In order to fully decentralize the backend of ShapeShift it is vital to have a source of reliable, indexed, and decentralized node data for all chains that are supported by the ShapeShift interface. If anyone is going to host decentralized copies of indexed node data, there needs to be an incentivisation structure in place to reward them for their work.
FOXChain, a purpose-built blockchain built on the cosmos SDK, has been proposed to solve both problems and has been discussed numerous times in the ShapeShift DAO community over the last 45 days. The purpose of this proposal is to formalize and fund the next steps of the development of this important piece of decentralized infrastructure.
This proposal outlines the first phase of necessary actions to be taken in order to make FOXCHAIN a reality. This first phase will fund the following deliverables to the ShapeShift DAO community:
- A technical scope document, including engineering requirements for FOXChain as well as any necessary diagrams and supporting documentation
- A spreadsheet that models the necessary FOX support needed for supporting the security of FOXChain and related tokenomics of supporting the chain
- a Proof of Concept built on top of the Cosmos SDK that will serve as the initial reference implementation of FOXChain for testnet purposes
- The hiring of an engineering lead and supporting team who will support (1), (2), and (3) and be poised to rapidly iterate into phase 2 of fully building out the FOXChain once the (1), (2), and (3) are fully delivered to the community.
Note: Cosmos is proposed as an ideal candidate due to its a) Tendermint consensus, and b) bonding/slashing mechanisms required for the implementation of FOXChain.
The motivation for building FOXChain runs on a number of different paths, but primarily it serves as the long term decentralized backend for all node data the ShapeShift interface will ever need. FOXCHAIN will act as a service for any application requiring reliable access to a consistent interface to any of the supported blockchains, in order to increase dapp development velocity, reduce reliance on centralized data sources, remove single points of failure, and increase censorship-resistance. On top of this there are many additional benefits that can be built out once the ShapeShift DAO has its own sovereign blockchain, though that does not serve as the primary motivation at this phase.
In order to move forward on the creation of FOXChain, this proposal asks for the creation of a purpose built workstream and appointing Michael Perklin () as its workstream leader. The workstream will deliver on (1), (2), (3), and (4) as defined in the abstract. In more a detailed sense this includes:
- The workstream will work on breaking down the technical scope of the FOXChain, including getting feedback from various technical stakeholders in the DAO and larger crypto community (such as Cosmos core devs, other Cosmos SDK chain developers, and other DeFi projects) in order to produce a full initial technical requirements document and any necessary design diagrams to inform future developers of FOXChain.
- The workstream will work with contributors to model out the tokenomics of FOXChain including the costs associated with running each ShapeShift supported blockchain and index, projected necessary FOX needed to subsidize months/years of node subsidies, FOXChain revenue generation for the DAO over the long term, and any other components to properly model FOXChain tokenomics.
- The workstream will work to either hire or bounty out developers in order to produce a FOXChain proof of concept which will be informed by (1) and (2) and will serve to launch the initial FOXChain testnet which can be iterated on in phase 2 to launch FOXChain into production.
- The workstream will work to hire an engineering lead and supporting team who can support (1), (2), and (3) as necessary but also more importantly so that team can be poised to be funded in phase 2 to iterate and launch the production version of FOXChain to mainnet.
In order to deliver on the above Phase 1 FOXChain scope, this proposal requests 300,000 USDC as funding (or equivalent FOX). If funded, Michael Perklin will take receipt of these 300,000 USDC at his consulting company and will have full authority to spend this 300,000 USDC in any way he feels will make progress towards achieving the FOXCHAIN objectives laid out in this proposal. The funding will be transferred in three separate 100,000 USDC transactions over three months. Any funds remaining after these objectives have been fulfilled will either be retained to fulfill future “Phase 2” proposals for FOXCHAIN, or will be returned to the DAO treasury if the DAO decides no future work on FOXCHAIN will be funded. Michael Perklin will be responsible for maintaining records related to the disbursement of funds and will share these records with ShapeShift DAO to ensure transparency.
The benefits of this proposal will include the first necessary steps to create FOXChain, a vital piece of infrastructure needed to decentralize ShapeShift’s backend and also provide the world and other interfaces with essential infrastructure (reliable, incentivized, indexed, blockchain data across many blockchains). In addition to this vital infrastructure, FOXChain will also likely become a significant source of revenue for the DAO over the long term if the project is successful.
The drawbacks of this proposal will be that it is a considerable sum to invest at this stage with no guarantee of success. The DAO will have to trust Mperklin to diligently put the right people and pieces in place to deliver on the scope laid out in this proposal. It is possible that phase 2 is not funded, and this never gets delivered to a production mainnet. It is also possible that a better solution or other alternative solutions out in the market end up being better suited to solve what FOXChain is trying to solve.