I am Philipp from ERIS Protocol, a LST provider on Terra, Migaloo, Kujira, Terra Classic, Juno and soon Injective. We do closely watch also Cosmos Hub and have an expansion plan in place to also support liquid staking on the Hub through ERIS. We currently have ~ 2.5 M $ TVL and have received a sizeable grant from the terra community.
The prop should be split into two distinctive proposals.
- Add the LSM for the ability to convert staked ATOM to LSM shares
- Add the regulation
These are distinct topics that also should be decided distinctively and not trying to get one through by adding the other and vice versa.
The regulation favors incumbent LST providers and regulates the free DeFi market based on bad LST models!
Our governance model is completely different to other LSTs, only allowing users locking the LST itself in a curve style gauge to leverage their voting power. In this way users decide both the delegations and governance and still have control over the network. As they are locking e.g. ampATOM or ATOM-ampATOM LP for Cosmos Hub they have a vested interest into the health of the system and the mentioned risks are mitigated.
Users and validators with staked interests in ATOM will still own their delegation and governance power!
https:// docs. erisprotocol. com/products/amp-governance/
Governance risk: Using Amp Governance, users and the open market decides on the governance.
Validator corruption risk: Using Amp Governance, Validators wanting to receive delegations will have a curve style bidding war in locking capital to receive delegations. This leads to exactly the opposite of validator corruption. You will enable validators to have a strong vested interest in the chain.
Vote power concentration risk: Using Amp Governance, users and the open market decides on the delegations.
Cascading liquidations risk: This requires multiple products / apps to be deployed to keep stability and is our main goal as LST provider. Our just launched Arb Vault on Terra showcases how we hold the peg between LUNA-LSTs which can also be deployed for other LST pairs on other chains. https:// docs. erisprotocol. com/products/arb-vault/
In total this is the ecosystem we can provide for stabilization and fair + market based approach.
https:// docs. erisprotocol. com/vision/#stable-lsd-economy
We do not have a token and are self & community funded to be able to provide the best value to the cosmos ecosystem instead of extracting value and maximizing profits like some of our competitors.
I strongly call upon the Cosmos Hub community to reconsider introducing regulation based on bad protocols / actors and also not favoring incumbent LST providers.
So my vote is clear:
- Add the LSM: YES
- Introduce regulation: NO / NWV
- Both in a single proposal: NO / NWV
If a regulation is followed up on, it should be applied to specific providers and not being generalized.