I’m really happy to see all of the amazing discussions going on above. With that being said, I don’t have much more to contribute currently to this discussion as I resonate with most of what others have pointed out above such as @Kam and @RoboMcGobo.
What I do have to say is, If and IF this discussion carries on, I believe It will be a type of M&A that we have not seen in this space yet (please do correct me if I am wrong here). M&As are also a lengthy and expensive business so we’d have to discuss alternative methods such as a Token swap (I’ve seen this discussed briefly above).
My second concern which many pointed out above is that more likely than not, Stride will be the chain most affected TVL-wise and with how much it can grow (since it will be more ATOM aligned than other chains) which would in turn, affect the Stride contributors/investors the most.
Lastly and I think no one has mentioned this yet but - If Stride gets absorbed into the Hub, can the Hub continue to natively issue ATOM and stATOM? I can’t think of a network that mints its own liquid-staked token. ETH has LIDO, StakeWise etc. all of which are third parties.
Would It be good to have a heavily aligned Liquid-Staking protocol for the chain?
Does that promote the decentralisation of Liquid Staked Tokens? There’s this issue on Ethereum whereby LIDO is in the limelight for having a lot of staked ETH - would this happen to Stride?
I don’t think it’s fair or constructive to reduce legitimate concerns about how each respective chain values this acquisition to something as simple as “people worried about their bags.”
This also ignores concerns around how Stride liquid staking as a product offering (as well as all non-ATOM existing and future LSTs) may suffer as a result of this acquisition due to a loss in perceived / actual neutrality, as has been raised by a few people in the forum now.
All that aside, I think the idea of a type of bond / revenue share token is an interesting idea that should be exploted further as a way to compensate for a perceived value discrepancy on the stride end.
Would be lots of questions associated with this (desirability of issuing a timeboxed revenue share token in the first place, would it be tradeable or soulbound, what percentage of revenue, how long is the term, how to handle the token after expiry of the term, who the “issuer” of that token is for legal reasons, liquidity provision of that token, etc), but think this is a neat potential solution.
Who is responsible for the losses incurred by the holders who purchased STRD tokens at a high price? Can these losses be compensated for by the belief in the development and strength of the Stride team, which motivated people to buy tokens at a high price?
The part you are interested in - about bonds with time-term interest: The idea comes from the services provided by Pendle, asset token and interest token. The interest token will decrease by 20% every year from the current income of 80%, for example, after 4 years 0. Stride Holder goes to exchange and gets Atom and an interest token. Please ignore the rationality of specific figures, just give an example to illustrate the technical feasibility, and this does not involve too many legal issues. There is a very broad space for bargaining and design. Those who value Stride’s income can go to the secondary market. Free trade.
Regarding the problem of non-Atom LSD: This is an opportunity to upgrade LSM & LSD and reduce the operating cost of the chain. Cosmos has too many chains and too few useful dApps. I think we all agree on this. Turning LSM & LSD into SDK, the Stride team’s goal after the merger should also be committed to this. Vitalik Buterin’s recent article “Should Ethereum be okay with enshrining more things in the protocol?” is also the same idea, in the middleware of the chain itself. In terms of services, more Public goods can be provided to reduce the deployment and operation costs of Appchain.
Regarding neutrality, Atom has been insisting on neutrality for more than two years and has not directly participated in Defi, NFT and other businesses. Atom has been continuously developing services for the chain, which is consistent with Stirde.
Andy we can merge in a year term if you think that Stride price is good - the community made Stride as project - no community - no project.
If you think that Cosmos has too many chains - it is not about Stride. Stride now is heart of all Cosmos ecosystem.
According to the corruption in Atom and others cains I seppose everyone knows - that stakers every chain pay for all, not teams or validators or funds. Stakers pay for ALL
First and foremost, i extend my gratitude to all those who will contribute to this discussion and to the Stride team.
Regarding the potential benefits for the hub, the proposition to merge with Stride appears to be a logical step. LSD stands out as a product that identifies PFM and effortlessly showcases a revenue stream. Introducing a product that grows in tandem with the interchain’s expansion promises to add significant value to the hub. As more chains join, more LST is generated, resulting in a greater inflow of value to the hub.
