The ATOM Wars: a new governance platform for liquidity injections

Thanks for commenting.

We understand your concern. The exclusivity of stATOM is only temporal since it will allow to launch ATOM Wars without much delay. We aim to allow other LSM TokenizeDelegations in the future.

Many thanks for all your thoughts and improvement propositions!! We will discuss them carefully.

We acknowledge the potential risk associated with a single entity gaining significant control over vATOMs. However, in our design, the entire system can be updated or completely removed through standard governance procedures. Thus, we consider the risk to be acceptable and manageable.

We understand your concern. We have chosen stATOMs for faster implementation and system testing, as integrating LSM shares would necessitate a more extended timeframe.

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One final question remains regarding the design: could you elucidate the reasons behind discarding the option to use AATs? As far as I know, AAT’s design was precisely tailored for this liquidity allocation purpose.

Additionally, on-chain governance has already endorsed AAT modules’ development via Prop #864. I’m curious why you didn’t opt to collaborate and bring evolution to this Hub infrastructure. In our original design, we intended to leverage AATs instead of deploying a Neutron smart contract. This point stands out as the primary difference between our two designs for PoL systems. I’m interested in hearing more about the considerations that led to this decision.

Thank you,
pro-delegators-sign

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In general I believe this idea is worth exploring!

But I have a couple of thoughts on the implementation:

  1. What mechanism can be put in place to make sure that regular community funds are not used for POL after implementing this?
    Why this is important: If POL is spent via gov props from the general community pool in parallel to the POL from the POL basket, there may not be enough community funds left to fund core teams such as Informal or initiatives like AADAO. Ideally social consensus alone for not using the general funds for POL is not enough. After talking to Noam, it seems AAT would fix this.

  2. Project vetting
    While in theory rational votes would not vote for any liquidity proposal that isn’t “worth it” for the Hub, there are two flaws in this logic:
    1 : Users do not seem to understand the ins and outs of Impermanent loss & liquidity provision, as shown bei users getting rekt by IL in the quasar TIA vaults last month.
    2 : users may vote based on bids rather than based on the risk/return for the Cosmos Hub
    Possible solution: Have a committee vetting projects and potentially only allow Atom/Atom derivative LPs

  1. Bids
    Adding to the previous point regarding bids, I wonder if the bids strategy is the right way to go. Another risk that Bids bring:
    Projects are incentivized to spend an amount up to the cost of liquidity to bribe voters. If two projects go H2H for e.g. the highest tranche, and both spend close to the cost of liquidity, the project that does not get the highest tranche will actually overspend on liquidity it receives.

  2. Short Cycles don’t align with slow Hub governance
    Given that Cosmos Hub governance decisions can take up to 3-4 weeks (incl forum post), 1 month cycles seem a very short time to react to anything where governance has to intervene. I believe doing 2 month cycles makes more sense in that regard

  3. Project not returning its liquidity
    Can this not be mitigated by deploying funds via multisig (or ideally timewave or AAT)? Seems unnecessary risk to be dependent on the project team to return its liquidity

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A lot of questions, but first and foremost. Why only stAtom? I see it is mentioned that it will not be the case in the next upgrades which might come in years to come. but by then we are making other LSPs obsolete. This should not be happening.

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I just published a new topic exploring potential risks and limitations in the original iteration propose. It also suggests a few adjustments that could improve the value prop of Atom Wars here.

I’d love to hear the feedbacks of the community on it!

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I didn’t say it compromised security for the hub… I said “This seems like you’re prioritising speed to market over the security of users’s funds.”. Meaning it compromises security for the end users and the people competing in atom wars, as they are now forced to take exposure to a single LS provider which they can’t choose. That’s not cool. Either you allow users to choose which LS provider they are OK having exposure to, or you don’t use LS providers (and use LSM), or you allow both. Forcing users to take exposure to Stride is not a fair ask.

Not really if you force said competitors to first of all take exposure in their competitors LSTs…

Explain to me the added complexity of allowing other LST providers’s tokens? Seems like a simple whitelisting process to me.

Sure, sounds as complex as launching straight up with LSM shares. Easy to solve by allowing any LS tokens imo.

Also still awaiting your answer on this:

Thanks again

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Thanks for your sharing your ideas!

A design in which ATOM holders’ decision is entirely based on the risk/return for the Cosmos Hub is what we have now. ATOM Wars aim to encourage ATOM holders to participate in funding decisions in exchange for a tribute for supporting a particular project. Projects must compete for such support. However, holders should also evaluate projects based on quality and their impact on the Hub. There’s a long-term incentive tied to this: if supporters choose low-quality projects and funds are lost, future funding for ATOM Wars may decrease, impacting supporters’ future profits. Since the community pool bears the primary cost of lost funds, not individual supporters, @JohnMontagu has suggested additional measures to better align these incentives.

Bid payments are conditional on winning. Hence, the loser project in your example will not pay anything.

This is a flexible parameter that can be easily adjusted. We’re eager to hear what the community thinks about it. Thanks for your feedback.

Yes, this is a risk that we want to mitigate. The options you mentioned could be helpful in addressing it.

Hey @Thyborg,

I know you guys are gathering the feedback and drafting a final version of this prop. I request another round of debate on the final draft rather than posting it directly on-chain.

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Yes, that’s the plan

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Landslide would pay for ATOM liquidity and security.

Landslide is the IBC connection to Avalanche, and our protocol is looking to more closely align itself with the Hub.

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This is very interesting to learn from the demand side of the equation. We would be pleased to hear more details and/or potential suggestions you think could help the final product to better suit your needs (if any).

Landslide seems like an interesting project with great potential for Hub alignment indeed. On a more personal note, we still have to conduct our due diligence and therefore we would like to ask if you would be opened to share 30m of your time with us to discuss your project’s vision and strategy. Feel free to send us a message at contact@pro-delegators.com.

Thank you for your time!
pro-delegators-sign

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The Cosmos Hub is an ever-evolving ecosystem where the community works together to strengthen governance of ATOM.

Which will help improve long-term profitability and promote the growth.

It show the community’s commitment to the the Cosmos Hub by.

:mag: Establishing a clear and transparent process for the creation and management of dedicated governances for each ICS agreement.
:shield: Ensuring that the governance structure is designed to be resilient and adaptable to changing market conditions and regulatory requirements.
:arrows_counterclockwise: Leveraging the expertise and framework of the AADAO (Atom Accelerator DAO) to create a sub-DAO specifically designed to manage the governance of ICS agreements.
:memo: Ensuring that the governance structure is designed to be compliant with regulatory requirements, such as those related to transparency, accountability, and conflict of interest.
:mag: Exploring other approaches and frameworks, such as creating dedicated governances for each ICS agreement, with a focus on regular review processes and adaptation.
:lock: This governance structure could help to ensure the resilience and sustainability of shared security models like ICS, while also providing a level of institutional expertise and credibility that would be attractive to Big Three index fund managers and regulatory bodies like the SEC. Additionally, this structure could be beneficial for validators, atom holders, and stakers in the Cosmos ecosystem, as it would provide a clear and transparent framework for managing the governance of ICS agreements.