Sunset Inter Protocol and Begin Wind-Down Process

Governance Signaling Proposals
1

This signaling proposal seeks the Agoric community’s support to proceed with the strategic wind-down of Inter Protocol. The proposal is intended to provide the Economic Committee, the DCF, Agoric OpCo, and other stakeholders with a clear mandate to initiate the sunset process, execute technical deprecations, and transition toward a BLD-centric ecosystem.

A “Yes” vote signals agreement with the high-level direction to deprecate Inter Protocol by mid-2025 and begin coordinated communications, user offboarding, and technical transitions as outlined in the proposed wind-down plan. A “No” vote will maintain Inter Protocol in its current state until further community action is taken.

This proposal reflects extensive deliberation by the DCF in collaboration with the Inter Protocol Economic Committee, Agoric stakeholders, ICF, and others.

Rationale

The recommendation to sunset Inter Protocol is based on a combination of factors:

  • Changing Market Conditions: The market appetite for decentralized stablecoins has declined, while operational complexity and costs have risen.

  • Ecosystem Focus: Refocusing ecosystem energy and resources on Agoric’s Orchestration efforts and solidifying BLD as the core economic token aligns better with long-term goals.

Inter Protocol’s early experimentation provided valuable insights and tooling. This proposal acknowledges its contribution while responsibly initiating its retirement.

Proposal Scope

This proposal does not execute the technical shutdown itself but instead signals community alignment and readiness to:

  • Wind down Inter Protocol by mid-2025 through a phased deactivation of features.
  • Support IST Vault and PSM users with resources and guidance to exit smoothly.
  • Replace IST with BLD in Agoric protocol-level roles (gas fees, Swingset execution, wallet provisioning).
  • Begin communications, governance, and implementation tracks for the deprecation process.

Wind-Down Components

The following milestones are part of the intended execution plan, subject to further governance actions:

  1. Cease IST Minting

  • Disable creation of new IST via Vaults (reduce mint limits, pause minting contracts).
  • Retain IST repayment and withdrawal functionality for a grace period. (see strategy below)

  1. Vault Closure Process

  • Vault users will reclaim collateral by repaying IST.
  • Liquidation parameters will be adjusted incrementally to encourage closure. (see strategy below)

  1. PSM Exit Strategy

  • The community requests that DCF use best efforts to support adequate IST liquidity.

  1. User Support and Communications

  • Publish educational content and clear instructions for users.
  • Notify via UI banners, Discord, community channels, and direct outreach to vault holders and whales.

  1. Shutdown of Inter Protocol Infrastructure

  • Deactivate Inter UIs (Vaults, PSM, Econ Committee Governance Portal).
  • Sunset inter.trade domains and social accounts.
  • Decommission oracles and auction services after vaults close.

Additional Recommended Actions

Execution of the sunset plan will have foreseeable consequences for the Agoric L1 in the following areas:

  • Change to acceptance of IST for gas fees
  • Updates to wallet provisioning and provision pool disbursements
  • UI and validator configuration changes to enforce BLD-only operations

It is expected that Agoric will engage in independent governance procedures to address these, or other related issues in the wake of this Signalling Proposal.. As these matters are outside the scope of this Signalling Proposal, these items are listed for completeness only and to recommend to Agoric to take action on these points.

Inter Protocol Sunsetting Strategy

​​The following strategy has been developed by the DCF in close collaboration with Agoric OpCo, the Inter Protocol Economic Committee, and other ecosystem contributors. It outlines the proposed steps for responsibly sunsetting Inter Protocol, with a focus on minimizing user disruption, preserving system integrity, and aligning with Agoric’s long-term priorities. This plan reflects DCF’s commitment to transparency, risk mitigation, and effective coordination throughout the sunsetting process.

DCF proposes a 60-day sunsetting period following approval of this signaling proposal. This window is designed to give IST Vault and PSM users sufficient time to unwind their positions and reclaim collateral in an orderly manner. During this time, key protocol functions will remain active to support user exits, and communication efforts will focus on ensuring all participants are aware of next steps, deadlines, and available support.

Timeline

  • April 16: Signaling vote posted - Discussion period begins.
  • April 26: Discussion period ends. Three day voting period begins.
  • April 29: Voting period ends.
    • If REJECTED: Inter Protocol continues as is.
    • If PASSED:
      • April 29: Begin Wind-down
        • No new Vault openings
        • No minting of IST via current vaults.
        • Liquidation Fee set to 0
      • May 30 - June 29 EC begins weekly increases in the liquidation Ratio (LR). Rates will increase 50% each week, starting the week of May 29, until either:
        • All vaults are liquidated, or
        • June 26 (on which date the ratio will be increased to a level that closes all vaults)
        • Whichever comes first.
      • June 30 T0 Shut down
      • July 30 Post Shutdown Communication Strategy

Risk Factors

  • User Confusion or Delay: Vault and PSM users may be unaware or slow to act. The plan includes multiple reminders and grace periods.
  • Validator Friction: Some validators may resist switching to BLD for gas due to its lower liquidity. Community coordination will be critical.
  • Systemic Dependencies: IST is interwoven with BLD tokenomics and must be decoupled carefully to avoid unexpected impacts.

