Foxchain x Coinbase Cloud: Support Proposal

ShapeShift DAO -

The following proposal is being made by Coinbase Cloud - many of you may be familiar with us from previous experience with Bison Trails.

We’re excited to explore an opportunity for partnership with ShapeShift DAO and Foxchain. Looking forward to engaging with the community and continuing the conversation.

Details on the proposal can be found below:

Foxchain x Coinbase Cloud: Support Proposal

Context

ShapeShift DAO is looking to launch Foxchain, a data availability network, on Tendermint with the objective of decentralizing blockchain data. Foxchain is a purpose-built blockchain designed to store metadata for every blockchain supported by ShapeShift. Operators running CoinStacks register their CoinStacks in Foxchain to earn passive income. Users find and connect to CoinStacks with Foxchain. There is no cost for anyone to use the network. Users can also delegate their FOX tokens to validators they believe are serving the community well.

Coinbase Cloud x Cosmos

Coinbase Cloud is a long-time supporter of the Cosmos ecosystem. We’ve been running validators for Cosmos since its inception and power infrastructure for a number of major participants. We also support other Tendermint-based protocols including Terra, Oasis, Crypto.org, Cronos, Provenance, Osmosis, and Evmos — allowing us to implement best practices and learnings that provide a seamless experience across protocols. We have grown to power a significant amount of staked assets on Tendermint protocols while ensuring high-level performance for both our public community validators as well as the private, dedicated validators we run for our customers.

We also know that launching networks is a difficult task and doing so successfully requires reliable partners.

Coinbase Cloud has a comprehensive cross-functional team that would partner with ShapeShift to enable best practices in design, build, ecosystem development, GTM, and positioning.

Our cross-functional teams include:

  • Protocol Operations
    • Protocol Specialists that provide a scarce and coveted resource within the crypto community by providing deep expertise across protocols, ensuring best practice implementation
      Product, Engineering, and Design
    • Product Managers, Engineers, and Designers that focus on and support Tendermint-based protocols
      Business Development
    • Business team support for Foxchain rollout to provide infrastructure for your token holders and developers, and to enable custodians and other partners to add staking support
      Product Marketing
    • Product Marketing team support for co-marketing and GTM efforts to increase brand awareness, recognition, and positioning, subject to Coinbase Cloud’s reasonable approval

We are beyond excited to be exploring this opportunity with you all. We see it as a fundamental enabler for the evolution of one of the most important blockchain ecosystems out there.

Proposal

In the following section we outline the terms of engagement we propose.

Phase 1: Design, Build & Launch Support

  • Technical Design:
    • Partner with ShapeShift, providing technical and protocol expertise to help establish world class infrastructure operations. Our engineering team has experience across a number of blockchain protocols.
    • Advise on blockchain network best practices to the Foxchain Team including:
      • Node Architecture Design
      • Key Management
      • Monitoring and alerting
      • Testnet/Incentivized Testnet/Mainnet rollout
  • Protocol Design:
    • Share learnings and best practices from expertise in 25+ protocol launches, including multiple Tendermint protocols
    • Provide hands-on protocol design support on token economics, governance design, penalty and slashing parameters
    • Connect ShapeShift team to other best-in-class protocol teams for collaboration and learning
  • Testnet Support:
    • Provide temporary operational node support, including running short lived testnet validators to test different types of conditions simulated by the ShapeShift team
    • Provide guidance on upgrade and incident response best practices
  • Launch Support:
    • Partner with ShapeShift in order to drive value in co-marketing and branding efforts, subject to Coinbase Cloud’s reasonable approval
    • Support ShapeShift with launch efforts by facilitating introductions to relevant protocol, custody, and/or investor relationships

