You da man.
I’ve read through everything and all the responses and have to still digest it all before offering my 2 cents.
I’m confident a lot of thought, time and effort has gone into this and for that we are grateful.
2 Likes
Many thanks for sharing!
First of all, do we need to put it on chain latest 03-10-2022? It is quite an extensive document which has a lot of implications for the future of the Hub. Now rushing towards a proposal seems kinda weird imho and does not respect the concerns people might have if they found a bit of time to dive into it.
I do agree with @serejandmyself. On Osmosis we have set the preference to do 1 gov proposal : 1 topic.
Getting a complete future vision and putting it into 1 proposal is too big. Because what do you do when you agree with most, but disagree with one? Splitting into pieces sounds a better route if you want to go through governance (which I like, because it gives some sort of control back to the community).
Content wise I have to dive into it further. A bit clarification on how all the funds will be managed wouldn’t hurt. We are slowly getting a route for the team delegations to get them transparent and accepted. Let’s not make the same mistake twice and create an unclear financial element at our first opportunity.
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Getting a complete future vision and putting it into 1 proposal is too big. Because what do you do when you agree with most, but disagree with one? Splitting into pieces sounds a better route if you want to go through governance (which I like, because it gives some sort of control back to the community).
I am strongly in favor of voting on the entire document. It clearly defines the Hub’s purpose within the interchain as well as the mechanism by which to realize that vision. The governance architecture proposed in Section 5, “Cosmos Governance: A Forum for Sovereign Interoperability” explicitly outlines a structure to ensure that the “community has some sort of control” and provides a map that can be used to navigate the ever-present gap in decentralized governance between accountability and control. As for your question, “what to do when you disagree with one part of the proposal,” well: that’s what discussion periods are for!
Each piece of this proposal is interconnected (like the interchain itself). While I also would like to see governance functionality whereby sentiment can be expressed toward modular segments of proposals, we are not there yet. Haste is required to align on a vision in order to build the social and technological infrastructure needed to bring about the Integration phase of Cosmos.
Beyond the pragmatic motivation for leaving the whole intact, there is also the call to action within the proposal. Compartmentalizing aspects of this document dampens this call for community members to organize themselves under a unified vision because it reduces the availability of context, which is so important for on-boarding and authority delegation.
On Osmosis we have set the preference to do 1 gov proposal : 1 topic.
The governance needs of Osmosis differ greatly from the needs of the Hub. Osmosis, being a DeFi appchain, has greater need to adhere to a corporate governance model (Vitalik, " DAOs are not corporations: where decentralization in autonomous organizations matters") in order to move quickly and efficiently. Insofar as the interchain has one, the Hub is a sovereign. Sovereigns require an overarching structure under which public infrastructure is built, aligned projects are funded, and authority is delegated. It is only right that this structure be ratified on-chain. Given our current governance module raising a signaling proposal is the most effective means by which to ratify such a document.
There are certainly actionable items that should be voted on as individual topics in governance but manifestos, constitutions, or documents that align a constituency under a structure which connects an entire ecosystem do not fall under that category.
A whole is greater than its parts. The interchain is better for everyone when the Hub is unified Hub. If there is disagreement with a piece of the document, let’s hash it out during this discussion period, not dilute the document by breaking it into separate proposals.
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Love this proposal. There’s a lot to it, and the numbers can always be changed, but the concept is really innovative and gives Atom a unique niche it can excel at in the interchain. I would say we need at least a few weeks more to debate and tune such a huge proposal before it goes on chain.
There are some big ideas in here that are hard to grasp (especially the MEV part) for most. Personally, I think it would be beneficial if someone put together nice graphics showing what this will look like at each level if it’s implemented. Something that shows clearly how this will build a sustainable future for Atom and how value gets sent back to hub delegators as it makes its way through the system.
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very exciting!
Have alternative gov models to classic representative democracy been considered?
Setting targets could be a great opportunity to experiment with sortition and deliberation methods
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The extra issuance in the first 36 months, it seems that won’t go to current stakers and strictly will go to the Cosmos Hub Treasury? I like the long term thinking, but it seems to be diluting stakers of their share without allowing them the opportunity claim the extra issuance. It’s like saying here’s a stock split that’s 2 for 1 but you’re only getting your original 1 and the two are going elsewhere.
