[Proposal #839][ACCEPTED] Fund 2024 Hub development by Informal Systems and Hypha Worker Co-op

Changelog • 2023-Sep-27: Posted initial draft • 2023-Oct-13: Adjusted the naming of opt-in security research topics • 2023-Oct-18: • Indicated ‘go to market’ status for IBC Routing and Mesh Security as part of the R&D budget. • Incorporated further details about headcount in the Budget section • 2023-Oct-20: • Added performance metrics • $5.7M budget will be held in 30% ATOM, 70% USDC • No bonus will be paid out unless teams exceed expectations for the quarter • Any bonus earned will be placed into a vesting account with a one year lock • Added specificity to Hypha’s headcount • 2023-Oct-20: Flipped to `last-call` with intent to go on-chain on October 26. Fixed internal links. • 2023-Oct-25: • Defined our 3rd party module maintenance responsibilities. • Defined our marketing and communications work for the Hub. • 2023-Oct-26: • Added ATOM numbers to prepare for going on-chain • Corrected some mentions of ‘opt-in security’ to ‘partial set security’ • Added detailed liquidation steps • Added Jim Parillo to the oversight committee, replacing ‘representative from Imperator’ • Updated performance metrics for Interchain Security • Added oversight…

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As a contributor to Neutron, I can only attest to the amount and quality of the work both Hypha and Informal have put into the Hub and Replicated Security. I think this proposal marks a step in an interesting direction for the Hub, bringing the core teams, their funding and accountability within the scope of the Hub’s governance.

Refining exactly how that is done, to ensure the financial stability of the core teams, their performance to the hub, and the mechanisms by which the Hub ensures accountability, is likely to take years of experimentations and fine tuning, but I think this proposal is a strong step in the right direction and has clear been thought through.

Personally very supportive.

PS: BORG-ify the Hub

Hey teams, First, I’d like to start with overall support of the Hub funding its core development and thorough and rigorous testing. The Hub has relied on the ICF to fund core and critical development for far too long. I’m glad to see someone stepping up on this front. As for the proposal itself, this feels like an omnibus. While these items may seem related, they each have different scopes and deliverables, and teams work on them. It would be best to have the community vote on each as separate funding for the year, with their own schedules, deliverables and KPIs to be monitored against. The community may want Maintenance and Testnet but may feel the R&D components are not worth funding from the community pool and may be best funded via ICF (as is their mandate). R&D Unless the Hub is going to license the software developed by it so it is open-source but not forkable/re-usable by other chains without permission/payment to the Hub, this seems like something that should not be funded by the Hub and should go through the ICF. The items in this section of the roadmap are still under active research and are more likely to be substantially modified, added to, or…

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Hi,

No doubt about Hypha and Informal quality, no doubt about the need for Atom community to fund by itself research and dev for Atom.

Where i’m confused again and again is why every single Multisig and now “Oversight Committee” is ~ always composed of the same people?

So, on the topic of R&D and performance bonuses: Research & Development: First of all, I actually doubt that the ICF is going to want to fund R&D for the Hub. I think they’re making it relatively clear they’re shifting focus to just the core Interchain Stack. Furthermore, it’s pretty common practice to fund R&D for blockchain teams, regardless of whether it’s licensed software. Most of the R&D topics laid out only apply to the Hub anyway. I’m not actually opposed to the Hub licensing its own software tbh. The big question is what legal entity sits behind this tho. Performance Bonus: If we want to compete with other networks, performance bonuses are critical. We need our devs to enjoy the upside of ATOM if they do well. Every other network with an ounce of success in Cosmos is doing this. We don’t want it to be more attractive to work for some other network like Osmosis than it is working for the Hub. Talent retention in this space requires performance bonuses. You can’t just say “oh don’t convert some of the ATOM then” and expect devs to wanna stick around. Base salary needs to be equally competitive as well. On the KPIs, I do think you make a good point there @Rarma…

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Informal Systems and Hypha Worker Co-op funding source should be fully funded by ICF.

Unless the tens of millions of ATOMs managed by ICF are transferred to the COSMOS HUB community pool and managed together.

Several questions:

1. What will be the role, function, and use of funds of ICF in the future?

2. Will all COSMOS ecosystem development teams apply for funds from the COSMOS HUB community pool in the future?

After seeing this proposal, I wanted to start from COSMOS
With withdrawals from the HUB community pool, the value of COSMOS HUB will definitely die in the future.

Both the Hypha and Informal teams have demonstrated a proven record of delivering cosmos and ICS developments and have effectively stewarded the Cosmos Hub with regular highlights to the community. It is evident that the current iteration of Interchain Security requires enhancements to meet the expectations of all stakeholders, and it is good to see a plan in place to achieve this.

Hopefully, that a significant portion of the Research and Development efforts will transition smoothly into the Development phase, with successful deployment in 2024.

Given that most of the efforts are concentrated on enhancing the Cosmos Hub, it is indeed a prudent decision to establish direct accountability of these teams to the Hub’s community. While @Rarma’s suggestions hold significance and merit further exploration, Everstake, in general, extends its support for this proposal.

To answer question 1: the ICF has been quite clear about what’s in scope for their funding and what isn’t in 2024.

Question 2: Cosmos SDK / IBC / CometBFT teams will (& should) NOT apply for funds from the Hub, unless this regards specific functionality that’s only being built for the Hub. But that’s not the case as of today.

This proposal only works for the Hub so the community pool is fair.
Your comment should used for others who ask for funds for Cosmos.

Informal systel has been raising fund 5.3M in Q3 2023 via VC.

Now asking for 5.7M here.

I wonder what will those investor will get and community hub will get too from IS?

Those 2 team will be accountable to cosmos community but how? accountable seems not accurate. We should tell now than later.

Thanks for commenting Rarma. I saw your tweets about this and am glad to see it on the forum as well. You bring up a lot of really good points, and we want to do them justice by writing a detailed response. It will probably take us a couple of days to finish addressing them, but just wanted to let you know we are working on it!

Interchain security and IBC are concepts Cosmos pioneered over 5 years ago that are only now reaching adoption and maturity at a larger scale. Many similar projects have emerged in other ecosystems, some with orders of magnitude more funding than what this proposal is requesting. It makes sense for ATOM stakeholders to directly support the development of these technologies instead of having to seek grants from other associated entities. The Hub’s version of Interchain security / shared security gives the most optionality out of all similar architectures, and thus deserves enough funding for this vision to be realized.

Informal / Hypha have shown to be more than capable in successfully launching Replicated Security, with Neutron and Stride becoming consumer chains. In terms of engineering complexity, it was close to the order of difficulty of Ethereum’s Merge.

The only thing I’d like to see in this prop is more of a breakdown of Informal’s headcount (i.e: what are the roles of the 12-16 individuals).

Looking forward to Atomic IBC and megablocks!

Thank you all for the discussion above.

We are very supportive of the teams’ decisions to approach the Cosmos Hub community pool for funding.

It is a priority for us at the ICF to coordinate funding with other communities and teams because we want to foster a self-sustaining ecosystem. We want to foster effective, sovereign, and decentralized communities.

The teams’ decision to go for CP funding helps accelerate this process – enabling us to refine our focus on the core stack and broader ecosystem. We also believe that the Cosmos Hub is a beneficiary of the growth of the broader ecosystem.

We aim to minimize our impact on the Cosmos Hub over the long-term not because we don’t care about the Cosmos Hub but because we deeply care about sovereignty and autonomy.

With that said, we are open and listening to the community’s feedback about their capacity to fund and support components of core development. We are flexible enough to accommodate the decisions made by the community in line with our strategy of supporting where we are needed to foster a self-sustaining and prosperous ecosystem around the Hub.

The Cosmos Hub is very important to us, and we want to see it thrive.

