[PROPOSAL][LAST CALL 2023-02-15] Confio Public Goods Funding

Hub Proposals Community Spend
1

Change log

We are collecting feedback now, with the intent to go on-chain with a proposal on Feb 15th

Summary

This is a signaling proposal. If it passes, it indicates the community’s willingness to raise a community pool spend proposal to support the Confio team in their stewardship of CosmWasm, CosmJS with the ATOM equivalent of $2.5M dispersed in two payments, in accordance with the process outlined below.

Purpose

Strengthening the ATOM Economic Zone through support and Public Goods.

Confio is the team responsible for the stewardship and development of a huge number of libraries fundamental to many developers in the Cosmos. The best known are the CosmJS & CosmWasm libraries, two key components of the Cosmos software stack, but you can review the list of dozens of repositories Confio maintains. These libraries are highly valued by developers and chains across the Cosmos ecosystem. In addition, they focus on expanding IBC protocols by developing IBC-enabled contracts and training others how to do so as well.

Confio is also prepared to offer some services and support for the success of Cosmos Hub secured consumer chains in exchange for such funding support. This will be defined more below, but it should be clear that there are also tangible benefits for the Cosmos Hub through this proposal.

Why should the Hub fund Confio?

Hard vs Soft Power

In the coming months, a software upgrade proposal to adopt Gaia v.9.0.0 will be raised to the Cosmos Hub. This proposal will include replicated security, which will allow other blockchains to “lease” the security of the Cosmos Hub, making it as difficult to perform an economic attack on a consumer chain as it would be to perform the same attack on the Hub itself. We can think of this as the Hub granting its “economic security” to the consumer chain. This can be thought of as a form of hard power.

In politics, hard power is the use of economic or military means to influence behavior. In our particular cryptographic environment, we can easily extend the metaphor to the use of economic security as an incentive to attract developers. In the Interchain ecosystem, we will see a marketplace of consumer chains seeking this economic security as a service.

However, this is a narrow view of the environment that consumer chains will be navigating. They will not only seek economic security, but are also likely to seek healthy governance precedent, adequate tooling, financial support, and access to human resources like talent, ideas, and users.

It should be clear from the above paragraph that hard power is only one means of exerting influence. In order to further strengthen the Hub’s position as a Hub in the interchain, soft-power is another key component.

In politics soft power is defined as the use of economic or cultural influence to influence behavior. In our cryptographic environment it can be thought of as the intangible areas that consumer chains will need beyond economic security.

It is worth noting that a complex interplay of relationships across chains in the Interchain is one of the central components of the Cosmos ethos, and the Cosmos Hub’s primary value proposition is to provide a firm foundation for navigating these relationships. By serving as this foundation, the Cosmos Hub and its stakeholders will accrue token fees of the chains that use its services. Thus, the Cosmos Hub is incentivized to provide the highest quality experience (in terms of both hard and soft power) for all those that choose to form a relationship with or around it. By doing so, it will attract the highest-quality talent and cement its role as an irreplaceable Hub.

Funding Public Goods

With the view of soft power in mind, it is clear that funding the maintenance and stewardship of two key components of the Cosmos software stack is valuable to the Cosmos Hub. Developers highly value both CosmWasm and CosmJS, and consumer chains of the Cosmos Hub are highly likely to utilize these libraries in the emergent value they create for the ecosystem.

By funding Confio, the Cosmos Hub asserts its willingness and ability to support the highest quality tooling in the Cosmos network, and thus support the chains that wish to use these tools. Supporting the Confio team is a valuable step in providing the intangible human resources that developers will look for when they are seeking a home for their next great idea.

Support for Consumer Chains

Additionally, Confio can provide tooling and support to help promote the success of various CosmWasm-enabled consumer chains. The exact scope of such support should be refined, but as a guide, some ideas we had are:

  • Providing reasonable technical support to CosmWasm-based Hub consumer chains (eg wasmd integration, extensions, etc)
  • Prioritize the needs of the Cosmos Hub (and consumers) in our backlog and roadmap
  • Providing off-chain developer tooling supporting the Hub and its consumer chains
  • Contribute as needed to development of ICS technology
  • Integrating advanced IBC protocols in Hub consumer chains

We are open to feedback to refine this list, but we want to make sure this is a two-way street, and the Cosmos Hub also benefits directly from the support they are considering to grant Confio.

