[Proposal #794] [VOTE ONCHAIN] Stride to join ATOM Economic Zone and adopt ICS

*****June 13th update: this proposal achieved social consensus via a successful signaling proposal , on May 11th. On June 13th, two executable proposals went live, which will implement this proposal - an ICS on-boarding proposal and a liquidity provision proposal . ***** Summary This is a signaling proposal for the Stride blockchain to join the ATOM Economic Zone and adopt interchain security (ICS) from Cosmos Hub. Under this proposal, Stride would share its various revenues with Cosmos Hub as follows: • 15% of liquid staking rewards • 15% of STRD inflationary staking rewards • 15% of maximal extractible value (MEV) revenue • 15% of transaction fees In return, Cosmos Hub would share its economic security with Stride. Also, since Stride would be part of the ATOM Economic Zone, Cosmos Hub would share 450,000 ATOM, to be provided to an stATOM/ATOM liquidity pool on Astroport’s Neutron deployment. These funds would be used to facilitate trading between stATOM and ATOM, would not be spent in any way, would remain the property of Cosmos Hub, and would always remain under the control of Cosmos Hub. In order to be implemented, this proposal must be affirmed by both…

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I think there’s huge mutual benefit for stride and atom here. Stride has proven itself to be one of the most successful ibc chains in cosmos and 15% revenue share seems reasonable.

Overall, I’m 100% for this proposal. I’d like to get an idea of when transaction fees will be turned on. It should be something the Hub holds Stride’s governance accountable to meet.

I saw “three months” referenced in the proposal, but its not clear that’s when tx fees (and MEV revenue) fee switch will be turned on.

Great proposal and will support

I think it’s safe to assume I can speak for everyone here. Make it 20% and you have yourselves a deal.

Stride: Under this proposal, Stride would share its various revenues with Cosmos Hub as follows: • 15% of liquid staking rewards • 15% of STRD inflationary staking rewards • 15% of maximal extractible value (MEV) revenue • 15% of transaction fees Thanks for this draft proposal @Stride , just a few questions to further clarify this proposal: • Neutron will be sharing 25% of their transaction fees and MEV revenue, how do you justify offering 15%? • The purpose of token inflation is to cause dilution to token holders so that they will be encouraged to stake to secure the network and avoid inflation while earning staking rewards. Inflation is variable so if security as measured by value staked is decreasing then inflation will raise to incentivize more staking. Now, in the case of Stride, like Neutron, the security would be provided by the Cosmos Hub, this is why inflation will be set to 0 in Neutron and there are no validators in Neutron, but the ‘Voting Vaults’ so token holders will get voting power without having to stake with validators. So, how does Stride justify keeping a high inflation since inflation will no longer be needed if security is provided…

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These funds would be used to facilitate trading between stATOM and ATOM, would not be spent in any way, would remain the property of Cosmos Hub, and would always remain under the control of Cosmos Hub. Liquidity pool are extremely risky. How can it still be considered property of Cosmos Hub if anyone can empty it ? Will those 450K ATOM be matched with same amount of $stATOM to keep a balance ? For Neutron, this stATOM trading liquidity would likely increase trading volume, which would generate transaction fees and create MEV revenue. Also, this liquidity may help attract more app developers to Neutron. Could someone rephrase or make clearer this point? Maybe I am missing something but I can’t make the connection between Neutron and Cosmos/Stride . A governor does everything a validator does, except validate transactions. STRD holders would be able to stake with a governor of their choosing. By doing so, STRD stakers would be compensated with inflationary STRD rewards and Stride protocol revenue, as they are now. Following your blog post in feb 2023, it seemed that the generated fees with liquid staking were not yet going to STRD stakers due to a needed…

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Maybe better not to assume to speak for everyone here…
Lot of questions to clear up first

Pookybear: Lot of questions to clear up first For example: • According to the STRD tokenomics, STRD staking rewards (I assume these are the inflationary staking rewards) are reduced by 50% every year on September 4th. That halvening schedule would remain in place, but in addition there would be a special 50% staking reward reduction when ICS was adopted. How does this effect the STRD staking rewards in the offer? Will those be: 15% x0.5x0.5= 3.75% staking rewards in couple of months just after joining? is it supposed to go to 0% because of ICS? In that case the 15% of STRD inflationary staking rewards in the current offer are worth very little. • “While the Stride blockchain does not currently collect transaction fees or MEV revenue, these will both be significant sources of revenue within roughly three months.” Can you give some estimates of the significant source of revenue so that we can value the 15% offer better? Does SRTD intent to implement the collection of fees before or after joining? What risk is there if it fails, is it voted already YES by the SRTD community or can it also be voted NO? Will ICS still be implemented in that "NO"case when there…

