stargaze

Prop 223: Bootstrapping the STARS pool on Cosmos Millions

This is the shortened version of the proposal due to description max length

Read the full proposal with details here : https://docs.google.com/document/d/10_Ouaa7jAXlKkt_qLww13_gFkijQZOGsnW1y5ch7RAA/edit#heading=h.9n9cdu6gg43k

1. PROPOSAL

The Cosmos Millions team proposes a sponsorship of 8,000,000 STARS for the launch of a STARS pool on Cosmos Millions, the prize linked-savings account (PLSA) built for the Interchain. This sponsorship is supported by the Stargaze Community Pool, to successfully bootstrap the initiative.

These STARS will not be spent, sold nor swapped, but exclusively staked to provide a stable and appealing incentive for STARS holders to engage in regular draws.

1.1 About PLSAs

Prize-Linked Savings Accounts (PLSAs) are used in traditional finance by millions of people around the world. In the UK alone, 22 million users have deposited 154 billion USD into Premium bonds, their local version of PLSA. PLSAs and no-loss mechanisms have been gaining traction in the broader DeFi space, with PoolTogether on Ethereum exemplifying this trend. Despite the bear market on January 14th, 2023, it attracted 60,348 users, showcasing its growing popularity (see Dune Analytics: @sarfang / PoolTogetherV4 - https://dune.com/sarfang/PoolTogetherV4) Given its architecture and usability, Cosmos is inherently more apt for implementing such mechanisms than Ethereum, foreseeing enhanced success and user adoption.

1.2 About Cosmos Millions

Cosmos Millions leverages the growing trend in PLSAs to bring engaging and rewarding experiences to the Cosmos Ecosystem. By depositing tokens into the protocol, users can securely save while also having several opportunities to win attractive prizes.

Cosmos Millions mission is to:

  • Introduce an element of fun into DeFi, for user interaction and engagement,
  • Add a token utility instantly,
  • Contribute to the overall growth and success of the Cosmos Ecosystem.

Highlights :

  • The protocol is open source (https://github.com/lum-network/chain/tree/master/x/millions)
  • The code has been audited by Oak Security. Full report here: https://github.com/oak-security/audit-reports/blob/master/Lum%20Network/2023-05-15%20Audit%20Report%20-%20Lum%20Millions%20Module%20v1.0.pdf

1.3 Why Sponsorship is Essential

Starting a pool requires a substantial initial amount. Without it, the opening rewards fail to attract new users. This method was applied to the ATOM pool, live since June 19th, 2023. It was sponsored by an AADAO grant of 9,496 ATOMs (100k USD at the time of request), showing positive outcomes three months after launch (see section 2.3. Main Metrics).

Experience from launching PLSAs shows that ideally, the generated initial amount should be above 1000 USD each week. This sponsorship is expected to produce roughly 390 USD in STARS weekly. However, given the current market conditions, this modified, lesser sponsorship amount is considered a viable alternative.

1.4 Benefits for Stargaze

  • Add a new utility to the STARS token:

    • Providing community members with a fun PLSA experience,
    • Without spending one cent to develop, audit and market the product (all these costs have been supported by entities related to the Lum Network).

  • Add a new way to own NFTs - NFTs can be included as part of the tokens to be distributed by the STARS pool:

    • Immediately as an extra reward obtained via Partnerships,
    • Then - if there is traction on the STARS pool - as an integration at the Cosmos Millions product level.

  • Create a positive effect on the tokenomics:

    • People that want to participate will have:
      • To buy STARS
      • Or deposit STARS proceeding from an NFT sale rather than selling their STARS on the market (hence preventing sell pressure).
    • Prizes won by STARS holders can be used on the NFT marketplace, increasing economic activity on-chain.

    Note: The assumption that winners sell directly their prizes is invalidated by the data gathered on the ATOM pool, where deposits grow faster than depositors (https://twitter.com/CosmosMillions/status/1701548324833186019)

Creating a STARS pool helps different communities discover Stargaze. As Cosmos Millions continues to expand and introduce new features, our goal is also to enhance visibility and accessibility for protocols. We aim to demonstrate that Cosmos Millions is a welcoming platform for a diverse audience, including both current Cosmos users and those who are not yet familiar. This approach helps projects gain more attention, for instance through marketing activities on social media or directly branding the STARS pool web page.