Execution Details

Community Pool Spend

Assumptions

All of the following statements are made using the following assumptions:

  • The ATOM price used in calculations is $13.004, which is the 30 day moving average price of ATOM as of February 6th.
  • Proposal 95 has passed, and those 588,000 ATOM have been dispensed
  • The calculations used to determine the community pool budget can be found here: Community Pool Budgeting Framework - Google Sheets
  • In the spreadsheet, the Hub funds Confio’s entire yearly expense. A more optimal outcome would be interchain collaboration in which each chain funds a percentage of Confio’s needs.

Pool Percentage

  • Funding Confio with the ATOM equivalent of $2.5M from the Cosmos Hub equates to less than 1% of the USD value of the community pool on a monthly basis.
  • Each tranche of community pool spend will consume for ~5.4% of the total ATOM in the community pool.

Payment Details

The process for the community pool spend will be as follows:

Signaling vs. Community Pool Spend

  • Contingent upon the passing of the signaling proposal, the first pool spend proposal will be raised in early march, the second will be raised in August.
  • The first payment proposal will be raised only if this proposal passes with a super-majority (>66%) of yes votes relative to no and no with veto votes.

ATOM Amounts & Sale Terms

  • Fund Confio with the ATOM equivalent of $2.5M with two separate community pool spend proposals, each requesting the ATOM equivalent of $1.25M.
  • The actual ATOM request in each proposal will be based on (30? 90?) day rolling average price before the proposal goes on chain. Thus the ATOM request in the second tranche will be adjusted to be reasonable.
  • The ATOM will be sent to a multisig and should be properly managed and slowly liquidated when the market can handle it.
    • Sale of ATOM should cause no more than 1% price impact in any given day? 4% on any given week?
    • ATOM should be sold over 1 month following the release of the funds to the multisig.

Fund Release

  • In order to provide a legally registered counterparty to fund Confio, the Neutron foundation will function as the standing recipient of the community pool spend
  • The funds will be released to a multi-sig wallet owned by the Neutron Foundation with the following 3-5 signers:
    • TODO: confirm exact signers
  • After the ATOM are liquidated into USD, they will be transferred from the Neutron Foundation to Confio
  • Confio will release a statement declaring receipt of the funds and the resumption of public goods work
  • A public report of work done will be issued in August, before the application of the second tranche. The purpose of this report is to solicit feedback from relevant stakeholders on the work Confio is doing and provide a chance for discussion of any adjustments in Hub-specific services.

Responsible Funding

  • It is in no one’s interest that Confio is solely dependent on the Cosmos Hub in the long term.
  • Confio will approach a number of other chains for similar community spend proposals.
  • Having funding secured over a larger number of tokens reduces sell pressure on any one of them and allows more of the funds to be held and staked.
  • While we would like to request the stated funds from the Hub regardless of success in other funding sources, success there would extend the duration that said funding could support. Confio is committed to working with the Hub within the scope of this proposal.

Forum post link

The original discussion started on twitter and then evolved into this forum thread. This signalling proposal arose from those discussions.

IPFS link

The first draft of this proposal, placed in the forum for feedback on Feb 6, 2023, can be found here:
https://gateway.pinata.cloud/ipfs/QmaBEvv3tPdMMtSiDmn2HVoVMMiHCndL4tUhgxJcAxEGes

The updated draft of the proposal, shared Feb 10, 2023, which adds information on how the money will be spent, can be found here:
https://gateway.pinata.cloud/ipfs/QmWzWv4yHpHyMh923W1LPKJRhKeXD6rQGmP8hZbCrXbDKe

The latest version, which now goes directly to community spend proposal without an intermediate signaling proposal, can be read here: https://gateway.pinata.cloud/ipfs/QmZXyos86CBDDY4yQhBbHGCFYtMm6cca4hYoZjB7uxAamw

Governance votes

This proposal is explicitly written as a signaling proposal in order to gauge the sentiment of the community. It is a method of communicating across the shareholder base and allowing ATOM holders to express their opinions with the weight of their vote, optimally creating a non-contentious governance environment and opportunities for feedback.

