Tokenomics RFP — the next steps

After months of application review and deep due diligence on prospective grantees, on July 21, the ATOM Accelerator DAO chose three promising teams to reimagine the Cosmos Hub’s inner workings and its place within the Interchain, from tokenomics and governance in the era of replicated security, to envisioning the Hub’s potential offering in a rollup-centric future.

Based on the lessons learned from Prop 82, the community has made it clear that any changes to the Cosmos Hub must perform a delicate balance of carefully considering all stakeholders while being easily digestible. To solve this, we have tasked the three teams to work on individual modules requiring their own governance proposal while clearly outlining any interdependencies between their proposals. This makes for a bottom-up build where the community will be the ultimate decision-makers on the future of the Hub.

The Selection Process

Selection sub-committee: A diverse committee was assembled to uphold transparency and fairness in the selection process. Members included:

• Youssef Amrani (Program Manager & member of the Reviewer Committee)
• Better Future (Program Manager & member of the Reviewer Committee)
• Xavier Meegan (AADAO Reviewer Committee)
• Jason Choi (Senior, Oversight Committee)
• Sam Hart (ATOM 2.0 main co-author)

Application Review: The committee received and meticulously evaluated 13 applications, focusing on each applicant’s merits and prospective contributions to the Cosmos Hub. A priority was given to teams with an existing knowledge of the Cosmos stack.

Shortlisting Process: Following a comprehensive review, the committee shortlisted five teams best aligned with the project’s objectives.

Conflict of Interest disclosures:
A member of the Oversight Committee, Joni, was invited to the deliberative session where members of the sub-committee debated before voting. Joni’s role was to supervise the deliberation and collect any conflict of interest disclosure.

Jason Choi voluntarily recused himself from voting on an application that was rejected thereafter. The team name is withheld due to confidential matters.

Youssef Amrani voluntarily recused himself for the vote on RMIT since he collaborates with 2 of RMIT members on Agoric .

The Grantees

The three chosen teams that will work collaboratively over the coming months are:

• Binary Builders
• Blockworks Research
• RMIT University

Together, they hope to lay out various proposals that:

1. Create better long-term alignment with the top developers in the ecosystem
2. Bring value to the ATOM token by aligning it with the growth of not only the AEZ but the Interchain as a whole
3. Develop smarter budget allocation strategies to ensure the Hub’s influence grows despite future boom and bust cycles
4. Establish a governance framework that enables smaller working groups to responsibly and effectively execute on behalf of the wider community
5. Offer insight into the economics behind Replicated Security with suggestions on how to create a more value-accretive relationship with Consumer Chains

Binary Builders

The team at Binary Builders needs no introduction. Led by Noam Cohen, the team has worn many hats throughout Cosmos’ history and is well-known in the community. Whether it’s establishing themselves as SMEs of the Cosmos SDK as core developers, being active Cosmos evangelists through their work with running the Interchain Builders Program to develop a talent pipeline for the broader ecosystem, their operations running critical node infrastructure for various Cosmos chains, or the Cosmos-focused analytics firm Numia, Binary is a world-class team with an incredible skillset.

The Binary team will predominantly cover three modules:

1. Monetary mechanism to allow the Hub to become a stakeholder in other chains in the ecosystem, aligning ATOM’s success with that of the Interchain
2. Dynamic spending model where the Hub spends less on staking rewards and other expenses in boom cycles to cover costs and continue growth in bear cycles
3. Mechanism to create long-term alignment with promising developers in the ecosystem that may lead to the Hub owning and sharing revenue with products incubated by DRIP

Their deliverables include:

1. System requirements, design documentation, and functional specs for each module
2. Contributions to a whitepaper that will be worked on collaboratively by the three teams
3. Forum posts and governance proposals for each feature

Blockworks Research

Although a fresh face to some in the Cosmos ecosystem, Blockworks Research is a multidisciplinary team of protocol-specific analysts who will leverage their knowledge of historical best practices from other ecosystems to help lead and coordinate this joint effort across the three teams.

The Blockworks Research team will focus on three modules:

1. Redesigning tokenomics, including inflation and budget allocations, with inputs from the other teams
2. Developing a mechanism that may help with validator stake centralization, especially as it relates to the economics behind Replicated Security
3. Developing a future vision for the Hub in a rollup-centric world

Their deliverables include:

1. Google Sheets-based model that allows the community to model out implications of ATOM supply flows based on governance-controlled parameters
2. Leading in the development of a whitepaper that will be worked on collaboratively by the three teams
3. Cosmos forum posts distilled into separate governance proposals

RMIT University

RMIT is an interdisciplinary team of academic economic Professors specializing in cryptoe-conomics and the political economy, governance, and mechanism design. The team, led by Chris Berg, Associate Professor and Director of the RMIT Blockchain Innovation Club, will bring their notable expertise to collaborate with Binary and Blockworks.

The RMIT team is responsible for two modules:

1. Researching and developing a framework for standardized contracts between the Hub and consumer chains to ensure full alignment
2. Researching and developing an effective governance framework that incorporates subgroups, and their relationships with each other and the mainDAO

Their deliverables include:

1. A research paper on how to govern cryptoeconomic relationships between security providers and consumers, including a decision tree-based framework that can inform commercial alignment and shared security services pricing models
2. A research paper on governance for the Cosmos Hub, including effective governance over community pool spends, and the relationship between individual subgroups and the mainDAO.

Timeline

Over the next two months, the three teams will work on their modules while collaborating on a weekly/bi-weekly basis to identify interdependencies and ensure a cohesive vision for the Cosmos Hub.

Below you will find a timeline of events, including approximate time windows for at least two Twitter spaces with the three teams and the community. Additionally, we will be looking for the teams to have a discussion on Youtube channels such as Cryptocito to voice their ideas and gather community feedback.