Thank you Lexa for your continued efforts and dedication to the Hub. Makes total sense for the Hub to funds its own development.

However, would agree with Rarma, Noam and others re the need for greater clarity around KPIs, deliverables and how the funds will be spent.

Going forward, I think it would also be good if we could figure out some relatively straightforward way of allowing the community to have some say in the composition of these committees.

Thanks for the detailed write-up @lexa - there’s no doubt about the importance both Hypha and Informal play within the ecosystem. I’d like to express that I am in favour of having the funding come from the Community Pool - I think this is an important step and would ensure that the accountability is with the Hub rather than another party. Rarma: While these items may seem related, they each have different scopes and deliverables, and teams work on them. It would be best to have the community vote on each as separate funding for the year, with their own schedules, deliverables and KPIs to be monitored against. With respect to the above, I am in agreement with Rarma. I think it would be beneficial to have a separate funding request and possibly different KPIs set for the different teams as they would be working on different aspects of the Roadmap. Noam: given the high amount of money requested I’d love to see some clarity on the headcount allocation per item. What’s also unclear to me is how many folks on the team are engineers v.s. marketing / BD. This is something that I think needs to be defined further before going on-chain. Take the…

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Gets kinda hard to add any constructive criticism after this post. Well done Rarma. Great feedback

Thanks for commenting here, @Rarma . Your response seems to have captured a lot of what everyone else was wondering too. To address your questions, and the questions of others, I’ll address it point by point: Omnibus proposal It’s important to have a core team that works on low level research and development of the Hub’s core features (right now this is ICS), while also integrating efforts from other teams. This is how most chains (and most software projects in general) function. Having a core team doing both maintenance and R&D builds expertise and continuity around the core features. If it’s not us, I would want to see another team filling this joint role. While these items may seem related, they each have different scopes and deliverables, and teams work on them. I’ll have to disagree on this a bit. Of the areas of focus we list, I think they are all quite related. Testing & Testnets and Gaia Maintenance are obviously pretty core to the Cosmos Hub. These categories are also where the Hypha and Informal Hub teams work closely together. We could have submitted separate proposals for each team, but since we work so closely together, and our work would be greatly…

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Schedule of work Like Jehan says, several of the items in our roadmap are closely integrated. I’ll speak to the maintenance (both Gaia and ICS) and testing components since those are the ones that have a clear schedule. This is a quarterly schedule for two releases per quarter, equating to a total of eight releases over 2024. At this point, we can’t predict or commit to exact features or core tech version updates for each release – we don’t have the information necessary to make those decisions or estimates yet. Similarly for ICS support at Hypha, we can’t accurately predict how many chains we might be onboarding (however, we expect this to be in the range of 2-5). For a sovereign-to-consumer transition rehearsal, this is what our schedule looks like: This work occurs for every rehearsal and must fit into the continuous Gaia release cycle – launch rehearsals, Gaia upgrades, and mainnet upgrades all happen on Wednesdays in approximately the same 15:00 UTC time slot to reduce coordination overhead. We have approximately a two week process for a launch rehearsal. As part of ICS maintenance and testing, Hypha onboards incoming consumer chains to the Hub’s Replicated…

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Hypha has been doing fantastic work! I’m really looking forward to wargame Thursdays. With that said, I believe that the cosmos Hub team at informal is still too much a part of ICFormal. As those who frequent the forum are likely aware, I’m really disappointed with the response from amulet which has mainly been nothing. Of course in addition to nothing, they also published and miscategorized a security issue. Their publication and miscategorization of this issue has forced myself and our team at notional to work in absolute overdrive. Informal systems still seems to believe that it is important to go through amulet. I am arguing that it is dangerous to go through amulet, and that there is no need to go through them because notional is working security on the hub. If amulets response had been better, we would gladly work with them just like we would gladly work with hypha and gladly work with informal on security on the cosmos hub. I do not believe that securing this amount of software is something that can or should be left to a single organization. Basically, security is the responsibility of everybody who touches the software stack. Hypha really seems to get this. As…

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Some really great points and feedback mentioned here: I think a lot of good topics for feedback have been mentioned already and so I wont go into detail. As mentioned by others, it could be better to be more specific about the team members working on the deliverables of the funding and the funding itself to be ‘for XYZ deliverables to be worked on by ABC individuals from Informal and Hypha for EFG period of time’ instead of for ‘the Informal and Hypha teams’ This coupled with a funding amount and people responsible for work and delivery for each single area of work , as mentioned by @Rarma regarding R&D vs Interchain Security vs Gaia Maintenance etc, should allow the community to review each part of the work done by Hypha & Informal more effectively, generally resulting in better accountability and more effective communication between the community & the teams regarding the work conducted. Seperating the work taken on from this proposals funding and the existing work being conducted by Hypha and Informal outside the scope of this proposal (such as existing work and projects or newly taken on work), from a reporting/accountability perspective, ensures the community can more…

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l1am_Crypto:

Seperating the work taken on from this proposals funding and the existing work being conducted by Hypha and Informal outside the scope of this proposal (such as existing work and projects or newly taken on work), from a reporting/accountability perspective, ensures the community can more effectively monito the work conducted and Informal/Hypha can more effectively communicate who by, how and when deliverables have been completed.

Well, so a corporation really only has one set of books. Which is why I am suggesting that the hub team leave informal.

I don’t like the overhead of that move but informal has done very poorly by the hub lately. But this didn’t really come from the hub team, instead it came from informal and Bucky’s entanglements with the foundation

I agree the points brought up by Liam. I feel like this proposal should be clearer in terms of who is doing what work, and what are the timelines. This allows for better accountability in the long term.

Whilst the rates mentioned are software development rates, is all this work really software development work?

For example, does it really cost $2.5million per year to do testing, testnet coordination, incident response and management? What part of this work also fits within the scope of @jacobgadikian’s Notional responsibilities?

Considering the teams are receiving $325k+ per team member (which seems insane to me), is there really a need to use another 100k ATOM bonus for performance?

more specific about the team members • @l1am_Crypto Jehan wrote an update to this that I’ve also included in the top-level post. On Informal’s side, it details the number and roles included in this proposal. I’ve done the same for Hypha here and in the top-level: • 2 general software engineers who write code, design and build tests, and work with other dev teams • 1 product manager who manages scope, timeline, communications, and is involved with every part of our team’s work • 0.5 devops engineer who manages and orchestrates our fleet of nodes on two public testnets and multiple consumer chains For a little more context, Hypha’s team is pretty small (3.5 people) and we tend to be mostly heads-down developing and improving systems to ensure that quality code lands on the Hub. Over the last year, we have shepherded drastic improvements to the Hub’s operations and security, as well as the smooth release of new features such as Replicated Security and the Liquid Staking Module. We think we punch above our weight in terms of delivering on our scope of work. As a note for both our headcounts, we will report on the precise number of FTE employed for each quarter and…

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This comment contains details about liquidation and payment mechanisms that will be executed as part of the proposal. Details of liquidation process To carry out the goals listed in the 2024 funding proposal, Informal and Hypha will need to hold the majority of the funds in the form of USDC, not ATOM. While we are obviously very aligned with the success of ATOM and will hold 30% of the funds in the form of ATOM to provide added incentivization, the majority of the funding will go to pay employee’s salaries and other fixed costs and for this we need stability. However, the community pool contains ATOM. So, before the start of our contract in 2024, a significant amount of ATOM will need to be converted into USDC. This USDC will then be put into the vesting accounts described in the funding proposal. Over 2024, this USDC will vest and will be used to pay for our expenses. Keeping 30% of the total budget in ATOM means that 4M worth of ATOM will need to be converted to USDC ; there are several ways this could be done. Potential conversion methods • Fully automated • The ATOM amount would be transferred into some mechanism like Timewave, which would automatically and…

