The Atom Accelerator DAO (AADAO) is committed to driving sustainable growth and innovation around the Cosmos Hub. Part of these efforts included the 2023 Tokenomics RFP, which laid the foundation for tackling systemic challenges related to ATOM volatility in community funding.
Emerging from this initiative is the DRIP Module, an innovative solution funded by an AADAO grant that aims to ensure stable and efficient funding for developers and projects. Let’s delve into how exactly this module will strengthen the economic fabric of the Cosmos Hub…
The Team Behind DRIP Module
The DRIP Module is led by a team of experienced engineers and Web3 pioneers, including:
- Daniel Harapko: Co-founder of MapOfZones and interchain payment protocol expert.
- Noam Cohen: Former DevRel lead at ICF, now leading the Builders Program.
- Alexander Dziki: Full-stack developer and Cosmos hackathon veteran.
- Nikita Pashkov: Cosmos SDK DevOps expert with over a decade of blockchain experience.
This team was awarded a grant from AADAO in order to design, develop, test, and integrate the DRIP Module into the Cosmos Hub’s ecosystem, ensuring robust capital efficiency and safety mechanisms for both developers and the Hub.
Learnings From Tokenomics RFP Turned Reality
How did the DRIP Module come about? First you have to understand the underlying issues the Hub has been facing:
- Public funding for core teams is vulnerable to token price volatility;
- Lump-sum ATOM payments expose developers to financial risks, forcing them to liquidate ATOM immediately or gamble on price appreciation;
- Simultaneously, the Hub risks overspending, especially during bear markets;
- Existing solutions, such as streaming funds, still lack mechanisms to account for ATOM’s fluctuating dollar value, leaving both developers and the Hub exposed to financial instability.
Described and elaborated in 2023 Tokenomics RFP, the concept of Developer Revenue Incentivization Protocol (DRIP) addresses these issues directly, allowing teams to request specific funding in dollars, with the Hub using a price oracle to determine the amount of ATOM required.
Spending limits are also set to protect against extreme price drops, preventing excessive depletion of resources. This system provides developers with potential benefits if ATOM’s price increases, while safeguarding against losses during price declines. More simply, providing:
- Dynamic Payments: Funding adjusts in real-time to ATOM’s price, ensuring stable dollar-equivalent funding.
- Capital Protection: Upper and lower spending limits prevent resource depletion during extreme price volatility.
- Upside Potential: Developers benefit from ATOM price increases while mitigating downside risks.
This model not only protects developers but also safeguards the Cosmos Hub’s Community Pool from inefficiencies and potential losses.
Ensuring Capital Safety and Efficiency for the Hub
The DRIP Module represents a significant advancement in aligning the Cosmos Hub’s financial mechanisms with its long-term goals. By enabling developers to receive funding tied to a stable dollar value, it eliminates the financial unpredictability caused by token price volatility. This stability allows teams to plan and budget with confidence, fostering a more secure and reliable development environment.
At the same time, the Cosmos Hub benefits from optimized resource use, avoiding overspending during bullish markets while protecting its reserves in bearish conditions. This balance reduces financial risk for both developers and the Hub, paving the way for economic growth by encouraging innovation and sustainable development.
In total, the team was awarded a grant of up to $246,154. The approved amount for this grant includes best guesses for audit and short-term maintenance of the module. As such, we do not expect the full agreed amount to be necessarily utilized – it is more of a maximum cap.
The approved grant includes about $100k to develop the DRIP module, $87.5k for audits and audit-related remediation work and a budget of $58.2k for planned and unplanned maintenance work that might be required in the six months post-launch, to be billed per hour.
Looking Forward
The DRIP Module sets a new standard for efficient, secure funding in decentralized ecosystems. Once deployed, it will empower teams to focus on building without financial distractions, while providing the Hub with a cost-effective model for supporting long-term development.
This initiative is a testament to the power of community-driven solutions. As the Cosmos Hub grows, AADAO remains committed to supporting innovations like DRIP that drive sustainable value for ATOM holders and the AEZ.
Are you driving value to the Cosmos Hub?
Funded by the AADAO, the DRIP Module is a prime example of how governance-backed initiatives can solve pressing challenges and create impactful solutions. If you have a project that can add value to the Cosmos Hub, explore our funding themes and apply for a grant today.Â
Please note: Applications will close on November 29th.Â
About the Atom Accelerator DAO
Atom Accelerator DAO (AADAO) is a governance-mandated DAO of the Cosmos Hub. We have been formed and mandated to drive value for the Cosmos Hub & ATOM, supporting initiatives that either directly create economic impact or produce value that can drive its growth. From this, our current primary mandates are public grants & venture grants.
Atom Accelerator’s venture arm, strategically invests in promising early stage web3 founders & startups both within and outside of the Cosmos Hub’s ecosystem. Offering expertise, guidance, and support as experts within the Cosmos ecosystem while driving value towards Atom.
In 2023, we deployed $3.8 million in grants to 39 recipients – resulting in, among other things – a $22m USD airdrop to the Community Pool, an AEZ Accelerator program to expand the AEZ, a successful hackathon with 42 project submissions bringing innovations to the AEZ – and many other key initiatives. Read about them in our 2023 Impact Report.
