[Proposal ##][LAST CALL 07/21/2023] Launch Duality on Replicated Security
Meta Your feedback means everything to us. This is a draft proposal – please let us know your thoughts by making a post below. If you’d like to have a synchronous discussion with us related to our proposal we can schedule a time through DM Telegram: @nicholasevans Twitter: @dualityxyz Change Log • [August 16th, 2023] Duality/Neutron merger proposal responce [Proposal ##][LAST CALL 07/21/2023] Launch Duality on Replicated Security - #88 by duality • [June 23rd, 2023] Initial post to Cosmos Hub Forum duality-1 1200×800 164 KB Summary This proposal seeks to integrate Duality v1 with the ATOM Zone by securing it with Replicated Security. It can be summarized by two major propositions: • Deploying a novel user-aligned DEX that reduces liquidity fragmentation • Aligning the deployment completely with the Cosmos Hub and its community With the following outcomes in mind: • Growing the activity and users of the entire interchain by integrating Duality with other highly active and decentralized communities • Providing a public good for the Cosmos Hub with absolute value and community alignment This proposal seeks to deploy Duality on the Cosmos…
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Overall I’m leaning towards yes. I see a lot of benefits for this including the community pool to strengthen and earn fees, but the size is my worry and seems a bit large for the protocol to risk. Is there any calculation and estimation based on trading volume on osmosis for example on fees generated over a set period and does that imply a good risk-reward ratio based on the allocation requested? Just some initial thoughts but I’m excited for duality to onboard ics
Do users really need so many dex? How to solve the liquidity dispersion caused by multiple dex? We have already seen various dexes such as osmosis, cre, astroport, shadeprotocol, kuji, etc. If the exchange startup of each project seeks funding from the community pool, is there a big problem with the utilization of funds?
Is it possible to see a working demo? How is the community supposed to make an informed decision without seeing anything?
Good points. Here are some points that might ease your concerns though :
- When ATOM trades on other exchanges, the value from the swaps (gas, MEV, sometimes app fees) flow outside of the Hub. Having a DEX aligned with the Hub in this ways will make it so the Hub retains that value.
- Duality is not seeking funding from the community pool. The community pool still owns the liquidity it deploys on Duality. They are just utilizing it on Duality and earning swap fees in the process.
- A goal of building Duality in a way that accrues all value back to the Hub and its users was to make it so future liquidity allocation proposals don’t need to go elsewhere. When a part of the ATOM Economic Zone needs to bootstrap liquidity, now they can do so in a fully aligned way.
- Duality is integrated with swap-and-forward middleware so people can swap remotely from other chains. As IBC and Cross-chain UX is improves, fragmentation will be less and less of an issue.
definitely, we’re putting something together asap
Good catch. The front-end is currently finishing up testing before being made public. That said, the chain binary is currently live on the ICS testnet so anyone can demo it via their command line. There should be a live front-end connected to our testnet deployment up in the next week or two. This is only a draft post, so everyone will get a chance to use a demo of the front-end before needing to vote on the final proposal. In the next few days we’ll share more, but in the meantime here are some screenshots on what to expect…
Swap Page :
Liquidity Providing on a Bell Curve Distribution (~stableswap LP):
Pools page
Definitely happy to have you on the AEZ !
I would just say that 500k ATOMs from the comm pool seems a bit overestimated to me. 200K headstart with a limited set of pools should be more than enough to get you the market depth needed to compete with existing solutions.
All I’m saying is that I’m personally very happy to see a more professional oriented AMM with custom curves. That will definitely please market markets to allocate liquidity more precisely and ajust to volatility on demand. On a user prospective as well, this can give a competitive offer against osmosis by having more ±2% depth with less TVL.
My advice would be to limit your scope to ICS projects pools first and expand very conservatively. You don’t want to play on Osmosis grounds for smaller chains outside of the AEZ.
So… very glad to have you onboard ! maybe just lower your expectations on the comm pool to avoid potential backlash, and see you for the on-chain approval !
Any projections would depend on the token pairs that the Community Pool end up deploying liquidity to which is not specified in this proposal.
As for protocol risk, this is a valid concern for all DeFi protocols. While you can never guarantee anything, Duality has received two audits from Informal Systems up to this point to manage protocol risk as much as possible.
Please consider adding log distributions. Professional MM use that one very often, more than linear or bell. Just an advice 
Great feedback. Mind sharing more info on this ?
Thank you for the quick response. Added to article. May I ask who you are in relation to this proposal? Do you work for Duality Labs and if so, what’s your title?
The 500k was anchored from the 450k specified to Astroport on Neutron in the Stride proposal. Since from the 500k, 100% of the swap fees would go back to the community pool and 100% of the gas fees and MEV would go to ATOM stakers, it’s expected that deploying community pool liquidity to Duality over elsewhere is more profitable for the community pool and ATOM stakers so the number is a bit higher.
Given this perspective what do you think?
That said appreciate the feedback and it’ll definitely be considered in on-chain proposal.
Integrating this significantly, will be seen as if the Cosmos hub is picking its winner. As well as this will step on the toes of other dex. I don’t think routing governance through the hub is a good idea, mainly because of the governance load that will be placed on the hub, especially if other chains have the same idea. Also is this project linked to DYDX or a fork?
Thanks for the feedback!
To clarify some points :
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Duality is not a fork of any other project.
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The goal is also not for the Hub to pick Duality as a winner, but rather to use it as an aligned piece of infrastructure to accomplish it’s liquidity needs in a way that accrues value back to stakers and other network participants.