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Thanks for the proposal Lexa and Jehan, I think you add great value to the Cosmos Hub. Just one comment. The CP funds come from a tax to ATOM stakers and validators. This funding will come from the CP to pay the salaries of several Informal Systems and Hypha employees. However, Hypha and Informal Systems are for profit companies. If the ATOM stakers and validators are paying the salaries of certain employees of Informal Systems and Hypha, shouldn’t these employees be ‘employed’ by ATOM stakers and validators, for example with some subDAO entity? For example, imagine a person works for company A, then he gets hired by company B and receives a salary from company B. Here what it is suggested is, people work at company A but the ‘company’ B pays the salary for the people at company A. If the Cosmos Hub is paying the salaries, these people should be ‘employed’ by the Cosmos Hub and work exclusively for the Cosmos Hub. If they are still employed at Informal Systems and Hypha, there are bosses in the companies so they need to answer to them and not to the Cosmos Hub since they are employed there. Also, Informal Systems and Hypha benefit because their overall costs would be lower…

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I think it is not right to say that the Hub would be paying salaries without actually ‘hiring’ the people themselves. We’re talking in terms of salaries because it’s a convenient way to break down what it means to have a contract worth a certain number of dollars, not because the Hub is directly paying salary directly. This is an agreement between the Hub and the companies, not the individual employees. The Hub pays the company to deliver the things we’ve outlined in the prop, and the company has its own employment agreements with its employees (including bosses, whose job it is to make sure this work gets delivered). Many people would choose to work for a company over a DAO or subDAO entity because of things like health insurance, benefits, retirement contributions, taxes, etc. I’d be very interested in seeing a DAO figure out how to offer a competitive employment package that accounts for things like health benefits, vacation time, etc. I think that would be a huge evolution in our ability to do decentralized work. Delphi Labs published content earlier this year about the idea of a legal entity that uses decentralized tech as an integrated part of the entity’s governance and…

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lexa: This funding would replace both teams’ current funding from the Interchain Foundation and have these teams be directly accountable to the community. This proposal assumes the “community” is positioned to perform accountability efficiently and effectively. It is not . To date, ATOM Community Pool expenditures and funded recipients have lacked a clear and consistent framework for transparency deliverables and initiatives; overall, even well meaning entities rely on a combination of self-policing and seemingly arbitrary and or partial disclosures. The hub community has yet to define nominal or normalized standards for “standards” essential to meaningful monitoring, evaluation, and reporting. At present, the “accountability” that exists is entirely self-designed and self regulating AND operates internally within funded teams. The “accountability” is totally dependent on ethical frameworks and internal controls at the design discretion of funded teams. To be clear, DIY accountability is not accountability. The community has observed challenges and limitations with internally curated and “ratified” oversight committee functions, as per AADAO operations. All…

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lexa:

Membership

The membership of the committee will not change throughout the funding period named in this proposal. The members of the committee are as follows:

• Stride contributor: Aidan Salzmann
• Neutron contributor: Avril Dutheil
• Polkachu representative: Polkachu
• A representative from Imperator
• Shane Vitarana at Stargaze
• James Hinck, Product Manager at Circle (tentative)

Add an accountant or a person experienced with preparing financial statements, please.

lexa:

The items in this section of the roadmap are still under active research and are more likely to be substantially modified, added to, or deprioritized. Over the course of 2024, we will focus on one or two of these topics to begin building and putting into production.

Some of the roadmap sounds like it can be redundant with R&D initiatives funded by AADAO. What will be done to avoid redundancy with AADAO if they’re renewed in December?

Separately – R&D on ICS insufficiently samples sentiment and experience of operator-stakeholders, namely validators. What will you do to make your R&D more diverse and inclusive of operator/provider perspectives and their ongoing concerns?

Accountability Really appreciate these two contrasting ideas – • urgent need for an external and independent oversight hub committee. • the importance of securing hub funds for Informal and Hypha hub teams. Without any existing accountability structures on the Hub, we’ve done our best to provide the best ‘DIY accountability’ possible. But accountability standards on the Hub are sorely needed, and it would benefit both the community and any entities looking to make proposals. Financial reporting and disclosure Our orgs work with accountants, who will be involved in preparing reports. Adding an accountant or another finance-oriented person to the committee is an excellent suggestion, thank you. We’ll look into that. Our vesting and operational wallets (including any locked vesting wallets for earned bonuses) will absolutely be made public. We’ll deliver financial reports (balance sheet, income statement, cash flow statements) on Hub-dispersed funds every quarter – this seems like the most sensible cadence to me since there will be monthly payroll withdrawals and quarterly assessments around the performance bonus. Each quarter, we will be able to report on our…

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lexa: Really appreciate these two contrasting ideas – • urgent need for an external and independent oversight hub committee. • the importance of securing hub funds for Informal and Hypha hub teams. Without any existing accountability structures on the Hub, we’ve done our best to provide the best ‘DIY accountability’ possible. But accountability standards on the Hub are sorely needed, and it would benefit both the community and any entities looking to make proposals. Hey Lexa, To be clear, my use of “DIY accountability” was minus snark. It’s clear to me both teams anticipated these concerns and shared as much re: roadmap, KPIs etc. The effort is both noted and appreciated. RE: • urgent need for an external and independent oversight hub committee. • the importance of securing hub funds for Informal and Hypha hub teams. Contrasting, yes. Although distinct, they don’t necessarily conflict. Thank you for adding an account/finance person to your committee. An unsolicited suggestion/nomination for you – someone like James Parillo at Figment would be an excellent addition. No idea about his availability or amenability, however. As for addressing ambiguity…

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jtremback:

Omnibus proposal

fwiw, an omnibus attempts to pork barrel a number of diverse and unrelated topics. “Omnibus” is a misnomer, here – while the proposal scope is substantial, and there are many parts, they’re all parts of that singular thing called hub development. I do share @Rarma’s view tho that it’d be good to R&D decoupled from funds for dev team. For different reasons.

R&D requires objectivity – if it’s lead by and large by devs moonlighting as product managers and economists, can make agenda setting and research priorities tolerant of cognitive biases and such.

Thanks for the comments @Cosmos_Nanny . AADAO redundancy We have a good relationship with @Better_Future and @Youssef of AADAO, and speak with them frequently about Hub direction and upcoming AADAO grants. We also have good relationships with many of their grantees, such as @effortcapital and @Noam . Through this we synchronize our efforts and avoid overlap. We also focus on different areas. Our team is focused on building and maintaining the base layer of the Cosmos Hub, in the form of Gaia and ICS, while AADAO grants tend to focus on higher level features of governance and tokenomics. ICS validator concerns We speak to validators frequently, but we will be stepping up our efforts to involve them in product decisions. A lot of our research has been focused on reducing costs for validators, especially small validators. Soft opt out is one early effort in this direction, and one of our main research focuses for next year, partial set security, should make a major impact by allowing validators to choose whether or not to run any given consumer chain, and giving a larger fraction of the rewards to validators who do choose to run it. Another mechanism that I will write up in…

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Thank you, Jehan.

Are you able to comment on ICF’s reasoning for situating hub dev funding through governance? While I agree it’s better to establish a more direct relationship between dev teams and the community – funding ongoing hub maintenance and development is the mandated purpose of the foundation.

