- TaxiStake would like to continue running a ShapeShift DAO branded validator but based on data from the last year, as specified in the 8 month update https://forum.shapeshift.com/t/cosmos-validator-update-8-months-later/1652 we are proposing the following terms outlined in this proposal.
Summary of changes from forum feedback:
Drop buy ATOM requirement from the DAO
- 75/25 up to 65/35 if delegation target hit
- Include potential IFC delegation as part of goal
- DAO handles ATOMs and delegates 50% back to compound
- On the DAO to setup a multi-sig still
- TaxiStake will delegate some ATOM to the self bonded address.
TaxiStake purchased the Cosmos validator from ShapeShift AG (on 09/30/2021), unlike most ShapeShift branded validators, the amount of ATOMs has been on a steady decline.
When we started TaxiStake, we were under the strong impression that “if we build it they will come”, however; over the past year we learned it takes a lot more than a strong brand to achieve success. The profitability of the validator depends heavily on us remaining in the “active set” of the top 175 validators. The ShapeShift DAO is the 45th biggest but over 80% of the total delegations are coming from only a few addresses. Through the past year TaxiStake has developed a strong trust relationship with these large delegators.
While these delegators support the use of the ShapeShift name for a portion of the revenue split, they have indicated that the biggest reason they delegate to TaxiStake’s validators is not because of the ShapeShift brand or support of the DAO, but because of the availability and the security standards put in place by the TaxiStake team. However, having so few delegators with the majority of the stake on the validator put the validator at risk of falling out of the active set if they were to decide to un-delegate. TaxiStake is proposing the following for both the ShapeShift DAO and TaxiStake to help ensure the validator maintains a solid base of delegated ATOMs while growing overall delegations.
The revenue split proposed is 75% to TaxiStake and 25% to ShapeShift DAO for a 3 month period. TaxiStake will delegate some of revenue it earns from the revenue split and re-delegate it back to the “self delegation address.” This will help keep the ShapeShift validator in the active set and signal to the community that ShapeShift is running this validator on the Cosmos chain for the long haul, with “skin in the game.” The rewards from these self-delegated tokens will all be added to the total revenue split. TaxiStake will retain ownership of these delegated ATOMs. TaxiStake will continue to perform all the maintenance, upgrades, monitoring, and governance tasks as is specified in the expiring terms.
Under this proposal, the ShapeShift DAO must create a multisig Cosmos address to be controlled by the Treasure Signers (TSes). TaxiStake is requesting that the DAO then re-delegates 50% of the ATOMs it receives in rewards back from that address to the ShapeShift validator. This is also the address used by TaxiStake to send the DAO its revenue split in the form of native ATOMs. Receiving ATOMs earned from the DAO’s delegations will give the DAO a new income stream, and more options for managing its treasury.
The ShapeShift DAO agrees to, at minimum, do bi-monthy promotions/advertising about positive aspects of the ShapeShift DAO branded Cosmos validator. Ideas for topics could be how easy it is to delegate and earn yield using the ShapeShift platform or how delegating to the ShapeShift validator funds further development of Cosmos integration in the platform.
The DAO is targeting 15% monthly growth rate as specified in the most recent DOA revenue model. https://docs.google.com/spreadsheets/d/1z8zHiVuFoDIKHRwKdVY8DAo8WE_LS2jMczBxPHsIRok/edit#gid=0 Increasing delegations by half that (7% a month) is adding approximately 68506 ATOMs a month for a total of 205,518 ATOMs in a 3 month period. If the DAO can hit that goal, TaxiStake will increase the revenue split from 75/25% to 65/35%. We believe that these changes will help ensure the long term success of the ShapeShift Cosmos validator, and continue to provide a growing revenue stream for both parties.
Revenue Split 25% for 3 month term Must create a multisig cosmos wallet address Delegates 50% of rewards back to the cosmos validator from the multisig cosmos wallet. Marketing agrees to at least 2 postings a month promoting the validator. DAO’s target (not just marketing) is to increase delegations by 7% (half DAO’s own target growth rate) will trigger an increased revenue split to 35% after 3 months. (note that is approximately 205,518 ATOMs). This will include the potential ICF delegations per the October 29th 2022, application submitted by TaxiStake. 978,669 current delegations x 7% = 68,506 ATOMs/month for a total of 205,518 additional ATOMs delegated in 3 months.
75% Revenue Split for 3 month term Re-delegate some revenue to self-delegation address Covers all hosting, maintenance, upgrade costs Provides all maintenance, upgrade operations, governance responsibilities
Sends rewards in native ATOM to ShapeShift DAO address