18-Dec-24: The idea of a reduction to 1% is gaining steam and interest to throw this on chain. Please provide any comments.
Original:
Folks,
Throwing a feeler out there to see if there is appetite to reduce the community pool tax back to where it was at 2%.
In my view, community atoms are almost always spent frivolously and due to the inherent lack of ability for the hub to provide oversight, fails in typical market standards one would expect when procuring services.
I would like to see the community pool used for the bare minimum - to fund atom maintenance not currently within ICF scope.
Additionally, Iâd like to see part of the pool burned into oblivion as well, which will do more for price than paying for âservicesâ ever will.
It appears thereâs a concern about prices, much like previous complaints weâve noticed recently. This seems to align with the prevailing negative sentiment, which is strongly associated with the current low ATOM dominance.
However, the key point to remember is that this chart shows a stable range. There are times of excitement, times of disappointment, but only a few assets in this industry have the privilege to endure for over 5 years and remain in the top 50. We might be at a historical low in terms of dominance, but this could be an excellent opportunity to remain optimistic about the Hub and counter the prevailing negativity.
Historically, ranges are ideal for contrarian behavior until they are broken. These challenging times for sentiment are when critical decisions should be made. We believe that reducing costs and âdoing nothingâ is the opposite of what should be done.
Iâm not saying do nothing. Iâm saying do the bare minimum for services that are actually driving value to ATOM , like informalâs work, and possibly some other much smaller high value grants that a small pool can support.
This is a good proposal. We definitely need roll back some of the spending as there is not much to show for it over the last 2 years. Increasing the community pool tax to 10% was a really bad idea a couple of years ago.
Ultimately, I believe thereâs more than enough funds in the community pool for any future initiatives. More likely coming back soon with AADAO winding down.
Stakers also got squeezed a bit by the inflation halving. Increasing the APR until other tokenomics reform is a good checkpoint along the way.
Will support this initiative. The large community pool being used time after time for stupid reasons had led to so many bad lights. I also think we have more than enough for now.
i agree with this proposal, bearmarket is behind us, i think so its a good moment to reduce this taxe till the next bear regarding the community pool trend.
Could anyone kindly explain the logic to keep Prop#848 in effect, instead of reverting back to the original inflation rate above 10%?
In addition, is it not, in fact, the case a higher tax on the CP would assist in making ATOM, which was not originally designed to be viewed as âmoney,â rather a staking/governance token, to become deflationary? Would a deflationary ATOM not serve the same âeffectâ as what the active forum community is striving for, assuming âpriceâ is what most are focused on?
What I would prefer is that we spend some time thinking about what exactly we want to use the Community Pool for and have a vote to reduce its scope. I think using this for providing liquidity (where we never sell the ATOM) is still a really good use case.
I agree that money has historically been spent unwisely. I think in an ideal situation we donât need grants from the CP to fund work that benefits the Hub. Instead, the ICF should cover most, if not all, development work. And as you likely know, the ICF has made it clear that theyâll continue funding the Hub moving forward.
However, I can imagine that in some cases ATOM holders might want to fund something that the ICF is not interested in funding, so to account for that we could separate the CP into 2 buckets:
Grants (e.g. receives max of 5% of the community pool tax)
Liquidity (receives the rest)
We do need a better definition of how to distribute this liquidity before we take this step, but weâre working on some ideas and will be able to share these in Q1.
At Govmos, we strongly resonate with @Noamâs point regarding the utility of ATOM for liquidity provision without the need for selling it. A perfect example of this would be Hydro. Alongside this, we support the ICFâs updated approach to funding development work. However, the Hubâs reliance on community pool for certain specific funding still exists, Hydro is another example to this point, as the current discussion in this forum seeks CP funds to source operations for 2025.
In light of these elements, we recommend maintaining the current funding rate. Reductions should only be considered if evidence suggests oversized budget within the CP, which is not apparent today.
For liquidity provision I think this isnât even close enough tbh. We really need to 10x the liquidity in Cosmos. Not saying the Cosmos Hub should carry that responsibility on its own but
Imo, best way to think of it is that if we have a pool of ATOM that canât be sold and only used for liquidity, youâre basically taking ATOM out the circulating supply.
Hydro has been nice for user activation, but itâs a long way from being scaled to make use of a large % of the community pool. Personally, I donât like extremely high POL deployments because it dilutes average LPers.
Cosmos needs a cultural shift, more users and more opportunities for users to deploy their own liquidity vs. the current status quo with multi-sig POL. Go all in on Hydro to give direct benefit to users or stop it, imo.
Outside of POL, I struggle to think of anything that the community pool should be used for at this point (with size). There isnât a good enough framework for efficiently using a giant pot of money and ensuring itâs spent wisely.
So, final thoughts:
Atom needs to be a more desirable asset that users want to use in deFi. Whether thatâs via Hydro, LSTâs or otherwise, users need to be activated and get away from multi-sig POL.
There is no proper framework for managing the community pool funds efficiently and with accountability.
The community is tired at this point. The status quo must change because perceived mismanagement of funds has caused severe damage to Atom (and Cosmosâ) reputation.
Stakers and LST users will appreciate the extra yield they get
If someone has something in mind for an overhaul of community pool spends and we can effectively make use of the funds in the future, we can revisit this, but for now, we have enough funds.
Going to make efforts to get this on chain very soon and see what the community thinks.
They said at some point in near future hydro will be able to auto fund itself, so after the 2025 integration it seems the CP will start to stop funding hydro or at least reduce its funding. And the CP is already large enough so I donât see why reducing CP taxes now would impact that, we already have enough to fund.
Also, I feel like we keep saying over and over again that we will make change to stop CP raiding, while not doing anything in this direction and in the meantime the CP continue to get raid. 1 year, 2 years, 3 years, at which point the changes are implemented?
Tbh itâs a bit concerning to me because we all know the missused of CP fund come from validators voting on proposals (who elsâ?) so itâs suspicious when all validators come to agree to not reduce the high CP taxe
If the community wants to reduce CP taxe, who are validators to decide we should not. A signaling proposal would give a clear idea of what wants the broader active community, not just 180 vals who have full access to the CP we try to protect.