I can confirm AADAO has a good working relationship with key people from Informal such as @jtremback and Lauren Gallinaro and we have regular touchpoints. Often times, we request their contribution to advise us on strategic grants like SDK module deployments for example and anything that touches the Hub’s base layer. Oversight On oversight, AADAO has paved the way to the self appointed committee methodology in absence of a dedicated mechanism and Informal/Hyphaa are taking the same path, which I salute. While our oversight committee is not perfect, it has so far been able to establish internal control mechanisms, manage conflicts of interests and discontinue grants that were not effective. Our Oversight Committee has also been fully transparent and proactive in terms of AADAO’s operations and financial reporting. I see our oversight committee as a self regulation body within AADAO that is catered to the specific needs of our organization. Is there a place for a Hub’s specific oversight team? Sure! Normally, any spend proposal should have oversight, whether from a self-appointed body or a community-elected one. To be honest, I think what matters most is not who from…

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@Youssef wasn’t questioning the relationship between AADAO and Informal/Hypha. The question is how redundancy can be avoided in the event of renewal. You can have good relations and redundancy with R&D objectives. In some topic areas, redundancy might even be desirable. As to oversight – am in agreement with you. generally. It’s not about who , rather what we can have established as standards and requirements so we can move the ecosystem beyond ad hoc accountability thick with “expectations,” thin on details. Expectations are messy. And no one is made happy. Right now, funded teams are hostage to whimsical demands for reporting, as an example. And when is what is delivered on a volunteer basis ever going to be good enough? Invocations of community “expectations” and preponderance of transparency demands happen in pockets of partisan conversations. This is wrong. Disgruntlement and annoyance with these demands also transpire in segmented rooms. This is also wrong. It’s not sustainable if we want to create minimum viable culture of respect in Cosmos. Just thinking out loud as to what we can do, collectively (as dissimilar we might be with respect to what kind of…

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James is a great suggestion

The most urgent need is to develop and define standards and reporting requirements for cp fund recipients. We don’t need to formalize a committee via governance to get this done.

+1 to this. I think that’s the most impactful work that can be done in the least amount of time and I’m happy to talk more about it when I have a bit more bandwidth.

Are you able to comment on ICF’s reasoning for situating hub dev funding through governance?

I can’t speak for ICF of course, but Maria did comment higher in the thread about refining their focus to the core stack and ecosystem.

Hypha is also not so involved in R&D, but I specifically want to call out the CHIPs process as a major factor in reducing redundancy with anyone, not just AADAO. Features from Informal’s Hub team, any AADAO grant recipients, and other dev teams should be posting ideas on the forum as their discussion phase, during which time any redundancy can be highlighted.

Hi Maria, thank you for your comments. It’s somewhat puzzling to infer that the foundation doesn’t view the Cosmos Hub as part of what it deems the “most relevant tech stack.” One could argue that the hub represents a direct and most relevant expression of the most relevant tech stack. During Cosmoverse, Brian mentioned that the projected outlay for 2023/24 is about $45 million. Can you clarify whether this figure accounts for ongoing funding to support development or if it assumes any offsets or other financial considerations? Separately, some quick questions for you and @crainbf : Financial reporting Are there any intentions/plans to disclose public-facing financial reports covering the period from Q2 to Q4 in 2021? Releasing reports for all the under-reported/unreported quarters and years can help us contextualize claims of responsible stewardship and the information shared in your 2022 annual report. Asset management and policies Does the foundation maintain specific regulations or policies concerning the pace of endowment spend-down? Are there guidelines in place regarding the liquidation of particular asset types to support the foundation’s operational…

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FrancescoSVC:

is there really a need to use another 100k ATOM bonus for performance?

I, too, think the bonus is overly generous and “exceeds expectations” is totally nebulous.

Don’t get me wrong, I’m all for funding these teams, but adding the bonus aspect with a subjective condition reeks of wanting the upside potential of ATOM without taking any risk. That’s not fair to those that have spent real money to obtain ATOM.

in3s.com will vote a reluctant “YES” on this proposal. The reluctance is only because of the inclusion of the bonus. (KPIs, as @Rarma suggested, should be used to determine if a bonus is earned.)

This person analyzed it very well, providing validators and delegators, think about it carefully.

G. 🎒🎺

We endorse this proposal but wish to highlight the profoundly unfortunate timing of converting ATOMs into USDC at a time when their value is severely depressed. It is imperative that we initiate discussions regarding the establishment of a financial committee to oversee stablecoin reserves and conversions on behalf of the Hub. This step is essential to secure funding for the development costs of core teams. Presenting $4 million worth of ATOMs at a price that may well mark the lowest point in this consolidation cycle is a situation we must avoid in the future. We strongly recommend that the community initiates conversations about creating such a committee as soon as possible.

We should consider the timing of execution. Right now, it’s not a good time. In the technical analysis of the chart, if we consider the worst-case scenario and can’t hold the current bottom, we should be prepared for a potential drop of up to 25%. Therefore, we need to save our budget for the next year.

Saddened by the fact that I’m voting no.

The clear control that the foundation has over Informal shows up even in security incidents, and it’s too much.

FWIW, I strongly support this team, but I do not support Informal Systems handling of recent security matters, which was basically to tell Notional to contact Amulet, who they knew full well wasn’t responding to Notional.

Catch-22’s like that have no place in security.

Have the following arguments of ICF funding responsibility been addressed?

G. 🎒🎺

A proposal by Hypha and Informal is up for vote on the Cosmos Hub. They want the community pool to fully fund their work. This is work specifically focused on improving the Cosmos Hub. Until now, these teams have been funded by the ICF. The proposal asks for $5.7m to fund these teams. This represents 16% of the current community pool of $36m. Does it make sense to have Hypha and Informal funded through the community pool? One thing that I like about the proposal is that it would really put the ATOM community in charge of the development of the hub. This is very cool. That is the way for the Cosmos Hub to become a coherent and effective, yet decentralized collective. A new type of organization. If the Cosmos community can figure out how to leverage on-chain governance for this, it would really make the Cosmos Hub into the largest and one of the most effective DAOs in crypto. For me, the Atom Accelerator DAO is a great example. I’m excited that there is a governance-funded grants program that funded 25 grants with $2.7m. It makes me bullish for the hub that AADAO exists. And it would make me even more bullish if the hub governance is directly funding its core development.…

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Brian, thanks for sharing. I have several questions for you and @mpg regarding the allocation and communication of funds ICF apparently earmarked for Cosmos hub development. • Could you clarify when the decision to allocate $3.5M was made? Additionally, when and how was this allocation communicated to the Informal and Hypha teams, if it was communicated at all? • According to the ICF’s 2022 report, approximately 16.2% of the total budget of $48.1M, or $7.8M, was allocated to hub work. If we include the $1M allocated to Hypha (assuming their work was exclusively related to hub development as per your report), what is Informal/GmbH take of the remaining $6.8M? • Was there an overpayment for hub development in 2022? Questions for @jtremback and @lexa : • Considering that Hub Dev total outlay was $7.8M and Hypha received $1M, what was Informal’s take for hub dev work in 2022? Why is the current proposal for $5.7M? • Is it accurate to assume that the $5.7M proposal accounts for the $3.5M guaranteed by the ICF? Does this explain why the cost estimate for the work is 27-36% less than total spend on hub dev in 2022? • What factors led to this substantial…

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Hi, perhaps I can help a bit here. The decision on the 3.5M was made last week and has not been communicated to the teams. The hub teams and other core teams have been under significant uncertainty as to the 2024 funding from the ICF. I have been advocating for the ICF to finalize and communicate initial funding decisions since July to give the teams time to prepare and enable more conversation and communication about the upcoming budget cuts for 2024, but unfortunately this has not occurred. According to the ICF report the Hub funding for 2022 was 7.8M - see the table page 17. It includes work at Informal, IG, Hypha, Iqlusion, Strangelove, Orijtech, a total of ~20 people. Due to issues at IG in 2022, it was decided in late 2022 to move the IG Hub team to Informal starting in 2023. Some of the team left, and Hub funding was streamlined from the ICF to just two orgs, Informal and Hypha. This has significantly simplified the organization of development and reduced costs and greatly improved the overall development velocity around the Hub. Going into 2024, the Informal/Hypha teams have sought to streamline and limit growth to provide a reasonable budget for Hub funding moving…

