ALPHAGROWTH PROPOSAL FOR
Cosmos Hub
ATOM GROWTH DAO – Growth & Developer Acquisition 2023
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Change log
- 2023-01-25 Created initial post
- 2023-01-25 Changed name and Updated Mandate
Outline
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[Preface]
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[Overview]
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[Vision and Mandate]
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[DeFi Operations]
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[Developer Acquisition]
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[Getting Started]
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[About Us]
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[What We Provide]
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[Track Record]
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[Project Deliverables]
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[Reviewer Committee]
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[Team]
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[Budget Request]
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[Bonus Structure]
Preface
On December 19th, 2022, Cosmos Hub Prop 88 was accepted, and a tax was created to fund the community pool, ongoing. “This large pool of funds is used to fund the growth of the ecosystem through grants, development funding and also community building.”
This signals that the community is not 100 percent content with the current avenues for maintenance and development, grants, and funding. Interchain Foundation (ICF) and All in Bits Inc. (AiB) are excellent organizations, but the need for extra support now requires advancing the Cosmos Hub.
On Jan 12th, 2023, a discussion was started in the Cosmos Hub governance forum around starting a grants program. The team is quite impressive, stacked with talented people throughout the Cosmos ecosystem. There are many valuable frameworks outlined in the proposal above; however, after running Developer Acquisition Grants programs for the past 18 months, AlphaGrowth has spotted multiple deficiencies in the ATOM Accelerator DAO proposal.
Our proposal aims to integrate the best parts of the ATOM Accelerator DAO proposal, ATOM ONE Constitution, and ATOM 2.0 white paper, as well as AlphaGrowth’s experience, to drive value to the ATOM token.
Overview
On the morning of January 23, the AlphaGrowth team was asked to join a Twitter Spaces event involving the review of the ATOM grants program. After a sufficient time listening to the conversation, it was clear that much of the line of questioning was in regard to company formation and framework and was process-driven, versus taking into account the goals and realities of running a grants program.
After engaging in the Twitter Spaces conversation and proposal review, AlphaGrowth was asked by multiple community members to create a competing proposal to help keep the Cosmos Hub ecosystem healthy.
“The vision of the Cosmos Network, as laid out in 2016, has been realized.”
— ATOM 2.0 white paper
Although the vision has been realized, this doesn’t mean the work is over. We believe that the story has just started, and there is a much bigger opportunity for Cosmos Hub.
For more than 18 months, AlphaGrowth has helped acquire developers and dApps on behalf of ecosystems. We know we can help Cosmos Hub with awareness, execution, and impact.
After a deep review of the current proposal discussion in the comment section, AlphaGrowth has outlined the benefits of the current proposal:
- Reviewer Committee creation
- Oversight Committee creation
- Funding and budget breakdown
- Timeframe of proposal
In our initial review, we found that the current proposal is a process-heavy framework lacking a coherent vision or roadmap of what should be funded. We found other missing requirements in the program we will look to address in this proposal.
In order of importance, we will address
- Vision: A clear mandate for the grants program.
- KPIs: How to drive accretive value to the ATOM token
- Operational experience running a grants program
- Developer acquisition marketing campaigns and costs
- Upstart costs in terms of time and capital
Other differences between our approach and other considered proposals
- We have experience running multiple grants programs
- We are established and have been in business since 2018
- We have 800+ developer teams and dApps looking for their next project
- We have an existing developer acquisition playbook
- We have built a grants CRM and dashboard to help quickly score and evaluate applicants
- We have an existing database of over 24,000 crypto projects
- We have 2500+ relationships in crypto and have deployed projects via grants to 70 EVM and Cosmos-based projects
- We will use funds to sponsor relevant hackathons
- We will use funds to promote awareness of ecosystem projects
- We will acquire projects and developers through our 10-person business development team
- We will work with Cosmos Hub and the community to help define, communicate, and drive the vision narrative
Let’s dive into how!
Vision and Mandate
As a public good, the Cosmos Hub has been very successful in providing a secure bridging technology platform to the entire COSMOS ecosystem via IBC. However, if you ask most crypto users what is the utility of ATOM, most users can’t tell you. It’s not explicit that incentivized staking to two-thirds of the token creates a secured Hub for the rest of the IBC to exist.
The utility of ATOM must become explicit for the narrative to grow. Drawing inspiration from other successful DeFi projects across crypto at large, there are multiple strategies that can be applied immediately to add utility to the ATOM token.
With the understanding that the security of the bridges drives all current value of the ATOM token, offloading DeFi risk to external appchains to provide token utility is of utmost importance. With the success of the Osmosis appchain as the prominent Cosmos-based DEX, we can see a path on how to build or partner with existing appchains to increase DeFi activity and token utility.
The narrative we propose is a campaign to turn the ATOM token into a commodity.
