Can you elaborate on this? It seems to me that the treasury is earmarked for growth funding and public goods.
My expectation is public good funding would be 5-10% of the initial reserve and only grow if the treasury books profits.
Maybe another 5-10% bootstrapping ICS zones.
Booking profits via the allocator module is in my mind more like 30% of reserve over the next 3 years.
If the this allocation + scheduler are profitable, the flywheel may become fully self sustaining.
The remaining 50% of the Treasury becomes a fund for the next set of opportunities, the ability to double down on whatâs working or a reserve to iterate on parts of the allocation arenât succeeding.
1 Like
Directing the post-36 month 1% to stakers would resolve many objections.
3 Likes
Sorry this is very confusingâŚwhat do you mean?
Are you saying that 30% of treasury would be used by allocator module? Is the allocator not simply a vehicle for investing? If so, how is this different from bootstrapping ICS zones or simply funding new cosmos projects?
1 Like
The allocator always owns a token, controls some asset over ICA or a yield generating asset like LP token.
The process of bootstrapping chains might not involve putting an asset in the treasury but instead creating things like the asset issuance chain because of the MEV scheduler value.
Vision is fresh and unique in the space (for that is risky), but I like it. I do although think we need to explore other ideas for funding the treasury instead of diluting community so hard.
And also make the treasury smaller and keep the individual sovereignity of the cosmonauts.
4 Likes
I still donât understand the need to build a bigger war chest via number of tokens. If the treasury has 10M tokens now, why not just cut inflation to 1% immediately and then the rise in price in atom will build the war chest itself. 300 million atom at $7 is 2.1 Billion, same as if those $10M tokens were valued at $210 a piece. Everyone would be happier with a rise in the âFutureâ reserve asset.
3 Likes
We canât imagine how much time and effort was put into this updated white paper and we agree, that it should stay in one vote as opposed to being broken down into pieces. We very much appreciate the extra time for everyone to chat about it.
2 Likes
No, donât agree.
Refinancing at the expense of the existing Staker.
4 Likes
Actually, quite curious @zaki_iqlusion, @hxrts or @Youssef: How did we end up with 10,000,000 ATOMs initially distributed? Was it based on the end goal of 300,000 ATOMs in the steady stage period⌠or?
1 Like
Right I see. In any case whether that is owning a token or generating Yield, those activities should have a net +EV. What I am trying to get at is that after 36 months, these activities should have provided positive yield making the treasury self sustaining and not needing additional 300K ATOM/month. Otherwise it is a continuous blank cheque.
4 Likes
From a lot of the twitter discussions happening, it seems there are a few things a majority of people agree on so far:
- The emissions after the 36 months are complete should be totally directed toward stakers, validators and community pool. The treasury should have more than enough funds by then to be sustainable if it is managed well by the sub DAOâs.
- The proposed end size of the treasury is staggering and doesnât have performance of the funding taken in to account. Many, including Zaki (below) would be in favor of restricting treasury emissions initially, then granting more funding if sub DAOâs prove to be effective stewards.
5 Likes
i think the good idea is that treasury to be replenished with part of Interchain Securityâs revenue and atom will be going to staked holders.**
3 Likes
It is great to see communityâs involvement in this super important proposal. Imo the aim of this proposal is to make ATOM like the EURO, a common currency among sovereign states (chains), which comes with its opportunities and challenges.
Some concerns have been raised in relation to the fact that after year three all emissions will go to the Treasury. In order to evaluate the feasibility of this proposal, some additional info is required. Would be great to get some clarity/inputs on the below:
⢠What are the main assumptions used to come up with the updated tokenomics? Would be great to share the main inputs of what was driving the new emissions schedule. While we can see the calculations re the emissions, there should be some âbusiness assumptionsâ i.e security revenue generated, Interchain Scheduler fees, number of custom chains and transactions etc. which have led to the proposed tokenomics/ emission schedule. That will help to
o better understand what is the forecasted revenue for the transaction fees + Interchain Security +Issuance from consumer chains, which are planned to replace the emissions to stakeholders
o assess in the future (i.e year 3) if the projections were reasonable and evaluate any required changes to tokenomics/emissions.
⢠The Cosmos Councils and Assembly will be very important for the Treasury management. I will not debate how much the Treasury amount should be, but in my view the Cosmos Assembly should have an incentive to make sound investment decisions without further funding, as such unconditionally reserving % of the emissions to the Treasury looks like a blank check, without considering the results from Assemblyâs management. In addition, the ATOM holders should have to vote on the % of emission that should go to Treasury on annual basis, in accordance with its performance and funding needs.
