why is your post flagged… lol
Thank you for the proposal, first and foremost.
Due to the imminent RISKS that come from LSD’s, despite the admittedly enticing potential economic gains, this proposal is a NWV for us.
Look… STRD #'s look great, especially within it’s existing time frame, however LSD’s during this chapter of the crypto game are still a GREAT potential risk that specifically leaves our minnows/shrimps/smaller players vulnerable. Don’t tell me yall don’t care about the minority now We are here for everyone, ESPECIALLY for the ones with quieter voices. Every Cosmonaut deserves to be heard in the Cosmos Hub.
NWV specifically to protect the MINORITY INTEREST from major players who hold greater economic power to potentially perform a hostile takeover. Not saying STRD would, but it could be an easy feat, no? For folks to exchange their ATOM for stATOM allows for the LS Provider to gain extreme leverage via voting power.
To answer each of your points:
1 - Stride and Neutron are different blockchains, so they have each proposed a different way to share their revenues with Cosmos Hub.
Stride is sharing revenue from four sources, while Neutron is only sharing from two sources. Also, Stride is a live chain, has achieved product market fit, and is already one of the top Cosmos chains in terms of revenue generation; whereas Neutron has not yet launched. In addition, Stride is offering to share inflationary STRD rewards, while Neutron is not. Most importantly, Stride is an appchain, while Neutron is not. That means Stride can share revenue from its core app, that being the Stride liquid staking protocol.
2 - Again, Stride and Neutron are different chains. If Stride were launching with ICS, perhaps its proposal would look more like Neutron’s, and vice versa.
When considering what to do about inflationary STRD staking rewards, the interests of many parties had to be considered: namely, Stride validators, STRD stakers, Cosmos Hub validators, and ATOM stakers. Stride’s proposal takes the path of compromise. Inflationary STRD staking rewards will remain, but they will be subject to a special 50% reduction to coincide with ICS adoption. It’s hoped that all parties can agree on this.
Your points about governors are partially correct. The 100 cap will be arbitrary - a vestige of when Stride was a normal Cosmos chain. But it’s not quite accurate that governors will have no costs. In order to attract delegations, with will likely contribute in various ways, like validators do. To reiterate, there are many parties involved in Stride’s transition to ICS, and some of them have conflicting interests.
3 - “Liquid staking rewards” refers to the proceeds of Stride protocol, the core app of the Stride appchain. Specifically, Stride protocol collects 10% of the staking rewards of all liquid staked tokens.
I see @Spaydh has already done a great job addressing some of your points. I’ll answer the others.
Stride’s proposal is to “share 15% of each following category with the Cosmos Hub: liquid staking rewards, inflationary STRD staking rewards, transaction fees, and MEV revenue.”
The first category would be shared in the form of various stTokens, as STRD stakers receive. The amount corresponds to Stride’s TVL, and the blended staking reward rate thereof. The second category would be in STRD. And then the third and fourth categories would be in various tokens - once those revenue sources come online, which will be in roughly three months.
There will still be inflationary STRD staking rewards after Stride potentially adopts ICS, only they will be subject to a special 50% reduction. This is considered a compromise, which takes into account the several parties involved and their diverging interests.
This prop can only pass if Stride and Cosmos Hub governance both approve it.
The Stride blockchain is already live, and is one of the top revenue generating chains in the Cosmos. So Stride will be able to share significant revenues with the Cosmos Hub on day one. Over the long term, with the help of Cosmos Hub’s security and liquidity, Stride has the potential to be an increasingly useful and popular blockchain.
A “hostile takeover” scenario using liquid staked tokens is highly unlikely, because many people are knowledgeable about this risk and are taking steps to remove it.
Currently, the Stride blockchain controls just 0.68% of staked ATOM. While this is a far cry from the 1/3 threshold, Cosmos Hub governance is already considering security precautions to prevent that threshold from being crossed. Zaki’s LSM proposal would limit the amount of liquid staked ATOM at 25% of total staked ATOM.
And even putting the liquid staking cap aside, the Stride blockchain is governed by STRD stakers, and, for such a young blockchain, the STRD supply is already well distributed, and is getting better distributed all the time. One of the main goals of the STRD tokenomics is to effectively distribute the STRD supply, which contributes to the decentralization of the Stride blockchain. For example, the vast majority of the STRD currently in circulation has been airdropped to ATOM stakers and given to ATOM liquid providers.
With the Cosmos Hub working to safely regulate liquid staking and the STRD token supply already fairly well distributed, a hostile takeover scenario is highly unlikely.
I appreciated the answer
Regarding the revenu split, do we have current monthly numbers for all 4 channels of income (like Jan, Feb, March 2023)?
