[Governance Discussion] Proposal #16 Feedback and Action Points

Dear Persistence community,

On January 24th, Governance Proposal #16 was posted on the Persistence Chain, proposing parameter changes to improve XPRT inflation distribution among the ecosystem stakeholders.

Really appreciate community members taking the initiative to advance the Persistence ecosystem. Most of the proposed changes are in line with the ongoing efforts by the Persistence core team.

I wanted to add more color to some of the points and open a discussion for the entire community to add their feedback before the voting period ends.


  1. Proposed changes:
  1. Points 2, 5, and 6 in the proposal are suggestive and not actionable. Hence, voting YES on the proposal only changes the parameters highlighted above and has no impact on suggestive pointers.
  2. The proposal quoted concerns regarding community pool usage for Proposal #2 and Proposal #13. I have added more details on the community pool spending below.
  3. By voting YES to the proposal, the users vote their intent to change the chain’s parameters as suggested. Despite not agreeing to all points (detailed thoughts below), I support voting YES on this proposal to change the proposed chain parameters.

Feedback and Action Points

Pain Point 1: Community pool usage and community pool tax

CP spend for Proposal #2 (530,000 XPRT) and Proposal #13 (450,000 XPRT):

  1. 100% of the allocated XPRT for Proposal #2 was used to incentivize XPRT/UST pool LPs. Hence, allocated XPRT directly flowed back to the community.
  2. Proposal #13, submitted by the Dexter team (a collaboration between AstroTech Labs and Yeti Labs, working closely with Persistence Labs), also committed the majority of allocated XPRT as LP incentives.
  3. While I agree that there might be an overlap between the objectives of the community pool and the ‘ecosystem development & growth’ allocation, both proposals were put on-chain and voted on by the community.

Regardless, the more important takeaway is that we need to rework the tokenomics and more clearly define the purpose of each allocation.

Action Item 1 [Ongoing]

The core team is working on the XPRT 2.0 proposition and will share revised tokenomics with the community for feedback before the upcoming inflation halving (tentatively early August).

Increasing Community Pool Tax to 10%:

I agree that the current 2% community tax is low and are happy to support the change to 10%.

However, as the pool increases in value, we’d need better governance processes to avoid abuse.

Action Item 2 [Ongoing]

The Core-1 Chain team has consolidated effective governance practices and will share the proposition on best options for feedback. The idea is to have open and constructive discussions BEFORE any proposal is posted on-chain.

Pain Point 2: Relation between upcoming halving and Foundation Delegation Program

The intent behind the FDP is to decentralize the network further, improve Core-1 chain resources (documentation and tooling), increase testnet participation, and support the most active validators.

Action Item 3 [Ongoing]

Provide an in-depth walkthrough of the FDP allocations and gather feedback from the validator community. Toward the same goal, a thread was published through the Persistence handle, and over the next two weeks, along with the Core-1 team, I plan to have multiple activities engaging the community to improve future FDP rounds.

Important Note: While halving would reduce the effectiveness of the FDP, the goals and the intent will remain the same. The FDP will be adjusted wherever needed to ensure it remains effective.

Rather than pressing on inflation halving, exploring avenues for funding staking rewards from protocol revenue instead of inflation is more important.

Pain Point 3: Validator commission based on FDP requirement of max commission of 5%

  1. This initial working value for Round 1 ensures that all applicants have equal FDP support.
  2. In Round 1, every validator who met the baseline criteria received a delegation of 785,714 XPRT, which (at 5% commission) generates 14,080XPRT/year or 1173 XPRT/month. This revenue alone should allow validators to break even at current prices based on our estimated infrastructure costs.

Action item 4 [Planned]

Open feedback form for FDP Round 1 to gather all inputs and make Round 2 even better. It’s an iterative process, and we require constant feedback to make FDP more effective.

Pain Point 4: Contributions to the broader Cosmos tech stack and ecosystem

  1. Find contributions of the Persistence Core-1 team to the Cosmos tech stack and the ecosystem here.
  2. Additionally, all Persistence Github repos are public and can be leveraged by the existing or new teams building within the Cosmos ecosystem. An ongoing open-source contribution is regarding the automated upgrades of the graph firehose nodes, which should enable all Cosmos-based chains running the graph indexers to do the same.

Action Item 5 [To start]

Align the efforts between the Core-1 team and the teams building within the Persistence ecosystem and identify public goods that need improvement and funding. Targeted funding will help both Persistence and the broader ecosystem.

Pain Point 5: Decentralization of the voting power

  1. While I agree that voting power should be more decentralized, this is a long process and can only be solved over time.
  2. The parameter changes for block proposer rewards could be a first step towards resolving this pain point, but further steps will be required.

Action item 6 [To start]

Launch an extensive research campaign to find ways to improve current chain mechanisms to promote decentralization further.

Response for each proposed item

Proposal 1: Increase community pool allocation to 10%

  • Agree (comments above under Pain Point 1)

Proposal 2: Enforce min commission at 5% via code

  • Disagree - there needs to be a clear indication that doing so will improve the network overall. It also puts smaller validators at a disadvantage if they want to use a lower commission rate to attract new delegators temporarily.

Proposal 3: Remove block proposal rewards

  1. Agree - While we don’t think this will magically solve all problems related to skewed voting power, it is an experiment we support.
  2. Bootstrapping validators with community pools - TBC, the FDP should be able to do this too.