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Thanks for your reply, ala.tusz.am!
I can relate to your point of view, especially taking this part out:
The first step in this process should be a community dialogue on the forum about a Cosmos Hub Charter and initial Rules > of Engagement
If we set these right just after the document has been ratified as the agreed intention of moving forward I am ok with putting the complete document on-chain.
However, it would need to be set in the proposal imo that this step will be taken quickly after. Having the intention to do so is nice, seeing the first steps in action is better.
First off, it seems like there’s some desire to give this proposal more time before it goes on-chain, so I’m going to wait another 3 weeks to be sure there’s enough time for discussion (October 24th).
The Community Pool will continue to get 5% of all Interchain Security + Cosmos Hub Transaction fees, so there will continue to be working capital there in perpetuity.
The Assembly can organize in any way they like, so I expect this discussion to be part of the Charter formation that would happen if the proposal passes. Individual councils will also have their choice in how to self-govern.
Yes, the ongoing issuance is slated slated to go to the treasury for public goods and growth spend. This is because Interchain Security revenues should more than make up for the security subsidy paid to delegators and validators. Also it’s the Assembly’s prerogative to use those funds judiciously. They could conceivably send some portion to the distribution module, or burn them if there are already significant revenues coming into the Treasury.
I’ve been speaking about the Charter with the Hypha team, and other core entities. You can see @sacha’s post, where he’s been starting to research Zcash’s equivalent to the community council here. We can certainly start a thread on the charter, but I want to spend most of my time answering questions about the paper until it’s on-chain.
5 Likes
I’d like to throw in an idea that we should also take this as an opportunity to consider the % the community pool receives. It’s been extraordinarily under-funded for a long time, yet it is constantly asked for funds for various initiatives. As the largest, most valuable DAO in Cosmos, would it make sense to double it to 10%?
awesome…the model helps a bunch, thanks
Hey, Youssef here from the whitepaper team. @hxrts just added 3 extra weeks to discuss the proposal (October 24th).
As for slicing the proposal into multiple pieces, I don’t think this is a good idea and here’s why:
- The WP has a holistic vision. The issue with slicing it into different gov votes is that some could pass while others could be rejected and if that was the case, the ATOM 2.0 vision itself would be threatened. Example: the Scheduler and the Allocator go hand in hand where Scheduler generates revenues to be invested by the Allocator and where the Allocator, through the funding of Cosmos projects, expands the size of the Scheduler serviced market. Having one rejected while the other passes would undermine the efficacy of the entire project.
- The governance process would be burdensome with multiple gov votes, adding unnecessary complexity.
I agree the entire paper is not easy to digest at once. This is why we’ll do custom communication sessions where we treat separately and deep dive into each of the major sections.
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Hey @tknox35
The WP suggests the creation of multiple councils, each with different prerogatives. Amongst those newly created entities, we propose a ‘‘Community Council’’ with a proper funding modelled based on both past spendings and projected spending growth. The Community Council will fast-track those spending requests. All relevant initiatives will continue to be funded.
This council will be laser focused on community spending initiatives. We believe it doesn’t make sense anymore to have all ATOM holders vote for minor spending proposals. A qualified team from the community should be put in place that will handle directly those requests, removing burden from the shoulders of the community at large.
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@CosmosBobo Adding to @hxrts point, the community pool has been underfunded for years and the opportunity cost for the lack of productive use all those years has been major.
The newly formed Treasury pool fixes this with a proper allocation that is also taking into consideration all the years where Cosmos Hub has been static in terms of investments and treasury management.
As for the dilution argument, while there could be some truth to it, I’d argue that ICS revenues that will be streamed to ATOM holders + the likelihood of extra ATOM price appreciation ( notably because of lower inflation but also the direct exposure to the growth of the Interchain) should more than compensate for it.
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Just a couple typos I saw:
Page 5, “will lead to a healthier ecosystem and “a” more demand for the Hub’s infrastructure offerings.”
Page 7, “the user experience and capital efficiency improvement offered by liquid “stalking””
4th reference on Page 6 does not link properly
6th reference on page 8 does not link properly
Thank you very much for all the work put into this new horizon for the Cosmos Hub, I would like to request a bit of clarification on a couple points defined in the paper.