I think the project needs it’s own token. You can airdrop 70% of it and leave 30% for more LP incentives at the beginning. And it should be hard money token like YFI kinda tokenomics and can also be used in conjunction with ATOM for governance of the dex.
$DUAL with 100K max supply.
Just my 2c about the proposal and discussion thus far. The below comments are all framed around my personal opinion that: • it’s very important for the Cosmos Hub to have a long-term, strategic, product-oriented mindset around the AEZ. • this applies to products and the teams that build them. Teams like Neutron ( @Spaydh ) and Stride ( @Riley @aidan ) have all demonstrated and exemplified this strategic, product-oriented mindset – which is a huge boon to the Hub. i believe Duality Labs shares a similar mindset (see here ). • The Cosmos Hub’s best bet is leveraging its resources toward bolstering the ATOM Zone. Dr2444: Do users really need so many dex? • Which users? • imo the way the interchain (and atom economic zone) wins is by strategically leveraging product x existing resources toward important liquidity. this means growing adoption & community beyond the pre-existing interchain communities. this only happens by orienting the product around pushing the envelope in regards to functionality and UX that’s particularly related to that strategically important liquidity • I think this section sums up some of the positioning: duality:…
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i have nothing interesting to add/ask, then…
BULLISH
edit : ah yeah, just one question : how long approximately it will/could take to achieve a system without admin/liquidity msig ?
thanks for the feedback, and thanks Elijah, just wanted to add 2 points that might help align views
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Validators running consumer chain binaries take on additional overhead, bootstrapping the protocol with enough liquidity brings in users and helps validators justify the overhead. Since all of the value captured in transaction fees goes back to the validators this would be a net benefit for the HUB, and the liquidity is all still owned by the HUB
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fully agree with the governance issues. Governance is way too expensive for everyone involved and adding more to that is not something we’re keen on. Duality was designed to require minimal governance overhead with this in mind. We’re also researching additional methods to further align Duality with ATOM and reduce governance overhead further
Blockquote * Can you say more about why that feels overestimated? (asking in relation to other proposals + my above frame of bolstering the zone). My thesis here is that you should focus on a progressive rollout… A go to market strategy has to be very well crafted if you don’t have the first mover advantage. Cause on that front, osmosis has a long headstart. Not to mention they will soon lend security out with interfluid-staking. Be smart to understand that your hedge on this DEX game isn’t the deepest liquidity, but the most EFFICIENT liquidity ! The one that attracts big holders to allocate to you instead. Cause they can better manage their impermanent loss by managing their shares in realtime with programmable curves. Focus on what you can offer that they don’t. Contact me if you need more insight : @Phil_RX Neutron has been granted more liquidity to support the depth of NTRN; as you don’t launch a token, don’t compare to them, that would be a mistake imho. Moreover, the Allocator will come in due time and it will require quite a lot of ATOMs to be filled. There are currently 3.5m tokens in the pool. I think you’ll encounter some opposition if the final prop requires…
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Will the DEX itself own liquidity, or rely entirely on LPers? We are a Hub validator and also happen to run a collator for https://hydradx.io on Polkadot. HydraDX is interesting because LPers contribute a single token, not a pair. Additionally, the protocol owns liquidity, so fickle liquidity providers are less of an issue. HydraDX uses a two token system though.
Well the most commonly used curve by professional market maker models is the log normal distribution, so you’d want to add that one ! Log-normal distribution - Wikipedia
As a smaller Hub validator we must watch our costs. We have soft opted out of consumer chains so far, to focus on profitability, and are truly grateful the Hub’s community sees the importance in that.
Once we hit the 5% voting power threshold we will need to spin up all consumer chains and our profitability will take a major hit. That’s ok as long as the consumer chains add essential functionality to the Hub and we’re just not sure another DEX is essential.
We don’t want to run infrastructure for 30 consumer chains. Most don’t realize how much money and work that entails. Many delegators just assume all validators make a killing and are part of some cartel. So, we are considering consumer chain proposals quite carefully.
It’s easy to see why smart contracts, liquid staking, and native asset issuance are essential.
Please help us understand why a DEX is essential. Why not just use Astroport? Why doesn’t Duality launch on Neutron instead of the Hub?
Good points, but just to clarify some things :
- The liquidity on Neutron from the Community Pool is not NTRN it’s stATOM-ATOM
- Liquidity providing with LSTs is more profitable than superfluid liquidity providing, as the LPs receive the entire staking yields as opposed to some fraction determined by a discount factor. This is why Duality will be doubling down on a partnership with Stride.
- Duality should work with the allocator not against it! When the allocator is live, it’ll be possible to facilitate the collaboration. I definitely wouldn’t think of the community pool spend and interchain allocator as mutually exclusive.
Please help us understand why a DEX is essential. Why not just use Astroport? Why doesn’t Duality launch on Neutron instead of the Hub?
Here’s a few reasons why a Hub aligned DEX is beneficial:
- Astroport takes a 15% application fee from liquidity providers and Neutron takes 75% of gas fees. Duality takes 0% of application fees and 0% of gas fees, so Cosmos Hub stakers get to retain 100% of both
- Serious decentralized financial infrastructure requires full stack control. Building a smart contract is not sufficient to building the best possible exchange that meets users needs.
Cosmos has always worked to be seen as chain agnostic. That was the reason the Gravity dex broke off and became Crescent so the Cosmos hub could be chain agnostic. If there was a change of policy, I have not been informed.
Not sure of this proposal. 500K is a huge ask. But the revenue-sharing model actually looks good.
