Privacy in Cosmos Live: Federico Kunze Küllmer (Tharsis) - Evmos Tokenomics

Transcript

[Applause] and now we're introducing to the stage foreign hello everyone um welcome to privacy in cosmos this is not a privacy related topic but it's more about how the atmos token model works and how it can be used to create incentive alignment across different actors which include also privacy decentralized applications and also privacy oriented validators on users of course so today i'm going to talk about the

problem context but this talk should be more about like erp 1559 on incentive alignment across different actors so what is erp 1559 this was this massive effort by the ethereum community to try to solve all the user experience problems that users were facing regarding transaction fees and gas costs and there was also like economic benefits and security implications of this functionality but basically it was trying to create a fee market so that the um that the transaction fee was more predictable for users and so you don't have to wait for additional

confirmations or like multiple times multiple blocks when suddenly there was a sudden increase increase in the block space demand um i'm not going to dive deep into the eap 1559 because that's like another topic but i'm going to explain now how it works at a higher level so before eip 1559 um the fees um on the block rewards were going straight to miners so the total of the gas price times the gas limit was going to the miner itself but after eip 1559 was introduced the fees itself was split between the base fee on the priority tip

that on only the ladder went to the valleators and they were still receiving the block rewards but um the base fee was burned as part of these uh economic benefit that was creating like a deflationary deflationary model and of course the miners were not happy and they went all against the developers and so there was this massive massive um drama um over early 2021 uh where miners trying to like create different threats against the developer community and the whole ethereum community to do a

51 percent octagon effectively um like hard forking um ethereum and yeah like even vitali created a blog post but in the end they were more or less right in the sense that a lot of the ethereum was effectively burned and if if it wasn't for eap 1559 then those ether would go straight to their bugs and of course when you're messing with someone's bug they're of course going to get a little bit uh anxious about this functionality on on the other side um there was like a huge push for from the

ethereum core development teams to how to improve eip1515 to like adopt widely adopt erp 1559 because of all the um ux benefit that it brought for the different users um there was even like core development teams uh on dops that were pushing for this like i support ef15159 uh which was a result of like this situation between like the different uh miners and also the developers um so going back to the original model like one of the main main problems here

is was that miners thought that the core um like developers had most of the powers as you can see here like the um how miners saw ethereum but ethereum is actually a big community of not only developers but you also have like application um decentralized application developers defy users holders and in the future there will be stickers also miners on core development teams so in reality developers are only a small part of the entire ethereum community an entire community as we can see in different projects nowadays

um so there weren't really incentive aligned with the project because like other than the foundation there's no sustainable long-term model for how to create alignment for the different teams developing on the protocol so the question is like can that do something to create these incentive alignment between all these different actors that i showed before and that's why on atmos we're introducing the novel dav store mechanism so the dav store is basically a decentralized marketplace where you have dev developers and users that meet together and

instead of burning the base fee as traditionally is in erp 1559 you're basically splitting that between the developers that are building building constantly on um on the protocol and also the validators in this case for atmos and the priority tip is still going to the validators um same as the block rewards so this sorry this effectively solves the incentive alignment on like ins yeah like creating alignment between different actors that were previously in conflict in other ecosystem on how to

create alignment with the entire protocol so in this case up for mmos core developer car development teams decentralized obligation development teams and miners or in this case validators will be incentive aligned to the long-term success of the protocol through these uh fee split mechanism in the dapp store yeah so going back to the other part of the community of users that we have how do we incentivize now all the users that are interacting with the protocol and there has been this running joke on

twitter when you basically have a sudden spike in the gas price so like the easiest way to deal with this is just create another evm fork and uh you create a new evm for it you start developing new applications you you basically fork some of the blue chip applications in other ecosystems you create a dex you create an a bridge you create some lending platform whatever and then you maybe have a dow to fund some of the development teams etc but in reality there's no sustainable long-term incentive program that is not one-off um that can create a like alignment between like the users developers um validators