Phase 1 Deliverables

  • Commit resources from Coinbase Cloud’s Protocol Operations & Product, Engineering, and Business team covering Cosmos, for real-time advising until genesis block (~mid-2022)
    • 1 Lead Engineer, 1 Product Manager, 1 Protocol Specialist, 1 Business Manager
    • 1 synchronous, recurring meeting with 1 Protocol Engineer, 1 Product Manager, 1 Protocol Operations Specialist, and 1 Business Manager to collaborate on above items
      • 1 hour / week
      • Commitment from Coinbase Cloud’s team supporting Foxchain to allocate time and resources to ensure synchronous meeting is productive and action-items are addressed prior to attending
  • Provide feedback and advice on an ad-hoc and recurring basis with regards to:
    • Technical Architecture
    • Protocol Design & Mechanics
    • Testnet Rollout
  • Establish a dedicated private channel for asynchronous discussion and ideation
  • Include Foxchain in relevant Coinbase Cloud public-facing material for prospective and current Coinbase Cloud customers/users
    • Documentation
    • Website
      • Under the “in development” section or equivalent prior to mainnet launch
  • Conduct joint promotional, marketing, and other business activities in relation to Foxchain mutually agreed upon by ShapeShift DAO and Coinbase Cloud prior to publication, subject to Coinbase Cloud’s reasonable approval
    • Social Media
    • Blog Post
    • Other applicable communication channels

Terms for Phase 1

  • ShapeShift DAO provides Coinbase Cloud with a token grant:
    • 2,500,000 FOX tokens
    • Tokens to be paid in accordance with the following schedule:
      • 25% upfront within 30 days of execution on the agreement
        • 625,000 FOX tokens
      • 75% via streaming payments per block over a 12-month period
        • 1,875,000 FOX tokens
        • Streaming payments made through Sablier
  • Coinbase Cloud provides the services listed above as (1) Phase 1: Design, Build & Launch Support (2) Phase 1 Deliverables
  • Termination
    • Either Coinbase Cloud or ShapeShift DAO may terminate this proposal at any time for convenience upon written notice to the other party.

Phase 2: Mainnet Support

Technical & Operational Support

  • Mainnet Support
    • Build, maintain, and offer dedicated validator nodes (Participate) to be generally available for large token holders, ShapeShift DAO members, custodians, exchanges, and other prospective customers
      • Build, maintain, and operate a public community validator for delegation on Foxchain network.
    • Build, maintain, and offer full node services (QT) to be generally available as HA RPC endpoint access capabilities for the developer community
      • Support mainnet rollout plans, launch coordination and onboarding with external partners
    • Create guides for developers, users and partners to understand key protocol functionality
  • Ongoing Support
    • Offer direct line to Protocol Specialists, Engineers, and Product Managers to work on roadmap features and ecosystem development
    • Aggregate insights and relay prospective and committed customers’ feedback
    • Provide ongoing guidance on product features and protocol improvements
    • Continued testing, feedback and troubleshooting on bugs or potential issues

Phase 2 Deliverables

  • Coinbase Cloud commits to building and offering our Participate (dedicated validator nodes), Delegate (public validator nodes), and QT (full nodes) services to the broader community
  • Coinbase Cloud commits to standard SLA terms for validator nodes (Participate) including missed rewards coverage and 99% uptime guarantee
  • Coinbase Cloud commits to standard SLA terms for full nodes (QT) including 99.9% uptime guarantee and downtime-related service credits
  • Include Foxchain in relevant Coinbase Cloud public-facing go to market material for prospective and current Coinbase Cloud customers/users, subject to Coinbase Cloud’s reasonable approval.
    • Documentation
    • Website
      • Under supported protocols after mainnet launch
  • Conduct joint promotional, marketing, and other business activities in relation to Foxchain mainnet launch mutually agreed upon by ShapeShift DAO and Coinbase Cloud prior to publication, subject to Coinbase Cloud’s reasonable approval
    • Social Media
    • Blog Post
    • Other applicable media channels

Terms for Phase 2 (Indicative)

  • ShapeShift DAO delegates FOX tokens to Coinbase Cloud’s public, community validator:
    • 40,000,000 FOX tokens
    • Tokens to be delegated within three months of mainnet launch for a minimum consecutive period of 12 months
  • Coinbase Cloud provides the services listed above as (1) Phase 2: Mainnet Support and (2) Phase 2 Deliverables
  • Termination
    • Either Coinbase Cloud or ShapeShift DAO may terminate this proposal at any time for convenience upon written notice to the other party.

