[Proposal] Allocate 900k ATOM for LPing in the Osmosis stATOM/ATOM pool

Hub Proposals Community Spend
21

I might of missed something what generates revenue for ATOM?

22

Hi Sunny,

I think this proposal underestimates the risks and overestimates the benefits.

Generally injecting liquidity by community pools will lead to removed incentives by Stride “DAO”, which will decrease real users and liquidity providers on Osmosis. Higher liquidity does not mean higher activity. It is the other way around. There is a bootstrapping phase to overcome low liquidity, but this has been reached by stATOM already.

You have said yourself, with concentrated liquidity, not as much liquidity is needed for efficient trading, so I wonder why you are asking to double the current stATOM-ATOM liquidity. The risks that have been introduced by the LSM module (instantly allowing big stakers to cash out) and depeg stATOM price are due to the protocol design, not due to bad liquidity.

This also has a lot more implications that are not being talked about.

  1. Liquidity provided for ATOM/stATOM on Neutron was part of ICS and sharing 10% of the revenue to the Cosmos Hub. The proposal now asks for liquidity without a RoI for Cosmos Hub. If you think that liquidity is better deployed on Osmosis, this liquidity should be migrated to Osmosis.

  2. Further creating dependency on Stride can lead to a similar single point of failure we have experienced with UST. There is already anti-competitive and monopolistic behavior happening by Stride and this proposal is further increasing that issue.

  3. Stride chain is already accumulating governance power over all ecosystems providing liquidity to them. Chains are already starting to lose sovereignty and especially with validators being aligned through incentives. With talks about Stride being bought out by Cosmos Hub, such a vote can be influenced by accumulating more governance power.

  4. An additional of 250 k usd per year is paid to stride stakers in perpetuity (if we estimate a 50:50 deployment of assets) - 10% returned again to cosmos hub stakers. Based on Strides comment that is equal to the amount paid for ICS. That de-facto means that Stride is getting a net positive revenue from being in ICS instead of providing value and covering infra for validators.

  5. Unclear relationship between Stride “DAO” and “lead” seed investor Raouf Ben-Har, the founder of Risk Harbor on Terra, misapropriating 200 M USTC just weeks before Stride seed round (https://x.com/RayRaspberry1/status/1696721209969324400?s=20, https://x.com/RayRaspberry1/status/1690509346776420352?s=20)

  6. EDIT: Almost forgot, are we really trying to disincentivize Lido ever launching in Cosmos? Actions like these should never been taken lightly in my opinion.

EDIT 2: I think a better proposal would be for Osmosis to join the AEZ with mutual benefits to both ecosystems. And providing liquidity can be part of the deal, but should not be one sided.

Best Philipp

7 Likes
23

Get liquidity that you don’t own
Provide $OSMO that the Hub own in exchange

So the Hub have an incentive to make it work, and still conserve $ATOM ownership until you accept be a provider chain or die

It’s win win for the Hub, not for Osmosis, but that’s the only way that it’s an acceptable deal

Otherwise the Hub doesn’t earn anything from it, and would better provide them on some others consumer chains

1 Like
24

I personally think it makes more sense for the HUB to wait for the DUALITY launch and LP it on Duality/Neutron

If you look at the numbers this proposal just doesn’t make sense in comparison:
Osmo: The HUB gets trading fees, no MEV, no OSMO token exposure

Neutron: Trading fees, NTRN fees, Astroport+Duality LST pools, big exposure to NTRN

1 Like
25

I support this Proposal.

26

Currently, the stAtom pool has around 10 million $. Why does it need more money? I will only support up to 450k Atom if the previous vote has expired.

2 Likes
27

No.
the reserved ATOM is used to incentive new project/protocol develop,not used to supply liquidity;
if one project couldn’t accapt by market in 1 year, u need consider your direction;
just like 90K BTC couldn’t rescue UST.

1 Like
28

JUNO OSMO UMEE HUAHUA NTRN… they all need liquidity.

29

After recent twitter discussions and what “the real AEZ” is, I believe we should stay true to the spirit of credible neutrality and split the proposed 900k ATOM request between OSMO, KUJI, SCRT, and NTRN apps.

ATOM is used profusely among these chains in various ways and offers the ability for the hub to be a steward in growing the pie.

5 Likes
30

I agree, Fin/Ghost, ShadeSwap/Silk and Astroport all have proven to generate sufficient volume on their own.

I see no reason why Atom should decide on LPiung such a significant amount to just Osmosis.

2 Likes
31

If we dont do it on this particular proposale, I believe a joint proposal for multiple chains would be pretty reasonable.

2 Likes
32

why doesnt each DEX make their own ad hoc LSD?

there is 10% staking yield just sitting there,

LSD providers are just an extra step that leads to a bevy of emergent problems.

Problems that might be obvious if the community pool didnt perpetually subsidize stATOMs lack of demand to subdue its outsized risk profile.

1 Like
33

I agree that there is a need for strong liquidity between ATOM/stATOM. However, I oppose incorporating stATOM/ATOM into the static liquidity position [1.0, 1.35]. It should be placed in the All range to allow it to move according to market logic.

34

After reviewing the assessments provided in our previous message, and considering that there have been no significant revisions to the economic offer presented in this proposal, we have decided to cast a NO vote. The rationale is straightforward: the hub doesn’t receive a favorable deal with this allocation.

3 Likes
35

STATOMUSD_2023-12-04_13-45-02
STATOMUSD_2023-12-04_13-45-023742×863 238 KB

According to the calculation,

the profits start decreasing from Dec/2023, and by Jul/2024, there will be no profits at all.

Please consider incorporating a linear increase in the range as well.

36

Since the feedback to spread the funds around to various Cosmos protocols was ignored, feel like we might need to make another proposal to allocate some additional funds for this purpose. Obviously, this proposal will pass easily, which is fine, but I know i’m not the only one moderately annoyed that this couldn’t have it’s scope broadened to include other protocols.

Kujira, Shade, etc. would all benefit from deeper liquidity, though I would like the agreements to be more thorough so that, hopefully, the community pool can receive a decent return on the allocation. Open to ideas.

2 Likes
37

I will only vote YES when Osmosis starts using Shared Security from $ATOM. Otherwise NWV
With that amount of liquidity provided by ATOM the validator set has to be same/at least as robust as the ATOM validator set

Also => distribute the fees to ATOM stakers and not the Comm Pool. CP has its own funding and with the fees from Osmosis will blow up out of proportion with money grabs as result.

1 Like