and that is sustainable sustainable in the long run that ensures the success of the project and there have been multiple attempts to do this uh so we can find avalon rush polygon d5 for all and defaults on defy summer and bsc also had like an incentive program that is basically trying to attract new users to provide liquidity for all the d5 applications but it has certain limitations under certain the limitations of these d5 incentive programs is that they're not sustainable it's only a one-off so one-off program that basically allocates 100 million dollars for incentives but it's usually also not

community-owned so they're like only the foundations are choosing which of the decentralized applications are eligible for these incentive programs so sometimes are not transparent like how do you know what are the requirements for your application to be in this incentive program and usually the biggest problems is that it doesn't really reflect the traction of these decentralized application projects and the adoptions of them in the in the uh layer one protocol and also tvl as we know doesn't reflect there's a growth of users so that's why on fmos we created these

novel usage incentive programs where it's directly proportional to the um to the utilization of each protocol where in every every epoch that creates new tokens those tokens are split between the second rewards the team investing the community pool but they're also 25 allocated to user incentives these user incentives are creating incentives for the users that are interacting with the smart contracts and i'm going to explain that now how it works so the workflow here is that we have developers or users or any participat or any user of the of the atmos

ecosystem that can create an incent uh on register an incentive through governance say for example i want to incentivize this little contract i'm going to use efficient as a and as an example i'm going to incentivize the fusion um for to get like a five percent of all the newly minted tokens from this 25 that i mentioned before um for a period that is allocated every week for a duration of six months um after the proposal gets approved and voted on every transaction that interacts with the diffusion protocol on the diffusion application will start collecting gas and these guys will be accumulated in these gospels

where at the end of each week you will basically calculate each of the uh parata shares of the total gas that you spent in these in these contracts compared to the total amount of gas that was spent during this period and then you're going to distribute the atmos rewards so basically i'm just just trying to summarize here how the atmos token worked is basically creating like a positive reinforcement cycles where developers and users propose usage incentives to more more growth to their decentralized applications these incentives drive users and rewards

with um with atmos tokens then the users take these rewards and spend these fmos tokens in this in the decentralized applications and services provided in the fms platform and then through the dapp store mechanism and the fleece big mechanism that i explained before developers earn half their transaction fees for each of the transactions that are targeting their contracts further incentivizing the development and the growth uh that allows them to create a sustainable long-term funding mechanism and then you create more proposals etc and then the positive reinforcement

cycle continues so atmos and going back to the original like community and like how the atmos ecosystem works atmos is trying to create incentive alignment for all the different users on validators and decentralized application undefiled users in the entire ecosystem so for example the atmos holders or evmo stakers will be able to stake their tokens or rp them like the d5 users will have the user incentives the decentralized application developers will have the dot stores

in addition to the grants and community pool which can also apply for core development and also the miners or in this case the evmos violators who have the transaction flees the transactions fees from the dopp store mechanism and the block rewards so atmos is trying to create an incentive alignment between all the different actors in the entire ecosystem to ensure a long sustainable growth and in the ecosystem so developers validators and users are going to make it thank you very much do we have any questions

okay so thank you hey hey sam um are you worried that this is gonna be a disincentive for gas optimization can you elaborate uh well if developers are getting a cut of gas revenue then you could basically you know launch an ave fork or something that's just like gas dis-optimized basically in order to get more revenue um that could be the case but usually

um so half of the fees are also going to the validers and there's also like um the the base fee can also be changed through parameters so instead of being a global as an ethereum that is not changing via governance we're also introducing the base fee that is instead of being set in this in in the blockchain state is uh can be configurable so if the base fee is already high uh throughout governance proposal it can be decreased so that that also decreases the um

the sort of like the fees that are being burned that before we were being burned and now are split between the violators on the developers so if someone tries to i guess like if the entire community of atmos decentralized applications tries to try to not be gas up optimized like the community could just like lower the base fee okay thank you very much thank you very much