[Proposal][#Voting Period] Signaling Proposal - Claw back unvested funds from Proposal 104

In Proposal 104, which was approved on 1 March 2023, Notional has been granted 120,000 ATOM for 365/24/7 monitoring of the Cosmohub regarding security vulnerabilities. The exact on-chain proposal can be found here The funds granted in the proposal have been used to create a vesting account. At the time of this proposal, there are approximately 120,000 ATOMs left in the wallet, with a current value of $1,100,000. Of these 120.000 ATOM, 90.000 ATOM are still locked and vesting.This proposal only refers to the vesting coins remaining in the wallet at the time of the clawback. Coins that have already been paid to Notional are not part of this clawback. The wallet with the vested funds is cosmos145hytrc49m0hn6fphp8d5h4xspwkawcuzmx498 In the past few days, Notional has undergone a separation. 16 of the developers, and therefore most likely all developers, have left the company in a dispute with the company management. Currently, there appears to be a legal dispute over the handover of the cryptographic keys and the transfer of company shares. This is all being shared on social media, which is currently ending in a real mud fight. An explanation of the devs who have left…

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An additional note. There is no proposal to claw back funds from a vested account. Therefore this proposal would require a coordinated update by all validators.

My open questions would be. Who would be able to create such update and coordinate the update?

I think this open question doesn’t prevent this proposal from being posted as this should check the community sentiment.

Also, to note here, 3/5 of the multisig that controls the vested funds have left Notional.

The remaining 2 are Litbit and Jacob.

Also, to note here, 3/5 of the multisig that controls the vested funds have left Notional.

The remaining 2 are Litbit and Jacob.

I just figured that out too. This means we need an upgrade no matter what…

@ctrl-Felix, could you update the wording to ensure the community is clawing back the UNVESTED amount? We don’t want any confusion around what is being clawed back.

Notional owns the vested amount (will probably need to go to a new multisig). The community can claw back any unvested tokens.

I think there’s an open question here. The 120k are vested, do these belong to Notional? Because I was referencing to the vested tokens

Because Notional states that the community can claw back these. And for the unvested tokens. How would that even work?

@Rarma

Assuming the wording is normal vesting-type agreements.
Begins at date x and each block y amount becomes available.

So if it began 03/2023 and we’ve vested 9 months of 36 months, then ~30k of the 120k ATOMs should be owned by National?

I might be confusing the wording with regard to vested/unvested. I want to avoid a Juno Whale situation

Got it. I mixed up the terms of vesting. I totally agree with the point you are making and I will make the edit.

Before making a software upgrade proposal, can we try and see if making a signaling proposal and demanding a return to community pool will work. Most likely if such a signalling proposal passes, IMO multisig members would be willing to comply given the wording of the Prop 104

This is actually a signaling proposal. I will add that to the title to make it clearer. It is written in the last paragraph.

However, the funds are vested. Even if the multisig members want they won’t be able to send the funds back to the community pool.

@Ghazni_Stakecito

Disagree with this, we just need notional team to provide a new wallet for the vested funds to address the issues of departing signers.

There was never an implication of headcount for notional to maintain for the purpose of the proposal. Unless there is evidence of Notional failing to fulfill their duties, this proposal is extremely premature. If nobody can provide the evidence to justify a claw back, there is no justification to proceed with this besides speculation.

Strongly disagree.

Do you not remember prop 16 and the fate that brought Juno?

Agree with @luisqa - until it’s shown that they cannot perform the duties agreed upon in the proposal, no clawback should be taken seriously.

Will veto any vote that forces a clawback of funds.

I think the appropiate thing to do is clawback the funds and then have notional or a successor prop.

We should develop a new account type with native clawbacks.

Comparisons to prop 16 are inappropriate. The community fund proposal contemplates a clawback for dispute resolution and this seems to be required in this setting.

@Tricky I get the point. But the proposal states out that the funds can be clawed back by the community. So this is not some loophole we are trying to find.