Voting Outcomes

  • If this signaling proposal passes, a community pool spend proposal will be raised. NOTE: the current proposal does not trigger the release of any funds. If it passes, the community indicates that at the present moment, with the available information, they have a willingness to release funds and compensate Confio with the ATOM equivalent of $2.5M, though the release of those funds is contingent upon the passing of the following community pool spend proposals.
  • If this signaling proposal is rejected, the next steps depend on whether concerns are related to some details, or the proposal principle in general. If the rejection is based on a clear set of issues that could be resolved, we will work with stakeholders to adjust these issues and may come back with a revised community spend proposal. If the rejection is based on the general purpose, no further action will be taken in regards to compensating Confio via a community pool spend proposal.

Voting Choices

The following items summarize the voting options and what it means for this proposal:

YES - If you vote yes you signal your desire to compensate Confio via the Cosmos Hub community pool.
NO - If you vote no you signal your dissent against compensating Confio via the Cosmos Hub community pool.
NO WITH VETO - A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance. If the number of ‘NoWithVeto’ votes is greater than a third of total votes, the proposal is rejected and the deposits are burned.
ABSTAIN - You wish to contribute to quorum but you formally decline to vote either for or against the proposal.

Open Questions

  • What other areas of the proposal do you have feedback on?
  • What services would you like to see Confio offer the Hub?
9 Likes
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This is a no-brainer Yes, of course.

Out of curiosity:

  • What other chains are you planning to ask for funding from?
  • How much total funding do you need for sustainable operations for the next few years?
  • Have you considered other ways to monetize your operations going forward so you’re not quite as reliant on grant funding?

Just wondering. Cosmwasm, and Cosmos adoption as a whole seems to be accelerating, so probably not a stretch to imagine that you will need to expand your workforce to keep up with demand.

5 Likes
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This would be an easy yes indeed.

If we are thinking about limiting the impact on the ATOM price, would it be adviseable to spread the sales over various exchanges? We have various routes for ATOM to be sold towards funding Confio, so that might already spread the impact on the liquidity of ATOM and thus the price.

It can also be determined that it should be a daily sale of ATOM via a sort of bot or alike, to even spread the impact even more. At a spend of 83k ATOM per 6 months (roughly) we are looking at 470 ATOM per day or so. Which is quite a small amount if spread over a couple of exchanges.

2 Likes
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Yes, I am in favor and support this! Only wish we had about 10 more Confio’s!

3 Likes
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Happy to see this happening!

I would love to see some more details on what exactly this would fund. Are there any concrete plans for the funds, or would it be to just continue development in whatever way Confio sees fit (except for “Prioritize the needs of the Cosmos Hub (and consumers) in our backlog and roadmap”, which is a little hard to make sense of, especially if you will seek funding from multiple places).

I guess what I would love to see is an actual detailed budget of what the money would go to and what the expected outcomes would be.

3 Likes
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what % allocation of the community fund/year is appropriate for the hub to spend on public goods funding like this? if we use a format like the one below to distribute a % of the community pool on a quarterly basis, we can distribute funds to contributors like Confio and create competition for regularly/predictably distributed funds.

Instead of paying people to decide how the remaining grants money is spent, we vote to distribute 588k ATOM to grantees for the 1st half of the year by introducing a proposal submission deadline for teams to submit grants proposals to funding tiers like $1k, $5k, $10k, 100k, etc. then pay a large dev dominated review panel for 1 month instead of 9 to review the grant submissions. the panel makes recommendations to exclude proposals for being spam or frivolous and the like, hopefully leaving a field of 20 or 50 or however many proposals each funding tier and use governance for ranked choice voting to fund half or 1/3 of the proposals in each tier until the tier funds are depleted. The voting doesnt determine whether or not to fund one thing over another or is it to much funding. the money is going to be spent and the voting is for what the community most wants to see funded. then we only pay for the month of panel oversight instead of 9 months of market rate salaries. the tiers can be be structured so many smaller grants are available to encourage innovation. This also encourages community campaigning for funding rather than back room dealings.

1 Like
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Hi Gjermund and thanks for the questions.

As a first part, we are maintaining the following repos which is quite a significant amount of work and a large portion of the need for Public Goods funding. “Maintaining” for me means not just updating dependencies and bugfixes, but also addressing user issues, adding features requested by the community, reviewing PRs, etc.

