Hi !
Here’s my 2-cents on the evaluation of this proposal.
0–Introduction
Proposal #9 was activated on 12/FEB/2022 02:44:27Z and will finish on 26/FEB/2022 02:44:27Z.
The objective is to fund Kronos Research to provide liquidity on centralized exchanges using automated Market-Making algorithms, without influencing the direction of the market, by fulfilling automatically orders in both directions. This is approximately the same as providing a liquidity pool on decentralized exchanges. It should indeed help price discovery on FX pairs.
1-- Legitimacy
Kronos Research is a legitimate company of automatic market-making trading. Based in Taiwan, they have many skilled employees (software, trading, …). I couldn’t check whether the people asking for the money are “real”, i.e. are from the real company : so, I’ll assume that if @zaccheah support the proposal and confirmed a potential contract setup with Kronos Research, the “In-Real-Life” steps were already verified.
2–Amount
The amount requested by itself is not shocking, even if it’s really high (6.8M $FX).
Overall, 6.8M $FX represent approx. 5 current days of volume on Bithumb, Coinbase, Kucoin and Upbit.
3–Proposal deposits
An initial 10k FX deposit was made from FxCore address fx1l6suag4xa7gdxrzf6xd6gtu6hk8wtx6thnr8vz.
This deposit can be traced back to the FxCore pre-launch staking team address on ERC-20.
Why is it linked to a team address ? Is the team driving this proposal ? Transparency must be given in that sense. This needs clarification before the proposal ends (Question 1).
4–If proposal passes
The 6.8M $FX would be transferred from Community Spend Pool to the following FxCore address fx1e2xjrsa0peksu66dhn5kvma7y8hdyz4zsjlxgn. This seems to be a pretty new address that we will monitor in the future if the proposal succeeds. We assume the funds would go back to an ERC-20 address to find their way to each of the centralized exchanges listed : Upbit, Bithumb, Coinbase and Kucoin.
Also, 6.8M $FX would leave the bonded delegated tokens, thus increase APY at some point, and maybe come back later on from centralized exchanges. We assume that it would contribute to dilute teams’ tokens (especially if taken from the EGF and not from the CSP) and increase public voting power, which is an extremely good point.
5–Governance
Our analysis of the blockchain tells us that, once again, public validators are far from having enough power to allow quorum reaching. Only team addresses and team validators would allow that. This doesn’t go into a sense of real DAO-governance. Thus, what is the point in voting ? This needs clarification before the proposal ends (Question 2).
6–Other
- It was our understanding that the funds were to be provided by the Ecosystem Genesis Fund, and not by the Community Spend Pool : but the proposal says the contrary (result of the
fxcored query gov proposal 9
==> '@type': /cosmos.distribution.v1beta1.CommunityPoolSpendProposal
). This is really disturbing because it was never stated (nor seen in the blockchain) that the Ecosystem Genesis Fund (controlled by the team) would fund the Community Spend Pool (controlled by the staking delegators – mainly by the team for now-). We didn’t see a transaction in that sense, neither did we see a proposal from the team to fund the Community Spend Pool with 6.8M from the EGF. There’s a clear lack of transparency on this matter in general. This needs clarification before the proposal ends (Question 3).
- A big missing point in the proposal is the description of how the company will report to the users how which part of the funds are being used on each centralized exchanges, how (and how much) the company will remunerate from this funding. This needs clarification before the proposal ends (Question 4).
- Is the team going to contact associative validators ? This needs clarification before the proposal ends (Question 5).
Conclusion
Even though @FrenchXCore validator is really into this proposal (in favor of a YES), we would very much appreciate more transparency about this proposal, actually not from Kronos Research but from the team !
An answer to below questions would be much appreciated:
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Question 1: Has the team funded this proposal deposit on behalf of Kronos Research ?
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Question 2: Since public validators and delegators do not own enough to reach quorum, is the public vote required to get an overall public feeling ? How will the team contribute to reach quorum this time ?
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Question 3: Will the team fund back the Community Spend Pool with 6.8M $FX from the EGF addresses if proposal passes ?
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Question 4: Can we have more information about how Kronos Research will report back the use of the funds regularly to the community ?
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Question 5: Is the team going to contact the associative validators or vote on their behalf ?
Thanks a lot for that.
@FrenchXCore