By the way, the following link is the one shared in the proposal where notional tracks their work:

Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

A new tool that blends your everyday work apps into one. It's the all-in-one workspace for you and your team

Their last commit to the gaia repo was 1 year ago: lint tests, too by faddat · Pull Request #1960 · cosmos/gaia · GitHub

And it was about linting tests.

Passing a signaling proposal is wise since there are multiple ways of clawing back the funds, including updates, new code, or even social agreements. Including my previous comment on another draft proposal in the forum of why Proposal 104 needs urgent intervention: This proposal must pass after recent events have highlighted Notional’s inability to adequately provide the services they claim to offer in Proposal 104. Thus far, they have utilized the loosely defined work in the proposal to bully others and threaten, harass, ridicule, and intimidate users and developers in the Cosmos ecosystem. Over the past week, the primary recipient of Proposal 104 engaged in bullying behavior with his departing employees in public, demonstrating his inability to handle a sensitive issue with the correct decorum. Additionally, the members that departed Notional represent parties in Proposal 104 today and a significant portion of resources tasked to do the work. If a genuine issue affects the Hub in a way that would require Proposal 104’s duties, ask yourself how you think Notional would respond. With professionalism? With competent engineering and support? With tactical communications…

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I had created an issue on cosmos-sdk to introduce this feature via gov voting

Tough charges here

Why we left.pdf

Google Drive file.

Seems appropriate, and would be curious to hear an official statement from both teams that will be affected: It’s unclear what is Notional right now, is it the management, or the engineering teams? Seems like the former, since the engineering team have a new company and name. Though both teams are equally affected.

concerned:

Passing a signaling proposal is wise since there are multiple ways of clawing back the funds, including updates, new code, or even social agreements.

Good point, but the Atoms are locked in a vested account, so not sure how would social agreement or other types (aside from software update) of approaches work?

This is a very important iteml.

The primary upstream of the hub is other repos. Frankly, security issues on the hub tend to come from other places due to the relative simplicity of the hub’s code, so I would encourage you to have a look at the following repositories, which I do believe are covered under 104 provided that the work done relates to the hub • GitHub - cosmos/ibc-go: Inter-Blockchain Communication Protocol (IBC) implementation in Golang. • Version 8 • GitHub - cosmos/interchain-security: Replicated security (aka interchain security V1) is an open sourced IBC application which allows cosmos blockchains to lease their proof-of-stake security to one another. • I clean it up and watch it and suggest things tho the main this is watching for security issues • GitHub - notional-labs/spammy: load testing tools for cosmos networks • Comprehensive test framework for the problem known as P2P storms A number of other people had asked about what our capability is to deliver on this and I also believe I have a pretty decent answer for that – basically I believe that we are quite well equipped to deliver on the project. The work itself was never handed out to a particular person in our…

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Rarma:

Also, to note here, 3/5 of the multisig that controls the vested funds have left Notional.

For me this is the highest priority item here, is dealing with the multi-signature situation.

I think that tomorrow I should be able to have a forum post up that does that and I also just want to let everybody know that whatever governance decides governance decides and that that is okay.

For whatever reason, it has been presented to the community that 104 is half of notional’s income and well it is simply not in fact it is I believe below 20%. It’s a cool proposal, I want to keep working on it because I really like the hub but if the community would not like to see our team working on it we should follow the communities wishes

ctrl-Felix:

have left the company

With keys and an intent to use them as leverage in negotiations as illustrated here:

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Can you show me PRs that have been actively merged as a result of proposal 104?
Or relevant issues?

And something I also would like to know is who was working on proposal 104? Was it you or your team?
So it sounds like you assigned the work to other people? Or how did that work?

Something I would like to add to this discussion are the Notional transparency reports, which I found after Lit sent me them:

Notionals Cosmos Hub Reporting Page Hub Relations

Overview As part of Notional’s ongoing work on the Cosmos Hub, we will be providing regular updates on our progress through monthly and quarterly reporting. These reports will allow the Cosmos community to stay informed about our work, provide feedback, and help guide our future efforts. Monthly Reports Our monthly reports will provide a detailed overview of the work we have completed during the previous month, including any upgrades or changes made to the Cosmos Hub. We will also discuss any…

I looked at the linked PRs and mostly found PRs of version updates, Dockerfile updates, etc.