From the outset, Stride and the Hub have demonstrated genuine alignment and cooperation. The teams supporting the hub have also put in substantial effort to facilitate the integration of LST into the Cosmos ecosystem (informal, hyphaa and iqlusion ). ICS have laid the foundation for cooperative ventures.
Also it can be inferred that, given the hub’s existing 15% share of the revenue, only 85% remains to be merged.
The Necessity for High Standards
Executing a M&A on a decentralized chain presents a unique set of challenges. Historical experience has shown that governance can lead to conflicts … It is imperative to anticipate these challenges. i think it will be needed the establishment of a subdao to oversee this merger, with funding provided by the hub. A significant portion of this funding should be contingent on the successful completion of the deal.
Complete transparency is a fundamental requirement from all teams involved in this process. This includes drafting contracts, proposing mergers, and disclosing financial data.
From a legal perspective, it is also essential to engage competent external legal and financial experts who can ensure that the deal is fair and equitable for both parties.
Regarding the merger process, here are fews ideas for discussion:
1. Method of Acquisition
Should we consider inflating ATOM back to ATOM 2.0? It’s worth noting that the community may have reservations about this tokenomics rework.
offset the cost through a augmention the current community pool tax
Stride fees, with the expectation that LSD will generate sufficient revenue to cover during the time enough to paid the loan interest for the acquisition.
Introduction of an ICS fee/relayer fee for interactions with Stride, both currently and in future atomic usages. (marginal revenues)
Token swap ? but this method doesn’t provide a real usecase for the STRD token
2. Valuation Process
To ensure fairness, two baskets should be established: one for the circulating supply and another for the remainder of the STRD tokens owned by the foundation, teams, and investors.
It’s crucial to avoid creating an ideal exit for investors by purchasing the protocol highly associated with the hub at market price. Some vesting in ATOM or equivalent could be considered.
Consider favorable terms for individual STRD holders, maybe at market price, or better rates with an Atom vesting
3. Innovative Approaches
Explore options such as liquid staking of the ATOM used in the merger, combined with vesting, Earning Stride protocol fees on top will help to reduce merge costs
Introduce an STATOM incentive for STRD token holders, offering a better conversion price than the market rate, coupled with vesting in STATOM.
Allocate a portion of the payment through an stATOM loan for a decentralized stablecoin (IST/USK ?) This requires careful consideration. And maybe explore the topic of adding a decentralized stablecoin protocol to the AEZ on ICS ?
Establishing a designated zone for conducting venture operations is an idea that, although somewhat nebulous in my mind, warrants consideration. This zone would serve as a platform where individuals can actively engage in the venture process, secure their ATOM holdings through locking or burning, and receive incentives for participating in merger and acquisition (M&A) activities/ fund chains joining ICS with an upside of being buy back by the hub ?
4. Strategic Reflections
Address the question of how to compete with other protocols in the absence of STRD incentives. For instance, if protocols like LIDO choose to support Celestia and dYdX, how can we remain competitive without a native token, especially when LIDO could offer LDO incentives?
Assess whether the Hub community is prepared to use ATOM as an incentive and fund Stride development in the future ?
Recognize that other chains may also opt to adopt LSM and native liquid staking, similar to Crescent in the case of a Stride acquisition, rather than “extracting” value from an external protocol.
Should let other chains participate into the deal ?
stride team will get a significative governance power that need to be evaluate (even if defacto, an LSD protocol have a power on the LST), with some counterbalance to incorporate in the deal maybe ?
These are considerations as we embark on this potential merger with Stride, open dialogue and collaboration is key to shape the future of our interchain ecosystem.
Sorry sir but I’ve paid my Stride very cheap back in January. So so price at which Stride holders entered isn’t the issue here sir. It’s what they paid for.
I’ve paid for Stride not atom sir. I’ve sold my Atom to buy some Stride
Sorry, Stride will not succeed alone, it will only succeed with the success of Cosmos. If Cosmos falls, Stride as a chain service will die.
Stride is not heart of all Cosmos ecosystem.
Cosmos Stack like Cosmos SDK、Wasm、IBC is the heart of all Cosmos ecosystem.