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Excited to see this proposal for Stride to hopefully become a fellow partner chain soon! Think I may be able to add some context on a few questions raised by the community, but of course I’m not part of Stride and therefore will speak under their control and possible correction Cosmic_Validator: Quoting from Neutron tokenomics: ‘Contrary to most Cosmos blockchain, obtaining voting power on Neutron does not require delegating tokens to a validator. Instead, users deposit NTRN (or a tokenized representation of NTRN) to a “Voting Vault,” a specific smart-contract designed to calculate voting power.’ There a multiple ways to implement governance on a consumer chain. Neutron’s approach is not “standard” for a Cosmos SDK chain because it moves governance to the smart-contract layer and uses the admin module to grant the DAO the power to make changes to the network. Alternatives exists, including using the SDK’s democracy module. I believe Stride is going for the SDK approach, hence the existence of “governors” which can be seen as representatives of their delegators. The proposal mentions that governors would “do everything a validator does except producing…

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I support most of the part but why the liquidity pool only on Astroport’s Neutron?
we saw UST event on Osmosis.
why do we need to use only one app?
we shouldn’t use only Astroport, more like Osmosis,Wynd Crescent etc

Cause Neutron will use RS, so it makes sense to use a dex which is also secured by the HUB. This is literally 1 pool…

I support the proposal, this is beneficial for the HUB and STRD.

Excellent sir! Thanks No live blockchain has ever adopted interchain security. Stride blockchain will potentially be the first. How can Stride ever be the first one live since it is relying on Neutron’s Astroport ? @lexa did a wonderful essay for Neutron with ‘detailed’ estimated costs etc… I deeply think need that kind of accessment for Stride. • With Neutron we 've seen that’s it is going to be pretty hard to match validators costs and the essay takes into account the appreciation of generated $ATOM rewards to validators to compensation the lack of revenue from Neutron which is IMO wrong and should not be considered at all in the math. • There are also hints about the opt-out which has also high risks of making small VP validators’ life even more difficult since they would not be part of ICS and the diversified tokens it brings. Delegators would only focus on validators taking part of ICS. Once again that’s aknowledging the bull bias in the essay that does ‘only’ consider the best case scenario if $ATOM goes up to $13.xx ish. Numbers do not add up in my mind as of right now for Stride, we lack clear view of everything and how a clear estimate of the…

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And you do the exact opposite with estimating the worst case scenario before we even know how it will play out.

I don’t get this type of argumentation at all. So what exactly is your best case scenario if the proposal doesn’t pass? Hey the validators can continue to make money, but the chain has no real use case and will die slowly? Damn what a great deal! Absolutely no one benefits

On the other hand you actually get a sustainable long term plan with RS.

Can people just think about what happens if the proposals don’t pass?

1. Atom will dump, hey the MC and the token price will go down ->you make less money
2. ATOM split, it is clear that we should split the community if RS doesn’t pass, people who want the classic ATOM can go with ATOM classic, people who want innovation etc. go with the new ATOM. The Ethereum split has shown which direction is the better one, the classic chain will become irrelevant and the classic guys won’t make any money
3. If ATOM splits, the entire ecosystem will be hurt, your heavy bags in other chains will get hurt aswell.

There is absolutely no scenario where you win if the proposal doesn’t pass.

Hey listen, I am trying to understand and get a bigger detailed view of what’s going on.

Once again do not take any assumptions/bold statements as judgmental, they are here to be challenged so I can better apprehend my future vote via the governance

Let me know if I should put a trigger warning on every post I do.

Thing is we are here to discuss and personally, to learn.
I am all in for Cosmos ecosystem to strive and be sustainable and I strongly believe in it’s future.

Just as I am trying to understand how this would be beneficial and trying to understand all the risk involved either is passes or not, you are coming up by saying there are higher risks if this does not passes.

I hardly see how this discussion is mutually beneficial and help people to vote in the maximum understanding of what is at stake.

Is it a reason not to try doing some risk assessment and have some form of criticial thinking when such an impactful proposal will be voted on the governance?

So please if you have any answers to my questions, feel free to share them.

Let me know if I should put a trigger warning on every post I do.

Don’t worry, I just write in a specific way, nothing personal or with an ill intention.

Thing is we are here to discuss and personally, to learn.
I am all in for Cosmos ecosystem to strive and be sustainable and I strongly believe in it’s future.
Just as I am trying to understand how this would be beneficial and trying to understand all the risk involved either is passes or not, you are coming up by saying there are higher risks if this does not passes.
I hardly see how this discussion is mutually beneficial and help people to vote in the maximum understanding of what is at stake.

Yes, and I want to know what is your best case scenario here if it doesn’t pass. How do you want to generate value for the HUB, how will it affect the price of ATOM etc. etc.

To give you a different example:
It’s like a discussion if we should use a Tesla car and you point out all the arguments why we shouldn’t use a Tesla car, but the alternative to not using the Tesla car is walking

I am totally in favor of STRIDE benefiting from ATOM’s economic security, and I agree with what has been said about the mutual benefits for ATOM and STRIDE with this relationship. The amounts seem reasonable to me and we must not forget that in any case, a good number of STRIDE holders are also ATOM holders.