While thinking about the situation I was wondering, why didn’t Notional create a patch for P2P-Storm?

There are multiple keys involved here. Because we are talking about the wallet keys here, not the validator key.

In theory a key is linked to the person. At least that’s the case with personal wallets. Now are these wallets the personal wlalets of these people or wlalets tied to their position at Notional. Latter would raise the question why there was a multisig in the first place. If the company can just claim these keys back.

Well other thing that I’d like to let you know is that I don’t actually think that @jtremback I really meant for this particular proposal to be a ton of code and quite frankly neither did I.

The only time that we would like to write tons of code as a part of 104 is chain upgrades.

Additionally, Felix due to the fact that you have for a very long time been contributing to Cosmo security, as we go through this redesign give your thoughts. I Don’t necessarily see a problem Even was involving you in it from a payment perspective let me get into that you are the discover P2P storms, but definitely of banana King and that’s freaking amazing.

So if it’s something that interests you, along the way of this formulation, I would like to cordially invite you to participate in like the next version of 104.

The final thing that I would like to make clear with you is that I think that in its current state, given that KVL wish to leave notional, we can safely say that 104 at least from a key management perspective is quite broken.

Thank you so much for your feedback and contributions over time

We wrote the entire IBC version 8, with the exception of the field length limitations and a couple of other quality of life improvements and I would say that for this period of time that is our largest contribution. You might want to check out the code comparison for the PR that brings IBC current. It is in my opinion very large and important.

The problem is not even on the contribution side but the use of the funds on personal interests over company.

It was mentioned in your proposal that it wouldn’t be use for anything, which wasn’t the case.

Proposal is not respected and should just get claw back, that’s simple.

Sir,

That doesn’t exist.

Do you really believe I did that?

I mean I guess that you do I’m going to just treat this like you’re not being facetious and I’m going to ask my colleague Robin to provide you with the necessary information to prove conclusively that that’s simply is not the case.

posting our latest report as it appear quite a few miss or do not read them.

Notional Ventures

what’s crazy here and since the beginning: we don’t even know who was working on 104, the sub-team size and their clear purpose/focus.

and what we have now is Jacob eluding Felix’s precise questions.

if you want to make things right and fair, return the funds and ask again with a reworked proposal.

the “we’re building a new team” can’t stand.

There is no sub team, just Notional. Jacob is the lead engineer on our Hub work and will remain so.

yeah and also the lead engineer of Dig rebirth, of Eve, of Danger Zone, what else?

you should re read 104.

this whole thing is a joke. i have respect for Jacob even if we often disagree, but here now, you’re clinging to this funding in a way it’s like you just say fck to the community.

I believe everything has been said. I put the proposal on chain and now it’s on the community to decide:

Mintscan

Interchain explorer and analytics powered by Cosmostation.

We have voted YES on Prop 860, on the basis that the funds need to go to a new wallet due to 3/5 of the multisig departing Notional. We do NOT see it as Notional or @jacobgadikian being delinquent in duties.

They have a contract with the Cosmoshub and should be given ample opportunity to succeed or fail on their own terms. The multisig members (and co) departing Notional does not nullify the contract.

edit: extrapolating a bit, regardless of the departing employees feelings on the matter (whether they’re willing to continue to act as multisig signers), from a liability perspective that’d put them in a gray area and I’d bet their lawyers would absolutely not support continued multisig membership.

Lavender.Five Nodes🐝

I echo this sentiment. After clawback Notional should request funds to be reinstated or a new multisig refunded so they can continue their work.

Statement from Notional:

Notional Ventures

How would the 90k ATOM clawback actually work?

It needs to of course go from the multisig → community pool. And even assuming this signalling prop forces 3 of the multisig to sign a transaction, can the tokens in vesting be moved in such a transaction?

Thought the whole point of the vesting function is that the tokens can be staked - no movement allowed?