But you are right. In addition to that, we should define some of the larger features we would like to build out in 2023. I will work on such a document and link it to this post.

Furthermore, we would concretely work with Neutron and Informal to get a clear list of needs of how we can support the Cosmos Hub and consumer chains. It is vague in a proposal, as I do not know what their needs will be in 6 months. But the purpose is to have 1 or 2 point people to give us feedback and let us know their needs.

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Is this about our proposal? Or more about Proposal 95 ?

I think everyone would benefit from a well-run grants program on the Cosmos Hub, and we would love to be able to apply to it in the future. I fully support the discussion of general funding of public goods, but think it is out of scope of this proposal. Happy to engage in twitter or another forum post if you wish though.

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That sounds great, and I totally get that it is hard to be a lot more concrete - but even just specifying where things are vague, why and what the plan is could be useful for people to see (at least it makes things a lot clearer for me)

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Easy yes. Confio is absolutely essential to a functioning Cosmos ecosystem. The only thing I don’t see on here is ICS-23. It looks like at least some of that repo was absorbed into the IBC-go repo after Dragonberry, however if there is any remaining maintenance/handoff work, I would make sure that’s accounted for and the grant amount is increased appropriately.

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I am in support of funding contributors like Confio, and apologize for spamming your proposal with my response heavily bleeding into a critique of prop95, but i feel a certain level of urgency to begin discussion on more efficient methods of distributing community pool funds that dont require 20% overhead for labor expense. given how pervasive scams are within the crypto space and how unenforceable consequences are, I believe it is unreasonable to ask a community to trust a self-appointed council to fairly and transparently administer funds.

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Many people asked for more clear information on how the money would be spent. I have uploaded a new IPFS document with a few more sections on how the money will be used. Attached here in text form:

Security and Maintenance

The main point of this grant is to provide Confio funding to resume their Public Goods work. Key among this is ensuring the security and stability of the entire software stack they maintain. Keeping all repositories updated with the latest dependencies (like upcoming Cosmos SDK and Wasmer releases) and actively monitoring potential security issues requires significant resources. Engaging with the community, adding minor features and bugfixes as needed, and reviewing incoming PRs, requires even more resources.

Confio now maintains at least 20 significant open-source repositories critical for the functionality and security of many blockchains. The increasing work to support all of these as a desired level of security and stability is often unseen or brushed under other milestones, but this in fact was the largest source of concern when we announced we would halt Public Goods work – that many blockchains are potentially at risk of attack due to unmaintained software dependencies

Maintenance is a continuous process that covers the following items:

  • Watch all dependencies for important updates
  • Monitoring multiple channels for security alerts
  • Reviewing, triaging, and resolving bug reports from users
  • Reviewing and possibly implementing feature requests from users
  • Monitoring chat platforms for issues and needs of users
  • Responsible notification of involved parties on any known security bug
  • Improving test coverage
  • Improving code-level documentation

Simply keeping this all working well and preemptively patching bugs before they damage any chains requires several senior engineers.

Rough Roadmap

In addition to ongoing maintenance and support for CosmWasm consumer chains, Confio would like to improve these tools, and especially expand support for IBC development in 2023. The following is a semi-optimistic roadmap of new functionality that Confio would like to develop. It is likely we won’t accomplish everything on the list, but with adequate funding, we should accomplish many items, and likely others not on the list.

This is not a promise of deliverables, but a general guide to what you can expect if Confio is funded:

Q2

Much energy will be spent grooming frozen repos, cleaning up issues and PRs, and charting upcoming milestones, as well as preparing for features to be finished in Q3. The following should be completed:

  • Full wasmd support for Cosmos SDK 0.47.0, including participation in testnets and help debugging.
  • Ensure full CosmJS support and compatibility for Cosmos SDK 0.47
  • Ensure wasmd (junod/osmosisd/neutrond) client builds and runs on Windows machine (no-cgo)
  • Implement enhanced ics20 as a CosmWasm contract
  • Prepare ts-relayer for better usage in CI
  • Integrate CosmJS with Cosmology tools to greatly reduce build size and optimize performance
  • CosmWasm Academy: Prepare videos on multi-contract development and testing

