Brazenly overvalued. Another example of entitlement in web3.
5 Likes
Honestly, the acquisition of Stargaze â with a market cap barely hitting $3 million â feels more like a bailout than a strategic investment. And itâs hard not to notice how the Hub is drifting away from its original mission of building infrastructure.
A $16 million offer? Thatâs five times the current market cap. It seems pretty bold, especially for a project that doesnât look profitable . The market cap alone tells the story.
I havenât gone through every single detail, but from where I stand, Stargaze looks like a project in decline. Offering holders four times the current value of their tokens raises a lot of questions. Why the handout?
Also, what does Stargaze really bring to the table that other platforms â some with 10 to 100 times the valuation â donât already offer? And why wasnât the more obvious route of making it a consumer chain considered?
Finally, if this project is really as promising as some suggest, then why is the token price collapsing? That doesnât exactly inspire confidence.
4 Likes
I don´t see it.
How can you say 1. The Project isn´t self-sustaining. and 2. you say a 20 k a month(each if they have 6 members) is resonable.
The price tag of this merger has to come down tremdously for ATOM holders.
I 100% support @mr-t and the Ark team, they have delivered industry leading infrastructure with their previous successful proposals and their proposed adjustments here will allow everyone to prosper via more tech advancements across the space.
2 Likes
I love Stargaze. But objectively speaking, if the hub is going to spend $16M on acquiring an NFT marketplace, it may as well build its own marketplace.
That will cost a fraction of this very likely, and it would leave aaaample budget for a go to market strategy to acquire users - of which it also has an existing base of loyal users.
Thereâs definitely also an overlap between Stargaze users and the Hub - so as many have stated already, the acquisition cost seems overstated.
Would be cool to see Stargaze on the Hub but objectively speaking, the math is simply not mathing on this one.
7 Likes
Iâd like to address the comments about the ask and why we are valuing Stargaze at this price. STARS suffers from extremely low liquidity, a $10k buy moves price over 20%.
This means that by valuing Stargaze on the last price/current market cap makes it extremely easy to manipulate. A small, strategic investment could rapidly increase STARS market cap, easily surpassing the current suggestions of where ATOM holders see âvalueâ.
For this reason, weâve chosen to value it based on the 200 MA which doesnât allow any bad actors to come in and game this where they could push the price of STARS up, then dump the ATOM they receive.
Iâd love to hear how other people think it should be valued based on this.
4 Likes
This canât be serious, right??
The overvaluation of a chain thatâs clearly dying is insane. Cosmos Community Pool is not a milking cow to bail out a failed project and a team that mismanaged their own chain.
- There are nowhere near 20k monthly active users. No way !!!
- You canât compare Magic Eden with SG,not even close in terms of UI/UX. ME and Tensor are years ahead.
- Most NFT trading volume on SG is just wash trading. Look at BK, Sloths, Omies, Wandering Whale, etc.
- Regarding communities,itâs the same small group of people jumping from one project to another,no real user base or growth. Above projects share the same community members.
- $120K/month for the team? This is LULU land. So the plan is to milk the Cosmos CP?
This is way way overvalued. It looks more like a cash grab,a bailout for the SG team,using the community pool. This doesnât benefit ATOM holders or stakers at all.
Seeing the alternative that Backbone Labs is proposing (a free marketplace), and considering what Ark Protocol has achieved with way less funding than SG had,and is still asking for,the acquisition of SG just doesnât make sense !
8 Likes
What I gather from all this is: Stargaze needs a bailout from the Hub and there is no Plan B.
16M for a 3M chain? For NFTs? In this economy?
Even if the Hub wants to think long-term and pretend people will care about NFTs again, Backbone_Labs wants to deploy an NFT Platform FOR FREE. (and much more)
A hard no from me.
(I have been staking and manually restaking (almost every week) my original STARS airdrop and voted on almost all onchain governance proposals. Even though this would help me get rid of those bags it would hurt ATOM way more)
2 Likes
The angle for Magic Eden might not even be that bad. Maybe we should rethink this one and propose to rewrite rebuilding Stargaze in such a way that it can be seamlessly integrated into Magic Eden. I am not familiar enough with Magic Eden, but it would be a win for the Hub, since it would allow to approach an userbase outside the Cosmos ecosystem (something we desperately need imo).
The process should entail something like this:
- migrate Stargaze to the Hub
- rewrite in such a way that it can be connected to Magic Eden
- make the integration a reality
And then go from there. NFTs running on the Hub will have the opportunity to approach a new userbase and it will enlarge the awareness of the Cosmos ecosystem.