ATOM should have all the same DeFi categories as ETH has, with multiple alternative appchains and dApps to choose from. On a categorical level, this includes but is not limited to ATOM-centric
- DEXs
- Order books
- Lending (money market, AMM money market)
- Fixed-rate lending
- Liquid staking
- Collateralized debt positions (CDP)
- Yield aggregators and strategies
- Derivatives and options
- Algo-stables (ATOM Backed)
- Synthetics
- Launchpads
- Reserve currency
- Concentrated liquidity
- Leveraged farming
- Prediction markets
- Indexes (token sets)
- Privacy services
- Insurance
From an infrastructure level, more attention should also be paid to
- Wallets (social unlock, Web2 login)
- Fiat onramps/offramps (Kado, Stably, Transak, Ramp)
- Payments (Superfluid, MoonPay)
- Debit card (stealth for now)
- Cross-chain comms (LayerZero, LiFi, Paloma, Axelar)
- Name service
Many of the items above do not need to be built and can be bought through partnerships and business models that add revenue streams and real yield to ATOM holders.
Speaking of real yield, the ATOM 2.0 white paper fundamentally aims to increase the footprint of the Cosmos Hub to help generate more fees in ATOM token. One question that keeps coming up is which appchains want to engage in this plan and how much in fees would be generated. The products required to develop this vision are as follows:
- Cross-chain rollup settlement
- Blockspace futures auction marketplace (Interchain Scheduler)
- MEV acquisition (Interchain Scheduler)
- Contract-based token swaps, lockups, and vaults (Interchain Allocator)
- Liquid Staking as a Service
- Appchain as a Service
While these are revolutionary ideas, they have not been battle-tested in the wild. It is our opinion that these concepts should be funded experimentally on appchains before risking the security and entirety of the ATOM market cap. The program should begin to deploy grants and coordinate to begin to slowly go down the path of growing the Cosmos Hub footprint.
DeFi Operations
Make Number Go Up
We all want to see the ATOM token go up and to the right slowly, surely, and sustainably. Without much in the way of utility or optionality of ATOM, a higher token price might just be a matter of waiting for the next bull market. Instead of waiting on the bench, AlphaGrowth will implement its proven strategies to foster sustainable token health.
Foremost, the more places there are to put ATOM, the more it will rise. Educating users during the customer journey will play a lead role in this. Also, if you can increase the number of goods and services that your token can plug into, you will increase its velocity, therefore increasing its price (based on the modern theory of money). Additionally, the demand for ATOM’s utility must exceed its supply. Further, to align with the crucial real-yield narrative, the fee generation of ATOM must exceed its emissions.
Other AlphaGrowth-implemented strategies include an ATOM debit card, concentrated liquidity vaults, downside protection vaults, multi-chain partnerships, token buy-back plans, and strategic DeFi listings.
End game? Number. Go. Up.
Buy Pressure vs. Sell Pressure
What are the things we can currently do with ATOM? After examining the actions a user can currently take, we can score the actions. Below, we give examples of activities, their associated value, and types of viable distributions available for the associated activity.
User Action Matrix
| Activity | Value | Types Distribution per Activity |
|---|---|---|
| Pool Token | +2 to +3 | Incentives |
| Buy | +2 | Investment |
| Lockup/Staking | +1 | Incentives, Emissions |
| Lending, Bonding | +1 | Incentives |
| Purchasing Internal Product | +1 | Premine, Airdrop, Incentives |
| Hodling | +1 | Incentives, Airdrop |
| Purchasing External Product | -1 | Tax, Lockup |
| Selling | -2 | Tax, Lockup |
Minimizing the pressure to sell ATOM while maximizing activities such as bonding and pooling will further better its overall health.
Token Optionality
On a granular level, implementing token optionality means leveraging both the community and business development partnerships. In the above User Action Matrix, we referenced some of the most commonplace uses of tokens.
Can we do all of these things with ATOM token? What about buying tacos? Can we buy tacos with ATOM? Optionality is freedom, and freedom is good.
How can we ensure ATOM has enough optionality to sustain its price over time? Let’s start with the end goal in mind. Our goal is to make ATOM a commodity. That’s really the only outcome we want.
We can think about it like a game of chess: If we get to the end of a game of chess, and there are no more options, that’s bad. When we run out of options, we lose. We don’t want to lose. We want ATOM to have many, many places to go. A token with nowhere to go is worthless.
Our goal is to put ATOM in so many places, across so many exchanges and applications, that the U.S. government considers it a commodity like gold or pork belly.
Incidentally, this will also create whale protection, crucial for stabilizing our project. Far and wide distribution of ATOM is our only real weapon against whales manipulating its price.