Q3

  • Safely enable floating-point operations in CosmWasm contracts (lots of prep in Q2)
  • Ensure ts-relayer works between major testnets
  • Extend multi-test to model IBC contract workflows (high level APIs inspired by ts-relayer based tests)
  • Implement general purpose DeFi-enabling protocol enabling composition of token transfers and contract calls in simple, atomic manner, including:
    • ICS20 token transfer
    • Interchain Accounts (ICS27) functionality (over one shared channel)
    • Interchain Queries functionality (over same channel)
    • Fee handling similar to ICS-29
    • Multi-hop token routing (sending tokens Juno → Osmosis → Hub with one message on original sender)
  • Successful AwesomWasm conference and Hackathon (July 12-16) - Q2 is full of organizing work
  • Academy: Prepare videos on IBC contract development and testing
  • Improve major pain points in Sylvia framework, bringing it to beta

Q4

  • Release wasmd 1.0!
  • Wasmd server running on Windows machine (for local testing)
  • TS-Relayer is more robust for real-world usage
  • TS-Relayer support for enhanced fee/gas/ordering calculations and filtering
  • Support for gRPC in CosmJS (if gRPC supports all needs)
  • CosmJS support in React Native
  • Release Sylvia 1.0
  • Prepare videos on Sylvia contract development and testing

Use of Funds

Confio currently has a burn rate of circa 200k Euro/month with 90% or more going to salaries. All funds from this proposal will go to pay salaries of employees. Principally developers, but also marketing/community building work (for the conference) and internal support (HR / accounting) needed to keep the company running.

Our headcount has been reducing and as of the end of February, we will have 20 employees, including 10 developers and 1 product owner (one more if Ethan gets to code again and stop fundraising). One year ago, we had 26 employees with 14 developers and 2 product owners. With proper funding, we would like to return to that size, which will allow us to achieve this roadmap while performing a proper level of security and maintenance work.

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We are happy to support this initiative @ethanfrey

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Fully in support of this proposal. CosmWasm is essential not just to the Interchain, but specifically to the Hub via ICS chains as well.

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I wholeheartedly support this proposal - CosmWasm is a critical piece of the Cosmos stack. Easiest ever YES vote from me.

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Glad to see this coming together! If anyone has outstanding questions definitely weigh in before it goes on chain!
And for those that just want more info on this situation in general, as well as some insight into what confio has done for the ecosystem, continues to do, and wants to do going forward, tune in to our Twitter spaces with them on monday! link here - https://twitter.com/i/spaces/1YqKDoAVoQOxV?s=20

We’ll absolutely cover any community questions that arent already addressed by the time we fire up the spaces too! So feel free to DM me, or leave questions here or on twitter!

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In order to be able to continue our Public Good efforts as soon as possible and given the positive feedback from the community, we decided to change to a Community Spend proposal directly. We also had legal issues routing the payment through the Neutron Foundation and will organize the payment directly to multi-sig GmbH multisig account. The rest of the proposal remains fundamentally unchanged, modulo minor details, like the time period we will sell over in order to minimize price impact.

Given these changes, we will delay posting this on-chain until Wednesday, Feb 15 (which is still 2 weeks earlier than we would have posted a Community Spend proposal had we made a signalling proposal first). This time is to collect feedback from the community on the final draft.

We invite everyone to attend the AMA today at 20:00 UTC https://twitter.com/i/spaces/1YqKDoAVoQOxV?s=20 or our AMA with CryptoCito Wednesday at 11:00 UTC for any questions or comments on this proposal.

Read the updated proposal

6 Likes
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its a yes from citizen cosmos for 103

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NO! This is double spending. This is directly within the scope/mandate of ICF. From their website…

"About

As stewards of the interchain, we fund and advance the creation of an interoperable, sustainable, and community-owned decentralized ecosystem.

Ecosystem

Our core teams maintain the protocols and applications Cosmos Hub, Cosmos SDK, CosmWasm, CosmJS, IBC, and CometBFT. Learn about our ecosystem and the Cosmos tech stack."

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@PaulEdward You’re mistaken; Confio haven’t received funding from ICF in nearly half a year - there is no ‘double spending’ since there hasn’t been any spending in a while.

1 Like