Before getting into FAQs, we’d like to say that we appreciate all of your feedback. The level of engagement and care shows that we’ve built something special together. We don’t take that for granted.
This idea is still just that — an idea. We’re not 100% convinced it’s the right idea, and would never try to push it through without broad consensus. Engaging with the idea in an open-minded way requires a bit of trust that the Stride team is acting in good faith.
We opted for an open, transparent process to involve the community in shaping the idea, presenting it once Stride contributors had internal consensus but before discussing it with many other members of the community. This required a bit of trust in the community to act in good faith, and we think it’s the right path.
The only thing we ask is that you approach the idea with an open mind. We’d like to address some common concerns we’ve seen that we think can be easily cleared up, so that we can refocus the discussion on the broader concept.
Also: we’re also working on a Swiss booklet, to give a balanced view of both sides of the core issues, adding to it as we get more feedback. The Swiss booklet will be published by Thursday October 12th. We’re planning on hosting multiple spaces to hear all opinions this week. And we’ll keep engaging on the forum.
Our thoughts on common questions and concerns we’ve seen so far:
1. What’s the cartel up to this time?
This is genuinely an open, transparent process. The path forward is up to the Stride community first, and Cosmos Hub community second.
Stride contributors could have written a full paper on the concept with a clear specific vision, but it’s such a big step that it would have been pointless without getting broad input first. Instead, we tried to keep it simple, to get people thinking about the high level concept without too much bias.
The idea didn’t come from a bar or drunken night. Informal systems floated the idea by the core team a few weeks ago, and we debated the pros / cons at length. Core contributors are broadly in favor of this idea, but it is not up to us. In fact, Stride contributors employed by Stride Labs will not be voting.
At the end of the day, it’s up to governance.
2. What even is the idea?
The idea is this: all STRD is converted to ATOM. Anyone who previously held STRD now holds ATOM. Stride is its own appchain / satellite chain, and the Stride team keeps working on Stride. 100% of Stride’s revenue would go to the Hub.
3. What would happen to Stride if a merge happened?
The Stride brand, discord, Firestride chats, community, core contributors would remain.
Stride would become the most decentralized liquid staking protocol in Cosmos, and likely all of crypto (ATOM governance is more decentralized than LDO governance).
The core value prop to Stride is leveraging the Hub’s decentralized governance, protocols like dYdX, Celestia, etc. As an added benefit, Stride would be fully aligned with the Cosmos Hub and have resources from other core Cosmos Hub contributor teams at their disposal. Stride would also be in a stronger position to secure large amounts of POL to support liquid staking growth.
4. Is this exit liquidity?
No, because there would be vesting with KPIs for the core team. The team only gets paid if they continue shipping aggressively. And the vest would likely be longer than the team’s current vest! And contributors are not optimizing for STRD liquidity right now; not as important as stATOM liquidity.
VCs would have vesting, too.
Given the KPIs, the Hub would be buying a dedicated team.
Keep in mind, Stride contributors have always focused on the ecosystem, not STRD. And this may be the best thing to do for the ecosystem.
Like many Cosmos community members, Stride contributors feel intense urgency about Cosmos, the hour is late. After the dYdX and Celestia mainnet, Cosmos Hub might not be the clear leader in terms of market cap. From the Stride contributor perspective, if ATOM does not succeed, Stride is less likely to succeed.
5. Would there be a huge mint?
Unclear. The tax could be used. Depends on ATOM tokenomics. Based on the current STRD marketcap, even if there were a mint, it would be a single digit percentage of ATOM supply.
6. Would the whole STRD supply be converted?
Probably not, because much is currently unallocated (or allocated to incentives).
7. What about incentives going forward?
Stride protocol has been scaling back incentives for a long time. With ATOM taken care of, incentives would only maybe be needed for stTIA / stDYDX / stSEI. Stride protocol still has a large unspent incentive pool, which, if converted to ATOM even partially, could be enough to support incentives required for expansion to new Cosmos chains.
8. How would Stride rewards go to Cosmos Hub?
Either streamed to ATOM, or to the community pool. Unclear, both would be good for different reasons. This question needs to be solved as part of ICS’s design regardless.
9. Would Stride support other chains like Osmosis, dYdX, Celestia?
Other chains may be more comfortable liquid staking if Stride is more decentralized. From a protocol’s perspective, once a liquid staking provider has a significant % of stake, it must be very decentralized with checks and balances. As an example, see the current discussion happening around Lido’s dominance on Ethereum.
10. Okay - but why even do this?
Despite its flaws, the Cosmos Hub is very special. It pioneered proof of stake, the appchain thesis, trustless bridging, liquid staking, and shared security. The token that drew Stride contributors into Cosmos was ATOM. It has created something bigger than itself — the best decentralized applications in the world can be built on Cosmos.
Simply put, many Cosmos chains currently depend on ATOM’s success. Over 75% of Stride’s revenue is ATOM. ATOM is the token with the most volume on Osmosis. ATOM secures Neutron. So Osmosis, Stride, and Neutron need the Cosmos Hub today. And it is the view of many people that ICS isn’t a compelling enough narrative for ATOM. We need to raise the stakes!
The reason we’re here is to build permissionless, open systems. This idea is about decentralization, and about ATOM’s secret power - decentralized governance. To give stakers and protocols more confidence in Stride protocol.
It would also give ATOM a future. For ATOM to be a top 3 token (where we think it belongs), it needs a strong narrative and to be fully decentralized. We think the narrative here could be it, and having a few more development teams would make the Hub more decentralized.
And if STRD gets converted to ATOM, current Stride holders share in ATOM’s upside.