To synthesize whatās in the thread:
Liquid staking is the future of L1 tokens because of:
need for decentralization
price stability and dex liquidity
composabiloty of yeld
Every L1 POS chain will move to liquid staking to improve on the aforementioned.
How will it empower the frognation?
sushi gets the best incentives for L1staking derivatives/MIM pools
people move delegations from CEX to wonderlandās Liquid staking
sushi gets the deepest liquidity
massive capital influx into wonderlandās treasury
broader MIM adoption (and also deepest liquidity)
ā¦ And the virtuous cycle goes on (go like and retweet the thread to read more about this vision)
Also Liquid staking tokens can be collateralised on abracadabra:
Deposit L1 liquid staking tokens as collateral > borrow underlying L1 token > lock into wonderlandās Liquid staking service > put back as collateral > keep folding like this to get amazing leveraged staking rewards with close to 0 liquidation risk.
I think the biggest value (aside from to the Wonderland treasury) is in democratising access to staking. As per the proposal, the minimums for Avalanche staking are often high relative to most usersā wallets.
This presents a great opportunity to bring new users into the Wonderland ecosystem, reward them (via liquid staking) for doing so, and hand them liquid assets with which they can invest in other Wonderland properties.
For instance, you could earn yield on your stAVAX in Popsicle, borrow MIM against your stAVAX in Abracadabra, and LP for the AVAX/stAVAX pair on Sushi, all of which compound Wonderlandās revenue.
I imagine this is the way the puzzle pieces fit together in Daniās mind.
I donāt think the general consensus is that liquid staking is a bad idea, itās the way itās being presented here thatās giving folks second thoughts. You donāt have to read to far into the discussion thread to see all of the concerns regarding: terms, duration, compensation, proof of concept, vetting of the team, etcā¦
I agree, this could be huge, but we need to be careful and not charge ahead just because we want to do something. Letās make sure that Dani and Sifuās hard work to date is rewarded instead of tested.
Adding to this I think itās really important to try to put yourself in the shoes of new retail investors.
Most of them are too far down the learning curve to be ready to participate in a DAO, farming, etc. They want the next opportunity not the old ones. They want passive income that can actually improve their lives, not to become master traders and crypto analysts. Liquid staking on AVAX and FTM eliminates entry barriers and makes all that possible.
The Wonderland/Frog Nation vision is the most āmetaā thing there is in crypto right now. This is just one piece of that puzzle. Accelerating network effect is how you win, not by obsessing over short term price action.
Highly import point to make, not everyone understands what liquid staking means, and there was clearly an intent to bring to awareness this subject to the community. No need to dish any contribution to the discussion.
Have that said, it is clearly stated by Dani himself since last december how he views this opportunity and how fundamental it is for the ecosystem.
Alright, we are taking too long here before moving to an RFC. And I truly believe we are beyond asking ourselves if this is the right play, as many times Dani tweets about this has been brought up.
Also I have to remind that within the vision for the ecosystem this DAO is meant to compete with VCs as Dani has tweeted few times. This is our first move acting like a VC! https://twitter.com/danielesesta/status/1476310214941065217?s=20
So, moving this to RFC section we can put behind 4 year concern as @j_rana already addressed, but few highlights are:
In my view trying to summarize community concerns here, what really needs to be taken to RFC are:
1. Better denominate a break clause
2. Proposer already agreed in a KPI grant model with a 3M upfront, formally discuss the parameters for it (reminder that 6M is 0.6% of the treasury, and a value made within days)
3. Decide whether the grant will be in MIM or TIME
4. Include a Clear timeline with milestones (this, in some way, links to KPI)
5. If proposer, as suggested by @g_bcn , is open to include specific terms and conditions for the āteamā to provide post-launch services to Wonderland ā i.e. ow fast should issues be resolved, penalties, etc. (kind addressed in the level of commitment accounted for the modelling compensation)
I do think the $6 million is low to us, but at the same time itās very high compared to other deals. I would like to consider a smaller cost of $1-2 million for development cost. This would be a nice annual salary for any Dev and doesnāt include the revenue share.
And then as we hit certain market share/revenue, we can pay out ābonusesā to the dev team. For example:
And we could even extend this kind of bonus structure to higher market shares. Maybe every 5% captured, an additional bonus of $1 million.
Note: once a market share milestone is reached, it has to be maintained for a certain amount of time before being completed. E.g. 2-4 weeks.
They are open to being paid out in TIME, but seems they would want a higher amount relative to MIM. 50% more. This may be a little too high a difference IMO.
They will be 100% responsible for running and maintaining the platform. Their incentive to make it work is the revenue share and market share bonuses I described above. But having a āpenaltyā of some sort for an error on their part may be worth looking into. After reading other similar deals, thatās not something Iāve seen before, so Iām not sure how to implement. I have done some contract audits early in my professional career, but I cant for the life of me remember how these issues were handled.
Just for clarification since it was discussed a bit in discord.
What they were referring here is not really about a penalty, but more common understanding. A service-level agreement (SLA) is what itās normally referred as. The team works on it all the time, but when X happens, these are the reasonable timeframe to have that fix, etc, etc. Not sure if this is very common in crypto, but seems to be a pretty standard thing for dev team providing a service to another party.
Not sure if thatās how you understood it, but figure Iād reply anyway so other people sees this.
Yeah, SLA was what I figured, but itās not something Iāve seen in any other deal like this at least. And I think the incentives are enough for them to fix anything ASAP. However, if they do start to underperform and we have issues with the platform that are unacceptable we have the break clauseā¦
This is something I havenāt touched on, but the $10 million is excessive. I think this should be completely scrapped. No other deal has this type of clause that I can see. They could easily develop the product, neglect it, leaving us forced to pay the $10 million to cut ties with them.
This is a major red flag for me. In fact, it is the reason I would vote No on this proposal.
No, good you made it clear, i was trying to keep as concise as possible, but failed on that topic.
Ya thats why I said it was kind already addressed, and also why i didnāt had an precise point regarding the break clause, it was noticed but barely disclosed.
@j_rana - Could you please clarify if this proposal is to sell your intellectual property (the code) to Wonderland and continue working with us OR if you will keep the IP and just work as a service provider?
Reason Iām asking is, I understand from the proposed costs and break-clause that youāre selling us the IP (not just your services). This also means we could actually break in the future (hopefully not) and continue working with other developers as weād have access to the original code.
If I misunderstood (and itās just services), then this is a major red flag to me. I believe weād need to re-discuss the pricing model and break-clause.
[quote=āKarePan, post:216, topic:3729ā] 3. Decide whether the grant will be in MIM or TIME
Believe payment terms should be issued in MIM - āStableā - there should be no upside to work performance which is metrics driven. If the team or platform wants to invest, that is their upside. You donāt typically pay for services which are variable on compensation, highly irregular. Although $TIME is being deprecated, it doesnāt matter. You pay a fixed cost for services rendered. An organization wants upside - they should invest like everyone else into the project.