Looks like Stride’s proposal for 450K ATOM will pass. Given Duality is giving 100% of the revenue back to CosmosHub, why are people considering 500K as huge? I would argue we should even have a bigger pool on Duality since it will give more revenue back to Cosmos Hub.
What do the developers of Duality --Duality Labs from my understanding-- get from all this? How are they compensated? What incentivizes them to keep building?
Our perspective is that at some point incentives will dry up, so we might as well bootstrap liquidity by doing our best to find organic product market fit. We have spent a lot of time looking at Ethereum data and it’s clear that incentives are not necessary to bootstrap a DEX. Uniswap is the most popular DEX by volume and they’ve never had incentives. By looking at the data in DeFi and history in tradfi we’ve isolated 4 large non-incentive based markets for LPing (dare I call them “product market fits” for DEXs)
- Sophisticated firms market making and making profit off of spreads + hedging off chain
- Long tail yield stategies (eg using LP positions as collateral for different yield strategies)
- Passive DAO treasury management
- DAOs making pools liquid for their community to swap for
We plan on building tooling on and off-chain to make Duality the best place for all four of these. As new areas of organic engagement with DEXs emerge, we will also pursue those as well!
Totally agree, but also appreciate all of the community feedback!
In the future, one thing we could do better is be clearer on this ask and where it’s anchored this way the concerns are mitigated.
Great proposal and the 500K number seems reasonable given comps (neutron and stride) which were also reasonable. I think Duality could do well especially as essentially the first spot CLOB app chain and being 100% aligned with cosmos hub on day 1 should be a driver of value to the hub.
Easy yes.
Unsure how we are supposed to onboard the next chain and keep paying server costs, salaries, etc
Any more RS patnership before at least EOY would be harmful to our current validator set.
We are still waiting for data from Stride and Neutron onboardings.
On the opposite side it seems that none cares since we opened up even more our validator set.
Now some validators are asking tangible and immediate help from the community.
Soft opt out is not a solution.
The community should focus on governance and token spread.
we get this question a lot, so much so that we added it in the FAQ: ref: What’s in it for Duality Labs?
to us this direction makes perfect sense: Create as much value as possible first and everything else is secondary. this is how a lot of trad-tech companies operate too. It’s important to have revenue, but we won’t capture any value before we’ve demonstrated PMF, created a ton of value, and have the full support of the community.
These things play out over the long term, so on the short term we’re focusing on improving the tech, growing the ecosystem and trying our hardest to materialize the vision we all share for what true, open and incentive-alligned markets and DEFI can bring to the world
Validator fixed cost were our biggest concern going into this and has been ever since Replicated Security was announced. I’ve heard a lot of approaches aimed towards mitigating this from a lot of teams working in and around cosmos.
The cosmos HUB needs to orient around long term value aligned product growth, and instead of pausing until the perfect technology is shipped, we should keep growing, demonstrate PMF and incentivize all relevant teams to solve these issues with more urgency.
Open communication and feedback like this is extremely important. we need to protect the validator set while growing the HUB. We just started an open discussion with relevant parties on telegram. Please feel free to join Telegram: Join Group Chat
serejandmyself: Unsure how we are supposed to onboard the next chain and keep paying server costs, salaries, etc ephemeral_25: Any more RS patnership before at least EOY would be harmful to our current validator set. I share these concerns and they’ve arisen frequently. It’s also good to examine them from a couple of different angles. The first part of this reply seeks to do that. It contains 1) a survey of existing discussions around the concern, 2) the problem space, and 3) the path to a meaningful outcome (which in turn illustrates the problem space). A survey of discussions For anyone browsing here that wants a quick survey of past discussions about this: • @lexa 's conditional basic income essay • @ChorusOne-Research ’s problem statement • @pupmos 's proposed changes to the replicated security model Problem Space All of the above conversations propose different aspects or solutions of the problem, but in short it can be summed up as: • cosmos Hub’s winning bet is to on-board as many high quality consumer chains as it can. The protocol has a long-term time preference (in the sense that it needs time to compete and capture…
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• The liquidity on Neutron from the Community Pool is not NTRN it’s stATOM-ATOM
• Liquidity providing with LSTs is more profitable than superfluid liquidity providing, as the LPs receive the entire staking yields as opposed to some fraction determined by a discount factor. This is why Duality will be doubling down on a partnership with Stride.
• Duality should work with the allocator not against it! When the allocator is live, it’ll be possible to facilitate the collaboration. I definitely wouldn’t think of the community pool spend and interchain allocator as mutually exclusive.
You’re right on all three, I have mix things with ntrn indeed. And regarding the allocation, if you request 500k atom be staked and then deposited in LPs with stATOM/x then I see the point ! I would simply recommend to state that more clearly in the final proposal. This may sound like a tiny bit of information but to me that changes the whole economic equilibrium and therefore now I understand the vision you pursue.
I would be curious to know a bit more on the type of relationship you would see fit with the allocator. Could be very interesting indeed but I’d love to hear that from you !
Good feedback regarding communication about the community spend proposal.
There should be a separate, more comprehensive community spend proposal coming over the next week or two.
With respect to the allocator : I actually have a call with them (Timewave Labs) today regarding that exact question ! Will get back to you with more info afterwards.
Thanks for being constructive.
Well having a liquid staked based DEX which use ICS to inherit the economic security of the said liquid staked asset, it’s certainly a thing that will offer interesting economics without requiring internal incentive mechanisms. It’s a winning strategy if you can figure out to attract external protocol based development to remain up to the general crypto innovation (decentralized orderbooks, programmable LP management for MM,…) I’m curious to see what you have in store. I read that you were “under-promise over-deliver” and I start to feel like you, indeed, have a lot going on behind the surface on that front ! I’ll try to reach out to you on telegram to have a more in depth discussion about automated AMM curve control and professional market making features
Please reach out, excited to connect !