3 Likes
How can we vote for it please ?
Since the ATOM 2.0 WP was published a few days ago, weâve seen, as expected (and desired), a large variety of questions and concerns. I am summarizing them below before answering to the best of my knowledge.
Iâve seen a lot of passion, engagement and willingness to contribute. This is healthy for the entire ATOM community and a sign that participative democracy is doing well on the Cosmos Hub.
Regarding the whitepaper itself, Iâm glad to see there is a relative consensus regarding the overall vision. Solving the high inflation issue seems to please a large portion of ATOM holders and people are also excited about the newly suggested Allocator and Scheduler.
From what I have seen, the points that generate friction are the following:
-
Treasury Pool and Protocol Owned Value:
ATOM holders seem in favor and they recognize it will bring value in the long run but they fear centralization in the hands of a few, poor execution and capital misallocation. This is legitimate. -
Issuance:
Many ATOM stakers expressed concern about being left out from the value generated by the Hubâs new Treasury Pool. They see it as a separate entity that is threatening their own holdings by taking a large portion of issuance that was previously theirs.
Stakers also think the amount directed towards the Treasury Pool is too high and the pace of funding too fast. Again, legitimate concern.
Finally, there is also a concern that ATOM stakers are taking all the risks. -
Governance: token holders voiced concerns about centralization of the Treasury Pool in favor of a few and also being excluded from that governance which they fear will not be representative enough of their own interests.
I will cover the newly suggested Treasury Pool in this post, then issuance and governance in subsequent posts.
The Treasury Pool is a tool in service to the ATOM community. Its has 2 purposes:
- Generate and manage revenues, mainly through the Allocator and the Interchain Scheduler. Note that ICS revenues would go solely to the distribution module and NOT to The Treasury Pool.
- Fund public goods necessary to scaling the Cosmos Hub but also the broader Interchain. IBC, Interchain Security or Interchain Accounts are examples of public goods.
Looking at point 1, the goal is to kick off a flywheel where the Interchain Scheduler and Allocator are mutually reinforcing systems. The WP calls this flywheel the Economic Engine. Now, in order for this to work, we need to fund the future Treasury Pool.
The Treasury Pool will not be one almighty, centralized entity that runs all the investments.
On the contrary, it will include many DAOs responsible for allocation through the Interchain Allocator. In this scenario, any group of ATOM holders can form an Allocation DAO by bonding their ATOM for a specific duration and receiving in exchange additional funding from the Treasury Pool to grow the ATOM economic zone.
Funding from the Treasury Pool is not automatic as projects need to be aligned with the long term vision and interests of the ATOM community. If there is such alignment, then the Cosmos Hub will grant those Allocator DAOs recurring funding and a performance-dependent bonus, which is paid to DAO participants in exchange for their service and for putting their capital at risk.
This has the potential to unlock the collective intelligence of the ATOM community and allow token holders to contribute in a meaningful way.
We know the newly formed Treasury Pool is not all powerful and that an entire ecosystem of Allocator DAOs gravitate around it but how can we be sure we avoid capital misallocation and poor execution? Weâre gathering governance questions from the community and will post a draft before the on-chain vote so people can get answers and vote with an informed mind.
There are several ways to tackle this (non exhaustive list):
- Governance has a major role to play. The WP suggests the creation of multiple Cosmos Councils, one of them being the Community Council. The Community Council can be instrumental in enforcing oversight and accountability. Higher up in the gov stack, the WP suggests the creation of a Cosmos Assembly, composed of members from the various Cosmos Councils.
- We can envision governance mechanisms to direct some of the Treasury Pool assets directly to the Distribution module (delegators-validators-community pool)
- Zaki mentioned formally restricting (through the Hub charter) capital deployment to smaller amounts until we are sure the allocation process is fine tuned and works as intended. Moving slowly, learning and iterating before accelerating.
We hope to incorporate in the governance draft guarantees, checks and balances so that the community feels at ease with the proposed roadmap.
7 Likes
The signaling benefit of having $1 billion word chest is just incredible what we would be saying to the world âlook this $1b is how we can fund your project and by the way we have a really really great team of allocators and theyâre going to figure out how to help you get this set up rapidly or reject you rapidly with useful feedback.â
Also if the treasury isnât self sustaining by year three then the entire concept has failed.