Regarding the problem of non-Atom LSD: This is an opportunity to upgrade LSM & LSD and reduce the operating cost of the chain
Enshrinement isn’t what’s being proposed though. The proposal is to have Stride continue on as a sidechain secured by ICS and using ATOM as its gov / gas token (think like what Duality wouldve been before the Neutron merger)
The fact of the matter is, if stATOM continues to be the predominant asset in Stride’s TVL a year or two post-merge, the merger will have failed. The Hub will have just purchased its own TVL back (likely at a premium).
To drive real value to the Hub post merge, Stride needs to be able to attract LSTs from external protocols like dYdX or Celestia. It may struggle to do that when it that revenue is going to be potentially used to fund competing consumer chain protocols.
Atom has been insisting on neutrality for more than two years and has not directly participated in Defi, NFT and other businesses
While this may have been true pre ICS / AEZ, it’s certainly not true now. The Hub has become a rent-seeking protocol that has a direct financial interest in the success of consumer chains that compete with many of the protocols that Stride does or will provide LSTs for. There’s nothing wrong with having a sustainable revenue model like that, but protocols will keep this in mind when choosing whether to onboard to Stride liquid staking, use another, more neutral provider, or simply create a protocol-native LST.
This could likely significantly impede the growth of this liquid staking product if owned by the Hub. This is especially true if Stride no longer has incentives in a native STRD token to allocate to be competitive.
Yes, it will not succesed alone but it is not the reason to merge.
Yes, technicaly it is not heart now, but community of Stride thinks about Stride this way. And in a year may be you change you mind about Stride.
A good portion of Stride’s supply (namely, the community pool, growth fund, and incentives fund) could be burned without minting any corresponding ATOM tokens. The fund is owned by the protocol and not any particular user or investor.
The protocol could just agree that the value of these uncirculating tokens is some value less than par which would allow for the Hub to buy all circulating STRD at the premium that is likely warranted here while still paying far less than the current market cap of $80ish million.
Will try to hash out numbers for what this might look like when i’m not flying.
Somebody just please remember to save the Bad Kids that are being held by the Stride multisig before we start burning things
Can anyone explain what exactly are the decentralization benefits that Stride gains and how are they measured. I would love to see some criteria and numbers here.
deal is proposed in time when liquidity is really low. Try selling/buying large volumes…so how to valuate this? Also regarding fair value - very hard to determine since CF are minimal / peer analysis shows that strd is overvalued. And don’t try to sell the future since we saw what happened with Luna.
alignment can be achieved on many levels. options etc what if we detail transition in 5 smaller steps. with final one when atom is swapped with strd (lets say in 5 years…when also CP will be enough big to swallow this)
what if stride team decide tomorrow or next year that they move to other project?
Why exactly is this good for Atom holders?
I think we are back again with the discussion about where do we want to see atom - where is this content alignment? or vision that everyone will be sharing and talking? I know that everyone would like to see atom back in two digits territory. but will such ad hoc actions help? or are we on path where division will break it?
Also - I can not overlook Thyborgs attitude toward Sunny which was revealed on stage yesterday (I felt it like if you are not with me you are against me - why such attitude I do not know but definitely this is not environment where new developers/investors will be willing to enter) . Same tone could be felt when this proposal was explained and neither Ethan nor Zaki was 100% sure about it. So talking about this bet - maybe it should be taken more by ICF - they have atom in their treasury for it. Putting the money where your mouth is?
There is no way this deal won’t rekt somes stride holders & dammage even more the atom tokenomics…
The best you can do is increase alignment between the hub & stride by investing more on stride and improve the ics deal.
to stride holders : the hub can acquire quicksilver and their team for almost nothing. if quiksilver was the one secured by the hub its valuation could have also went to 80m and this is still possible
80% of stride tvl is atom. Yes atom has shit tokenomics but whitout the atoms on your tvl stride price worth nothing.
Big no for this prop we can build so many things with so much money. Increase alignment is the best you can do. You launched a token you can’t dump it just like that on atom holders.
Without looking into it too deep, I like the idea…anything that adds to the utility of ATOM is goes and I would rather treasury funds go to an establishes protocol like Stride instead of start ups. I understand this could be detrimental to current STRD holders however, I’m sure they can be mad whole somehow.