3 Likes
The valuation might be too high, but itâs clear that we have to do something different in the Cosmos ecosystem. Iâd vote yes to this, just to make some change, but I understand why everyoneâs saying the ask is too much.
This also flies in the face of the Cosmos ethos, but Iâm ok with that for now. We have to figure out some why to get more users in to Cosmos. Every chain is going to die if we donât attract more users.
This proposal is far from perfect, but itâs a wild swing that could save the Cosmos, or at least hasten the slow death weâre all experiencing.
3 Likes
Thanks for putting up this proposal Shane.
Unfortunately the asking price is so immense, that I wouldnât want to give it any deeper thought on whether thatâs a good purchase price or not, nor is that any good way to start negotiations in good faith.
Only in Crypto we ignore common business sense and practices, help out a failing projects or bail them out.
Other NFT projects already expressed their willingness to deploy for free, whatâs the reasoning not to work together with them and just ignore Stargaze after that offer?
Great feedback ser! Let me address both questions:
It seems that the number of users per month is a metric that has been taken up and quantified and added to the acquisition cost.
I understand your concern about Sybil accounts since its a common practice in crypto. But first, you can check for yourself that 20k is correct by analyzing onchain events. Even Minstcan shows 19k for the last 30-days. Stargaze is a very social platform where people like to flex their collections â which Iâd assume leads to fewer Sybil accounts. All of these accounts, regardless if they are Sybil or not, still will pay 3,000 ATOM in gas if migrated to the Hub. Do have other ideas on how to account for bringing on such an active userbase to the Hub?
My second point would be about the elephant in the room, which was not mentioned at all in the proposal, the infinite extraction of value
Alright this is a valid concern and should be addressed. First of all, a down chart doesnât always mean extraction. When TSLA goes down, it doesnât mean Elon is selling. The chart is based on market sentiment, volume, and liquidity. That said, Stargaze unfortunately did have a large extraction event early on. However, that is not a reflection the current team â which has done nothing but build and try to bring as much value to the Cosmos ecosystem as possible. Besides Osmosis, Stargaze has been one of the only chains with real users and real culture. While the Foundation has sold some tokens to pay devs, itâs a small fraction of volume and liquidity. The biggest issue with the token is the lack of liquidity. For example, just a $10k buy can move the price over 20%. The plan was to add liquidity and do buyback and burns when the platform is profitable. But for that to happen, Stargaze needs more exposure. Thatâs why a Hub acquisition makes sense. Stargaze can remove itself of the shackles paying for securing the chain, and direct profits to ATOM stakers. See the section on Sustainabiity and Growth.
4 Likes
So are you implying that Mintscan is incorrect? Because Mintscan shows 19k active users for the last month.
2 Likes
Hey Tagu!
The monthly active user estimate is taken from Mintscan, the same source for all Cosmos chains compared. The point is really how Stargaze compares to other chains in the eco using a consistent metric. The ratio is what matters and I donât think Stargaze has more sybil accounts than other chains.
Actually when we see projects come from other ecos with tiered WL systems for a big mint (e.g. testnet users or stakers Tier 1, then SG projects tier 2), the sybil red flags tend to appear in the phase that samples from outside the Stargaze userbase. Of course it could be that SG users are just more crafty and less likely to move all their NFTs to a single wallet after minting like we saw Union testnet users do with Whalesharks for example 
NFTs are worn on socials and often tied to Discord accounts for gating, directly connected to socials via Stargaze names, etc. in a way that fungible tokens are not, which deters sybil activity.
Of course it canât be eliminated completely but SG probably has more measures in place than any chain and still has a significantly outsized userbase relative to chains that have less measures in place to deter sybil activity.
1 Like
With all due respect and the shared goal of wanting success for ATOM, from my perspective as both an ATOM and STARS holder you and many others on this forum who are against this proposal are missing the forest for the trees.
The language you are using to highlight the downsides to ATOM, like âmassiveâ and âimmenseâ, is hyperbolic considering the context and stakes. A purchase price of $3M or $15M is a very small fraction of ATOMâs market cap and will have much less of an impact than (1) if the proposal to acquire Cosmosâ leading nft marketplace is accepted or rejected (regardless of the reason) and (2) if the proposal is accepted, the success of the project and its impact on ATOM.
The upside of this proposal to the ATOM brand is very large â namely the nft marketplace helps the HUB to accelerate strong multifunction utility complimenting increasing interoperability/IBC Eureka, the rollout of the Stride Dex, and the upcoming EVM compatibility and other protocol enhancements. There is also downside to the ATOM brand if the nft marketplace stays/becomes moribund or the proposal collapses with unconstructive debate reminiscent of past infighting.