- We can probably imagine liquid staking to push the ATOM staked rate much higher than it is currently. The fact that we have multiple protocols working on liquid staking solutions including Pstake, Stafi, Quicksilver, Stride and Lido bring the case for cross chain open-market.
Is there clarity on the potential pitfalls if Liquid Staking protocols prove to have issues or if people choose to not use them? Could this potentially create a security risk for the Cosmos Hub?
- “The transition phase starts the moment that Cosmos shifts to the new monetary policy”
This is roughly a year later when ICS and Liquid Staking prove themselves and not before?
- “As an additional safety measure, during the transition phase no more than 10% of the Cosmos Hub Treasury can be deployed within a 21 day period.”
Will this be programmed in?
- “The Cosmos Hub governance may then elect to use infrastructure provided by the Allocator in order to periodically auction collected fees into a target currency, ATOM, or stablecoins before tokens are sent to the distribution module",
This means that we will not receive a rainbow of tokens but that instead they will be swapped to ATOMs or stables before being distributed?
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Instead of pausing the new monetary policy if the stake rate falls, could you calculate the monthly issuance + the difference of what the original monetary policy issuance would be? And if not, does a pause in the new monetary policy delay the monthly issuance by the length of the pause or how does that work?
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“Beyond centralization concerns, the revenues generated from MEV networks are typically shared among validators or clients directing orderflow, while protocols and their token holders are left out of the value chain”
According to Figure 6, interchain scheduler revenues go into the treasury and to partner chains, it does not seem clear if this fixes the issue of ATOM token holders being left out of the value chain. Is it explicitly for the holders of the consumer chain?
- “Expanding liquid staked ATOM markets by entering into AMM pools with liquid staked ATOM or ATOM-backed assets such as collateralized stablecoins” With so much competition, I fear this section of interchain allocation would result in preferential treatment from the hub to certain parties.
Is it the council that decides where, when and how much?
- “If the borrowing protocol defaults on its loan, they could mint the borrowing protocol’s tokens to cover losses”
Could this potentially result in the hub being responsible for what happened to Terra?
- “By purchasing synchronous regions of block space on different chains, users can lock-in arbitrage opportunities or schedule cross-chain settlement transactions with strong execution guarantees”
Any users? Could this also be potentially used to attack a chain by purchasing multitudes of block space?
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Do we know what teams are accountable for developing each of these pieces?
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Does funding for this development come from the future treasury?
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Do we have people or teams in mind for these councils or DAOs, and how will they be decided or voted on?
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Will the $ATOM in the treasury be staked or liquid staked? It would be great if they didn’t dilute stakers ics rewards since the treasury will already be awarded at the lowest inflation point 300k atom per month.
Can someone from the white paper team please confirm that the decision-making process for allocation of Treasury funds proposed within $Atom 2.0 white paper is as follows:
1 - DAOs of investment professionals will be invited to form
2 - $atom 2.0 holders can liquid stake to investor-led DAOs where they trust ppl & decisions
3 - voting amongst investor-led DAOs to invest T funds in ecosystem/projects will be weighted according to quantity & duration of $atom liquid stake each DAO collects
4 - DAOs will be given some incentive for winning in this game !
5 - once a decision is reached by the weighted average of investor DAO votes, then the Allocator tool will be used to technically / administratively buy the tokens in the target project
Is this a correct understanding?
If this is correct, then we can distill it down to say:
“100% of investment decision-making within Cosmos ecosystem will be community-endorsed, merit-based, & w/ competition amongst incentivized investor DAOs that should lead to excellence in decision-making."
This model ensures that reputation and track-record will accumulate for investor DAOs over time. We should expect to see ‘cream rising to the top’ with the best investor DAOs with the best track-records slowly gaining more of the community support via liquid stake over time.
This is dynamite, if I understand correctly! 
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It has eventually become clarified that the $ATOM generated inflation after the 36 month period will be going to the Treasury and NOT staked holders.
I don’t like sugar coating things so I will say it as it comes straight out of my mind:
Treasury continuing to get the rewards past the 36 months, in my view, demonstrates a lack of confidence in what we will be trying to achieve here and constitutes a paradox. Wouldn’t be surprised if some call it greed down the road.
The point for raising 55-60M $ATOM is to provide a war chest towards facilitating the plan for $ATOM 2.0.