Yes. Yes. And another time YES!
I don´t see anything more that should be discussed. This needs to go to governance asap!
So suppose we made a mistake with stride now we don’t want to keep making the same mistake. What is the basis of giving this much amount to any project? At least stride has a working business model. But that’s not the point, I have a very simple question what are the basis of giving this much amount and if anyone replecates the same proposal would we say yes?
Totally understand your concern and hopefully this clarification can help.
The liquidity in the community spend proposal is not being given away (or even spent), the community pool is just liquidity providing in the pool and collecting swap fees from the liquidity. 100% of the gas fees and MEV goes to ATOM stakers and 100% of application fees from the LP position go to the community pool. When the community pool can withdraw the funds, it goes back to the community pool.
just to clarify the amount is not given, it is an LP owned by the cosmos HUB and can be withdrawn at any time back to the community pool. And since Duality doesn’t take any fees all value accrued from this position will be accrued to the community pool.
The reasons for it are described above but can be summarized as
- bootstraps a cosmos HUB owned protocol
- alleviates HUB validator costs by increasing volume → transaction fees
- bring value back to ATOM
- expedite the process of making the Cosmos HUB a core piece of liquidity infrastructure
If I am not mistaken, technically we cannot control the multisig with gov it is the people who we have to trust to return the Atom. Correct me if I am wrong.
But my major concern is What criteria we are setting to receive (for the time being) these huge amounts. It seems, just because they are using the ICS we are entertaining them. We should act differently, Cosmos Hub is enabling the app chain thesis without maintaining app’s own validator set for that tradeoff cosmos Hub stakeholders (validators/delegators) are getting the fee share. Now only on the basis that they are adding a utility to Atom (fees) we should start giving them these huge amounts?
Now suppose a proposal from existing dex (sifchain/kava/umee/) to use Atom as the only method of fees but they need to deepen the pools with the Atom. will we be in favor of that? although this is a better case bacue it also avoided the Validator overhead but I would say no.
Totally understand your concerns here are some clarifications that might help : If I am not mistaken, technically we cannot control the multisig with gov it is the people who we have to trust to return the Atom. Correct me if I am wrong. The Multisig is made up of the top validators on the Cosmos Hub. While it’s not perfect and we specify that we are working on better solutions, you already trust these same people when transacting on the Hub. What criteria we are setting to receive (for the time being) these huge amounts The criteria that people vote on is whether it benefits the Hub. The case made in the proposal is that by using community pool funds to temporarily LP, the Hub benefits because it : • generates swap fees for the community pools (and staking fees if it’s an stATOM pair) • all MEV fees captured by the network accrue back to the Hub • the community pools still owns the funds (they are not being given to the chain) • would bootstrap a replicated security chain (a part of the ATOM Zone) • all gas fees created go to stakers and validators Now suppose a proposal from existing dex (sifchain/kava/umee/) to use Atom as the only method of fees…
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I have spoken about this on Twitter already, but Duality has set the bar for how a consumer chain aligns itself with the Hub. I am FOR this proposal. 500k ATOM is more than worth it, but we want to make sure the POL ATOM on Duality is used in the most capital efficient manner to generate revenue for the Hub.
While this could be changed via governance, I’d like to encourage the community to consider burning all ATOM used on Duality and only take in swap fees/MEV revenue.
@nicholas @Elijah whats the plan on dynamic swap fees (volatility fee)? Is this something we can expect at Duality launch or will there be static fees for each pool?
You could design a vault on top which changes the spread (fee) dynamically on top of Duality. We tried to avoid using oracles in the core design throughout the process though to allow the complexity to be built on top instead of inside the protocol.
That said we’re working on some ways to manage the liquidity in a capital efficient manner that won’t be live on launch. As for burning, why is burning better than internalizing the fees and growing the community pool? It’s probably in the best interest of the community pool to become sustainable overtime in order to fund future development and growth so keeping the rewards would make sense to me.
Very nice proposal!
I don’t see any conflict of interests!
But, can we exclude CEXes validators (Coinbase, Binance) from getting rewards?
That’s a fair point! I see tx fees trending towards zero over time for all applications and think it could be a good way in the interim to capture value across all ATOM tokenholders instead of just ATOM stakers. It’d be a good way to counterbalance some of the Hub’s inflation and create even more scarcity in the liquid markets.
With that being said, as inflation comes down with increased stake rates and a relatively underfunded community pool, it probably does make more sense to direct most of the revenue back to the community pool to fund future dev and growth.
duality:Liquidity Injection
To help bootstrap Duality in making the ATOM Economic Zone the entry point and center of economic activity in Cosmos, the proposal requests a liquidity injection of 500k ATOM from the Community Pool.
The liquidity will neither be owned nor operated by the Duality Labs team. It will be delegated by the Community Pool to a trusted multisig of Hub validators and contributors (see below).
All value accrued from the corresponding liquidity position will be returned to the Community Pool upon withdrawal. Because 100% of network fees will also be routed back to the Cosmos Hub, the liquidity provider fees generated through any volume will go entirely back to the Cosmos Hub as Duality takes no cut of liquidity provider fees.
this will make ATOM into a farming token like all the other DEXs & odds are it will be abused by devs/validators holding big bags from last cycle looking for exit liquidity.
If the hub is trying to become a meme, what better way is there than voting to turn it into another in the pile of cosmos DEXs?