Proposal 4: Inflation rate change to 1

  • Agree - this will make the inflation more reactive to changes in the staking ratio.

Action Point 7 [Started]

  • As a liquid staking hub, the Persistence community must collectively emphasize the ideal bonding ratio we want to achieve once liquid staking XPRT becomes the default over XPRT.
  • With Liquid Staking becoming more prominent, inflation adjustments based on the staking ratio might not be relevant.

Proposal 5: Better Community Pool Usage

  • Agree

Action Item 8 [Planned]

in line with Action Items 1 & 2: Clarify community pool objectives and usage

Proposal 6: Manually fund the community pool with 1M XPRT or drop it amongst long-term holders and supporters

  • Disagree - this part of the proposal needs to be better researched and taking into account our feedback on the background and Pain Point 1, I believe the objective of this suggestion has been addressed.

I can confidently say that the Persistence team is committed to working relentlessly to ensure long-term holders and supporters benefit in the long run through initiatives such as XPRT2.0.

Final note

I am delighted to see this proposal and welcome all initiatives to improve the Persistence network health and decentralization. Like most Persistence core team members, I am aware that many things have a lot of room for improvement, and aim to take into account all feedback to drive the ecosystem forward in the best possible way.

Open to exploring various routes (working groups, DAOs, community calls, etc.) to find the best way to do this in a collaborative, sustainable, and decentralized manner.


Voted yes on Prop 16 already. We have the following comment in the vote tx memo field: This is a text proposal for some important changes to the network. While more analysis is needed for each item in the proposal, we agree with the general direction of this proposal.


Voted YES on Prop #16 for the benefit of the Persistence chain.


Cosmonaut Stakes Voted YES on Proposal #16 for changing the parameters. While I agree with most of the points made by the Core-1 Team in this post, there are some questions and points I want to highlight below.

1. Inflation Halving Question

According to the XPRT Tokenomics and Utility article, the upcoming inflation is on the 1st of April. But, the quote below suggests it’s not. Am I missing something?

2. Foundation Nodes Question

Although the Foundation Delegation Program has seen a major redelegation from the Foundation Nodes to validators, according to this article, the Foundation Nodes were expected to be shut down by early Q3 2021. What’s the motive for not sticking with the initial plan?

3. Enforcing a 5% Validator Commission via Code

Enforcing a commission of 5% may help smaller validators, but will also give validators with big voting power even more voting power (e.g. GPool, Staking4all).

While we care about the decentralization of the core-1 chain, the average staker doesn’t. Thus, they often choose between the top validators with the lowest commission. Doing so earns them more XPRT (because of the lower commission), while also feeling secure (because of the high amount of total XPRT staked under the specific validator).

To prove the 5% enforced commission could work, a great example is Stargaze - their Validators Nakamoto Coefficient is at 11.

To prove lower commissions don’t help smaller validators, Cosmonaut Stakes’ commission was at 0% for approximately 1 month. During this time, almost no delegations were made, and stayed in the active set due to my stake.

To prove the point even further, here’s a Twitter poll suggesting most delegators find a commission of 5% the most trustful. Although it only has 23 votes, this could be conducted from a bigger Twitter account so it receives more votes.


Architect Nodes voted Yes on proposal 16 as we are in agreement with the actionable items mentioned in the proposal. Here are couple more comments somewhat related to this prop:

-Feedback provided to Persistence team on FDP. Team can consolidate feedback and share with community.
-We are generally in favor of minimum commission enforced via code. It has been hotly debated at length so I will leave it at that.

For other items mentioned in this prop, we will vote based on information provided in future proposals.


Vote yes on proposal 16.
And agreed on a 5% minimum commission enforced via code.
It’s not about giving big validators more voting powers like @CosmonautStakes said.

The more commission they receive, the more they must contribute to the community and ecosystem.

1 Like

Good points, many holders think this changes will hurt their positions, since the team can´t stick to the initial model, and is not clear anything about the tokenomics any more, enforcing 5% commission via code doesn´t change anything about descentralization because people trust more in validators who are big or trusted more by the comunity, the chance for smaller validators is to charge less fee not more, this turn all smaller validators less appeal to the stakers.

We’ve checked your proposal and totally agree with you

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Hello Cosmonaut Stakes,

Thank you for bringing up these points. Here’s response to individual pointers:

  1. The halving is determined based on the blockheight and not a calendar date particularly. At the time of the genesis the block height was predicted to be on April 1st but since then the block time has differed hence causing the delay.

Also, want to clarify XPRT emissions are not determined by the calendar days but individual blocks. So with the block time slowing down XPRT emission also slowed.

The halving will happen in August, we calculated the block through the halving module and you can use this mintscan link to bookmark it: Mintscan

  1. I agree that Foundation nodes did take longer time than expected to shut down. The expected timeline for the validator to reach a respectable threshold was Q3 2021. Now with validators very active during chain upgrades/halts, the Foundation nodes can be taken down.

  2. I have seen smaller validators attracting significant amount of delegations with lower commission rates. But if there is enough evidence of minimum commision rate supporting smaller validators, I encourage smaller validators to open a forum discussion.

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Hello Ilildur,

More than happy to clarify things related to tokenomics. Can you please share any specific concerns/questions?

Voted yes as we believe these changes will benefit the network’s health & sustainability and the community overall.

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We agree that the network needs to be developed further and therefore support this proposal and voted “yes”.