ICS 2.0 Economics : Partial Set Security (PSS) Financial Model
Introduction: Given the upcoming launch of ICS 2.0, referred to as Partial Set Security (PSS), we have been tasked to build a financial model as part of a grant submission to the Atom Accelerator DAO (AADAO). Given the prevalent misconceptions regarding shared security models, we recognized the critical need to address this matter. Our proposed solution involved developing a comprehensive financial model to elucidate the underlying mechanics and propose paths to create equitable and durable Consumer Chain (CC) agreements. A dynamic sheet to visualize the model is linked at the bottom of this post, and a website front-end for this is currently being developed by AADAO to enhance the tool’s usability. Abstract: The model is constructed to consider the perspectives of four key stakeholder groups in PSS design: consumers, validators, delegators, and the Hub. We propose a solution that addresses the interests of all parties, seeking a financially viable compromise. To facilitate analysis, we have included examples and examined the underlying trends in PSS’ variables as they evolve across diverse revenue models. This forum post is meant to decrypt the model itself as well as all…
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Awesome post. I really enjoyed reading it. We need to be clear and set high standards for PSS. The last thing we want is chaos with multiple chains onboarding with opaque strategies and parameters that would be critical for them and the hub by extension. I’m looking forward to the discussion and responses from more technical and involved members. For now, I have one question, which might not be directly related to your post but is relevant to the PSS I believe. Do we have process standards or known best practices for existing chains that could transition to PSS without their initial token? I think this is one of the main barriers, and we should communicate how to transition to PSS without harming the holders of the native token. My only point of reference is the proposed Stride/atom token merger, which was refused by the stride community who estimated greater returns on the stride token at that time (and I wonder if their opinions have change now that stride token value was divided by 4 in the past months) Basically, what is the way to abandon your native token and go to PSS without hurting (too much) your current holders? To me it should be add somewhere in the PSS’s…
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Tagu: what is the way to abandon your native token and go to PSS without hurting (too much) your current holders? The topic at hand is multifaceted, and our following perspective is one of several possible interpretations. We focus on the classification of token use cases. When migrating an existing Cosmos chain, the token historically served two purposes: utility and security. Utility often encompasses governance rights, with potential distribution of protocol or application revenue as an economic incentive. Security, on the other hand, stems from the necessity of a sovereign Cosmos consensus to provide economic security to its Proof of Stake mechanism. In the context of a migration to PSS, this second aspect would cease to exist. Consequently, the token would transition from a dual model to a single model, solely focused on utility. This transition would necessitate a reevaluation of the tokenomics. To this day, most Cosmos chains are using inflation to fund economic security, it is plausible that the most likely course of action would be to eliminate that inflation entirely. Another approach is to have some tokens previously allocated for security, in this case, these…
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A quality work that deserves to be highlighted properly. Perhaps this first model will become the initial tool for future business facilitators of the Cosmos Hub. However, I think we are not yet at that stage for a simple reason: regulation and CBDCs are not yet in place. Most of the liquidity and real-world business has not yet arrived due to the slow creation of these regulations. I believe it is important to start collaborating with governmental entities to explain the security and interoperability propositions of this new programmable finance, and thus begin working with real-world businesses.
I think that funding some lobbying efforts would be interesting at this point in time.
This is an excellent tool for both project core contributors and validators. We began using this at Elys Network when it was released and we have designed a strong incentive/revenue share structure for our Opt-in validators. We expect to release the details soon here on the forum with our draft consumer chain proposal language. Looking forward to it!
Hesham
Elys Network
Growth Lead / BD
Thank you, Hesham.
We were pleased to contribute to this public good. We did our best to explain and describe the multi-faceted aspects of the PSS agreements. This model is quite complex and may seem confusing at first glance. If you managed to navigate it efficiently, we truly want to congratulate you!
If you have any specific feedback to share, it would be highly valuable. We are currently working with AADAO and a web development team to create a more user-friendly interface for interacting with the model. Your insights could greatly assist us in this effort.
Please feel free to reach out via PM or email us at [email protected].
Best regards,
Govmos
As part of our mandate for this project, we were tasked with delivering a comprehensive video review outlining the significant changes brought by the introduction of Partial Set Security (PSS). While producing a financial model to facilitate productive agreements between providers and consumers was a major milestone, we believe offering an educational deep dive in a format more accessible to community members is equally important. We released this video a few weeks ago but felt it was worth sharing on this forum as well. We’ve created a dedicated post for it:
Given the launch of ICS 2.0, referred to as Partial Set Security (PSS), we have been tasked to build a financial model as part of a grant submission to the Atom Accelerator DAO (AADAO). Given the prevalent misconceptions regarding shared security models, we recognized the critical need to address this matter. Our proposed solution involved developing a comprehensive financial model to elucidate the underlying mechanics, it also included an educational video targeted to popularize this update to…