On the other hand, I wonder about the use of the hub’s background to consolidate pools on DEXs such as astroport, osmosis or others. We are in the early stages of proposals for the use of ICS and one can easily imagine that asking community fund will become the norm if we start doing so.

Is it really good from a security point of view to have big amount of community pool ATOMs on DEX and do we have enough to consolidate pools everywhere in the futur? I’m asking but in the same time i’m not totally against the idea …

ephemeral_25:

No live blockchain has ever adopted interchain security. Stride blockchain will potentially be the first.

How can Stride ever be the first one live since it is relying on Neutron’s Astroport ?

Stride is a pre-existing (live) blockchain that’s migrating from sovereign to consumer - definitely the first time that’s happening afaik! Neutron isn’t live yet.

The devil in the details, you are right. The first (already) LIVE blockchain to adopt ICS.

I should read twice

Edit: Making a token edit to this post, hoping it becomes visible.

In roughly three months, transaction fees and MEV capture should both be turned on.

Currently, transaction fees are set to zero for the sake of user experience. Since users only come to Stride blockchain for liquid staking, it would create friction if each user had to acquire a small amount of STRD. In roughly three months, users should be able to pay their transaction fee using any currency, like on Osmosis. Once this is possible, the average transaction fee will target five cents, which is much higher than most Cosmos chains.

With regard to MEV capture, Stride contributors are working with Skip to build an auction module, which would allow for instant unbonding of stTokens. Due to market forces, the instant unbonding fee would converge to the slight negative premium of swapping an stToken to its unstaked version on a DEX.

Stride:

In return, Cosmos Hub would share its economic security with Stride. Also, since Stride would be part of the ATOM Economic Zone, Cosmos Hub would share 450,000 ATOM, to be provided to an stATOM/ATOM liquidity pool on Astroport’s Neutron deployment. These funds would be used to facilitate trading between stATOM and ATOM, would not be spent in any way, would remain the property of Cosmos Hub, and would always remain under the control of Cosmos Hub.

Will the Hub be earning rewards for this LP position? My assumption would be yes, because we are still taking impermanent loss risk.

why is your post flagged… lol

Thank you for the proposal, first and foremost.

Due to the imminent RISKS that come from LSD’s, despite the admittedly enticing potential economic gains, this proposal is a NWV for us.

Look… STRD #'s look great, especially within it’s existing time frame, however LSD’s during this chapter of the crypto game are still a GREAT potential risk that specifically leaves our minnows/shrimps/smaller players vulnerable. Don’t tell me yall don’t care about the minority now We are here for everyone, ESPECIALLY for the ones with quieter voices. Every Cosmonaut deserves to be heard in the Cosmos Hub.

NWV specifically to protect the MINORITY INTEREST from major players who hold greater economic power to potentially perform a hostile takeover. Not saying STRD would, but it could be an easy feat, no? For folks to exchange their ATOM for stATOM allows for the LS Provider to gain extreme leverage via voting power.

To answer each of your points: 1 - Stride and Neutron are different blockchains, so they have each proposed a different way to share their revenues with Cosmos Hub. Stride is sharing revenue from four sources, while Neutron is only sharing from two sources. Also, Stride is a live chain, has achieved product market fit, and is already one of the top Cosmos chains in terms of revenue generation; whereas Neutron has not yet launched. In addition, Stride is offering to share inflationary STRD rewards, while Neutron is not. Most importantly, Stride is an appchain, while Neutron is not. That means Stride can share revenue from its core app, that being the Stride liquid staking protocol. 2 - Again, Stride and Neutron are different chains. If Stride were launching with ICS, perhaps its proposal would look more like Neutron’s, and vice versa. When considering what to do about inflationary STRD staking rewards, the interests of many parties had to be considered: namely, Stride validators, STRD stakers, Cosmos Hub validators, and ATOM stakers. Stride’s proposal takes the path of compromise. Inflationary STRD staking rewards will remain, but they will be subject to a special 50%…

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I see @Spaydh has already done a great job addressing some of your points. I’ll answer the others.

Stride’s proposal is to “share 15% of each following category with the Cosmos Hub: liquid staking rewards, inflationary STRD staking rewards, transaction fees, and MEV revenue.”

The first category would be shared in the form of various stTokens, as STRD stakers receive. The amount corresponds to Stride’s TVL, and the blended staking reward rate thereof. The second category would be in STRD. And then the third and fourth categories would be in various tokens - once those revenue sources come online, which will be in roughly three months.

There will still be inflationary STRD staking rewards after Stride potentially adopts ICS, only they will be subject to a special 50% reduction. This is considered a compromise, which takes into account the several parties involved and their diverging interests.

This prop can only pass if Stride and Cosmos Hub governance both approve it.

The Stride blockchain is already live, and is one of the top revenue generating chains in the Cosmos. So Stride will be able to share significant revenues with the Cosmos Hub on day one. Over the long term, with the help of Cosmos Hub’s security and liquidity, Stride has the potential to be an increasingly useful and popular blockchain.

A “hostile takeover” scenario using liquid staked tokens is highly unlikely, because many people are knowledgeable about this risk and are taking steps to remove it.

