This grant is for the development of the Developer Revenue Incentivization Protocol (DRIP) module, which was proposed as part of the 2023 ATOM Tokenomics RFP.
The Cosmos Hub is limited in its ability to issue funding for key core development efforts. Because Community Spend proposals on the Cosmos Hub tend to request 100% of funding up front — the only method available with the current governance module — it creates both execution and pricing risk. Execution risk arises because the Cosmos Hub lacks in-protocol mechanisms to recover funds from recipients who fail to meet their commitments, while pricing risk stems from the mismatch between proposal costs in USD and payouts in ATOM, which can fluctuate in value – causing the Community Pool to overpay or underpay medium to long-term funding proposals.
The DRIP module essentially allows proposals to have milestones, with funding released periodically (DRIP funding). This system also links ATOM payouts to its current market price, ensuring that payments remain fair and aligned with real-time token values.
Once DRIP is deployed, instead of making large upfront payments, the Cosmos Hub will be able to make more flexible, ongoing payments like “$50k per month,” adjusted to the price of ATOM at the time of each payment, eliminating the need to lock in prices at the time of proposal approval.There will also be mechanisms to deal with extreme price drops, need for notice periods to stop funding, and other aspects of funding. Please check out the Cosmos Forum discussion on the DRIP proposal.
Although proposed in 2023, this module’s development is now possible with CosmWasm available on the Cosmos Hub.
This module will form a core part of the Cosmos Hub, and as such, 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 approved amount to be necessarily utilized – it is more of a maximum cap for the maintenance period mentioned below. The approved grant includes approximately $87.5k for the 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. We expect longer-term maintenance costs to be significantly lower than the cost in the first six months, and expect to renew a longer-term maintenance agreement based on actual-billed maintenance hours during the initial period.
As author of the DRIP research, Noam Cohen will be supporting Daniel Harapko in architecting the module’s design and logic. Daniel and his team will also be coordinating with the Cosmos Hub engineering team at Informal Systems to integrate the module into the Cosmos Hub and produce documentation for both the code and its usage for Community Spend proposals.
The DRIP module will go through a Cosmos Hub governance vote, in order to be deployed on mainnet.