No response to this? @Elijah
Hey !
Sorry I didn’t see this earlier. I do work for Duality Labs. For titles - we try to deemphasize titles at Duality Labs, but I am a founding member and work on product and research.
Totally understand your concern, but think there are some misconceptions.
There are no farming incentives being requested.
The only request is that the community pool uses assets that aren’t currently being utilized to LP. The community pool would still be entitled for the liquidity that makes up the LP position and the rewards it generates.
Farming typically implies inflationary rewards, however there would be no inflationary rewards in this case.
so you are asking for an unsecured loan the size of the community pool? why not coin the hub FTX2.0?
by farming i mean a repetitive process of harvesting liquid tokens (atom’s CP) in exchange for some intentionally/unintentionally useless inflationary token.
it makes no sense to risk the stability of the hub to be just another DEX in the haybale of DEXs.
Thank you for the proposal. Will check it thoroughly.
Our concerns about long term validator sustainability and therefore decentralization of the Cosmos hub have not yet been lifted but this proposal is exactly for which ICS was intended.
Horizontal scalability and Risk separation at its finest.
Lavender.Five will support this proposal and will dedicate additional time and resources to duality in the form of emergency multisig participation.
Totally understand your concern. To clarify though : so you are asking for an unsecured loan the size of the community pool? • There is no unsecured loan. A loan implies Duality would have ownership over the funds and be able to use the funds at will, while being required to pay them back after some time frame. This is not how the liquidity injection works though. Noone at Duality Labs will custody the funds at any point, nor will they be able to use the funds at will. The funds would only be used as described in the proposal with no participation from Duality Labs and the funds go back to the community pool afterwards. • As for the size. 500K ATOM is not the size of the community pool. The community pool has more funds and this is only a fraction of those. It’s also worth noting that the community pool still has rights over the temporarily LPed funds so they are not being stripped from the community pool. by farming i mean a repetitive process of harvesting liquid tokens (atom’s CP) in exchange for some intentionally/unintentionally useless inflationary token. • There is no useless inflationary token being exchanged for ATOM in this proposal. ATOM would be…
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you are proposing making ATOM into the inflationary farming token. Elijah: As for the size. 500K ATOM is not the size of the community pool. The community pool has more funds and this is only a fraction of those. It’s also worth noting that the community pool still has rights over the temporarily LPed funds so they are not being stripped from the community pool. Elijah: There is no useless inflationary token being exchanged for ATOM in this proposal. ATOM would be liquidity provided, and the community pool would receive the swap fees from that liquidity provision. according to Wikipedia: In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. This is exactly what Duality is proposing. Elijah: There is no unsecured loan. A loan implies Duality would have ownership over the funds and be able to use the funds at will, while being required to pay them back after some time frame. This is not how the liquidity injection works though.…
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Will try to ease concerns as there still seems to be some misunderstanding. Also happy to move on from this conversation if you don’t feel like we’re getting anywhere. you are proposing making ATOM into the inflationary farming token. There is no proposed farming or inflation of ATOM in this proposal. The proposal does request existing funds that are currently not being utilized, to be liquidity provided by the community pool on Duality. The community pool would have rights over all of the swap fees generated and the liquidity position. according to Wikipedia: In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. This is exactly what Duality is proposing. This definition implies that Duality is a receiving credit from the community pool (and thus in debt to pay back the credit). But this is not what the proposal suggests. This proposal does propose the community pool utilizes existing funds that are not being utilized on Duality though. Duality labs will not…
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duality:
- 100% of gas fees will go to the ATOM validators and delegators
What will the searchers earn then? Or do you mean 100% - part that goes to searchers?
Also, are you using the skip protocol for mev?
Good question, it meant that 100% of the value that isn’t leaked outside of the network (ie doesn’t go to searchers) will go to ATOM validators and delegators.
We are currently working with Skip on MEV although we have not announced the exact details yet (coming soon).
No Duality token, that’s correct?
Could this change in the future?
That’s correct, Duality labs won’t be launch a token and there are currently no plans to do so
Thanks for all the positive feedback and constructive discussion points!
We’ll be putting this on-chain soon. There are still a couple of days left for final feedback
Take care everyone 
The rewards validators earn - ATOM. Will this be ATOM on ATOM or ibc ATOM?
Also, can a validator identify whether the ATOM comes from Duality or from the Hub?
Duality will use IBC atom as a gas token, the source of ATOM for rewards can be identified
Elijah: The Multisig is made up of the top validators on the Cosmos Hub. While it’s not perfect and we specify that we are working on better solutions, you already trust these same people when transacting on the Hub. But in case of daily transactions we are secured by the network and software, the worst a validator can do is get me slash 5% but in the case of multisig we are 100% relying on the intent of the validator (multisig) things are not same. I won’t argue that we should have a better escrow solution in a binary. But please don’t say that the situation is the same. Elijah: The criteria that people vote on is whether it benefits the Hub. The case made in the proposal is that by using community pool funds to temporarily LP, the Hub benefits because it : • generates swap fees for the community pools (and staking fees if it’s an stATOM pair) • all MEV fees captured by the network accrue back to the Hub • the community pools still owns the funds (they are not being given to the chain) • would bootstrap a replicated security chain (a part of the ATOM Zone) • all gas fees created go to stakers and validators Most of the validators are in loss,…
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But in case of daily transactions we are secured by the network and software, the worst a validator can do is get me slash 5% but in the case of multisig we are 100% relying on the intent of the validator (multisig) things are not same. I won’t argue that we should have a better escrow solution in a binary. But please don’t say that the situation is the same.