Currently, the Stride blockchain controls just 0.68% of staked ATOM. While this is a far cry from the 1/3 threshold, Cosmos Hub governance is already considering security precautions to prevent that threshold from being crossed. Zaki’s LSM proposal would limit the amount of liquid staked ATOM at 25% of total staked ATOM.

And even putting the liquid staking cap aside, the Stride blockchain is governed by STRD stakers, and, for such a young blockchain, the STRD supply is already well distributed, and is getting better distributed all the time. One of the main goals of the STRD tokenomics is to effectively distribute the STRD supply, which contributes to the decentralization of the Stride blockchain. For example, the vast majority of the STRD currently in circulation has been airdropped to ATOM stakers and given to ATOM liquid providers.

With the Cosmos Hub working to safely regulate liquid staking and the STRD token supply already fairly well distributed, a hostile takeover scenario is highly unlikely.

I appreciated the answer

Regarding the revenu split, do we have current monthly numbers for all 4 channels of income (like Jan, Feb, March 2023)?
Perhaps if we have a deeper history, we could even identify a trends that’ll confort delegators in their vote.

@Cosmic_Validator and @Spaydh also had an interesting conversation about the opt-out.
Is the idea to simply protect the bottom 5%VP to slash/jail on consumer chains?
Does this still involve bottom 5% validators to secure blocks for the consumer chains?

My main concern is those small validators not able to cover the extra infra costs securing consumer chains.

NWV specifically to protect the MINORITY INTEREST from major players who hold greater economic power to potentially perform a hostile takeover.

Stride is adding a module to allow stATOM holders to vote - STRD stakers don’t get to vote on behalf of stATOM minters.

More importantly, liquid staking isn’t going anywhere, even if this proposal fails. Making Stride an ICS chain makes Stride more accountable to the Hub, by leveraging the Hub’s valset. Doesn’t this accountability to the Hub make liquid staking safer? I don’t see how a NWV protects minority interests.

A recent proposal introduced the idea of capping LSTs globally to 25% of stake ([Signaling Proposal][Draft]Add Liquid Staking Module to the Cosmos Hub - #38 by zaki_iqlusion)

The point of the soft-opt out is that the bottom x% validators cannot be punished for not running a node on the consumer chain, so they can choose to avoid any additional cost.

Ok that’s what I was understood from your earlier conversation.

For sure it’ll be beneficial but it’s not taking care of what I thought being the root problem.

I think I got all my answers I’ll just vote what the majority of ‘bottom’ validators vote since for me they are bubble of concentrated risks during the earlier implementation of ICS while we experiment and have a good production idea of what it involves and how it evolves.

Hey everyone! First post on the Hub forum, and long overdue I think! Seeing a lot of the comments on this prop, I just wanted to take some time to discuss liquid staking reward commissions, an aspect of Stride’s tokenomics I don’t think many in the Hub community quite understand yet (totally understandable, we can’t keep track of all 65+ connected chains). This is important to understand to fully grasp the insanely lucrative value of what Stride is proposing to give to ATOM holders in exchange for joining the Economic Zone. Stride levies a 10% tax on all staking rewards earned by its liquid staking derivatives. Here’s how this looks in practice: • Alice liquid stakes 10 ATOM with Stride, receiving stATOM in exchange • 90% of Staking rewards (less the validator commission) are compounded into the redemption value of Alice’s stATOM. • The remaining 10% of staking rewards are collected by Stride Now, here’s the cool part. Where do these 10% of Alice’s staking rewards go? Straight to STRD stakers. That’s right, 100% of the reward share allocated to Stride is distributed directly to STRD stakers. This is the case with every chain that Stride has onboarded, meaning that…

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PLEASE,DEPLOY ONLY ON ASTROPORT IS VERY RISKY.
WE GOTTA RETHINK.
WE SHOULD DIVERSIFY 450kATOM LP if it’s approved.

Thank you for explaining Makes much clearer. I think it is very good and important to thoroughly examen the mutual agreement by both parties and get everything not clear out of the way. Then when prop is accepted on both chains the cooperation and working together will be smooth and with much enthousiasm from both chains
To be clear => I am in favor of this proposal

Tessellated is supportive of this proposal. As a smaller validator, we’ll validate for Stride without the soft opt out

Stride: If this proposal is approved, the Cosmos Hub would share 450,000 ATOM with Stride, to be provided to an stATOM/ATOM liquidity pool on the Astroport DEX on Neutron. (See appendix for Astroport details.) This action would provide mutual benefits for all three potential founding members of the Economic Zone. why are we supporting a LSD provide and a certain dex? what about other LSD projects and other DEX which will join us later. Stride: The 450K ATOM would simply sit in a liquidity pool, facilitating trading between stATOM and ATOM. These funds would not be spent in any way, and they would always remain under the complete control of Cosmos Hub. And it bears noting that at the current Cosmos Hub community pool tax rate, 450K ATOM represents just five weeks of tax revenue. Some people are already trying to limit the liquid staking and we as a community is decreasing the share. Stride: Under this proposal, Stride would share its various revenues with Cosmos Hub as follows: • 15% of liquid staking rewards • 15% of STRD inflationary staking rewards • 15% of maximal extractible value (MEV) revenue • 15% of transaction fees…

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Fully support this proposal and direction for the hub!!

