the dollar, there is still a significant amount in circulation with each proposal.
Over the past 12 months, $ATOM 1,420,485 has been allocated to funding, rising to $ATOM 1,460,485 if proposal 836 is accepted.
At the current $ATOM token price, this represents $9.403 million.
That’s 0.0485% of $ATOM’s market capitalization, but more importantly, almost all the liquidity available for ATOM pools on Osmosis today…
(see community-approved proposal numbers 814, 800, 717, 687, 202, 155, 104, 103, 101, 95, 94, 89, 79 and 77.)
Problem number 2: $ATOM spent leaves the Community Pool
This may sound logical, but I don’t think it is. Project funding should be a long-term, ongoing process, not a one-shot affair. I would add that we should have milestones in the funding, with a public presentation of the results, and the implementation of a continuation, or not of the funding.
This is not the case at the moment, and so we have funding allocated that does not lead to the expected result, with maximum risk-taking for the Community Pool, and therefore the community (find examples).
To date, the Cosmos Community Pool has 5,075,301 $ATOM available. This represents 970,905 $ATOM in staking revenues, per year, with the current APR.
That’s $6.4M of funding, per year, at the current price.
That’s more than enough funding.
Proposed solutions
Focus 1: Preserving and expanding the Community Pool
My first proposal is that, when funding is requested, it should be presented in terms of the number of $ATOM per day, and the duration of the day.
In this way, the Community Pool will be able to store the number of ATOMs needed (the latter being variable) to provide the financing required and voted by the majority, without touching its capital.
Let’s go back to our figures. We have financed $1,420,485 in ATOMs over the last 12 months. To simplify the calculation, let’s agree that 12 months ago, we already had $5,075,301 + $1,420,485. If these $ATOM had been staked, they would have generated ((5,075,301+1,420,485)*0.1913) 1,242,643 $ATOM in rewards.
Without staking and linear financing, our Community Pool went from (5,075,301+1,420,485) $ATOM 6,495,786 to $ATOM 5,075,301, with builders financed out of capital.
With staking and linear financing we would have an unchanged Community Pool, and builders financed on rewards.
Axis 2: Organize financing via the Community Pool in a linear fashion
A development project is complex, managing teams, particularly in Web 3, is tedious and time-consuming, and blockchain, apart from ATOM Accelerator, which has its own funding, currently has no means of monitoring the project.
Thus, achieving linear financing, day after day, with funding renewal gates, via public proposals, secures the long-term financing of Cosmos, and its builders.