I didn’t say they were the same, I said you already trust these same people when transacting on the Hub. This was never meant to imply that the trust assumptions are equal, just that these are the same players you normally trust.
Most of the validators are in loss, and the ICS is incurring more loss for validators, now situation is getting bit clear neutron is proving to be total loss for validator resources and now stride is not very different. Adding more chains on the expense of CP will not receive my favor unless we have a clear plan of support for validators.
We have been working on a number of solutions to reduce costs on validators. To join the working group and see what ideas are floating to the top feel free to join our telegram link
Weren’t you also a proponent of expanding the active set recently?
Yes.
And what does this mean?
Thanks for the reply again.
But very respectfully i disagree, from where I see it we are just working (not delivering) on the validator’s problem. We are trying to provide every half-cooked idea otherwise.
It is not like we don’t know the validator problems, we are aware we are working on it since last year but RS delivered neutron went live, Stride went live now we are trying to add another chain but we are still working on the validator problems. The clock is ticking here too.
The fair cost pernod is 500 USD/month neutron generates nearly 0 per month, Stride is not different and we are trying to add more chains at the expense of CP, without solving the core problems.
here is the topic where we were talking about to support the validators in April, 3 months passed by but we are still working. Scaling up with conditional basic income
how can I differentiate ibc ATOM from Duality from ibc ATOM from Neutron?
“we are still working on the validator problem but hey, let’s add 5 more unsustainable validators to the set”
Do you know if there is a summary of these solutions? Its a bit hard to search inside of a telegram chat. I found a post by Jehan and pretty much it. Would be great to keep a track of these.
They are mentioned in the “Rs reimagined” post
However yeah if it doesn’t exist, a summarizing post would be nice.
Indeed, several solution proposals have surfaced in this forum, with some, like the ‘soft opt-out’, finding their way into real-world application. Other solutions, such as providing a conditional basic income for small validators, advancing the implementation of ICS to V2 (Opt-in) or V3 (Layered) via fraud votes , managing on/offboarding of consumer chains even in M&A format , and permitting validators to define their commission rates for each consumer chain have also been tabled.
- Basic income: sounds like a communists wet dream. Wont work. Doubt it will even get accepted. Simple reasons - it will be deemed as unfair sooner or later and imo has several other implications on the economy.
- allow com rates: great move, which should have been implemented from the start as suggested by many. Wont solve the issue. Issue for small validators today: they arent getting enough delegations. I dont see how increasing com rates will help that
- fraud votes: this is actually something that can help imo
Well…you are worried about ICS tokenomics and validators running at a loss while also advocating to expand the set to validators that would run at a loss if the soft opt-out mechanism wasn’t in place.
I guess I’m confused on why expanding the validator set made sense knowing the economic situation of ICS
Not for me, but… expanding validator sets and trying to defend the need for ICS tokenomics to be changed don’t contradict each other whatsoever. They are 2 separate issues. Not all validators join the set to make money. Believe it or not. I have been taking to validators (and been one myself since 2016 - bitshares type witness node) for 4 years. Some support networks at their own cost for years. You be surprised. Some even put their money into their projects. All because they believe in the network and align with its values. They want to do good. Hence, they want to solve the tokenmocis issue. This does not constitute for the decentralziartion values being taken away.
effortcapital: Well…you are worried about ICS tokenomics and validators running at a loss Yes, this part is right. effortcapital: I guess I’m confused on why expanding the validator set made sense knowing the economic situation of ICS Let’s zoom out and take a look again. Those 5 validators were added after the prop was already incurring the same costs as the active validator. None of those 5 validtaors launched their operations around that prop they were there for quite a long time. Those 5 validators had significant voting power and they were missing on the commission and staking reward because they were inactive. now they are active they are earning on commission and staking rewards. So from my perspective now at least they are earning something earlier their earning were “0”. You have every right to disagree with my thoughts and if you do that doesn’t change the fact that validators are in financial trouble. Now, look at the cosmos hub as a stand-alone project that should only onboard the c-chains if they are adding long-term and short-term value to cosmos HUB. in the cosmos Hub we should take care of every stakeholder and Validators are the…
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I would say again. even if adding more validators was a mistake (I don’t agree) this doesn’t change the fact we are doing injustice with validators, by adding every useless consumer chains, we can add doesn’t mean we should add. And on the expense of CP not at all.
ah this good old empty “leach the CP for individual gains” argument
Hi guys, sorry if it’s unrelated to the thread. What is your suggestion for me to find information about AEZ? I really like to know the big vision behind it and what kind of ecosystem/platforms we need to build to make this AEZ concept a success. Thanks.
they dont have a vision yet.
AAdao hired two teams that fit their narrative rather than being the best qualified and we are waiting for them to present some grand coherent vision.
before that happens we are expected to pass spends to fund startup ICS chains with no capital of their own and at additional cost for validators without any plan.
as they aimlessly and desperately spend the community pool ATOM price adjusts down for the additional risk validators move onto delegators without compensation. this reduces the revenue potential of Stride and reduces the security able to be offered by the hub.