Perhaps if we have a deeper history, we could even identify a trends that’ll confort delegators in their vote.
@Cosmic_Validator and @Spaydh also had an interesting conversation about the opt-out.
Is the idea to simply protect the bottom 5%VP to slash/jail on consumer chains?
Does this still involve bottom 5% validators to secure blocks for the consumer chains?
My main concern is those small validators not able to cover the extra infra costs securing consumer chains.
NWV specifically to protect the MINORITY INTEREST from major players who hold greater economic power to potentially perform a hostile takeover.
Stride is adding a module to allow stATOM holders to vote - STRD stakers don’t get to vote on behalf of stATOM minters.
More importantly, liquid staking isn’t going anywhere, even if this proposal fails. Making Stride an ICS chain makes Stride more accountable to the Hub, by leveraging the Hub’s valset. Doesn’t this accountability to the Hub make liquid staking safer? I don’t see how a NWV protects minority interests.
A recent proposal introduced the idea of capping LSTs globally to 25% of stake ([Signaling Proposal][DRAFT] Add Liquid Staking Module to the Cosmos Hub - #38 by zaki_iqlusion)
The point of the soft-opt out is that the bottom x% validators cannot be punished for not running a node on the consumer chain, so they can choose to avoid any additional cost.
Ok that’s what I was understood from your earlier conversation.
For sure it’ll be beneficial but it’s not taking care of what I thought being the root problem.
I think I got all my answers I’ll just vote what the majority of ‘bottom’ validators vote since for me they are bubble of concentrated risks during the earlier implementation of ICS while we experiment and have a good production idea of what it involves and how it evolves.
Hey everyone! First post on the Hub forum, and long overdue I think!
Seeing a lot of the comments on this prop, I just wanted to take some time to discuss liquid staking reward commissions, an aspect of Stride’s tokenomics I don’t think many in the Hub community quite understand yet (totally understandable, we can’t keep track of all 65+ connected chains). This is important to understand to fully grasp the insanely lucrative value of what Stride is proposing to give to ATOM holders in exchange for joining the Economic Zone.
Stride levies a 10% tax on all staking rewards earned by its liquid staking derivatives. Here’s how this looks in practice:
- Alice liquid stakes 10 ATOM with Stride, receiving stATOM in exchange
- 90% of Staking rewards (less the validator commission) are compounded into the redemption value of Alice’s stATOM.
- The remaining 10% of staking rewards are collected by Stride
Now, here’s the cool part. Where do these 10% of Alice’s staking rewards go? Straight to STRD stakers.
That’s right, 100% of the reward share allocated to Stride is distributed directly to STRD stakers. This is the case with every chain that Stride has onboarded, meaning that STRD stakers get real yield paid in ATOM, OSMO, EVMOS, JUNO, INJ, STARS, LUNA, and every other chain’s token that is onboarded by Stride in the future. Note: These are all staked with Stride and distributed to STRD stakers as stAssets first to improve the fungibility UX and compound the rewards.
In addition to the tx fees, MEV, and inflationary rewards being offered. Stride is including 15% of these liquid staking rewards to be paid out to ATOM stakers once Stride is onboarded as a consumer chain, meaning that ATOM stakers will also receive a diversified real yield in stATOM, stOSMO, stINJ, etc. IMO, this will end up being the meat and potatoes of the value that Stride will offer to ATOM stakers under this proposal. Let’s run through some numbers:
In the time that Stride has been publicly live, Stride has paid out $1,212,008.02 in yield to STRD stakers (source: info dot stride dot zone - cant post links ). Had ICS been live that entire time, that would’ve resulted in approximately $181,801.203 paid out to ATOM stakers. That may not seem like a lot right now, but Stride’s TVL has been exploding since then, almost doubling in the last month alone. Stride is still bootstrapping and the rate of its TVL growth is accelerating rapidly. When TVL grows, so too do the liquid staking rewards paid out to STRD stakers and, under this proposal, ATOM stakers.
Stride plans to onboard every Cosmos chain it can to its liquid staking protocol, increasing TVL further and thereby also increasing rewards. Other catalysts for massive TVL growth are on the horizon, including the upcoming launch of the LSM module on the Hub (and hopefully other chains will follow suit here), as well as the proliferation of new defi usecases for liquid staked assets in the ecosystem as more and more money markets and DEXs launch.
Incentive alignment between the Hub and Stride via ICS is also a massive potential growth catalyst, as the Hub will see a benefit from accelerating DeFi growth for Stride, as indicated by the section of this proposal purporting to liquid stake about 225k ATOM and pair it with ATOM in a liquidity pool on Neutron’s Astroport outpost. Initiatives like this will increase adoption for stAssets which, again, only increases the reward share to ATOM stakers.