A Note on Voting

There are four possible vote options:

  • Yes: Support this signaling proposal and initiate wind-down planning.
  • No: Reject this proposal; Inter Protocol continues operating as-is.
  • Abstain: Choose not to take a position.
  • NoWithVeto: Strong opposition. If over 33% of non-abstain votes select this, the proposal fails and deposits are burned. This should be reserved for proposals that would actively harm the chain.

Voting Yes indicates support for:

  • Initiating the strategic wind-down of Inter Protocol by mid-2025
  • Enabling communication, technical, and governance workstreams to proceed

Voting No indicates a desire to continue operating Inter Protocol in its current form. No technical shutdown steps will be taken, and the community will need to revisit this decision in a future proposal.

Links

1 Like
2

Who are the other system contributors involved in the strategy?

3

If we talk about transparency, it would be good to publish all the actors involved in the strategy.

4

This came out of work by DCF, with consultation and input from the Agoric Product, Engineering and Management teams, and from the Economic Committee. And of course, there was review by legal counsel. This is the usual group of actors that assists with facilitating Inter Protocol matters.

1 Like
5

Everything I’ve read in the announcement about the protocol being phased out looks very lame. I was setting up a few vaults at Inter, but only shut them down because I realized that if I didn’t, I would lose money. Because I can only put ATOM and OSMO in the collateral, which have no sustainability whatsoever. There never appeared to be a single coin out there with good exchange rate stability that I could afford to pledge without fear of liquidation. Which means it was all useless and you didn’t even try to make it useful. And yet I was planning to use it in the future because I was expecting coins to be added in the future. For the simple reason that I believe in DeFi, not centralized stablecoins.
But I understand why you do, and you don’t seem to want to give the real reason. What did they promise you? Listings?

1 Like
6

The company is American.
The United States wanted to use its own stablecoins, USDC.
The company was given a choice - either this way, or you go against the system.
AGORIC lawyers considered it right to do everything according to the law and have to abandon IST.
I hope I have correctly stated these reasons.

1 Like
7

Insinuations won’t particularly help the community reach a consensus. If you’re indeed aware of a law establishing USDC as “the American stablecoin”, and requiring US companies to abandon any other stablecoin project, please share links here.

Although built on Agoric, Inter Protocol is a decentralized community-driven project. That’s why its future is decided through a community governance process.

8

Onboarding new collateral types have always been a prerogative of the Agoric and Inter Protocol communities. As a reference, a discussion was opened on February 20th asking users and ecosystem members to weigh in on the types of assets to be added next. It didn’t attract a single comment.

9

I agree, I most likely read fake news
Soorry use

10

Yes, but it is difficult to talk about decentralization when voting power is centralized.

11

This is turning out to be very interesting. I’m subscribed to Agoric’s Twitter account with notifications, but I’ve only seen posts from Denver, posts about how well it’s going, and stupid furry memcoins that no one ever launched. But such important information I missed. I apologize. Was this announcement even a tweeting?

Everyone crypto team loves to misuse the word “community” when sole decisions need to be taken.

1 Like
12

BLD is the native token of the Agoric chain, a foundational asset to the network that enables staking, voting, and governance activity within the Agoric ecosystem.

I have some reservations about using BLD as a fee token.

2 Likes
13

I’m curious to hear your reservations

1 Like
14

I’m also interested.

1 Like
15

IST is what attracted me to Agoric… I use IST for the tokenization of real estate assets. I insist in using an interchain decentralized form of USD. I am already looking at SILK, any other good alternatives out there?

16

Dean hello)
I’m also interested to hear your opinion about my thoughts)
Topic - Restore TRUST and get HYPE

17

I think we should stick to the basics. To protect the security of Agoric, I think BLD should remain a token for staking and governance. That’s why the existence of IST, which also functions as a fee token, is attractive, and I cannot agree to simply abolish it.

18

Not really, the result so far since the establishment of Agoric platform and IST say otherwise. At current stage, BLD token value has collapsed to the ground. The investors want to secure and prioritize BLD value rather than utilizing IST. Decentralized stablecoins are not attractive, USDT and USDC say them all. DAI on the other hand is separate projects from Ethereum which is MakerDAO. That also started when Ethereum acquired majority of developers and users beforehand.

2 Likes
19

Thank you for your reply. I believe that the value of BLD is in continuing to strengthen the security of the chain. To be honest, at this stage I do not know whether treating BLD as a fee token will lead to compromising the security of the chain. However, as Agoric expands in the future, if huge fees are covered by BLD, I think it will no longer be able to fulfill its role as a staking token. I understand the difficulties and hardships of operating IST, but I believe it is a token that will definitely be necessary in the future. It would be a shame to abolish it as it is.

20

While I understand the concerns around maintaining the security of the Agoric chain and the role of BLD in that context, I respectfully disagree with the idea that using BLD as a fee token inherently compromises its function as a staking token.

In fact, aligning network fees with BLD could potentially enhance the token’s utility and value, thereby reinforcing security. By integrating fees with BLD, we increase demand for the token, which can lead to broader participation in staking and governance. Rather than undermining its role, this could actually make the chain more secure and economically resilient.

1 Like