Sometimes things are so carefully crafted by default that they don’t need much things to say about them but a simple YES.
Very good job here adjusting modals to strike the most profitable balance for both parties and congratulations to those who participated in weighting the parameters.

Good proposal, all information is clear. Thanks.

This is a great proposal . Clearly aligns the ATOM token holders with the Stride blockchain with a generous offering. Really admire the commitment of the Stride team to move with great pace to join the Hub’s security and will solidify Stride as the premier liquid staking protocol of the Cosmos.

Wanted to raise a query about the use of liquidity in two parts. Firstly, why is the liquidity being used on Astroport alone? This proposal is between Stride and ATOM, with Astroport seemingly only coming into this as they are deploying contracts on Neutron. Currently, ATOM, stATOM and STRD are not listed on Astroport despite the availability of the IBC connection. Osmosis is also planning on deploying Cosmoswap, our cross-chain liquidity solution, to Neutron. If the benefit to Stride is that the quantity of stATOM increases, and the benefit to both is the ease of access to these liquidity pools then surely it makes more sense to spread this liquidity between liquidity locations in order to achieve both breadth and suitably deep cover. This would also benefit Stride as the incentivisation of the existing stATOM/ATOM pools could potentially reduce, allowing them to be redirected to more liquid staking derivatives as more chains are onboarded - which in turn would result in higher revenue share with ATOM stakers from this agreement. Secondly, just wondering why there is an automatic sunset clause in there rather than a minimum guarantee. The ATOM Accelerator DAO members…

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Keep Liquid Staking ENTIRELY OFF the original vision of keeping the Cosmos Hub MINIMAL

These LSD’ / LSM products can fully thrive outside $ATOM.

The security risks are still too significant at this stage. Hostile takeovers being “highly unlikely” inject the need for trust, when the first HUB, let alone the whole eco, is pushing for a TRUSTLESS system. Thankful it’s kept at 25%, the founder, Jae Kwon, initially proposed as a decent hard cap #.

Appreciate the response @JohnGalt @aidan

The thing is, this does keep liquid staking off the Hub. The code lives on Stride, so it can’t interfere with Hub block production.

I disagree that liquid staking is bad, but let’s focus on a simpler point - liquid staking is unavoidable. It is currently offered by centralized exchanges, chains that are not accountable to the hub (that don’t use ICS), and (hopefully soon) chains that do use ICS. Even if you’re not a fan of liquid staking, wouldn’t a chain using ICS for liquid staking be the least-bad option, in your framework?

It appears to me that Cosmos Hub wants to deploy liquidity from its community pool on chains and DEXes within the ATOM Economic Zone. If a chain could get liquidity from Cosmos Hub without joining the AEZ, then what would be the point of having an Economic Zone at all? Look at it this way: would the Osmosis community incentivize an OSMO/USDC pool on Kujira? If the Osmosis community did this, it would certainly increase the ease of access to OSMO, and increase its breadth and coverage - but I have a feeling the Osmosis community would never do this. By putting all the 450K liquidity on Astroport Neutron, Neutron gets more tx fees and more MEV revenue. Also, this liquidity may encourage developers to start building on Neutron, as their apps can have synchronous compossibility with the liquidity. Moreover, I don’t understand why Osmosis would want more stATOM liquidity. There’s already over $20M in the Osmosis stATOM pool. Perhaps if the Osmosis community wants greater depth in its stATOM pool, they could contribute OSMO incentives. Currently, the pool receives no OSMO incentives, despite being the second largest pool on Osmosis. Regarding your second point, in my opinion…

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what benefit does ATOM get by giving away its liquidity to Stride to put in an LP? are all LP rewards distributed back to ATOM delegators? do delegators get a substantial Astroport air drop? Why would ATOM trust Astroport DAO to act in ATOM’s best interest?

stride LSD redemption rate perpetually increases, which means that to maintain stride LSD LPs: more and more native atom must be locked up for LSDs to be liquid. I dont understand the upside for ATOM to take on so much risk given LSD’s lack of demand.

I agree on your second point! This is why I was wondering why the clause was so restrictive with an end date/action required rather than just setting a new status quo which would require a further proposal to change.

As to the first, there is currently that liquidity because Stride is renting it. My concern is that with Stride having this liquidity at their disposal they will cease renting at all, potentially causing issues for stATOM integrations on Osmosis and elsewhere. There appears to have been a pattern of Stride incentivising stAsset pools exclusively on the home chains recently with Luna, Inj, Evmos POL and now potentially restricting this to Atom consumer chains alone if rental ceases and Astroport gets exclusive access to this liquidity.