What Chuck E. Cheese Can Teach Us About Tokenomics
Imagine we’re standing outside a brand-new Chuck E. Cheese. We’ve got $1 billion in Chuck E. Cheese tokens in our pocket, and obviously we’re super excited to go in to play games and win prizes.
We walk inside and find Chuck E. Cheese completely devoid of games. Not a single one.
Confused, we ask the person at the front what the deal is.
He tells us, “Oh, we’re waiting for more developers to come build the games. The games are coming soon. Just stick around. But hey, join our Telegram and Discord to see when the games get here!”
We feel lost and let down. We came all this way for nothing. Oh, and those $1 billion in tokens? Worthless.
App Store
In a different scenario, we are super excited about the new iPhone – so many cool ways to use it, right?! But when we unbox it, connect it to the internet, and open the App Store, we find nothing. No games, no social media, no camera, nada. Not even a calculator app. Now, what? Sorry, Steve Jobs, we’re switching to Android.
At this point, we may be beating a dead horse, but if we want ATOM to go up, it has to go many places first.
DeFi operations are the effective execution of taking modern monetary theory and applying token optionality.
By having more dApps use ATOM, token optionality fundamentally increases, which increases token value through a simple formula: MV = PQ.
You can read more about token optionality on AlphaGrowth’s series about solving problems that help blockchain projects grow and scale.
Developer Acquisition
There is a common flaw that many grant programs have, called proximity bias. Proximity bias in this context is that to receive a grant from Cosmos Hub, you must be Cosmos Hub-aware. To be frank, unfortunately, most crypto projects who begin building in crypto don’t even know that Cosmos Hub exists. The result of this is that there are hundreds of high-quality teams the community and ecosystem are missing from the grant-selection process.
The other fundamental flaw in the current program is thinking that Cosmos Hub needs new early-stage projects to build on its ecosystem. Cosmos Hub has the available funds to also buy existing projects to go multichain. Buying teams vs. funding early-stage builders is a functionally different process that requires an outbound approach vs. an inbound approach.
Sharing Success
Through running multiple ecosystem business development teams over the past year, we learned that one of the most important aspects is bringing the community together through wins for the community. Many projects we have attracted to new chains simply want exposure and distribution for their project and acceptance and awareness from the community. To help ecosystems with high-value, low-cost activities, we provide support for ecosystems through press releases, Twitter campaigns, and other community engagement such as in-person meetups, cocktail events, and community-building activities.
Developer Awareness
The next-best way to incentivize developers to engage in the community is through awareness and developing real relationships backed by real conviction in the form of capital. Many say imitation is the highest form of flattery, but we believe investment is even higher.
Event Sponsorship
Along with community events, expanding awareness of other developer communities is extremely important. In the past, we have helped communities such as Vyper expand to aligned events like the Python community event. We will provide guidance and support to find other aligned events for Cosmos Hub to engage with and get involved in.
Hackathon Sponsorship
Hackathons are a very well-known tactic to engage developers in a new community. For over 10 years, the AlphaGrowth team has participated in, sponsored, and run hackathons for different tech industries. On behalf of the Vyper framework, we helped sponsor and acquire excited developers to come hack away at projects. The AlphaGrowth team also ran a $1 million marketing hackathon for the NEAR ecosystem to bring more exposure to Web2 marketers about the tools built on the chain.
About Us
What We Provide (SITED Framework)
Track Record
redacted because length restrictions.
read entire proposal here
Project Deliverables
Ecosystem Evaluation Setup
One major issue that AlphaGrowth has identified is the lack of a clear narrative and roadmap of the Cosmos Hub ecosystem. Without clear messaging around desired projects and the grants program, ecosystem growth slows. While Cosmos Hub is winning by being the most secure bridge and a staking dApp, what made Cosmos Hub successful originally may not help continue growth.
We will provide a roadmap and strategy for the ideal ecosystem layout. From a quick initial identification of shortfalls, we see that ATOM could benefit from the addition of multiple types of infrastructure wallets (social unlock, Web2 login), fiat onramps/offramps (Kado, Stably, Transak, Ramp), payments (Superfluid, MoonPay), debit card (stealth for now), cross-chain comms (LayerZero, LiFi, Paloma, Axelar), and name service.
In terms of DeFi dApps and appchains, money markets (lending protocols), bonding protocols, options, yield optimizers, vaults, voter escrow DEXs, leveraged LP positions, secondary bond markets, and even another DEX or two would be beneficial.
We will provide a developer journey audit to identify onboarding blockers as well as the strategy to mitigate them. Our first step is to interview all current grant winners and understand their issues and rough patches joining the ecosystem. We describe many of the common onboarding blockers in the section above.
Data & Software Usage
redacted because length restrictions.
read entire proposal here
Monthly Business Development and Outreach
After the ecosystem narrative and criteria are established, AlphaGrowth will leverage its data and insights to identify all acquisition and partnership targets for the Cosmos Hub ecosystem. AlphaGrowth will score and sort rank targets based on a multifactor approach including onchain and offchain data.
