Signaling Proposal: Update Instructions for ATOM POL 3

Hub Proposals
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Summary

This is a signaling proposal that aims to update the instructions for the ATOM protocol owned liquidity (POL) that was deployed by Cosmos Hub in proposal 800. The liquidity is currently stewarded by the ATOM Accelerator DAO, which stewards it according to a clearly-defined set of instructions issued by Cosmos Hub governance.

Previously, Cosmos Hub governance passed proposal 823, which extended the ATOM Accelerator’s stewardship of this POL until March 1st, 2024. This proposal aims to extend the term of AA DAO’s stewardship by an additional six months, to September 1st, 2024.

Background

According to proposal 800, which originally deployed the ATOM POL, it was established that the ATOM Accelerator DAO would steward it until October 1st, 2023. To quote from the Cosmos Hub forum post that serves as the basis for prop 800,

“The ATOM Accelerator DAO members have agreed to steward the 450K ATOM liquidity position as described above until October 1st, 2023 at the latest. At that time, if Cosmos Hub has not passed a signaling proposal to establish a new solution for the liquidity position, then the ATOM Accelerator will begin the process of returning the funds to the Cosmos Hub community pool.”

Subsequently, proposal 823 extended the duration of the POL position to allow for adequate time for an alternative manner of stewarding the position to be implemented. Timewave Labs has built a smart contract system called the Covenant system for this purpose.

Since the passage of proposal 823, the Covenant system contracts have been completed and audited, but the Cosmos Hub requires interchain account controllers in order to utilize them. These are not expected to be implemented until a subsequent Cosmos Hub upgrade sometime in Q2, 2024. Once this upgrade has been completed, the ATOM POL currently stewarded by the AA DAO can be transferred to the Covenant system (requiring a Cosmos Hub governance proposal). But for the time being, it would make sense for the AA DAO to continue stewarding the liquidity.

Justification and Details

This proposal aims to extend the term of AA DAO’s stewardship of the ATOM POL by six months.

Sometime within the next six months, Cosmos Hub governance may wish to instruct the AA DAO to transfer the ATOM POL it currently stewards to the Covenant system. But in the meantime, it makes the most sense for the AA DAO to continue stewarding the liquidity.

The members of the ATOM Accelerator DAO have agreed to continue stewarding the liquidity for an additional six months, until September 1st, 2024. This is likely the simplest and safest path forward for continued stewardship of this liquidity, as it would not involve creating a new multisig or moving the liquidity. Although 2 of the multisig signers, have left the AADAO, all have agreed to stay on the multisig for the prescribed 6 month period should this proposal pass.

Moreover, it makes sense for the AA DAO to continue to steward the funds because they are trusted and respected by the Cosmos community, and have thus far proven to be well-suited for this responsibility.

New instructions

This current proposal aims to update the AA DAO’s instruction to the following:

Continue to hold the 450K ATOM, in the form of LP tokens for the stATOM/ATOM pool on Astroport Neutron. Do nothing with these funds, unless instructed to via a Cosmos Hub signaling proposal.

If by September 1st, 2024 no further instructions regarding the ATOM POL have been received from Cosmos Hub, then begin the process of returning the entirety of the funds to the Cosmos Hub community pool in the form of ATOM.

If at any time Cosmos Hub issues any new instructions concerning the ATOM POL, then follow those instructions.

Final thoughts

In summary, this proposal simply aims to maintain the status quo regarding the Cosmos Hub’s 450K ATOM liquidity position on Astroport Neutron, currently stewarded by the ATOM Accelerator DAO.

Instead of the complicated process of establishing a new multisig to steward the liquidity, it makes the most sense for the AA DAO to continue its stewardship for an additional six months, until September 1st, 2024.

Sometime before that date, it is expected that a proposal to begin the process of transferring the ATOM POL from the AA DAO to the Covenant system will be posted to the Cosmos Hub governance forum. But in the meantime, this current proposal simply aims to instruct the AA DAO to keep stewarding the liquidity.

2 Likes
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Just FYI, the link onchain to the forum post for this prop is broken: Leap Cosmos Dashboard

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Hmm weird. The link works fine on Mintscan

Must be a formatting thing that doesn’t translate well across dashboards :thinking:

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Could you provide the exact number of AADAO members currently? The previous explanation was ambiguous regarding the current membership.

Moreover, it seems the initial objectives have not been met as planned. Considering this, is it possible to revert the Atom to the community pool and conduct a reassessment in September? Should the conditions be favorable at that point, the Atom could then be redistributed. Opting for this approach appears to minimize risk and simplify the process. The best stewards of community assets are the community itself.

When does the AADAO plan on replacing the 2 vacated positions?

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Note: To give more context to this discussion, readers might also want to take a detour on the current debate going on around “Atom Wars” for another interesting talk about Protocol owned Liquidity (PoL).

Nevertheless, both this and Covenants are PoL systems that are not functioning at this point in time, which means that an extension of the current AA DAO’s mandate is definitely a reasonable solution until we have more alternatives to discuss. Six months also seems like a good compromise to us.
We will vote YES to this proposal.

pro-delegators-sign

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To facilitate the integration of the Covenant system

— a smart contract solution for enhanced liquidity management — into the Cosmos Hub ecosystem during the planned upgrade in Q2, 2024.

The ATOM Accelerator DAO proposes extending its stewardship over the ATOM Protocol-Owned Liquidity (ATOM POL) by six months, concluding on

September 1st, 2024.

  1. Managing liquidity efficiently.
  2. Minimizing disruption caused by the transition.
  3. Fostering trust among stakeholders.

Previous Stages of ATOM POL Management:
Initially set until October 1st, 2023.
Subsequently extended to

March 1st, 2024,
via Proposal 823. If no further instructions regarding ATOM POL are received by

September 1st, 2024
the ATOM Accelerator DAO will revert the assets back to the Cosmos Hub community pool.
Benefits Anticipation of the requirement for Interchain Account Controllers after the Cosmos Hub upgrade.

Avoidance of complexities associated with creating a new multi-signature wallet.

Seamless incorporation of the Covenant system once ready.