Appendix

Long-Term Collaboration with Coinbase Cloud

Our deep Tendermint-based protocol expertise has allowed us to implement best practices including but not limited to:

  • Remote Signer for Security
    • Running Tendermint infrastructure requires running a remote signer, which Coinbase Cloud does through our managed service provider (MSP)
      • Remote signers are one of the most secure ways to generate private keys and sign transactions
  • Managed Service Provider
    • Coinbase Cloud works with Packet, a leading MSP, to provision the signer and has a documented chain of custody into Packet’s secure data centers
  • Redundancy
    • Each Cluster* has redundant infrastructure that is deployed on a different cloud provider/data center and region than your primary Cluster, so you are protected from an outage
  • Double-Signing Protection
    • This unique process prevents a unique, block-signing entity from introducing an equivocation event — such as double-spending
  • Service Level Agreements (SLAs)
    • Market leading SLAs including 99% uptime guarantee
  • Security
    • You manage the authentication options for each node. Service includes bottom-up resiliency with proprietary non-custodial key management, multi-cloud provider, multi-region capabilities, and 3rd party security audits
  • Support
    • 24/7 support including around the clock monitoring, and proactive updates
    • Dedicated Coinbase Cloud team for your network: 1x protocol specialist, 1x lead engineer, 1x partnership manager, 1x customer success manager, directly available to you
  • Community Engagement
    • Continual community, protocol, and industry updates and education from our in-house team of protocol specialists
  • Payment Flexibility
    • Coinbase Cloud is committed to the growth of the industry and, as such, is able to accept payment in digital assets
19 Likes

Thanks for posting this @Lewis - I think this is a great proposal and I am excited to hear the community’s feedback. We would be very excited to have coinbase cloud as a partner as we develop and build out FOXChain!

10 Likes

Thank you @Lewis and the Coinbase Cloud team for putting together this proposal! I really appreciate all of the thought that went into structuring this deal to make it a win-win-win (for ShapeShift DAO, for Coinbase, and for the world). I am in full support of this proposal as written and look forward to hearing the community’s feedback.

On that note, I’d love to schedule a call to introduce our two communities, walk through the proposal, and field any questions. @Lewis and @mperklin, would any of these times next week work for a community call (for you and anyone else you’d like to invite)?

Tuesday Feb 22nd
1:30-2:30pm MST

Thursday Feb 24th
10:30-11:30am MST

Friday Feb 25th
10:30-11:30am MST
3:30-4:30pm MST

11 Likes
  • Coinbase Cloud commits to standard SLA terms for full nodes (QT) including 99.9% uptime guarantee and downtime-related service credits

Is this referring to the full nodes providing multi-blockchain data to the FOXCHAIN network? or is this purely about running foxchain nodes themselves?

My main interest is seeing a Proof of concept built that attempts to gain consensus on the integrity of multi-chain data being served by the FOXCHAIN to our wallets clients first. deploying a generic cosmosSDK PoS chain is rather straightforward. But gaining consensus on multi-chain data, and being able to slash fox when that served multi-chain data is invalid, stale, or out of consensus (during fork/rollouts/rollbacks/consensus failures/etc) will take a lot more effort and will probably require a module being added to the cosmosSDK node itself. This module will affect consensus and probably be the bulk of the development effort and challenge of a network rollout.

Is coinbase cloud going to be serving the FOXCHAIN multi-chain data from your coinbases nodes/infrastructure (ie bitcoin/ethereum/ect)? if the intention is for your proposed validators to attest to the validity of served multi-chain data coming from coinbase; 40million delegated to a single source of data feels risky before the network is proven. ideally, that would be spread across our unchained stacks/taxistake we have more direct control over. With other trusted sources in the space like coinbase down the road as a redundancy. (or for those providers to risk their own capitol/ gain their own rewarded fox early at their own risk)

It’s also rather into the technicals but our current wallet infrastructure depends on indexers like blockbook. FOXCHAIN ideally would be serving and attesting this indexed data as well, by finding consensus on it. As being served bad indexed data could hurt users. I’m wondering how that plays in.

Thanks for this post, and look forward to seeing FOXCHAIN move closer to becoming reality.