In sum, I believe the stakes are high, but not because of the price. I also believe it is in our interest to trust Barry and Mag and their strategic direction and not to second-guess their reasonable choices unless and until their strategy fails or they propose something off the wall. So far they have been very successful in aggressively changing ATOM for the better in their new roles leading the ICF as well as in their prior roles leading Skip. Iâm rooting for them and support their strategy, including this new opportunistic proposal to advance it.
As a STARS holder, I donât care much what the price is. Most of the investment by most STARS holders is lost in any event.
3 Likes
Have taken some time to consider this.
My fundamental question is what is the hub actually acquiring?
It seems that it is a culturally rich loss making application.
Am in favour of finding a different model of buyout in an attempt to find a way to Shane and the team a runway to profitability and allows STARS token holders to be exposed to future upside. The model proposed above doesnât feel suitable for a loss making protocol.
Something like this could be viable.
$X to team tied to unlocking kpis over a year with vesting over a further Y months.
The app moves to hub, but keeps the token (CP gets burned). Use a% revenue to buy and burn stars and b% to buy atom. After a period of time the buying stars can be replaced with paying the team but the atom % remains.
This would give the team a run way. Would raise the stars price if the chain stars to be as successful as suggested above. And would give atom a slice of the action. There would be risk on all sides but also benefits.
1 Like
I think itâs inaccurate to imply that @bpiv400 @Mag are meaningfully involved with the proposal.
Iâve heard them being notionally supportive of exploring a possible acquisition, I doubt they support the numbers or reasoning attached to the valuation.
The ask involves 3.075m of 9.6m
ATOM from the Hub community pool. The pool is not a treasury controlled by the ICF.
The ICF/L has no discretionary control over the allocation of these funds. While ICF/L employees may and can have influence in our discussions, the authority wrt to how these funds are used rests with the consensus of ATOM stakers.
Itâs the community that must be trusted to evaluate and decide on the merits/demerits of the proposal.
2 Likes
Given that Stargaze has outcompeted all other NFT marketplaces in the Cosmos to date I donât really think this would be âchoosing a winnerâ but rather listening to the broader userbase and choosing the best native product.
Stargaze has always been committed to the ecosystem and won the vast marketshare despite numerous competitor launchpad + marketplaces receiving funding from various sources over the years and delivering worse product. Top collections from those competitors now trade primarily on Stargaze and funds that went elsewhere a waste. If all Cosmos chains whitelisted ICS721 for all of their collections to allow trading anywhere, Stargaze would already dominate further. Itâs a no brainer to me to just join forces already.
For Intergaze, first we can look at what it is now with no Hub merger in place:
We committed to building it and delivered it before this proposal went up. Iâm optimistic and excited about deployment on the Hub, but since it is an uncertainty then naturally in the meantime Stargaze has pursued deployments elsewhere (strong demand from creator and user feedback.)
Intergaze is a bespoke launchpad + marketplace for the Initia ecosystem and for a distinct userbase. The target user for Intergaze is one that will be using Initia as their primary ecosystem to start. We designed the fee structure for Intergaze such that Stargaze is still preferable (lower fees for creators and traders on SG), it is permissioned at present and there are only a few collections. As it goes permissionless it will be low lift - primary features are all on Stargaze - and it is a smaller revenue generating launchpad/marketplace in a distinct eco. Outside of a deal, we arenât building something to compete with ourselves.
Intergaze under a Hub Merger:
There are several options. It could be an outpost integrated economically with SG on the Hub (revenue share, etc.) Weâve suggested an oversight DAO to ensure accountability on any CP funding and weâd like to work with the Hub community on what is most sensible regarding additional product like Intergaze if a deal happens.
This is a valid concern. Intergaze dev started before there was any kind of discussion about migrating to the Hub. Obviously, if the Stargaze team is paid for development, it should all go to Stargaze. Part of the reason for creating the Oversight DAO is to watch out for conflicts of interest like this. The Oversight DAO can block team funding if they find any kind of misuse of funds. That said, we could include Intergaze as part of this deal, with Intergaze profit going to ATOM stakers. Initia is part of the greater Cosmos ecosystem after all.
I know this may seem like a lot, but you have some of the details wrong. Average revenue is 50k and we have hit over 150k in our best months. The team allocation is for 1 year, with the goal of achieving sustainability. Fund distribution is also gated behind an Oversight DAO. If Stargaze is on the Hub, the increased exposure will lead to more volume â which leads to more revenue. So most likely there will be no need to fund the team for any more than one year.
1 Like