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The numbers you’re talking about are from the 2022 transparency report for all of ICF’s funding. We’ve reported our teams’ 2023 numbers in the proposal text: $1.2M for Hypha, $4.5M for Informal’s Hub Team. We were not aware of the ICF’s Hub development budget for 2024, nor were we aware that ICF was willing to deploy that budget to the community pool or pay it directly to orgs chosen by Hub governance (quoting Brian’s comment here on those being options under consideration). We’re willing to work with the ICF and the liquidation multisig to make this happen. To be super clear - we came to our $5.7M budget based on the cost of our work in 2023 and our projected roadmap and headcount for 2024. We did not choose $5.7M with the intent to receive additional ICF funding (i.e., planning on receiving a total of $8.9M from two sources) nor with the intent of later revealing that the ICF would subsidize that number. Our budget is $5.7M for this work regardless of where the funding comes from, same as 2023. This is what we think it will take to do the work we’ve committed to in the proposal and maintain the level of service provided in 2023 (focusing on improvements and R&D for ICS,…

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Hi Ethan, I appreciate your response. I calculated $7.7M from the 16.2% allocated towards Cosmos Hub from $48.1M total spent. It is closer to $7.8M as 48,100,000*0,162 = 7.7922. I also recalled you saying IG team working on hub was relocated to Informal, it was unclear to me if this happened during or after the 2022 report. Regardless, the presentation of team composition and breakdown above indicates 14 FTE from Informal (from 8.8 FTE reported in 2022) and 3 from Hypha. It was an error in communication to say Informal received $7.7M of the total outlay for Cosmos Hub development-- rather I meant to ask what was Informal’s take of the remaining $6.7M seeing that Hypha was paid $1M for their exclusive work on the Cosmos Hub per 2022 report. I suggest for future reporting, would be more clear to show how much each team’s compensatory take is within a general subcategory rather than just showing how many FTE persons they have working on it. I’ll edit my message to this end. Unfortunate that ICF’s funding decision was not communicated to Informal/Hypha teams efficiently. I don’t think it’s a fair to have community vote on assumed support from the ICF, and the funding…

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I did see the note in the proposal text about your teams’ 2023 numbers. I was trying to understand them in relation to the 2022 reported numbers on total spend for Cosmos Hub. Working from the numbers provided in the 2022 report, and the numbers provided in Forum and in your proposal – one can infer Informal absorbed the GmbH team working on Cosmos Hub, and Ethan confirmed this in his response.

So it’s natural to wonder how one keeps the preponderant team intact, with similar FTE headcount from 2022 – working on the same (if not more) at less cost.

There are several concerns with this funding proposal:

1. Development funding should come from ICF, which is their mandate. I checked the interchain treasury, – seems to be healthy.
2. One proposal for two development company is too complicated to manage accountability.
3. This proposal quite large in scope and funding. Any development over $1m generally difficult IMHO.
4. Having liquidation multisig seems complicated. Has anyone thought about tax implication imposed on this group? Is there an entity in place to do it?
5. We are shorting ATOM by selling 70% to USDC. Not good optics. I do understand the projects need it in USD to fund for future payrolls. I think ATOM should be funded directly to the project to be liquidated (and funded more often like quarterly basis).

For all these reasons, it is a difficult proposal to get onboard.

Thanks for the comment, @stakefish_gov . I’ll address it point by point. • The answer to this depends on why you think that development funding should come from the ICF- because they can do a better job allocating funding than the community pool can, or because they have a lot of money? They’ve announced that they plan to put $3.5M in the community pool, and I applaud this. Personally I’d love to see a lot more than that put in the community pool by both the ICF and AiB, and I think that the Hub taking core development into its own hands is a good way show that it’s time to make that happen. • We work together very closely, which is why we combined our proposals. That being said, we will present separate quarterly reports to the oversight committee, are graded separately, draw from separate vesting wallets, and our funding can be terminated separately. What are your specific concerns? • We have one unified team that takes on many aspects of maintenance, support, production operations, and R&D on the Hub’s core offerings. That is a large scope. In my experience, trying to develop a product with many sub $1m grants ends up being more expensive, as shown by the grant-based Hub…

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Thanks, helpful feedback. We’ve written up a detailed FAQ addressing many of the points that have been raised here and elsewhere. We hope that will clarify most questions, but we’re happy to keep clarifying things here. At a high level, headcount has reduced overall from 2022 from a combination of increased efficiency in team organization and the associated increase in focus that came from consolidating the Hub team in Informal and Hypha. This proposal is an opportunity to mark and celebrate that as a major milestone in the development of the Hub. Things still aren’t perfect, but they seem to be much better than they’ve ever been. As for the ICF. Interacting with the ICF can often be difficult and confusing. I’m in a weird role to comment on it for obvious reasons, but even I feel this way. I do think there is still hope (starting with the newly elected FC members, to be announced soon), but suffice it to say this makes ICF a difficult and confusing customer for core dev teams. So this proposal is Informal and Hypha together saying they want to have the Hub directly as a customer, to be more accountable to the Hub, independent of the question of the ICF. This proposal will…

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We weren’t involved in the planning of the proposal to understand all the nuance of the issue. But as it stands, ICF has yet to set aside $3.5m to the community and the timing of this proposal makes it difficult. If ICF can speak officially their position on future funding (responsibilities, scope) of the CosmosHub w.r.t to Informal and Hypha, then I think it would give more confidence this proposal. You can very well propose this again at later date.

I think the burden is not just approving the $5.8m, but also the precedence we set on future proposal like this.

Yea, setting precedent is a big goal with this proposal. Here are some of the precedents that we wanted to set: • Optimistic revocable funding: We think it’s not good to give grantees big up-front lump sums, but it also isn’t good to make them make new proposals every quarter or whatever. For this reason, we have used vesting accounts to release the funding over the course of the year, and specified procedures to claw back funding if performance goals are not met. These mechanisms will be automated by @Noam ’s DRIP mechanism, which we hope to make use of next year. • Oversight committee: There have been many props with multisigs in the past, but sometimes they haven’t necessarily provided the active oversight they should. We designed the committee with specified meetings, time commitments, and grading standards. • Per head accounting: We think that per-head accounting is not perfect, but it is the best compromise between a fixed lump sum (which lacks accountability) and completely open books (which hurts flexibility and many companies will not be willing to do). In theory, someone could game this by hiring a lot of unqualified or junior devs, but this should be caught by the…

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Recognize this is a precedent setting proposal, but afraid we’re at risk of setting the wrong precedent. We should not vote on a proposal that requests $5.7m when the real funding ask is $2.2m. Asking community to overlook the language and ask amount is inappropriate and makes the request process ripe for future abuse. It might incentivize projects to initially request larger amounts from the cp, whilst actively seeking additional sources of funding even after the vote period ends. The imperative here is governance assumes that teams that are submitting funding requests have exhausted all tenable sources of funding prior to making their proposal. And have had “finality” with respect to all funding conversations. Approving a proposal based on updated information that does not amount to more than a mere promise of support from the ICF erodes transparency and trust. In view of the above, I encourage Informal and Hypha teams to submit an updated funding proposal that accurately reflects their financial requirements. Some exposition on applicable terms and conditions for distribution of bonuses also desirable. Asking voters to ignore the on-chain “ask” in consideration of…

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They set a 25% buffer as a hedge against a decline during the voting period, but they believe that a $4 million liquidation won’t have an impact.

It is recommended that the offer for $2.2 million be made ‘on-chain’.
What started with blockchain must be concluded with blockchain.

To transfer control to the community, return all of ICF’s funds and then delegate responsibility.
Using 20% of community funds for annual maintenance is still premature.

