ICF governance x cosmos hub constitution

Hub Proposals
9

Draft ICF Governance x Cosmos Hub Constitution

We the Community of the Cosmos Hub, in order to form a more perfect Union, establish cohesion, ensure standardized IBC adoption, provide for the commons, promote and lead the general multichain thesis, and secure the free passage of liquidity to ourselves, our industry, and our posterity, do ordain and establish this Constitution for the Cosmos Hub. We the Community of the Cosmos Hub do form the true Foundation of our grassroots movement to properly and effectively steward the direction for the Cosmos Hub, Cosmos ecosystem, and deliver us to the promised land of a free and open Internet of Blockchains.

[This is an open document that welcomes your input/feedback. None of it is concrete until sufficient thoughtful discussion has been had before processes/rules are ossified into the Official Constitution that should/will eventually be put immutably onchain.]

Proposed Process:

Voting/Passing Foundation Council Candidates:

  1. Cosmos Hub stakers nominate some names for candidacy. Candidates will accept or reject (hopefully with rationale) before moving on to the next step of the voting process.
  2. [OPTIONAL] Candidates can optionally jump on a live debate to declare their candidacy and self-advocate
  3. [DUE DILIGENCE] Cosmos Hub gov has the right to compel a thorough due diligence check on each candidate before they qualify and get the all-clear to progress on to the next round (see Policy Rules below).
  4. Once candidates are whittled down to 1 individual per FC slot, Cosmos Hub stakers will vote to approve/deny. If approved, the newly elected FC members will take office.
  5. Repeat this process once every 4 years under normal circumstances. If a Candidate get impeached during off-election season, then Hub gov will undergo an emergency vote to install a new Candidate, following the same 5-step process.

Term Limits:

  • a FC candidate who gets voted in can only stay in office for up to 4 years. They are disqualified from future candidacy if they have ever occupied a role before.

Compensation:

  • Cosmos Hub pays FC members (the decision-making body) in ATOM, paid for through the community pool.
    • Multisig signers responsible for the reliable, recurring distribution payouts (perhaps on a quarterly basis or via some vesting schedule), should be frequently rotated. OR else, a Gnosis Safe or Apollo Safe option should be explored for the best possible onchain payroll UX.

FC Advisors:

  • Potential to explore Advisors who are application developers or individuals who have their fingers on the pulse of the industry who should be involved in supporting FC members in decision-making wrt roadmap, priorities, technical DD of grant applicants to assess merit
  • FC Advisors can be a useful ancillary support role to involve people who may not want to fill a FC seat but can be helpful nonetheless

HARD Policy Rules:

  • NO kickbacks for FC members
  • FC members are barred from accepting advisory roles in projects within the Cosmos ecosystem
  • FC members are barred from investing in or operating Funds that may directly benefit from their place in office
  • FC members have only 1 full-time job: to administer grants in the interest of effective ecosystem development as mandated by the ICF Mandate (see below)
  • FC member candidates MUST undergo an audit and reveal their existing (active) token holdings (not net worth/fiat holdings), advisor or partnership interests, funds/ventures they’re invested in, and any other potential conflicts of interest to the best of their abilities BEFORE they qualify for office
    • At the 2-year and end-of-term marks, FC member undergoes 2 more audits respectively, so that the hub community has transparency and confidence that there was no lobbying, kickbacks, nepotism, or bribes taken
  • lobbying is strictly prohibited
  • NO same organization that has received $1.5M or more of foundation grants in aggregate over a span of 3 years can qualify again as a grant recipient until at least the 3 year cooldown period has elapsed
    • By comparison, Uniswap Labs received a grand total of $100k in 2018 from the EF to then turn that into a $16B token project that has reliably amplified that value back to ETH holders ever since. The idea that ANY organization in Cosmos would need more than $1.5M year after year is egregious and part of what makes the ICF Treasury in its current form a “slush fund.”

**Failure of FC members to comply with The Policy may result in Cosmos Hub gov impeachment and cutoff of compensation in real-time. The onus will be on Hub gov to restart The Voting process until a new replacement candidate is identified and placed into office.

