First of all, we want to sincerely thank all community members who took the time to contribute — both in support and in critique. Every comment was carefully considered, and as a result, we’ve adjusted several proposed amounts and quantities. Below, we address some key points raised in the discussion.
1. Financial Aspects
As outlined in our initial post, the APR may decrease by approximately 0.3% — a negligible figure when considered in context. Coupled with a reduction in the CP tax, the net effect should be a meaningful increase in the APR for stakers.
More importantly, this program is designed to maintain the Community Pool’s relative share of the total supply over time while generating ≈750,000 ATOMs per year. These additional funds could support long-term community grant initiatives, such as the Atom Aligned Apps (AAA) program proposed by Interchain Labs — or any other community-led effort.
Our goal is simple: to reduce the CP tax while maintaining the CP’s relative share between 1–2% of the total circulating supply, and to use staking yields to sustainably fund the AAA. The math is straightforward: at 10% inflation, a 2% CP tax is just enough to maintain the CP’s relative share — but not to fund anything beyond that. Any expense beyond the yield at this rate results in net dilution.
Let’s break this down with simple math:
If 125,000 ATOMs are delegated, and validators receive 15% APR with a 5% commission rate, this equates to roughly 80 ATOMs per validator per month.
Yes, some may sell to cover infrastructure costs — which, as we noted, can reach $700/month. Moreover, as the new roadmap of the Hub includes a VM, this will further increase the amount. But this program ensures that only serious, high-quality validators are supported. If they consistently deliver top-tier performance, they will retain their spot in the validator set — regardless of size. This creates a worthy incentive targeted to support financial stability for operators, and increased network performance for the Hub.
We appreciate the intent behind this idea. However, to keep the system governance-controlled and not committee-managed, we’ve deliberately proposed a simple and transparent framework: one yearly revision and redelegation, all fully under the control of Cosmos Hub governance. No multisigs, no representatives — only governance.
2. Governance Considerations
We’ve had constructive conversations with ICL, and both parties agree that a community-driven solution is preferable. As suggested by Magnus, we’ll wait for the AAA proposal to be formally posted before advancing ours. This will help the community better compare and understand the broader vision for the CP.
This characterization is both misleading and unfounded. The proposed staking program would constitute a very small share of the staked supply, distributed transparently and equally among 40 validators. Each would receive just ≈0.05% of the total validator vote power — a negligible amount that does not pose any risk of circular influence.
3. Eligibility Criteria
We considered this but ultimately decided against it. Requiring self-bonding would exclude smaller validators — often those operating at breakeven or a loss — and contradict the inclusive purpose of the program. Instead, we favored governance participation metrics, as these allow any validator to qualify based on objective performance, not access to capital.
We respectfully disagree. As noted by another user, you appeared to conflate “signed blocks” with “proposed blocks,” which may have led to your concerns. Our choice to analyze 90-day signed block history ensures we capture both consistent performance and responsiveness to network upgrades. These are the very traits we aim to reward.
4. Other Concerns
This concern doesn’t align with the data. Our metrics prioritize small-to-medium validators, and the upcoming curated list of eligible participants will clearly show how this proposal increases decentralization, not the opposite. We’ll publish that list once the eligibility criteria are validated.
Govmos has long been the highest ranked contributors to this forum. While it’s unfortunate that some may still doubt our motives, our consistent history should speak for itself: we advocate for the network’s long-term resilience, not personal gain.
That’s precisely the problem. Relying on “printing” more ATOM to fund future grants would require increasing the CP tax — which directly reduces staker rewards. This proposal offers a sustainable path: generate yield without inflating the token or compromising rewards.
5. Conclusion
We believe this proposal provides a sustainable, math-based framework to fund grant programs indefinitely, without ever depleting the CP’s principal.
For example, staking 5 million ATOM and allocating the remaining 4.3 million to kickstart a grant program like AAA would still yield 790,000 ATOM per year, ensuring that the CP maintains at least 1% of the total circulating supply and fund the AAA annually (on top of the initial 4,3m allocation).
In the graph above, the red line reflects the CP’s share with staking; the blue line, without. The result is clear: sustainable funding, no dilution. The 2% tax alone only maintains the relative 1-2% share of the CP. By enabling community staking, the extra revenue generated would be allocated to fund the AAA program, every year. Achieving the same amount of regular funding with the 2% tax alone would cause the CP to dilute.
This is not about creating a cartel or consolidating influence. It’s about:
- Supporting the best 40 operators with minimal monthly support (≈80 ATOM/month),
- Enhancing network security,
- Improving stake decentralization, and
- Building durable, grant-driven growth for the ecosystem.
Thank you for your continued feedback and engagement,
Govmos