10 Likes

As this idea has matured from a late night hot tub conversation, continued in a train carriage, to the old ShapeShift board room, it’s super exciting to see this reach a formal forum discussion.

FOXChain is key to not only ShapeShift fully decentralizing our remaining backend infrastructure, but is a missing pillar of censorship resistance for the crypto community as a whole, across many chains.

This is an extremely well defined proposal, and on behalf of engineering, I fully support this proposal from Coinbase Cloud, and look forward to seeing it coming to fruition.

I’m available at any of the times listed above and would love to chat about this more at length.

14 Likes

Coinbase Cloud x ShapeShift AMA is scheduled for 10:30am MST on February 24th :tada:

Looking forward to diving deep into this proposal and hearing everyone’s questions and feedback

11 Likes

This is a killer start to what will be a beautiful partnership :slight_smile: Thank you guys for stepping into the future with us!

12 Likes

I wish I understood blockchain technologies better. I’ve watched FOX go though their changes for about a year now as a token holder. I read about the new proposals and have participated in some early voting but most the conversation about the technology is over my head at my age. I will keep learning but from what I do see, I am excited for the future of FOX!
Keep up the good work!:seedling:

10 Likes

I love this collaboration. I think it adds a lot of legitimacy to our DAO. Coinbase has a very rigorous legal process to go through.

My only concern so far is this delegation of 40 million FOX. That is about 4% of the TOTAL supply of FOX. I have seen on early chain launches, concentration of voting power can be dangerously high. If any one validator gets more than 33% of the voting power, in a Tendermint ecosystem, the chain can stop if that validator goes down. Some examples of this have been: LUM, early UMEE launch, and HUAHUA. HUAHUA had a unique way of trying to fix this with a contesnt to promote decentralization. Mintscan - Chain explorer by COSMOSTATION

It’s too early to know what the economics of FoxChain will be. I think there will be a token bridge from ETH.FOX to FoxChain.FOX. Migration will most likely be slow of tokens from ETH to FOXCHAIN.
I could see a 40 million delegation being OK but would like to see a way for other validators to apply for similar sized delegation grants from the strategic reserve. How did you land on this 40,000,000 delegation number?


edit: This was answered during the AMA. Coinbase is aware of the 33% problem and will work with us to help. It is over several months and we can take actions to mitigate too much concentration of power.
I’ll still let them reply.

6 Likes

ShapeShift DAO -

Thank you for the feedback and discussion - we really appreciate the engagement and have revised the proposal language to address the community’s concerns around the delegation in Phase 2.

At a high level, we made the following clarifications and adjustments:

  • Ensured ShapeShift DAO’s FOX token delegation will not exceed 20% of actively staked tokens
  • Extended the timeline for the delegation from three to six months to allow more time for FOX tokens to be staked across the network
  • Back-loaded a significant portion of the delegation to the 60-180 day time period to mitigate the risk of over-delegation to one node
  • Added language to commit to keeping validator fees in line with similarly sized infrastructure providers (we do this as a best practice, but documented by language now)

Revised proposal language below:

Terms for Phase 2 (Indicative)

  • ShapeShift DAO delegates FOX tokens to Coinbase Cloud’s public, community validator:
    • 40,000,000 FOX tokens
      • ShapeShift DAO shall use reasonable efforts to ensure that the delegation referenced in this proposal will not exceed 20% of actively staked FOX tokens
      • Tokens to be delegated within six months of mainnet launch for a minimum consecutive period of 12 months
      • Delegation to be phased in the following schedule:
        • 30% within 30 days
          • 12,000,000 FOX tokens
        • 30% within 60 days
          • 12,000,000 FOX tokens
        • 40% within 180 days
          • 16,000,000 FOX tokens
    • Coinbase Cloud provides the services listed above as (1) Phase 2: Mainnet Support and (2) Phase 2 Deliverables
    • Coinbase Cloud commits to setting a validator commission fee in line with similarly sized, premium infrastructure providers on the network, to the extent doing so is commercially reasonable
    • Termination
      • Either Coinbase Cloud or ShapeShift DAO may terminate this proposal at any time for convenience upon written notice to the other party.
5 Likes