This proposal is to signal the community’s agreement that Inter Protocol should be upgraded to include the latest version of the Vaults contracts, as written by Agoric OpCo, to extend Inter Protocol’s capabilities. A “yes” vote will indicate the community’s preference for packaging the Inter Protocol Vaults Contracts installation into the Agoric Mainnet-1b release, as per Approach #2 outlined in the Forum post at: Inter Protocol Vaults: Contract Implementations - #9 by rowland
This signaling proposal also names ATOM as the first collateral type to be used with Vaults, with the risk-based parameters, such as overcollateralization ratio, to be determined by the Economic Committee.
The Approach #1 vs #2 discussion / deliberation has been open for at least 5 days (since May 8th @ 4pm PT) and is moving on to the Voting Period via this signaling proposal.
This proposal is for a network upgrade and requires no BLD to be spent from the Community Fund.
Installing the Vaults contracts serves a community good for the Inter Protocol community as it enables minting IST without having to swap assets for IST, as well as enables the use of volatile assets, instead of other stablecoins.
Regarding the options for installing the Vaults contracts, there are two approaches that have been detailed in the forum post:
Agoric OpCo has spent considerable time testing contract deployment with multiple approaches:
Separate contract installation and deployment from chain upgrade, as expected for future third-party contract deployment.
Integrated installation and deployment of the Inter contracts, as was done with PSM installation.
Approach #1 in practice is more complex than will be required for third-party contracts because Inter contracts get privileged authority to mint native IST. Thus, it entails some execution and governance fatigue risks, and takes longer to complete.
Approach #2 reduces the cost and effort of deployment, but requires that the Inter Protocol community determine and recommend the specific code and configuration (e.g., in a signaling proposal) to include with the platform upgrade. The community should consider both options and decide which is best.
The extensibility of Inter Protocol and Inter Stable Token (IST) enable many collateral types, as the native token for the Cosmos Network, ATOM is proposed as the initial Vaults collateral. The process for vetting and adding other collateral types is out of scope of the initial installation of Vaults, but shall be addressed by the Economic Committee in the future.
The primary risk factor of bundling the Inter Protocol Vaults release with the Agoric Mainnet-1b upgrade is that if the Agoric upgrade succeeds, but the Vaults release fails, the Agoric upgrade may need to be rolled back, or at a minimum, a new upgrade process will have to be developed.
Voting Yes is voting to approve this proposal of adopting Approach #2, and installing ATOM as the first collateral type for the Vaults contracts. If this proposal is approved, it is expected that the next step would be a Network Upgrade on-chain proposal that encompasses upgrading the chain and installing the Vaults contracts, with ATOM as the initial collateral type, during a single upgrade window.
Voting No would result in taking Approach #1 and not confirming ATOM as the initial collateral type for Vaults. Approach #1 would require a separate upgrade for the Inter Protocol Vaults contracts from the Agoric Mainnet-1b chain upgrade. This would add complexity, time and a second upgrade window, during which existing contracts, such as the PSM would be unavailable. Additionally, a separate transaction would be needed, which would incur a fee to install a large bundle on chain; a problem obviated by Approach #2.
There are four different possible votes that may be cast:
Abstain: indicates that the voter is impartial to the outcome of the proposal.
Yes: indicates approval of the proposal in its current form.
No: indicates disapproval of the proposal in its current form.
NoWithVeto: indicates stronger opposition to the proposal than simply voting ‘No’. If the number of ‘NoWithVeto’ votes is greater than a third of total votes excluding ‘Abstain’ votes, the proposal is rejected and the deposits are burned.
Please note that this proposed process does not mean people should vote NoWithVeto merely because of failure to follow the process to the letter; procedural issues alone should not merit a NoWithVeto vote, rather, that special power should only be used if the proposal at issue would harm the chain.