Hey there, so I wanted to reply and make some comments before we go ahead and put up the proposal. • once the hub is on 47, can we please move any multi-sig to groups? It is vastly better. • before we push the button on this, can you please provide the tag of the release that you would like to put on chain and also the corresponding commit hash? • I have heard some concerns about excess state growth in consumer chains. I know that these concerns came from you guys but I wanted to let you know that to my knowledge all consumer chains are reporting this at this time. I don’t yet have a solution, but I have invited representatives from every consumer chain team ( @Spaydh & @aidan for example) to a signal group so we can work through it. I suppose that it probably makes sense to add somebody to that group from informal, so I will add @jtremback now also. • I would like to do a final check, and I should note that even if this is put on chain, if you could please just reply to this, that would enable me to do that. Final note Congratulations and thank you for your work. The chain looks excellent, as does the business plan. If there’s anything that you guys need…
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Our Thoughts and Background on the Neutron X Duality Proposal A few weeks ago we reached out to Timewave Labs to collaborate on some product directions and research we had been working on with respect to using the Duality DEX module for treasury management. From there, we began conversations with the goal of figuring out how we could collaborate with one another. We shared a concern with many Neutron stakeholders - our visions and goals overlapped immensely which could lead to infighting instead of working together, something that would not be beneficial to the burgeoning, but still nascent ATOM Economic Zone. The vision we shared in our preliminary proposal on the Cosmos Hub forum has not changed in the slightest. We outlined four major goals : • Growing the Pie : The emerging ecosystems around the Cosmos Hub and the rest of Cosmos will be in the best position to succeed if we put our energy into collaboration, not conflict. • Liquid Staking Tokens : Liquid staking tokens will unlock an unprecedented level of capital efficiently not previously seen in Cosmos due to most value across the ecosystem being locked in staking for security. • Unlocking On-chain Exchange :…
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sorry but really disappointed. even if a day one fan of Neutron.
Duality should be a chain, and accrue value to Atom directly, as planned initially.
edit: but i guess i don’t see the full picture 
We’ll do a twitter space as soon as possible to give longer form thoughts and hear everyone’s opinions out.
Our belief is that if the proposal were to pass it would be accruing value to ATOM directly via the community pool’s share of NTRN (currently worth >$12million) and the fees and MEV share.
Instead of spending a considerable amount of time in conflict with Neutron, I think working together would also alleviate fragmentation of resources and progress within the AEZ.
Always appreciate your feedback though.
will listen to this space of course.
for now i don’t get why being a consumer chain means automatically being in conflict. i don’t get why as a chain you couldn’t work together. not fully obviously, but it could also be cooperative.
also competition is good sometimes for innovation. more than acquisitions often.
you said many times the only way to create the product you wish was to have the ability to customize every single part of the stack. what would change now?
i’ve no strong opinion to be honest. and i believe you’re going to build great products wherever you are. rn i’m just hum, disappointed, you’ve just killed my hopes! ahah.
people have been admirative of your initial proposal, the great alignment with the hub you proposed.
i believe you’re going to need to tell us more than “let’s not fight and hey look the 12M CP, it’s ok” to keep people positive about this new plan.
anyway good luck. i hope Neutron firstly will achieve to make people actually vote and reach quorums.
ps: approximative english, my bad o/
for now i don’t get why being a consumer chain means automatically being in conflict. i don’t get why as a chain you couldn’t work together. not fully obviously, but it could also be cooperative. I agree it doesn’t automatically mean conflict. On a personal level, we had a great relationship with various Neutron stakeholders before the proposal was made. But from a liquidity perspective, there was certainly conflict for resources - Stride’s liquidity injection being one example. From a partnership perspective - being able to work with Astroport, Mars and Timewave as a few examples. also competition is good sometimes for innovation. more than acquisitions often. Agree competition is really good. But as two pre-PMF, pre-(significant)-revenue protocols, it seemed like close collaboration could be a fruitful avenue for improving our chances of building something that people love to use. i’ve no strong opinion to be honest. and i believe you’re going to build great products wherever you are. rn i’m just hum, disappointed, you’ve just killed my hopes! ahah. I understand this concern, but happy to prove you wrong about your hopes. I genuinely think working with…
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Of course, I and many others will feel disappointed and backstabbed. A product was promised while private discussions were going on in the background with Neutron. It feels that way because I and others don’t feel like the Hub is aligned with Neutron (mainly because Neutron isn’t specific).
Duality is a product that made so much sense for the Hub, it felt like validators would have gladly supported it (contrary to what the post on the Neutron forum implies). As it was said in you initial post, the great thing about an app chain is that it can customize itself to support all its product features, while IBC prevents it from being isolated.
Maybe it’s a money problem ? A payment is stated but it doesn’t appear in your motivations. If so, there might be another way here.
I just want to add that if this goes through, it has a massive (negative) implication for the AEZ, imo. It means Neutron will compete with the Hub for expansion and product acquisition. Long term implications could be worse.
Super excited about this merger. We do believe this will be net positive to the Hub. Looking forward to the Space.
More dapps, not more chains 
increase the 25% rewards to 100% to Atom stakers and thats fine…
hub is dying because of all your good ideas
No IBC routing in the Aez
Not CC rewards enough
closed discussions in backside
No CW permissionned on the hub
gg
why doesnt the hub just give duality the neutron it is getting after airdrop ends? 28x gains from prop72, like zaki was talking about?
Of course, I and many others will feel disappointed and backstabbed. A product was promised while private discussions were going on in the background with Neutron. I understand how you feel and likely won’t be able to change that on my own but will continue to share my thoughts and work through potential solutions. It feels that way because I and others don’t feel like the Hub is aligned with Neutron (mainly because Neutron isn’t specific). Interesting… I had never considered specificity as a reason for feeling alignment / misalignment, but now that you say it makes a lot of sense. It’s basically the sentiment that - “If Neutron does everything than what’s left for the hub”. That said I think this is a solvable problem. Perhaps a well defined vision from both the Neutron and the Hub would help a lot ? My personal opinion on the topic is that the Hub should double down on the things that it already has a competitive advantage at - “moneyness” and security. This means eventually deploying the mesh security module on the Hub, building ATOM liquidity throughout the AEZ, reducing inflation, stabilizing governance processes. Money and Security are massive markets in my…
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Neutron will compete with the Hub for expansion and product acquisition
I think this is only a problem as long as Neutron and the Hub don’t have publicly defined mission statements. In my first reply I outlined some thoughts on this. I would love for the conversation to be more about how we can find common ground between Neutron and the Hub because it feels far from doomed to me.