2. DIVING INTO DETAILS

2.1 The Protocol is in active evolution

Since the launch of the ATOM pool on June 19th, Cosmos Millions has seen significant improvements:

  • Enhanced prize strategy with bigger prizes and more winners
  • Added Mobile accessibility with Leap Wallet integration
  • Added a prize notification feature accessible via Discord
  • Introduced a Depositors Ranking to enhance user engagement
  • Implemented numerous UI/UX optimizations for an improved user experience

In short, Cosmos Millions is an innovative and secure DeFi protocol that offers users the opportunity to earn prizes without losing their initial deposit. With this proposal, we aim to provide this experience to every STARS holder.

2.2 How it works

  1. Users deposit their STARS tokens via a dedicated web application (https://cosmosmillions.com/)
  2. The total amount of tokens bonded over a period of time is put to work, with staking rewards collected. These staking rewards are then used to generate prizes for users on a larger scale than what each user could get individually
  3. Afterwards, a draw happens. As a result of the draw, a number between 0 and N winners is randomly picked.
    • Good to know: if a particular prize is not won by anyone on the current draw, the corresponding staking rewards are added to the next draw's prize pool (the total amount of assets available in a pool before a draw takes place). So either most of the rewards are won as prizes, or they snowball draw after draw until they are ultimately won as prizes.

For more details, the documentation is available here: docs.cosmosmillions.com

2.3 Main metrics

The ATOM pool has 23,223 ATOMs bonded. 268 unique depositors made 638 unique deposits. Since the ATOM pool launch, the number of new deposits kept going up faster than the number of new users, indicating a strong retention. In September (to date) the user growth vs. August is + 8.1%. Over the past month, unique deposits grew by +16.2%.

2.4 Other considerations

For detailed comprehension and additional insights, please refer to the full text at https://docs.google.com/document/d/10_Ouaa7jAXlKkt_qLww13_gFkijQZOGsnW1y5ch7RAA/edit#heading=h.9n9cdu6gg43k.

Below is a summarized overview of the main topics addressed in the document:

  • The sponsorship amount origin and why it has been reduced following guidance of the community,
  • Details of the future evolutions,
  • Cosmos Millions features, including the clawback option for the Stargaze community,
  • All development costs are covered by entities related to the Lum Network,
  • The initial STARS pool parameters.

Multisig

Funds will effectively remain under the Stargaze community control. Funds will be received using a 3-of-5 multisig handled by 3 Stargaze members and 2 Lum Network members:

  • Reena J. Shtedle (Stargaze validator)
  • Zdeadex (Stargaze validator)
  • Fabien Penso (Stargaze validator)
  • Sarah-Diane Eck (Lum Network)
  • Fabrice Bascoulergue (Lum Network)

at multisig address : stars1aly95v4ywc3qgsr7vcdgy73hut2tqdcysr90z8

Going further: partnering with Collections…

We're passionate about NFTs, and we're always looking for innovative ways to enhance the experience of participants in Cosmos Millions. With that in mind, we are excited to introduce a new initiative for the STARS pool: partnerships with Collections on Stargaze!

This initiative aims to increase engagement and contribute to the discovery of new collections, as well as promoting existing ones.

We’re excited to announce that Stargaze NFTs will be won in the draws of the STARS pool… Starting with a Bad Kid NFT generously granted by CORTLANDT! Stay tuned

CONCLUSION

This proposal aims to fund the STARS pool on Cosmos Millions with 8,000,000 STARS. These STARS will not be spent, sold nor swapped. They will be staked to provide a sustainable incentive for STARS holders to participate in regular draws.

The Stargaze community would instantly add a new utility to the STARS token. All tokens used in Cosmos Millions will ultimately be staked natively on-chain, hence contributing to the security of the chain - while providing a fun experience to depositors!

Voting

By voting YES you agree to allocate 8,000,000 STARS that will be staked to incentivize with ~39k STARS / week the STARS pool on Cosmos Millions.

By voting NO you reject allocating 8,000,000 STARS that will be staked to incentivize with ~39k STARS / week the STARS pool on Cosmos Millions.

By voting ABSTAIN, you formally decline to vote either for or against the proposal but want to contribute to the quorum.

By voting NO WITH VETO, you express that you consider this proposal malicious or harmful and you would like to see depositors penalized by revocation of the deposit, which contributes towards an automatic 1/3 veto threshold.