Proposal for alternative to Staking and Expenditure of Treasury GABs


#1

Currently there are two GAB’s under review.

  1. Grant of SWM tokens to SWARM foundation for 2019H2 Budget
  2. SWM network policy - modified issuance staking by Swarm council exception.

Proposal:
The staking model remains as previously approved, but swarm council have the right to allow exceptions to aide with the onboarding of clients to the network.
In the instances where a exception is agreed, the reduction from the network policy staking model will be absorbed by the private entity who completed/provided the onboarding process.

Example:
A company wants to complete a tokenisation with a value of $100,000,000.00. The network staking policy states this tokenisation process must lock up $100,000.00 in SWM.
If as part of the issuers engagement/proposal they require/negotiate a reduced stake lock up, and this exception is approved by the swarm council, this reduction in the SWM lockup from the network staking policy would be borne by the entity that provided the onboarding process.

This proposal and it’s impact On the current GAB’s

  1. The cost for works complete to date by Swarm Capital of $241,000.00 could be used by Swarm capital as a credit against a future reduction/exception in the staking model, if necessary and approved by the council.
    In the example of a $100,000,000.00 tokenisation.
    If swarm council agrees to a exception to the staking model of $50,000.00, as opposed to $100,000.00 as per the network policy. This would mean Swarm foundation have reduced the liability to Swarm Capital from $241,000.00 to $191,000.00. ($50,000.00 staking exception)
    This process would allow Swarm Capital to progress with their dealings via council approval without reducing the utility of the swarm token or changing the network policy.
    The exceptions process could be maintained on a trial basis with Swarm foundation having the benefit of reducing the liability owed to Swarm Capital, access to use future Swarm Capital developments or offset against other such benefits as deemed fit by the council and or GAB’s.
    This would be a trial process which would incentivise all parties to maintain the existing network policy. This trial would also work towards finding a staking balance which may require a change in the network staking policy due to market dynamics, which can’t currently be fully assessed.

#2

Makes sense, I’d agree to something along these lines. However, I think we also need to be reasonable and look at competitors.

  • How much does Secutitize charge for 100m tokenisation-only? We still need to be priced competitively.

  • We should have different requirements for small assets, simple tokenisation and a ST raise.


#3

Securitize is as low as $5,000 per quarter with no up from cost for a deal this size.

So $20,000 per year subscription, with no upfront fee.


#4

The need to deviate from the network policy should be a outside entities business decision and cost, not a deviation which mostly impacts the token holders via less staking, unless it can be proven the current model is so uncompetitive that it should require a wholesale change. It has to also be assumed that as the staking rates were agreed only 6 months ago the parties involved ( council, foundation and capital) complete the necessary due diligence against the competition prior to issuing the GAB. I agree the staking model was a round one version but to go from agreed fixed rates to case by case without giving qualitative or quantitative reasoning doesn’t seem sensible.
I Agree that lower values could have a fixed rate which is much lower and closer to Sams proposal. I don’t necessarily agree with 1 Swm under 10k as it almost makes it look like a gimmick.
On the example from corn it’s impossible to compare in reality. If the tokenisation is for 1 year then swarm aren’t competitive. If the tokenisation lasts 20 or 30 years then the staking model would look a lot more competitive on the staking basis, without knowing what SC would want for their element of the process. It’s also perfectly reasonable that the platform isn’t competitive at every level at the start and SC or an other need to focus their resources on the areas that are competitive as opposed to just changing network policies.


#5

Agreed. 1 swarm is out of the question, maybe we should have a comparative USD/fiat price at tokenisation time.

Also I am weary of leaving deals open ended if we don’t feel the council is looking after token holders’ interests. We should have a final say on each deal, so the way it’s structured, unless some changes are made to the GAB, for me this is a No and needs to be rewritten with some safeguard in place.


#6

I don’t agree with the community having the final say on a case by case basis as the commercially sensitive nature of this business won’t allow that. I wouldn’t want to do a deal with someone and then have to wait for a vote by anons to see if they accept it. Also if there are a lot then it could just clog up the process unnecessarily and reduce sc’s ability to do what they want to do. If the community have to make multiple votes every week then it could actually reduce the communities willingness to be involved. I would be happy for the council to allow exceptions as long as the offset exception is absorbed on the issuer side and not just the networks staking policy.
Considering there is a figure of 241k currently outstanding then this seems the most obvious place for the exceptions to be offset to move things forward.
Once deals are issued on the depository the community can then assess the staking policy based on factual information and not assumptions or speculation. Any example is irrelevant without knowing the specifics, I don’t see anyone giving the specifics prior to completing the deal.
There has to be some trust and the format noted above generally allows for this whilst maintaining the incentive for all parties, as agreed 6 months ago.


#7

I tend to agree, though i’d want only one SC representative in the council to keep a balance of power and avoid situations where a big staking discount could be offered for a cash settlement or similar. Just a preventive measure. Though I think 1 SC person on the council would be required, as long as they are not the majority and the others are community members and large swarm holders separated from the for-profit.


#8

I don’t care if someone does get a part cash deal tbh as long as the staking requirements are met via tokens or a separate similar value system.


#9

On the issue of sc having council members or a majority. Based on the info given, after 2020 there won’t be anyone from sc on the council. Only 1 sc member will be on the council after March 2020. I see it more likely that the foundation will be asking sc to put someone on the board after 2020 than actually being concerned about sc having a majority.


#10

Yeah somebody from SC on the council is very welcome. The majority can be a risk we need to assess.

Regarding the discount I was talking about, the risk only exists if a cash payment is made in exchange to a vastly reduced staking or no staking at all, and if it’s approved by the council. So I agree with you, just trying to foresee any potential problem.