IMG_20231207_1514233216×1314 202 KB

By the mintscan the 120K Atom is vested

No, mintscan isn‘t ideal to check that. Because it only shows the initial vesting amount (and the parameters used to start the vesting) but not the current state.

Address cosmos145h...x498 Details - Cosmos (ATOM) Blockchain Explorer

Explore the activity and balance of any address on the Cosmos (ATOM) blockchain. Includes transaction history and token holdings.

This is better to see it.

This requires a software update proposal. Because even if all multisig participant would want they wouldn‘t be able to do.

Because unvested coins are not transferable. I guess we would need some sort of state update. I am not sure how to completely implement it though.

If this goes through, what I think it will given Notional itself recommends to vote yes, I will open a Github issue for this. And then we will see there how this gets executed

good decision from Notional today

it’s a bit premature but, what if those funds once returned are dedicated to an IBC security bounty?
:>

ctrl-Felix:

This requires a software update proposal. Because even if all multisig participant would want they wouldn‘t be able to do.

Because unvested coins are not transferable. I guess we would need some sort of state update. I am not sure how to completely implement it though.

If this goes through, what I think it will given Notional itself recommends to vote yes, I will open a Github issue for this. And then we will see there how this gets executed

Thank you Felix. This is a rapidly moving situation and I’m very limited in what I can say. Please simply know that I FULLY endorse this course of action.

tom:

it’s a bit premature but, what if those funds once returned are dedicated to an IBC security bounty?

I wouldn’t support bounties administered by Amulet, Informal, or Strangelove.

The funds will be returned to the community pool though, so, the community will get to decide what to do with them, as is right and good.

Hi Felix, I wish to inform you that the document you linked to contains numerous mischaracterizations and falsehoods.

That being said, thank you for making this proposal and for getting it on chain rapidly.

Sincerely from my heart,

Jacob Gadikian

schultzie:

We have voted YES on Prop 860 , on the basis that the funds need to go to a new wallet due to 3/5 of the multisig departing Notional. We do NOT see it as Notional or @jacobgadikian being delinquent in duties.

Thank you very much

When we were speaking against this prop we did not fully understand the situation. Getting funds back to the pool is the best course of action. @joe-bowman and I are happy to write the update handler.

Once again, thank you

ctrl-Felix:

My open questions would be. Who would be able to create such update and coordinate the update?

Myself and Joe, I think. If for some reason I am out of touch, I humbly ask one of the Cosmos’s many highly qualified engineers to handle the task.

We should be able to do the handler, I will be in VN for the next 3 weeks at minimum.

Thank you again.

Leave funds at rest: all participants doxxed

Cosmos community members - This is Long (representing the other co-founders / shareholders of Notional). As you may be aware, Jacob and the other co-founders of Notional have been in a dispute regarding the division of assets of Notional. This dispute remains ongoing.

In response to Jacob Gadikian’s latest post to transfer the unlocked tokens into his chosen Cosmos wallet address, we humbly request that this be put on hold until further notice. The shareholders of Notional have not resolved the dispute regarding the division of Notional’s assets. Transferring the unlocked tokens to Jacob’s chosen wallet address would be detrimental to the ongoing settlement discussions. We are happy to answer any questions regarding what happened and Notional / Jacob’s actions to the extent we are asked by anyone in the community but for now we would request that no tokens be transferred to any wallet address and all actions be put on hold except the clawback of the unvested tokens.

Open Communication: Maintain transparent and open lines of communication with all parties involved. This can help prevent misunderstandings and facilitate a smoother resolution process.
Mediation: Consider engaging a neutral third party to mediate the dispute. A mediator can help negotiate a fair settlement that is agreeable to all parties.
Legal Counsel: Ensure that you have legal representation to advise you on your rights and the best course of action according to the laws applicable to your situation.
Documentation: Keep detailed records of all communications, agreements, and transactions related to the dispute. This documentation can be crucial if the matter escalates to legal proceedings.
Community Engagement: If the dispute affects community members, consider keeping them informed about the general progress of the resolution without disclosing sensitive details.