After thorough deliberation by the DCF board, in consultation with top-level Agoric stakeholders, the DCF has decided to open a discussion related to the strategic sunsetting of Inter Protocol. The discussion and subsequent sunsetting (pending community support) is aimed at enabling Agoric to sharpen its focus on Orchestration initiatives and to reinforce BLD as the core token driving the Agoric ecosystem.
The recommendation to sunset Inter Protocol has not come easy, as we all hoped we would see the day when IST became a top stable token within the Cosmos and beyond. Careful analysis of evolving market conditions, rising operational costs, and decreasing market appetite for decentralized stable tokens has aided our decision to bring the discussion to the community. We believe this strategic pivot will position Agoric and BLD to better capture future growth opportunities and clearly define the vision.
If the community concurs that sunsetting Inter Protocol is appropriate, DCF will develop a comprehensive proposed wind up plan, including detailed timelines, vault-holder transition support, communication plans, and risk mitigation measures. We will then post a signalling proposal with the proposed plan and stakeholders will be invited to review the plan and participate actively in the discussion and vote. If that signalling proposal passes, then the process of sunsetting will begin.
This announcement serves solely to initiate a community discussion on whether the community supports sunsetting the protocol. If there is consensus, a signaling vote will follow according to Agoricâs standard governance processes.
Thank you for your ongoing support and collaboration. We are committed to a transparent, community-driven approach and look forward to your engagement and feedback on this important issue.
Hi ric, please could you share materials on the thorough deliberation by the DCF board and others, and any analysis you have already done, so that the community can make an informed decision. Thanks
I believe the decision to unwind makes sense in theory, but the timing could be problematic. Many investors who minted IST likely used it to fund additional crypto purchases. Shutting it down now, when the crypto marketâespecially the Cosmos ecosystemâis deeply in the red, might not be ideal. This could result in significant losses of collateral for many investors, which isnât the outcome youâd want. It risks alienating a community that embraced your innovation, only to face steep costs for doing so at a time like this.
Thatâs an entirely understandable concern. However, as you know, thereâs no crystal ball to tell us when market conditions will improve. Even if the community supports sunsetting, the wind-down process will take time to design and execute carefully.
Waiting for a potential market recoveryâon an unknown timelineâbefore initiating the process could significantly delay the strategic opportunity this discussion is meant to unlock: allowing Agoric to sharpen its focus on Orchestration, elevate BLD as the core of the ecosystem, and reduce the ongoing costs DCF is incurring to maintain Inter Protocol.
I think itâs important to underscore that Agoric is not âabandoningâ IST. Inter Protocol is a decentralized project, and nothing moves forward without community consensus. This discussion is simply the first step in that process. From the beginning, Inter Protocol was designed to transition into the hands of the community.
As for âconsequences,â â as mentioned - we see this shift as a wholly positive step for the Agoric ecosystem. Sunsetting Inter Protocol would allow Agoric to sharpen its focus on scaling Orchestration efforts and reinforce BLD as the central token driving the ecosystem forward.
That said, there are important implications for IST users and vault holders to be aware of, should the community support a sunset. These are mostly expected and manageableâsuch as the need to exit vault positions and swap out of ISTâbut they will be handled with care, transparency, and support throughout any transition.
The outcomes of those discussions are essentially captured in the original post. Iâm not sure sharing internal notes will afford you any new information. That said, if you have specific questions, we will be more than happy to answer them.
From Agoricâs side, the decision was partly framed around the broader idea of deepening focus on Orchestration and exploring paths to further isolate BLD as the core token within the ecosystem. The ongoing human resource pull required to maintain Inter Protocol was also a significant factor in the conversation.
On the DCF sideâas Ric notedâthe decision centered on the substantial costs involved in operating and sustaining Inter Protocol, especially when viewed against current market conditions and the ongoing challenges in driving meaningful traction for IST within the Cosmos ecosystem.
I fully support the decision to sunset the IST. The use case for IST is limited, and the primary concern for investors is capturing the real value of the BLD token. Over the past few years, many have critiqued the tokenomics of BLD, with the consensus being that itâs flawed. For example, one of the most liked comments on Reddit was, âWonderful. Too bad their tokenomics are horrible.â Removing IST is a necessary step to enhance the tokenomics of BLD and to position BLD as the primary means of transfer and store of value.