I really hope that this does not pass in its current form. The moves from ICF ( @crainbf moves were welcomed) leave me feeling like we really don’t know everything that we should.

The fact that we were unable to contact informal except via security provider @Jessysaurusrex is just too risky, since Amulet didn’t get back to us.

So at this time it isn’t possible to support funding Informal because their internal policies are dictated not by what is best for the hub, and maybe not even by what is best for informal, but instead dictated by what is best for the Interchain Foundation – or even – not what is best for ICF either – simply by what is dictated.

If 839 is passed, it is likely that Informal will continue to do what ICF tells it to, as the foundation is more important to the survival of Informal than the hub. I don’t want a hub that does what it is told, but if there’s one thing that can be said of informal, it is that they do what they’re told to by the Interchain Foundation, weather or not that is good for the hub.

It should not pass in its current form.
And I would think Informal, of all teams would agree.
Didn’t Informal eventually reason to vote NO on 818 because the proposal was submitted with an incorrect parameter? Isn’t 839 also “technically” incorrect if the amount requested from the hub is not $5.7m? If the funding request is $2.2m, proposal should reflect this on-chain.

Fwiw, there’s an unspoken premium in continuity of service. It’s a good team.
If the ICF wants to progressively transfer its service agreements to the hub, the community requires some reporting from the foundation.
In the absence of historic payments made, for what deliverables, and how much for each – it creates an imbalanced burden on the team to rationalize the ask without any context. Painful.

Security should not be subject to interest group politics. This is worrisome - what you say, Jacob.

I really appreciate Ethan’s response above. I’m fully in agreement with what he is writing.

To clarify two things: Jacob questions whether Informal would still be beholden to the ICF. That would really not be the case here, certainly not for anything Cosmos Hub related. It would become the responsibility of the Cosmos Hub governance to effectively deploy that.

With regards to the question: What comes after 2024? I would be in favor of the ICF continuing to fund Cosmos Hub development and do it via the community pool. At least if the results are positive for the 2024 year. Of course, amounts would depend on the overall budget and treasury situation.

I would also be in favor of exploring using on-chain governance controlled mechanism to control and deploy more types of funding in the future. That would be great.

Hi @crainbf – I definely think the joint funding is the right way to move forward. Would the Foundation Council be able to make this decision together in time for this proposal? It would be a big boost in confidence, and derisk the community burden.

Yes that decision is already made. The ICF is committed to fund the $3.5m to the proposal if it passes.

crainbf: To clarify two things: Jacob questions whether Informal would still be beholden to the ICF. That would really not be the case here, certainly not for anything Cosmos Hub related. It would become the responsibility of the Cosmos Hub governance to effectively deploy that. 1000005427 864×1872 194 KB 1000005428 864×1872 143 KB 1000005422 863×1238 134 KB 1000005424 864×1872 212 KB Brian, informal refuses even to discuss security with our team, citing ICF policy. twitter.com Jacob Gadikian 🐳⚛️⚗️ @gadikian The vulnerability has been confirmed by @CelestiaOrg @terra_money @osmosiszone @Injective_ My exploit technique relies on another bug in @cosmosibc which was first identified by @ctrl_Felix . All of this has left me in the difficult situation of knowing roughly how to take down… twitter.com/i/web/status/1… 11:57 PM - 1 Nov 2023 18 2 Since I believe that Informal will continue to receive funding, I believe nothing will change, because the bug is in comet. Thus, an informal based hub team, would also have to follow the rules of the ICF. This whole move only changes…

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I am against funding of mesh security development. I don’t see how mesh security accrues value for ATOM.

Mesh will accrue value for all, I think.

The only area where it could be a threat is commoditization of security, and I agree with @jtremback here – security is going to eventually be commoditized.

Better to be best prepared team, I reckon.

Informal obeys. Cosmos pays.

Jacob Gadikian 🐳⚛️⚗️

Informal’s contributions to Cosmos Hub have been so significant that they hardly need verbal recognition. We also acknowledge that they are one of the very few teams we can trust going forward.

However, there are a few unanswered questions:

• The development of Cosmos Hub was initially funded through ICF’s fundraising (donations) during the ICO a long time ago. Moreover, ICF’s current financial state seems to be sufficient to support this. In other words, the development of the Hub should be solely funded by ICF. We want to emphasize this point.

• While the above reflects my opinion, additional remarks may not be necessary. ICF has announced its intention to donate 3.5 million to the Hub pool, but this has not been executed yet. I am uncertain whether it is appropriate for the Hub’s community pool to advance the funds that ICF has not yet paid. If, due to any circumstances, ICF cannot fulfill its commitment, the entire burden would then fall on the Hub.

Is there anything I might have misunderstood? If so, please let me know.

crainbf:

would also be in favor of exploring using on-chain governance controlled mechanism to control and deploy more types of funding in the future. That would be great.

@ebuchman @mpg @crainbf

Can you deploy funds directly to the Hub?
Has this passed analysis from the foundation’s legal team? Sending ICF $ATOM to Hub pool makes you an “Active Participant,” does it not?

@jflowers515 thoughts?

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https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets

ICF would just be funding core development as it already has been. If it passes, it should be fine to deploy it to the community pool.
The important thing that we need is visibility where the funds go and some assurance that they are used well and accountability for it.

To me, every funding request on the hub should be read as a contract. It’s a contract between the proposer and the community that authorizes it.

To me, because proposals require a period of deliberation (at times negotiation) on Forum, there’s an implied “integration clause” to every funding request slammed on chain.

This means the language in the proposal, in contract, supersedes all other agreements – and this is necessary to prevent parties from claiming later there are other agreements or understandings outside of the provided contract.

#839 is precedent setting with the wrong precedent. You are authorizing the pertinence of off-chain understandings, and subjectively interpreting the proposal to mean what you want it to mean. This is wrong.

Voting YES means you’re still authorizing a $5.7m budget with $4m liquidation of $ATOM.

To avoid any potential disputes, Informal should resubmit an accurate proposal asking for authorization of $2.2m with $1.5m liquidation of ATOM.

it should be fine

To be clear, you think it is fine?
Or are you saying you have already checked with your legal team and they’re ok with the foundation directly sending funds to the hub?
cc: @mpg

It would be nice if the voting starts and debates take place, and after the voting concludes, the discussion points can be separately included in the ‘on-chain’.
I believe that if the proposal is modified and reintroduced, it could gain more support, but it might take some time.
It’s worth considering such an approach.

I believe that the collective intelligence arising from such discussions or debates will guide the hub in the right direction.

They have no incentive to do this if the hub authorizes 839. I’ve asked the proposers multiple times to resubmit with updated numbers to simply keep the on-chain record accurate with their ask, they refused.

Here are my more detailed comments on this proposal:

1. I am absolutely against funding Mesh Security. This item needs to be dropped. I don’t see how it generates value for ATOM.
2. $325K per developer is extremely generous. Goldman doesn’t pay salaries like this.

On this 17 developer team, you should have about 3 tech leads that can command $300K per year, the rest should be coming in at about $200K max. The testing team should be in $100-120K range.

So I assume:
4 testers at $120K = 480K
3 tech leads at 300K = 900K
11 devs at 200K = 2.2M
Total opex: 3.6 million
If I add 20% profit margin (ie 20% for the Big Guy, Ethan) = 720K
Total = 4.3M

I need you to cut $1.5 million from this proposal to be acceptable.

I am also against bonus pool because my ATOM investment is in the negative this year. Bonuses are paid only when the company (in other words me) is doing well. I am not doing well this year, so no bonus pool.

Prepared for what? For the commoditization of security? It sounds to me we want to LEAD the commoditization of security. I don’t see why we need to do that as an ATOM tokenholder and one of ATOM’s major products being providing security.

