Upon discussing proposal 26 submitted by Cyber to the Cosmos hub, calling for it to make a collective decision about participating in its takeoff round, we came upon some fantastic feedback and excellent questions from atom holders. I would
like to address 1 particular question and to clarify things a bit.
The most common question is what will Cosmos hub gain from having CYB tokens in its community pool. This is probably the most important question and I’m glad it was asked by so many people. This shows that people care about the ecosystem they are part of!
Before answering this question, let’s look at what are CYB tokens and what is their primary use. To make a long story short, here are the 3 use-cases that CYB tokens have:
- Staking (securing the network and receiving rewards)
- Bandwidth limiting for submitting links. Transactions in Cyber are free, this means that we need a spam protection mechanism, this role is carried out by our Resource Credit model or energy for short. Simply think how everything today needs to recharge before it can be used
- Expression of intentions for indexing and ranking the content by the users. Cyber mission is to create an open semantical core that belongs to the users and crated by them. Hence, every time a user submits a cyberlink, he expresses his will, which is computed by validators or in other words, the validators index and rank the content based on the intentions of the users
In Cyber almost every transaction has meaning and influences the current shape of the semantic core. This means that the computations in Cyber are useful and meaningful for the solving of this particular issue: the decentralization of the semantical core of The Great Web. CYB tokens and the energy model are the core utility of that mechanism.
Cosmos was created to become the internet of blockchains. A protocol that propagates the spirit of decentralization and governed by the community.
It is for the very first time that we see a full-blown on-chain governance mechanism at work with a community pool that is actually funding things and working for the best of its stakeholders.
For such technology to succeed, a lot is required. One thing is a solid foundation it can build on. One virtue of such a foundation is the monetary flow of income that has to feed this machine for as long as it exists.
A good question that arises is how to turn the community pool into a pool that isn’t (a) a pot of money which goes solely to network security, (b) a pool that isn’t solely a build-up of inflationary rewards and (с) has long term prosperity value (its value rises).
The solution to the above problem is to establish a fund, that is managed and processed collectively and consists of a diversified number of assets that can bring long term value to its stakeholders.
This means using the funds to support exceptional projects that are building with Tendermint and Cosmos-SDK. After all, if we want to glorify the ecosystem, we need for it to grow. How will it grow? It will have projects with a clear utility, amazing products and provable distribution. This will attract users, developers and large stakeholders to the projects and the ecosystem.
This proposal challenges the very essence of decentralization. What we propose is to experiment with DeVC o decentralized VC. Rather than going to VC, we want to utilize the instruments that Tendermint, Cosmos and decentralisation provide for us. Cyber coming to the Cosmos community pool is the same as going to a VC. Only here, we ask for a collective decision from the community to become our anchor funder. Think ICPO, initial community pool offering. We are sure that this will become a trend.
This gives us all the opportunity to see decentralization in action. Can an on-chain governance mechanism make such complex decisions? We think it can! After all, the idea of decentralised projects is to eventually become decentralised, without a single entity in charge of these projects.
So what is the purpose and the benefit? Simply put: test decentralised mechanics and diversify the community pool to provide for it a long term sustainable value.