It also seems like the main meat of this deal is the exchange of 15% of revenue etc for increased security. By itself, I question if this is really worth it to Stride since the vast majority of their inflation is not for security so the savings are far lower than the costs. However, the additional stATOM part of this proposal seems to be designed to mostly benefit Astroport rather than Stride or Atom.

common_spelling: what benefit does ATOM get by giving away its liquidity to Stride to put in an LP? Neutron, Stride, and the Hub all benefit. Neutron and Stride benefit through increased stATOM activity (activities like lending/borrowing), the Hub benefits directly because Neutron and Stride are paying the Hub, and indirectly because ATOM is used in defi. ATOM delegators already got a large Stride airdrop, and will soon get a large Neutron airdrop. common_spelling: Why would ATOM trust Astroport DAO to act in ATOM’s best interest? The ATOM is owned by the Hub, not Astroport DAO. The ATOM Accelerator multisig would be used for custody at first (already trusted by the Hub to custody funds), but a smart contract is being worked on to further decentralize. https://twitter.com/ATOMAccelerator/status/1648703182586118144 common_spelling: stride LSD redemption rate perpetually increases, which means that to maintain stride LSD LPs: more and more native atom must be locked up for LSDs to be liquid Astroport’s metastable pool will solve this ARC-56: Fund Bounty to Finalize Metastable Pool Type - ARC (Astroport Request for Comments) -…

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As to the first, there is currently that liquidity because Stride is renting it. My concern is that with Stride having this liquidity at their disposal they will cease renting at all, potentially causing issues for stATOM integrations on Osmosis and elsewhere. Isn’t it an Osmosis issue only? It makes more sense for the AEZ to have its own deep liquidity for Atom and Atom LSDs. There appears to have been a pattern of Stride incentivising stAsset pools exclusively on the home chains recently with Luna, Inj, Evmos POL and now potentially restricting this to Atom consumer chains alone if rental ceases and Astroport gets exclusive access to this liquidity. Still looks to be an issue only for Osmosis. Isn’t it beneficial for the Hub if consumer chains dispose of their own liquidity, increasing economic activity directly on the AEZ? It also seems like the main meat of this deal is the exchange of 15% of revenue etc for increased security. By itself, I question if this is really worth it to Stride since the vast majority of their inflation is not for security so the savings are far lower than the costs. You should’ve raised your concerns for Stride interests on…

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aidan:

Astroport’s metastable pool will solve this ARC-56: Fund Bounty to Finalize Metastable Pool Type - ARC (Astroport Request for Comments) - Astroport

So we are voting to commit community funds on a theoretical and untested LP type?

aidan:

There is demand for stATOM, for example, stATOM is one of the most popular collateral options on Mars and Umee.

stATOM is the least popular collateral option on Mars…and on Umee,1/28 of the stATOM supplied is utilized.

by what metric do you label stATOM popular?

will the LP rewards go to AA?

I still dont understand why Atom would risk >$4.5mm in funds for an LP that reduces ATOM volume and use in defi by outsourcing its txns to stride.

common_spelling:

stATOM is the least popular collateral option on Mars…and on Umee,1/28 of the stATOM supplied is utilized.

by what metric do you label stATOM popular?

It’s a popular collateral token. Behind USDC, stATOM is the second-most supplied collateral token on Umee. This is visible on-chain and on Umee’s frontend UX — The Cross Chain DeFi Hub.

There is little stATOM borrowed, but that doesn’t mean it’s not utilized - it’s being utilized as collateral. Leveraging stATOM is a common use case and works like this: one can supply stATOM, borrow USDC, buy and supply stATOM, and repeat. You can see the same behavior on Ethereum, Aave has 295m wstETH supplied (second most popular collateral after ETH), and 7m wstETH borrowed.

if the major selling point of LSDs is they can be used as collateral, Stride can only succeed to the extent that validators are willing steal from $ATOM.

$STRD’s success is not based on being innovative or having demand driven value, it’s based on the assumption that validators will vote to invent a market for LSDs with the LSM and 450k ATOM LP that doesn’t compensate the chain for the risk validators are forcing on it.

If ATOM is controlled so centrally that it jumps at a deal to provide a wrapped version of itself with >$45m of publicly funded liquidity with no compensation for the risk taken on by the chain, the hubs future looks bleak.

JohnnyWyles: Firstly, why is the liquidity being used on Astroport alone? This proposal is between Stride and ATOM, with Astroport seemingly only coming into this as they are deploying contracts on Neutron. Currently, ATOM, stATOM and STRD are not listed on Astroport despite the availability of the IBC connection. I think a discussion is also important regarding potential conflicts of interests: • Luke Saunders is the CTO of Delphi Digital, and he incubated projects like Astroport and Mars protocol on Terra and he is part of the reviewer committee for grants of the ATOM Accelerator DAO (AADAO) • The Stride proposal to onboard as a consumer chain suggests the AADAO as the team to manage the multisig for the 450k ATOM. Also, Stride received the largest grant so far from the AADAO. In addition, Astroport is mentioned in the Stride proposal • So, Delphi Digital/Astroport is involved in the AADAO, which gave the largest grant so far to Stride. And Stride, in the consumer chain proposal, are mentioning the AADAO for the multisig and Astroport for the 450k ATOM liquidity • The AADAO grant given to Stride is to develop a solution for deploying ATOM from the community pool…

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It looks like you are diverging from the main purpose here, which is to discuss wether this proposal benefits the AEZ or not.