This in turn requires a sacrifice from the community of faithful staked holders that most could be willing to make. This war chest in turn is 15-20% of the supply, not a negligible amount.
Administering this fund will require wisdom, yet the amount should be more than enough to facilitate growth and ensure the sustainability and longevity of Cosmos Hub.
Excluding $ATOM staked holders from receiving the total of rewards after the 36 month period is over, essentially diluting the stake in exchange of a promise of x,y,z shitcoins providing a decent return is both a paradox and absurd.
Cosmos Hub is a PoS network, diluting staked holders is thus a paradox and should be unacceptable by the community. It will disincentivise many from staking and ICS or any of the valuable layers built on top of the network should be bringing additional value, not replace $ATOM as a reward token altogether.
Even 1% matters.
The only alternative would be to cap the supply but I believe that would not be viable or reasonable.
To the ones arguing that the returns from other assets will outperform returns from receiving staked $ATOM I say two things:
This demonstrates a fundamental misunderstanding of $ATOM’s potential (especially after 55-60M will have been allocated to the Treasury), and second many people (including myself) may not want to engage in taxable events dumping assets secured by ICS in exchange for $ATOM.
I strongly feel you should resolve this now not in a future Proposal and explicitly state that the rewards go to $ATOM staked holders after the 36 month issuance is over. That is rewards go back to those who backed the hub with their hard earned money and passionate voice for 3+ years and shall continue to after the vote has passed.
Finally a much deeper analysis of the role of Treasury, Councils, their exact role on Governance, their votes and how they are calculated should be demanded by the community towards the Proposers. That is you Proposers should take the time to explain thoroughly.
It is not clear to me yet but i think or sense that community’s role could be eliminated or undermined compared to now where all decisions go through governance. It is thus a duty of the Proposers to fully clarify how we will be affected once Prop has passed.
Community should be on their guard during this process.
11 Likes
@johnniecosmos Your concerns have been voiced and we hear you.
A few clarifications:
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Governance regarding Treasury & Councils + Assembly: the goal of these newly formed entities is to provide a better infrastructure in order for the Hub to move and scale faster. Current governance mechanisms are clearly not adapted anymore, especially with what we want to achieve with ATOM 2.0.
While I understand your concerns about ATOM holders being left out from major decisions, I can assure you this is not the case. More details on governance to come. Please do understand that the scope of the governance framework for the newly proposed roadmap is considerable and will take months to implement. All the governance leg work will be done post proposal voting, not before but you will get a sense of the proposed direction prior to the on-chain vote -
Regarding dilution of ATOM stakers vs Treasury Pool: we will implement a mechanism whereby a portion of revenues from Scheduler and Allocators flow back to the Distribution Module (is: delegators + validators). We will make this more explicit if it wasn’t clear.
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Finally, the Treasury Pool is in service to the ATOM holders, not the other way around. I sense in your framing you believe ATOM holders and the Treasury are separate. They are not. The Treasury Pool will be controlled by the Cosmos Assembly, which will be directly accountable to the ATOM holders. The Cosmos Assembly comes from the ATOM community.
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I can understand the point of view from @johnniecosmos.
If after 3 years the Treasury is filled with 55-60 million ATOM the warchest will already contain roughly 1 billion $ against current rates.
And then we aim to improve the price of ATOM, making the war chest even better filled. So cutting the inflation to (near) zero for stakers after the 36 months of accumulation for the treasury might not even be needed.
Imagine that ATOM will go the all-time-high again around $50. At that time the treasury has 2,5-3 billion dollar to spend. And not even taking into account the additional income that can be generated with the things developed in the ATOM2.0 roadmap.
I think it would be best to adjust the whitepaper on that field to make sure that after the first 3 years from now the business model should be self-sustaining. That also puts a little bit of pressure on getting the right things done on time and puts pressure on selecting the best added value.
(I am looking forward to the Cosmos Assembly though, might be something really interesting with the right people on it with all kind of different skill sets)
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I will be waiting for more info to surface regarding your point 1 but still don’t get and haven’t been provided sufficient feedback on why sending 3.6M $ATOM to the Treasury annually (after having raised 60M) is a good idea.
Actually i think it is a bad idea we should resist and that the rewards should flow in raw $ATOM directly to staked holders.
Please revisit my post in order to see why i think this.
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