Also my offer still stands. I’m down to hop on a call at some point and chat synchronously because typing out long messages on the forum is really time consuming. As you can tell I respect your feedback a lot (else I wouldn’t be responding in these massive messages).
This offer to chat live also stands for anyone who is providing valid concerns, and engaging in good faith. My goal here is only to find solutions for people’s concerns and soften the disconnect between our opinions.
tensions between neutron and the hub can be reduced by increasing from 25% to min 75% the rewards to atom stakeholders
Even 75% wouldn’t matter at this point with how little is happening on Neutron in terms of transactions and MEV. Many things are on the way already and various hackathons are incentivizing teams to build within AEZ/Neutron, so revenue will improve over time. Until then, numbers are pretty unreliable.
I think you are right. Neutron requested a clear definition of cosmwasm on the Hub, the same should apply to them. We can’t have them gatekeep what should happen with the AEZ.
I agree. And I think of the community pool funds as a holdover - compensation to the Hub, so they continue to retain considerable value before Neutron has the opportunity to hit critical mass.
We also need to acknowledge that there is a tension between two things :
- In order for the Hub’s 25% of fees to becoming meaningful
- Not wanting Neutron to grow too big or have too large of a scope
In order for the 25% of revenue to become meaningful, the Hub needs to support, or even just allow Neutron to thrive in the first place.
To the people concerned that Neutron will get big and just leave, I can’t speak for Neutron, but I think this will only ever be true if it’s manifested through ill will between the two communities. Every Neutron person I’ve met acknowledges the immense cultural and monetary value that the Hub and ATOM has played in the growth of Cosmo It would be negative sum for either protocol to diverge.
Yep. Pie needs to be grown before we determine exactly how much of it is fair tbh. There is no real economy or liquidity in the “AEZ” yet, so need to stick to the plan and re-invest in those who are taking the leap to create something.
It’s all for nothing if we don’t bring in the users, devs, liquidity, etc. though, so hopefully that’s what we’ll see in the next 6 months. Right now things feel a little grim and mis-aligned while we experiment with all of this.
betrayals happen every day and that’s nothing new… personally, I find no use for the hub if the rug is pulled from under it. When neutron wants to leave AEZ it will be too late to recover Duality which was reserved for him.
and the Minimalism of the hub … lol an aberration I do not understand why the commu or some big bags are so reluctant on the evolution of the hub while security alone will make the hub obsolete. The hub can very well evolve without compromising its security.
When neutron wants to leave AEZ it will be too late to recover Duality which was reserved for him.
I don’t think anything Neutron has done signals they will ever want to leave the AEZ. The Hub is a major stakeholder.
and the Minimalism of the hub … lol an aberration I do not understand why the commu or some big bags are so reluctant on the evolution of the hub while security alone will make the hub obsolete
I don’t think I’m advocating for Hub minimalism. I’m advocating for the Hub to focus on the adoption of ATOM, the development of interchain security networks, and the growth of the ATOM economic zone. These three things are not minimal imo.
i propose
- neutron & duality merge
- atom & stride merge
- Elijah Cosmos CEO
The first two actually seem like good ideas, but the third not so much 
“We reject: kings, presidents, and voting. We believe in: rough consensus and running code”
I’ll try to put things as simply as I can: 1-NEUTRON would gain from having a duality module in their chain 2-STRIDE would gain from having a duality module in their chain 3-POLYMER would gain from having a duality module in their chain … We should ask ourselves: does ICSv1 need a DEX app-chain ? It might sound stupid, but think of it… this is the real question. is the AMM a core module like the bank, auth, staking, slashing, governance, etc… or is it a custom module ? Cause the app-chain thesis for public chains is about using core modules and to build a custom module which is the best at doing what it does. Then use IBC to interact with other custom modules on other chains which themselves are the best at doing what they do. I generally tend to say that chains that try to cumulate multiple custom modules are deemed to die or split. Die because others will be more efficient, being focused on one thing, when the other has two. Or split because the teams working on the different modules will end up having different political visions for their respective modules. So another question to ask is this: is this a one way trip for duality into neutron or do you envision a…
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incoming space about the topic
https://twitter.com/i/spaces/1LyxBqgnLEMJN
Trying to understand what merging the duality into neutron would represent I decided to use my favorite Cosmos model. Using the ancient city structure as an analogy for the Cosmos network architecture. Of course, here we replace citizens by data structures. This model has been detailed in a much more comprehensive manner in the forthcoming report we will release soon. lUr02T3-security 1280×1120 169 KB With the help of this model, we can easily see the ICSv1 security layer, in the city center, covering the core public infrastructure. I always saw Duality as the smaller market (1) which is right in the center of the city. Cornered by merchants (2) which would compare to LPs (those holding the merchandise traded on public markets… data & tokens) and the temple (4) where public politics happen. People don’t see it today but… the temple is stride bc liquid staked tokens will carry a lot of governance powers in the near future. holding significant shares of voting rights in many projects all across the city. With that analogy in mind, there is the need for an individual market in the center of these… one that deals with the nearby districts we just mentioned. One that differs…
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