The comittee of the AA DAO consists of 6 members, which I believe each have their own distinct opinion and act in the interests of the Cosmos Hub. We could consider a potential conflict of interest if the AA DAO was managed by Luke Saunders alone. This is not the case.

There is obviously a synergy between Neutron, Stride and Astroport. This cooperation is positionned to be the backbone of the AEZ as Astroport will host Neutron launch and be the main AMM on the AEZ. Unless someone has interests in other AMMs/DEXs, picking Astroport for this liquidity is an obvious choice.

Astroport was formally the largest DEX in the Cosmos, has battle-tested smart contracts, and highly experienced contributors. Seems like the perfect place for Cosmos Hub to provide liquidity. But the most important thing is, Astroport is the only confirmed DEX that will exist in the ATOM Economic Zone and be secured by interchain security.

As for the individual you mentioned, he is one of many ATOM Accelerator DAO members.

Finally, the grant you mentioned will benefit the Cosmos Hub, by allowing it to trustlessly deploy funds from its community pool. The tool being built can possibly be used to deploy funds to other DEXes as well.

The Cosmos is a small place, and people from different organizations often work together. Doesn’t mean there’s a massive conspiracy going on.

duality should be secured by the hub no ?

as Cosmic Validator pointed out, it seems like AA already made arrangements for the chain and any discussion is a formality that is largely ignored. stride was given a grant to facilitate taking funds from the ATOM community pool before it was even accepted. If stride cant thrive and establish its own demand, requiring a market to be created for it from ATOM, how will it ever be more than a liquidity parasite and centralization risk? The LSM also introduces regulatory risk as it makes a case for validators being broker-dealers, selling unregistered securities (illiquid derivative NFTs) to stride. Cosmic_Validator: • So, Delphi Digital/Astroport is involved in the AADAO, which gave the largest grant so far to Stride. And Stride, in the consumer chain proposal, are mentioning the AADAO for the multisig and Astroport for the 450k ATOM liquidity • The AADAO grant given to Stride is to develop a solution for deploying ATOM from the community pool into ATOM/stATOM LP pools on Astroport built on Neutron • Overall it seems that Astroport is benefitting a lot from these arrangements, and the potential conflict of interests seems to be Astroport having influence at the…

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Stride: It’s 106 miles to Chicago, we’ve got a full tank of gas, half a pack of cigarettes, it is dark and we are wearing sunglasses…
Cosmos: Hit it!

(ps for ppl who are too young to have any idea what this references to: google blues brothers)

Stride:

The answer is: if Stride shares its revenue with the Cosmos Hub, in return the Cosmos Hub will share both its ample security and liquidity. And this huge boost in security and liquidity would supercharge the Stride blockchain, accelerating and amplifying the success it has already achieved on its own.

Why you don’t stake with all the validators to support the decentralization?

You need to revist your policy.

i like cosmic validator, they are exposing the corruption they are still attacked for. if they can expose validator and AADAO corruption and help stop the loss of another 450k in ATOM liquidity that sharing 15% of $10mm of revenue will never repay atom, i think cosmic validator is square in my book.

This is an interesting proposal for the Stride blockchain to join the Atom Economic Zone and adopt interchain security from Cosmos Hub. Its good to hear that Stride would share its various revenues with Cosmos Hub! - overall this proposal highlights the benefits of collaboration and cooperation between different blockchain ecosystems. It will be interesting to see how this proposal is received and if it will be implemented in the future . From our side we definitely suppport this proposal.

Stride:

Under this proposal, Stride would share its various revenues with Cosmos Hub as follows:

• 15% of liquid staking rewards
• 15% of STRD inflationary staking rewards
• 15% of maximal extractible value (MEV) revenue
• 15% of transaction fees

What are the current incentives to Stride validators/delegates? Is it 100% of inflationary staking rewards and other fees?

If so, I’d find it odd that Cosmos Hub validators would be paid any less than existing validators. The incremental costs to Cosmos Hub validators are nearly the same.

Personally, I’d like to see a much more details breakdown of expected costs and revenue for Cosmos Hub validators. They’d be tasked with the incremental effort and costs of running the Stride validator client.

Hey Andrew, Stride validators / delegators currently receive all staking rewards and liquid staking rewards. You can find much more detail here.

Under the proposal, Cosmos Hub validators who run binaries for ICS consumer chains would receive 15% of STRD staking rewards, plus 15% of liquid staking rewards, 15% of MEV rewards and 15% of transaction fees. Existing Stride validators would continue providing the slew of services they currently provide (running relayers, exposing public endpoints, governance involvement, code contributions, etc) and receive fewer rewards than they currently receive.