At present, security is not a commodity and I don’t see why we need to FUND this development. We can postpone this. I am generally against it all together but at minimum this item should be postponed till next year and reviewed then. I don’t see the urgency of funding this particular research.

This year the focus should be on CONSOLIDATING what was accomplished in 2023 and that is - interchain security. Fixing all the bugs and bringing it to market and having this product generate value for token holders. I am all for the partial set security and other refinements of ICS, but I am very adamantly against Mesh.

Definitely need somebody to address these questions.

Folks at Goldman and upper echelons of IB do get paid though – depending on your group, even a first year analyst’s total comp >$325k. Finance operates from a different compensation scheme. Their base salaries are artificially low so it’s not the best reference.

For fair comparables, we should look at similarly situated software companies in web3. I’ve had a selective view of top dev salaries in Cosmos, Polkadot, and Solana. I rarely hear of anyone breaking the 300k ceiling in blockchain. The few who do are CTOs.

I’ve worked outside of finance as well and I can tell you from all the companies I have worked at (in Silicon Valley, outside of Silicon Valley and Wall Street) Goldman had the highest base salaries for a given tech position/skill set. You have to go to top hedge funds (Bridgewater, Millenium, TPG) to beat Goldman pay. Goldman usually prices itself about 10% below the top hedge fund salaries. Basically you pay (ie get less salary) for the name and the reputation and for a lot of people this works - they never leave Goldman on their own

In this situation, I am sure all of the devs have big ATOM bags (which means they have big upside) so I don’t see why we need to pay such a large premium over what is the industry average as you suggest.

We don’t. We shouldn’t.

It’s 3 days before the vote closes, and I see less than 33% turnout (vs a typical 55-60% range). We’ve read doubts about allegations towards ICF with @Ash_Han ’s Letter to ICF and @jacobgadikian ’s holler on security issues on Twitter and on this forum. Those should be addressed, with the security issue discussed independently. Love that passion, btw, hope we can channel it into a new thread. We’d like us to all stay focused here on the improvements on Cosmos Hub and the proposal here is about the costs, hence we’re staying focused on the discussion here on the deliverables and the budget. lexa: Per-head rate For both organizations, our per-head total rate averages around $325K per year, this is how with Informal’s 14 and Hypha’s 3.5 team members, we get to a cost of $5.7M. This total cost includes approximately $225K in salary (and relevant overhead such as employer taxes and benefits), the remainder includes standard overhead margin to pay for operational expenses like legal, HR, finance and other support as well as some profit margin to the companies, to ensure long term sustainable growth. We’re highly concerned that the USD$5.7M costs for 2024,…

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Hi sir, I just wanted to let you know that currently if you want for this proposal to fail, then you should not vote at all because it has not yet met quorum.

If it does meet quorum, then you should veto.

Additionally I’m going to get an alternative proposal up today that:

• provides funding from a group of validators to the individuals involved, or a new co made by them.

• Eliminates the bonus

• creates the expectation that a bonus gov prop should be made in the same amount at the end of the term

• removes the harmful influence of @ebuchman and Informal

• mentions that ICF may or may not contribute atoms (they have not yet done so, we should assume that it will not occur)

… maybe we shouldn’t put the cart before the horse?

This proposal might actually pass. Also, it looks like @lexa had put a lot of effort into this and it’ll be deem worthy that we allow her to take the lead in making the adjustments if it doesn’t pass.

I think it’s worthwhile for the community to jump into a call or schedule an emergency Twitter Spaces event co-hosted by a few folks such as Lexa and yourself, and post the TL;DR here thereafter

Oh I’m aware that it might

And that’s a shame

Everyone should read @crainbf blog

On Cosmos Hub and ICF

A proposal by Hypha and Informal is up for vote on the Cosmos Hub. They want the community pool to fully fund their work. This is work specifically focused on improving the Cosmos Hub. Until now, these teams have been funded by the ICF. The proposal...

Good morning! We voted YES.

CosmosHub community in control of its development is a good thing! A couple caveat that we’re assuming – Request is in USD of $5.7M. Excess of funds are returned immediately, and the governance can amend elements of this proposal in the future. More on our blog:

Cosmos Hub Funding 2024 (Prop #839)

Background Proposal 839 seeks $5.7 million from the community pool (controlled by governance) to fund the development and maintenance of Cosmos Hub in 2024. This funding would be directed to Informal Systems and Hypha, organizations that have been...

It’s a Yes. Informal is the only team that shipped something on the Cosmos Hub and completed a roadmap, the ask is big, but also the value of the work done so far.

Proposal #839 is poised for approval. In passing 839, we are illustrating a state of insufficient decentralization. The SEC has posited that networks that can be characterized as “sufficiently decentralized” might be exempt from securities classifications. However, the precise criteria delineating adequate decentralization remains ambiguous. And while the exact level of decentralization required is not clearly defined, their aptitude and appetite for discerning what is “insufficiently decentralized” is sufficiently an acute existential threat for crypto. You know, regulators be regulating without regulatory clarity. This stuff about centralization/decentalization matters bc the SEC is all over this stuff. They just sued in Texas saying ETH is subject to US jurisdiction bc majority of validators are located in states. Centralization is the vulnerability regulators use to bring action. Our centralization via Ethan, Jae, ICF, AiB were already cited factors leading to ATOM being classified as a security in the Binance lawsuit. In view of this fact, the manner in which 839 is been rationalized by principal agents is a very bad and big problem. Centralization makes us a…

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Please bear in mind we’re on the cusp of another deranged political season in America. Figures like Warren, James, and Gensler are on the lookout for actionable narratives to bolster their sanctimonious pursuits.

Power thirsty politicos are illusionists turning apples into oranges.
839 makes Cosmos an apple.

Imo, because of 839, we are now regulators’ low-hanging forbidden fruit.
So, Howey like dem apples?

Not a lawyer or legal advice. But It doesn’t seem to make sense for the Comos Hub community NOT to accept a donation from a Swiss foundation. We are not giving any token or anything else in return.

If this is still a concern, it would be pragmatic to get a legal opinion from a reputable source like Fenwick on this matter.

When the donation is used to influence the outcome of a vote it is influence seeking.
And when you vote ‘yes,’ you can be perceived as participating in the influence.

And yes, you are not a lawyer. In part, the reason I want to secure a lawyer to provide comment and analysis is we take unqualified takes to create agreement – to our own peril, ser.

Think of it this way. The best practice is the practice that eliminates unnecessary questions.

This is strategically dumb. And irresponsible – all because proposers cannot “afford” the time to resubmit a proposal that requires simple change. Change the numbers. The funding request should read $2.2M and the allocated support from the ICF should be paid directly to developer teams.

The funding request should read $2.2M and the allocated support from the ICF should be paid directly to developer teams.

Connecting the two would be a problem.

Initially there was no connection. What actually happenned was, the community questioned about ICF funding and ICF were open to it.

It is still a concern. If you have Fenwick retained ask them.
You’re referring to Fenwick and West, right?

For a stakeholder-operator like Stakefish, you should review this with legal. You’re not just another validator on the hub. Your vp is 2.87% – meaning, your respective part in the exertion/expression of influence is more a concern for you than a validator that has .019% vp.

stakefish_gov:

Connecting the two would be a problem.

Can you be more clear? Connecting what is “a problem.”

So that I am more clear, the fact that the “donation” is connected to 839 IS A PROBLEM.

• No donation should be made from the ICF to the hub
• ICF should send ATOM/cash directly to developer teams.
• Informal and Hypha should resubmit a revised proposal with funding request for $2.2M

The proposal can’t be made with the condition of external entity’s action.

I see where you’re coming from, but I’m looking at it from many factors as written in our blog. I can see that this is a deal breaker for you and I can respect that.