ICF Mandate (2023-2025 or until delivered):

  1. Solve distribution
  2. Solve fragmented liquidity
  3. By addressing 1 and 2 → achieve network effect
  • to export IBC permissionlessly to every ecosystem, unencumbered by ICF and Core Dev politics/red tape
    • [TODO] explore possible financial sustainability routes to garner IBC adoption through, for example, a 15 basis point fee imposed in ATOM, distributed programmatically to relayers who relay every IBC highway they support
  • to import liquidity while weaning off of heavy reliance on trusted centralized liquidity and bridges, e.g. circle, bitgo, wormhole risk exposure
    • Cosmos is a relatively small ecosystem compared to Ethereum. Thus its lifeblood depends on importing liquidity from, by and large, the EVM ecosystem. Which means that its liquidity onramps converge on only a handful of options: USDC (Company: Circle), WBTC (Company: Bitgo).
  • [WORTH EXPLORING] Cosmos Hub to become a DA layer for sovereign rollapps? ATOM to become settlement token and Hub to act as settlement layer for rollups.

Contextual framing that informs ICF Mandate:

Industry Wide Problem Statement:

  • What Cosmos got right as outlined in the original whitepaper is that the broader lay of the land develops in such a way as to have many chains emerge that each offer compute, block space, and throughput enough to process transactions in relatively short timeframes (sub-10 seconds). Blockspace isn’t scarce. We can keep spinning up more blockspace with new L2s or appchains. You can choose your own adventure as a new blockchain dev. What remains to be solved then, isn’t blockspace but how not to fragment liquidity as soon as a new chain gets spun up.
      1. How can we scale blockchain infrastructure to be able to support at least 100M new users, and…
      1. how can we do it all without fracturing liquidity as soon as a user moves value from one chain to a new chain?
  • The bridging status quo is not only regressive where decentralization is concerned but highly trusted and requires high amounts of liquidity to already exist on an established chain in order for bridging to work. If the Cosmos value proposition is such that you can spin up a new appchain with relative ease, the question becomes HOW do you bootstrap your initial liquidity without needing to rely on some heavy-handed coordination tool like token incentivization? Especially if a new consumer chain decides to use an existing coin like ATOM for security and has no such new token incentive, how would a new consumer chain bootstrap liquidity for itself? Unlike other ecosystems, Cosmos distinctly needs to solve this problem if we believe in enabling sovereign appchains and sovereign rollups to have a reasonable shot at success.

Cosmos-specific Problems:

  1. While Cosmos’ distinct value proposition is in allowing anyone to spin up and bootstrap a new chain, its biggest adoption impediments are: 1) distribution, 2) permissionless development, e.g. cosmwasm docs.
  2. Political overhead that are symptomatic of dysfunctional/unaccountable leadership/decision-making processes at the ICF FC level that this Constitution aims to fix.

1 and 2 can be solved with the structures around 2 to go from dysfunctional to functional. Once 2 is functional, then 1 can be solved, assuming the new FC members adhere to solving the ICF Mandate.

Where Cosmos Stands to Lead/Shine:

  • We can only ride on the coattails of Cosmos having been right about the direction the industry was going to take is now running on fumes. More active involvement and, more importantly, intentionality needs to occur in order for Cosmos to move forward full steam ahead to maintain its leadership and obtain dominance where the multichain thesis is concerned.
  • Celestia’s modular outlook makes sense as a viable outlook of the future of blockchain scalability. We have the opportunity to position the Cosmos Hub as a centerpiece of the modular stack by seriously looking at the technical viability of pivoting the Hub into becoming a settlement and/or DA layer.
  • As a net liquidity importer, appchains need an ability to hook into a trustless source of liquidity on top of the existing centralized options like WBTC and USDC. Bitcoin is the top contender to act as this source of liquidity. Once this infrastructure is laid by the WARP team, Cosmos appchains can start directly importing synthetic BTC without the need for an intermediary pegged chain like Thorchain and Nomic and without the need to already have liquidity.
  • Solving for the economic sustainability of running relayers. We should seriously be exploring charging fees for relaying IBC packets. Without solving this critical unsolved problem, it’s difficult to imagine a future where IBC becomes de facto standard.
    • Devil’s advocate will argue that TCP/IP doesn’t technically come with a fee but in the web2 model, ISPs did emerge and are profitable, which is what enables messages to be passed across the internet. However, in crypto, there’s no ISP model, so other avenues of revenue generation need to be explored. LayerZero takes 6 basis points per tx and sustains itself in doing so.
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