Informal Systems is drawing up a breakdown of expected costs and revenues for Cosmos Hub validators, I believe they are planning to share that in the next few months.

how would liquid staking rewards be paid out if the LSM cap is reached?

Genuine question: how do you define which validators support decentralization?

I want to integrate the price of STRD into my system. Is this the correct one Stride price today, STRD to USD live price, marketcap and chart | CoinMarketCap ?
Or will the token be migrated to a “new Stride”? Or something like aSTRD?

Riley:

(running relayers, exposing public endpoints, governance involvement, code contributions, etc)

Got it. Do you have a rough cost breakdown of these activities as well? Because from my POV, Cosmos Hub validators operating the client will be the bulk of realized costs with only marginal revenue.

I’d like to see this discussion be more of a negotiation on what a fair fee for operating as a consumer chain should be because right now it feels too hand-wavy.

making an unregistered security ($STRD) into a consumer chain seems like an unreasonable/irresponsible risk to ATOM, the ecosystem, and its users. By distributing STRD security as rewards for staking ATOM, it exposes all participants to unwanted regulatory scrutiny.

-Investment of money: Users invest their cryptocurrency holdings to purchase Stride tokens.
-Expectation of profits: Users expect to earn staking rewards on their Stride tokens.
-Common enterprise: The Stride tokens are backed by a common pool of staked assets, and the staking rewards are distributed to token holders based on the performance of the underlying assets.
-Efforts of others: The non-custodial process, where the underlying assets are staked by/to a third-party validator, the rewards are compounded and distributed to token holders

Hi, I am trying to understand the role of governor and why it is actually needed? A governor does everything a validator does, except validate transactions. Governors would be able to set an optional commission, and would vote on behalf of delegators To my understanding, governors will not run infrastructure (aka stride consumer chain node) but because they can setup optional commission, they will receive rewards. If this ^^ is true and I got this right? Please convince me why this is needed at all and how earth this is fair to cosmos hub validators that will actually bear all the consequences of running the node (not to mention they have no choice in ICSv1). My second argument is that this design complicates things for no reason. Actually there is a reason that is centric and beneficial to Stride and Stride only. I can imagine that Stride wants to retain the current validator set (on stride) due to social obligation and possibly economical too (people invested money and time to run the stride and now will face no commission rewards if they are not running nodes on hub). From the HUB validator / node operator this is additional complexity, that I also mentioned is…

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So in a perfect scenario (which does not exist), decentralization should be everywhere for every stakeholders.

Developers should opensource their code.
Validators should try to get geographic decentralization.
Delegators should spread their delegations.
Projects should not stake at all or evenly to all validators.

Now back to your question, no we can not define decentralization of the validator without doixxing. But a project can help the decentralization by even delegations.

Congrats Stride team on a successful proposal.

Hey team, Why does none of the original proposal text have this revenue-sharing model?

Stride:

• 15% of liquid staking rewards
• 15% of STRD inflationary staking rewards
• 15% of maximal extractible value (MEV) revenue
• 15% of transaction fees

hi all, can you please elaborate on what token will be issued as rewards?
Is it still planned to only payout STRD and ATOM as rewards? Thus, swapping all the stXXX to STRD?

@Stride @lexa please, anyone knows?

I believe this is to support Atom Economic Zone and bolster liquidity in these dexes. The hub gains no direct benefit from other dexes.

stride LSDs create market inefficiency and introduce a myriad of governance and economic risks. Stride only acts as middle men in the transaction and promotes itself by claiming it will increase volume and growth throughout the ecosystem, but that is based on all the building required to correct the market inefficiency and attempting to mitigate the many risks it creates.

Instead, 1:1 LSDs can be issued by Hub validators using the LSM: freeing up the same stranded ,staked, capital for use as collateral in DeFi. staking rewards can be claimed by the bearer of the native LSD using ICA/ICQ.

a cap would still be applied by the LSM and it would have a natural peg at the same price as a circulating native ATOM, but may end up with a premium = inflation given staking rewards to bearer.

native LSDs require less liquidity than than many 3rd party LSD providers, yield more than stride, and have significantly fewer governance and economic risks. while stride’s business model is to capture value from ATOM, a native LSD is entirely value additive.

hey guys c’mon, this has been unanswered for 21 days now @Stride

This is a groundbreaking move by Stride! Joining the ATOM Economic Zone and embracing ICS is a testament to their forward-thinking approach. This strategic decision will undoubtedly amplify their global presence and economic impact. Furthermore, I can’t help but imagine the immense potential this holds for partnerships with innovative players, especially in tech. As an avid follower of advancements in the tech industry, I’m eager to see how this unfolds. Kudos to Stride for their bold step forward! If they’re looking to maximize their reach in the Android app development space, collaborating with a leading agency could be a game-changer. It would be intriguing to see how this integration takes shape in the mobile app ecosystem!

An inspiring launch, Aether looks to synergize with stride’s liquid staking derivatives, we hope to be able to follow your path soon.