Hello everyone!
This is my first time contributing to the CosmosHub Forum. By way of a minor introduction, my name is Joseph, a lawyer by profession currently working as an advisor to projects within the digital asset industry - I am also a core contributor at dYdX, a part of the team over at the dYdX Operations SubDAO and part of the TraderJoe Governance Council.
I shall post my thoughts on the proposal above hereunder:
- Decentralisation
Decentralisation is a wide spectrum and this term should not be used that liberally as it could be misleading or otherwise could be misconstrued. Decentralisation could be broken down into further sub-sets (Economic Decentralisation, Legal Decentralisation and Technical Decentralisation).
When the team states that the conversion of STRD to ATOM will “greatly increase the decentralization of the Stride protocol”, what facet of decentralization are they actually referring to? In my personal opinion, the conversion of STRD-ATOM will merely change the governance parameters around the Protocol by introducing a new number of governance participants (i.e. ATOM holders), to the equation and giving them a say in the Protocol’s direction. This action in and of itself does not make the Protocol ‘as decentralised as possible’ as there are a lot of actions that need to be taken for a protocol to be ‘as decentralised as possible’ (such as reducing influence & control by the founding team, taking active action to decentralise the Frontend, decentralising software development by incentivising further teams to develop on or with the product, ensuring equitable reward disbursement, making sure the corporate structure does not retain undue control over the Protocol etc.)
2. Current stage of the Protocol
My personal opinion is that the Protocol still has a lot of room for growth as a stand-alone and ring-fenced project (ring-fenced from being governed by ATOM holders). As per DeFi Llama, the Protocol has a mere 35M of TVL and, albeit this being a fantastic achievement from a Cosmos perspective, the team should always meaasure their success by comparing to other Chains and the similar/identical products that exist on other Chains. Ex. Lido Finance has 14.2 Billion in TVL. This is not to say that the 35 Mil achieved is sub-par or ‘nothing’, but this should serve as a motivator to the team that their product has gained traction, is gaining traction, and will continue to do so without this merger.
3. Commercial considerations
As per (2) above, the product is still in a very nascent stage of its lifecycle. Liquid Staking is still a very novel primitive and I expect a lot of innovation re. LST products being shipped in the next couple of months (Do not ask me how I know…). As opposed to proceeding with this token swap and risking that the protocol’s holders look back at this in a year or two and see that they were severely undercut (as I do see this Protocol continuing to grow in the coming years), I would suggest that the team works with the community to create a streamlined set of objectives that it wants to achieve by virtue of Stride.
As opposed to this token swap, I would thus propose working on a roadmap to have a streamlined vision shared among all holders and community members re. what is to be expected from Stride in the coming years (even if this is just solely R&D, or launching the protocol/enabling cross-compatibility on other chains.
All in all, I do not think that this proposal would change a lot aside from potentially increasing the team’s runway for a couple of months. Were this to go through, I think the community would look back on this in a year and deem the decision to have been shortsighted.
Conclusion
As I posted on X (@immutablelawyer), the dilemma here is the following:
i) Be the first to spearhead a new wave of CosmosHub ‘owned’ applications; and
ii) (i) occurs and risk jeopardizing the chances of going beyond Cosmos.
The product has found market-fit on Cosmos and will find market-fit elsewhere as demand for LST alternatives is there. I am confident the team will continue to ship without this merger as I do not think it provides any substantial value-add in the mid-longer term (from a decentralisation or commercial perspective).
Well done to the team for enabling this productive discussion!
Kind regards,
IL