You have to look at this like a regulator. Right now, what you are authorizing is a bribe. This is the anatomy of corruption working as a bribe, provided to me by a lawyer that is a friend. This is not legal advice. “…agents who seek a rent may use bribery—transfers of income—to gain access to the rent.” The agents: Informal and Hypha, are seeking funding through the hub through a bribe for the hub, and are utilizing a donation from the ICF to the hub, as an inducement/reasoning (bribery) to secure funding for 2024 hub maintenance and development. Transfer of income: ATOM from ICF treasury to the hub Objectives of corruption via vertical centralization: • “restricts entry to economic activity” (how ICF behaves, and how ICF has set up Informal to gatekeep contributors) • “…creates artificial scarcity” (there is not viable alternative other than Informal and Hypha to do this job. In part, this is the effect of ICF’s management over contracting development of hub and CESS. ICF funding decisions over the past 6.5 years promotes artificial scarcity of providers. You can’t even make a goddamn security report without preferential treatment according to @jacobgadikian )…

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stakefish_gov:

The proposal can’t be made with the condition of external entity’s action.

No. I’m saying the proposal should not be accepted factoring in the condition or promise from contributions from another entity.

Every validator voting Yes is effectively expressing approval of this condition/promise that has the effect of a bribe.

We think $5.7m is a great motivator for Hypha and Informal to allocate time and resources to resubmit a second proposal. We have a lot of respect for the due diligence done by everyone here, but we still cannot get over the fact that we are spending quite a bit and allowing for a profit margin and bonuses at times where many are bleeding and finding it difficult to recover from red figures this year. We need to move forward, at the same time we’re not pressed for time. The continuity of development is crucial and the Atomic IBC is important. The vote is poised to pass, all I can ask for is for the teams to respectfully forgo the bonuses, if not have the committee set a really high bar for awarding bonuses. The 7 USD spot pricing is also odd vs. a more typical 30-day TWAP in grants that we’ve seen. The recent price bump is likely a bonus in itself if it holds for the year. Separation of duty is difficult, and talents may or may not be scarce. Leaders who stepped up to take on leadership roles can face these challenging questions which we hope can be clarified sooner than later in the future. For these reasons, we’ll vote to Abstain which effectively contributes to the…

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jacksteroo:

We think $5.7m is a great motivator for Hypha and Informal to allocate time and resources to resubmit a second proposal

Why would they have to resubmit a second proposal requesting $5.7M if they get the $5.7M through 839?

G. 🎒🎺

Meant to say it’s a huge budget allocation ask, hence it should be highly motivating for Team Hypha and Informal to send in a new request, instead of saying “we lack resources to submit a new proposal”… we’re disappointed when we hear that.

It’s not motivating when you feel entitled to it.
So if you want them to feel the sufficient motivation to resubmit, KysenPool should vote NWV rather than abstain.

Voting No/Abstain at this stage is basically voting Yes.

If you want to express dissent in your vote, there’s only one vote.

jacksteroo: The vote is poised to pass, all I can ask for is for the teams to respectfully forgo the bonuses, if not have the committee set a really high bar for awarding bonuses. The 7 USD spot pricing is also odd vs. a more typical 30-day TWAP in grants that we’ve seen. The recent price bump is likely a bonus in itself if it holds for the year. I’d like to address these two points. The bonuses are to be awarded by the oversight committee only if we receive an overall grade of “exceeds expectations”. These grades are decided unanimously by the committee, and if even one member doesn’t feel that we exceeded expectations, then I’m guessing they will default to “meets expectations”. So I think it’s unlikely that we will get them unless everybody is really thrilled with a quarter. On the liquidation and the buffer, we are covering upside and downside. We will only receive $4M USDC + $1.7M worth of ATOM from the main budget (excluding the bonuses), no matter what the price is. That means that if the price is $10 when this is liquidated (just to make the math easy), the liquidation multisig would sell 400K ATOM for USDC, and keep 170K ATOM for the main budget, resulting in…

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ICF should give all money (atom/btc/eth) back to cosmoshub. And hub will actually take responsibility for COSMOS.

The hub can’t. There is no established accountability framework or mechanism.

If the inflation cut proposal passes (Min Inflation to 3.5% and Max Inflation to 10%) and I think it will pass rather overwhelmingly unless Jae is able to put together a ATOM 2.0-like veto vote which I don’t think he will, ATOM will be trading north of $15 next year. So in dollar terms, the amount of compensation you are getting will be double what you are planning for today.

Obviously if you are a trader don’t take my word for it and trade this because I don’t know jack, but I, in the role of a CFO/budget manager, would be making these assumptions.

Voting ends in few hrs and there’s still 59 validators who have not voted, many top ones?

Liquidation transparency report [updated: text formatting] The liquidation multisig has processed the ATOM-USDC liquidation. This is the transparency report on the process including links to multisig addresses, transactions, and details of the OTC deal obtained. The proposal text quotes 814,285.71 ATOM to account for the full $5.7M budget, plus a 25% buffer, bringing the total community pool spend in the proposal to 1,117,858.14 ATOM. This liquidation process has used 425,986 + 181,043.66 for a total of 607,029.66 ATOM. All excess ATOM (410,829.18) has been returned to the Community Pool. Given the upwards price movement during the voting period of the proposal, the 25% buffer was not touched, and the $5.7M + 100k ATOM budget used up 12% of the community pool, not the 20% quoted in the proposal. Important notes • The following multisigs are used throughout this process: • Hub multisig address: cosmos1jemq23tnffvmcfx0zktjenck2r6pzjuxx5yxkc • Ethereum multisig address using Gnosis Safe: 0x09F7A6F4ca66913AA897f2DCe24e352e28153724 • Noble multisig address: noble1jemq23tnffvmcfx0zktjenck2r6pzjuxwh3wwk • All multisigs used in this process are controlled by a ⅗…

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ccclaimens:

The end state of this process is:

• 281,043.66 ATOM in the Hub multisig.
• 4,000,000 USDC in the Ethereum multisig.
• 410,829.18 ATOM sent back to the community pool.

Thanks for the transparency. But what are the plans for this 30% left in ATOM of the $5.7M budget? If this is sold later and ATOM price is much higher, will the same process be done with a return of ATOM above the 30% dollar value? For the 100k ATOM bonus it is different and understandable to keep it as ATOM

The 30% of ATOM will be placed in the vesting wallets alongside the USDC budget portion. Part of the design was to hold a portion of the budget in ATOM for values alignment, since the budget is guaranteed (subject to adequate performance) but the bonuses are not.

Second Liquidation Phase The liquidation multisig completed the final phase of liquidation on November 30th by completing stages 3 and 4 that were previously remaining. We are sharing the work done during this phase to provide transparency to the community. Important notes • As before, the following multisigs are used throughout this process: • Hub multisig address: cosmos1jemq23tnffvmcfx0zktjenck2r6pzjuxx5yxkc • Ethereum multisig address using Gnosis Safe: 0x09F7A6F4ca66913AA897f2DCe24e352e28153724 • Noble multisig address: noble1jemq23tnffvmcfx0zktjenck2r6pzjuxwh3wwk • All multisigs used in this process are controlled by a ⅗ threshold of the validators identified in Proposal 839: • CryptoCrew • SimplyStaking • Stakecito • Stakin • Citadel One • Funds in final vesting accounts are controlled by the teams but unvested amounts can be clawed back by Cosmos Hub governance through a software upgrade. The final vesting accounts created are as follows: • Hypha Budget vesting address cosmos13gatuxfqxn7m3vtlydkyznfs9k8xv8283la5a5 • Hypha Bonus vesting address: cosmos1s39x73k7l0s88jkm399nkdk693ljmkjd2x83es • Informal Budget vesting address:…

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