Next, we will reach out via Telegram, Discord, LinkedIn and Twitter to start a conversation and present the Cosmos Hub opportunity to prospective projects.
If the team is interested, we can then discuss and negotiate the costs associated around migrating the dApp to the Cosmos Hub chain. On top of funding, dApps can request multiple other ecosystem services:
- Marketing AMAs
- In-person events
- Loans to bootstrap liquidity
- Investor introductions
- Token swaps
- Bridging services
- Liquidity incentives
Next, we will help introduce and guide incoming dApps through common blockers and provide technical support to help launch the dApp.
Finally, the business development team will hand off the dApp to the marketing team to help with ecosystem exposure and launch.
Developer Marketing
There are two parts to developer marketing with which AlphaGrowth will help Cosmos Hub:
- Developer acquisition marketing
- dApp ecosystem marketing support
We have found developer acquisition to work through four processes: hackathon sponsorship, community event engagement/sponsorship, Twitter and LinkedIn ad campaigns, and direct message campaigns. We will commit to sponsoring an event, hackathon, or community at least once a month.
Upon launch, the most goodwill appreciation you can receive from community dApps comes from helping to support and shout out the dApps that have chosen to launch on your ecosystem. We will spend marketing dollars around the launch of each dApp that comes to the ecosystem.
Reporting
AlphaGrowth will also communicate monthly through reports and calculations on the campaign’s progress:
- Progress of grantees
- Outbound pipeline status
- Feedback from developers
- Narrative audit
- Use of funds: distributed grants, provision of initial liquidity
The team will establish direct communication channels with the community to post reports and receive feedback. We will also set up biweekly community office hours with grantees.
We’ll say it again: The Cosmos Hub community will always know where it stands, and more importantly, where it is going.
Team
The ATOM GROWTH DAO will be run by the team at AlphaGrowth led by founder Bryan Colligan who has over 9 years experience in crypto. Upon the introduction of DeFi in 2020 Bryan left FT Partners investment bank to pursue his passion in helping build the Future of Decentralized Finance. Bryan can be seen here helping run a web3 techcrunch demo day: The Cross Chain Coalition WEB3 Demo Day - YouTube
https://www.linkedin.com/in/bryancolligan/
Budget Request
Legal Setup
- Base rate (one-time): 2,000 ATOM
- Total cost: 2,000 ATOM
Ecosystem Evaluation Setup
- Base rate (one-time): 4,000 ATOM
- Total cost: 4,000 ATOM
Data & Software Usage
- Base rate (one-time): 2,000 ATOM
- Total cost: 2,000 ATOM
Monthly Business Development and Outreach
- Base rate (monthly): 5,000 ATOM
- Total cost (6 months): 30,000 ATOM
Developer Acquisition Marketing
- Base rate (monthly): 4,000 ATOM
- Total cost (6 months): 24,000 ATOM
Reviewer Committee
- Base rate (monthly): 2,000 ATOM
- Total cost (6 months): 12,000 ATOM
Total 6-month service fee: 74,000 ATOM
Grant Deployment
- Month 1: 10,000 ATOM
- Month 2: 20,000 ATOM
- Month 3: 30,000 ATOM
- Month 4: 40,000 ATOM
- Month 5: 40,000 ATOM
- Month 6: 40,000 ATOM
Total 6-month grants: 180,000 ATOM
Total all-in cost: 254,000 ATOM
Bonus Structure
For every project and client to align incentives, we require a $200,000 bonus commission to be evaluated and voted on by the community. After 6 months, we are requesting 20,000 ATOM tokens.
KPIs for bonus structure are as follows:
- 100 new ways to utilize ATOM via pools, money markets, utilities, and dApp integration on both Cosmos appchains and as utility on EVM dApps
- $100 million of total market capitalization added in the next 6 months
- Sponsoring 2 Cosmos ecosystem hackathons
- 10 student organization sponsorships
- 500+ applicants for Cosmos Hub grants
- Weekly AMAs on progress and new initiatives
Governance votes
The following items summarize the voting options and what it means for this proposal:
wallet address: cosmos1yrkhlplhukmnfrwsmt9nak0g8cch0eusuqqaus
Voting
By voting YES, you indicate support for funding the Growth & Developer Acquisition program that will be managed by a multisig committee of 5 members.
By voting NO, you do not support this proposal in its current form and refuse to fund the Growth & Developer Acquisition Program.
By voting ABSTAIN, you formally decline to vote either for or against the proposal but want to contribute to the quorum.
By voting NOWITHVETO, you express that you consider this proposal malicious or harmful and would like to see depositors penalized by revocation of the deposit, which contributes towards an automatic ⅓ veto threshold.