Furthermore though thatâs why I am in favor of simply minting the new Adams into existence at the upgrade block height. This makes everything else clearer and removes complexity.
the wp
I have been asking around on Twitter for the LATEX source code, but canât find it, can anyone point the way? Iâd have PRâs I think.
1 Like
yep
My feeling is that nobody is fully confident yet and in fact it includes me because there are a number of novel concepts here.
Why wait around? We can mint 69,420,808 at upgrade height and put them in the treasury. We also reduce the complexity of the paper and make it easier to understand if we do that.
Yeah my opinion here is that it would be a good idea share the repo of the the paper source code so that the community can make pull requests and attempt to improve difficult to read sections.
This is what I always loved and hated about the technique that @jaekwon used but at the end of the day I am very glad that he did maybe not so much because of any effect or lack thereof on the outcome of 69 but it gave us a new scenario to think about when reasoning about governance. It ended up pretty academically interesting to me.
update
I am withdrawing support for atom 2.0.
It is incredibly irresponsible to put a billion in community funds into multisigs.
https://twitter.com/gadikian/status/1577522325783707649?s=20&t=vKxAFa-kfs75tFQV_Cr4NQ
Seriously I want no part in that. There are many, many good ideas here, but this is a bridge too far for me. The design expressed literally endangers the physical safety of community members no way, I would veto.
updated summary position
NoWithVeto due to endangering the health and safety of community members and $1b
I donât want to issue 69,420,808 atoms into a mechanism that endangers users.
1 Like
Hello everyone,
After digesting the paper for a bit and following the discussions on the paper, I had another question and wanted to see what the ATOM dev team is looking to go towards.
With respect to the Interchain Allocator, there is the idea of Covenant to establish protocol-protocol communication. I wonder if these protocols mentioned in the reference are limited to just Cosmos-SDK L1 chains?
I raise this point with this mentioned in the whitepaper :
In time, the Hub may support multiple Allocation DAOs. Other chains may form their own Allocation DAOs, which would further streamline crossprotocol coordination.
Since the Allocator is looking to be designed with protocols, would it not be efficient to work with L2 IBC-enabled protocols, so Letâs say CosmWasm-enabled chains like Juno that have DAOs could participate in Allocation as well. I am biased since Shade Protocol is an L2 on Secret Network it would make it possible for Shade to not only offer ATOM-enabled services in the future but enable a wider use case for ATOM to work with it.
This would also target L2âs DAOs on ETH if ETH ever adopts IBC natively.
Answer to @Ticojohnny
Question 2: âThe transition phase starts the moment that Cosmos shifts to the new monetary policyâ
This is roughly a year later when ICS and Liquid Staking prove themselves and not before?
Answer: This is correct. We need to make sure the staking ratio is considerably higher before kick starting the new monetary policy. Could be a year from one, maybe less. It will really depend on how fast ATOM holders decide to Liquid Stake their token. Same for ICS.
Questions 3: âAs 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.â
Will this be programmed in?
Answer: We havenât gotten into that level of details.
Question 4: âThe 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?
Answer: could not find your quote in the WP. This part is about the Allocator, not ICS from what I understand.
Regarding ICS, the plan is still for delegators and validators to receive consumer chain native tokens as rewards (% of transactions + % issuance on chains secured by the Hub).
Question 6. âBeyond 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 chainâ
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?
Answer: The original idea was to split revenues from Scheduler between partner chains and the newly formed Treasury Pool. The discussion has evolved since and we could envision a mechanism where a portion of Interchain revenues goes to the Distribution module (delegators-validators-community pool). However, from the revenues going to the Hub from Scheduler, the largest part should go to the Treasury so that Allocator has enough funds to allocate
Question 7: âExpanding liquid staked ATOM markets by entering into AMM pools with liquid staked ATOM or ATOM-backed assets such as collateralized stablecoinsâ 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?
Answer: Entering into AMM pools with liquid staked ATOM is good for ATOM utility and helps aligning with other protocols, notably protocols secured by the Hub. Same with collateralized stablecoins backed by ATOM: gives more utility & legitimacy to ATOM.
I donât see preferential treatment as an issue. We need at some point to make decisions regarding what chain we partner with.
Question 10: Do we know what teams are accountable for developing each of these pieces?
Answer: yes we have a good idea on who will be working on what. Technical resources to build the different pieces are competent and available
Question 11: Does funding for this development come from the future treasury?
Answer: Correct.
2 Likes