Frankly, were Stride to only pay out 15% of these rewards to ATOM stakers and nothing else, the potential value would already exceed anything that the Hub is likely to get from Neutron’s tx fees and MEV, even at a 25% share. However, these rewards are also being supplemented with Stride’s upcoming tx fees, MEV, and inflationary STRD rewards, leading to what may quite possibly be the most profitable consumer chain that the Hub will ever onboard.
This single integration has the potential to cause a paradigm shift in the value accrual proposal for the Hub and the ATOM token. If you think I’m exaggerating, take a look at the price performance of STRD, which has effectively 3xed in value since liquid staking rewards to STRD stakers have been enabled (source: coingecko).
As a small afternote, as a large STRD staker I almost feel that this proposal is too good for ATOM stakers to the detriment of STRD stakers in terms of the value being offered. However, I think that the value of what the ATOM Economic Zone can become with players like Neutron, Stride, and the Hub (and hopefully soon many ore chains) working together will more than make up for what STRD stakers will be giving up.
Let’s pass this thing and usher in a new era of value for both the Hub and for Stride.
PLEASE,DEPLOY ONLY ON ASTROPORT IS VERY RISKY.
WE GOTTA RETHINK.
WE SHOULD DIVERSIFY 450kATOM LP if it’s approved.
Thank you for explaining Makes much clearer. I think it is very good and important to thoroughly examen the mutual agreement by both parties and get everything not clear out of the way. Then when prop is accepted on both chains the cooperation and working together will be smooth and with much enthousiasm from both chains
To be clear => I am in favor of this proposal
Tessellated is supportive of this proposal. As a smaller validator, we’ll validate for Stride without the soft opt out
why are we supporting a LSD provide and a certain dex?
what about other LSD projects and other DEX which will join us later.
Some people are already trying to limit the liquid staking and we as a community is decreasing the share.
how did you reach these numbers and who were all the people involved in these closed meetings. Shouldn’t these things be available in public space.
As observed from twitter some DAO members were involved in this. Isn’t it like frontrunning which is being done by public representatives in governments?
From what I see certain people are benefiting from public goods and also getting credits.
Fully support this proposal and direction for the hub!!
Sometimes things are so carefully crafted by default that they don’t need much things to say about them but a simple YES.
Very good job here adjusting modals to strike the most profitable balance for both parties and congratulations to those who participated in weighting the parameters.
Good proposal, all information is clear. Thanks.
This is a great proposal . Clearly aligns the ATOM token holders with the Stride blockchain with a generous offering. Really admire the commitment of the Stride team to move with great pace to join the Hub’s security and will solidify Stride as the premier liquid staking protocol of the Cosmos.
Wanted to raise a query about the use of liquidity in two parts.
Firstly, why is the liquidity being used on Astroport alone? This proposal is between Stride and ATOM, with Astroport seemingly only coming into this as they are deploying contracts on Neutron. Currently, ATOM, stATOM and STRD are not listed on Astroport despite the availability of the IBC connection.
Osmosis is also planning on deploying Cosmoswap, our cross-chain liquidity solution, to Neutron. If the benefit to Stride is that the quantity of stATOM increases, and the benefit to both is the ease of access to these liquidity pools then surely it makes more sense to spread this liquidity between liquidity locations in order to achieve both breadth and suitably deep cover.
This would also benefit Stride as the incentivisation of the existing stATOM/ATOM pools could potentially reduce, allowing them to be redirected to more liquid staking derivatives as more chains are onboarded - which in turn would result in higher revenue share with ATOM stakers from this agreement.
Secondly, just wondering why there is an automatic sunset clause in there rather than a minimum guarantee.
The ATOM Accelerator DAO members have agreed to steward the 450K ATOM liquidity position as described above until October 1st, 2023 at the latest. At that time, if Cosmos Hub has not passed a signaling proposal to establish a new solution for the liquidity position, then the ATOM Accelerator will begin the process of returning the funds to the Cosmos Hub community pool. This process would involve using the Stride app to unbond the stATOM side of the position, which would take approximately three weeks. Therefore, in this scenario the ATOM Accelerator would return the 450K ATOM in the liquidity position to the Cosmos Hub community pool no later than November 1st, 2023.
This seems to write you into a corner. What happens if this doesn’t happen in time or a proposal isn’t quite agreed upon when the unbonding period gets triggered? Surely would make more sense to have the liquidity guaranteed until the 1st October 2023, then inaction or indecision maintains the status quo.