While I understand your concerns regarding the timing of unwinding IST, I believe the long-term benefits outweigh the short-term risks. The decision to sunset IST isnât about causing harm to the community, but rather about streamlining the ecosystem and enhancing the overall value proposition of BLD. Continuing with IST, especially when its use case is minimal, could undermine the tokenomics of BLD, which many have criticized over the years.
Yes, the timing may seem challenging given the current market conditions, but holding onto IST only prolongs the inefficiencies within the ecosystem. In the long run, focusing on BLD as the primary token for value transfer and storage will create a more robust and sustainable system. Itâs a necessary step to improve the overall health of the project and provide real value to investors, even if it involves some short-term pain. The communityâs trust in innovation and long-term vision should prevail over the fear of temporary losses.
Thanks BCMO. One of the reasons initially given for the need for IST was for stable pricing, i.e. why would people want to pay fees in a currency that is constantly changing in value. Is this no now longer a concern if BLD becomes the fee token? I.e. are there now mechanisms to keep fees stable/low enough despite the stated goal to improve the value of BLD? Or is it just that the inital thinking was flawed?
Then, you better use USDC instead. Decentralized Stablecoin doesnât work. Period. The regulation gets tougher on decentralized stablecoins nowadays. IST hinders Agoric ecosystem.
Plus, ETH, SOL doesnât have issue with people using their ecosystem even though stable pricing isnât there. That is my observation. BLD should become store of value and means of payment like ETH.
Iâd like to hear the thoughts of the DCF/team who Iâm sure have given more thought to this than us. I donât think we would want to replicate the issues Ethereum has with congestion (how many L2s are we on now?), and neither do we have the fee architecture of Solana.
Thank you Ric for starting the discussion! The stablecoin world very different from when IST was envisioned, and Orchestration doesnât naturally drive value through IST. So Agoric Systems is focused on the perspective: âHow should we align BLD with Orchestration?â
So making the BLD token the gas/fee token is the critical first step. Following that, and especially as we collectively ship more Orchestration products â that people want and pay for! â we can further enhance the tokenomics and that BLD/Orchestration alignment.
Great question. The crypto world has evolved quite a bit since then, with the evolution of fee markets, MEV, etc. And orchestration, async, etc. also change the considerations here in ways that we now understand better. For example:
What users pay and what execution nodes get paid donât have to be the same thing.
Users should pay in stables, but until they are ready, letâs not complicate thingsâŚ
In an async system, userâs shouldnât be paying for execution gas.
We want to avoid incetivising artificially raising the cost of execution
WRT 1: as part of Chain Abstraction, thereâs lots of dev to make it so users pay in whatever is convenient, and each services gets paid in whatever it requires. Solutions range from smarter wallets to clever paymasters that front-run your transaction to make sure you have fees. Itâs still generally, but things like Osmosis just trade from your token to the gas required.
WRT 2: Iâm not sure I strongly believe this, but itâs certainly the case that users are not demanding to pay in stables right now. They just want it to be easier. I want us entirely focused on solving problems that people actually want solved right now enough to pay for! So letâs shed any complexity we donât need.
WRT 3: The world is async; the multichain is async. Itâs not real feasible to for example simulate seamless cross-chain actions that happen over time. That especially true if you have actions that occur over time, that are batched (as a result of one action, itâs worth rebalancing; who paid gas for that?). So I believe that contracts should pay for the gas they need, and they just need to make sure they charge users enough to cover the contractâs costs.
WRT 4: this was one of the main drivers: have gas costs NOT go to validators, but instead have their rewards come from something derived from the value that platform provides. This is the key area to keep working on tokenomic improvements. Thereâs an interesting recent proposal in Cosmos, for example, where fees from contracts go to place a limit order on the underlying token, thus helping sustain value (among other options). I think thereâs going to be some very interesting
opportunties there, but we all need more actual apps before clear patterns can emerge.
So was the thinking âflawedâ. Maybe. âPrematureâ? Almost certainly
I agree with your conclusion, but FWIW I dontât agree about decentralized stables, given ethena.fi. But itâs certainly a complex area. And was insurmountably worse in the previous administration.
As part of the strategic refocus around $BLD, is it conceivable that the fees generated could be partially redistributed to $BLD stakers, in addition to the rewards from inflation? This would help strengthen the attractiveness of staking, align economic incentives with ecosystem growth, and recognize the commitment of participants securing the network.
