Native staking of funds from the Community Pool

[LeonoorsCryptoman]

Recently we have seen multiple proposals on the DYDX-chain regarding staking a portion of the Community Pool funds via Liquid Staking Providers (Mintscan (passed), Mintscan (rejected), Mintscan (passed)). During the conversations on the forum there are 2 major intents to be seen by (a portion of) the participants;

1. The preference to diversify on providers to reduce the risk inherited by LSTs and by relying on a single source
2. The preference of Antonio to encourage native staking from the Community Pool instead of relying on a service provider at all

In that light it is interesting to see that Osmosis is currently leading the pack with a set of proposals to diversify on the LST-assets held by the Osmosis Community Pool (Re-evaluation of Liquid Staked OSMO held by the Community Pool - Proposal Discussion - Osmosis Community Hall, Mintscan, Mintscan, Mintscan). The intent is to make sure Osmosis does not rely on a single protocol while still making sure that liquidity is efficiently used and competition is supported as well.

That being said, looking at the recent voting for also liquid staking a part of the Community Pool which was downvoted it is not desired to have a conversation right now on diversification of LST providers. However, I would like to have a more thorough conversation on the remark made by @antonio with respect to the preference of more native staking of the funds from the Pool. This conversation is meant to explore that intent, see what is needed, find out what is hindering and if possible derive steps on the path towards that preferred situation.

First of all I would like to invite @antonio to share more insights based on this desire as expressed in [DRC] dYdX Community Staking with pSTAKE Finance - #23 by antonio and the mentioning of a possible legal structure as in [DRC] dYdX Community Staking with pSTAKE Finance - #29 by antonio.

@antonio, will you do the honors and kick-off with sharing more information? Thanks!

[rspa]

Thank you for putting forward this initiative. This seems to be ideally aligned with what both the founding team and the community want.

[LeonoorsCryptoman]

@antonio can you chip in?

[Govmos]

At Govmos, we believe it’s crucial for the community to take steps towards further decentralizing voting power among the validator set. This is vital for addressing past issues, such as missed blocks, as noted in this discussion:
[FIX] Stabilizing the Validators' Block Miss - #7 by Govmos.

We think a dedicated program should be discussed by the community to complement both the foundation program and the partnership made with Liquid Staking Providers (LSTs). Regarding the reasons that we examined to support the adoption of LSTs as a part of the solution have been listed in this post:

DYDX community staking improvement proposal

Balancing the pros and cons of the proposed solution is an extensive job. We will try to address this complex topic by providing the elements we perceive from our point of view. It feels essential to stress that we are obviously unable to grasp the entirety of the levers at play. Nevertheless, we have expressed support via our votes to the initial proposition, therefore we feel obligated to answer both our delegators and the whole dYdX community to the factors that contributed to this choice: 1…

We’ve thoroughly examined the reasons leading to our partnership with Stride to address this matter, particularly the lack of community discussion (the entire post is available here: We’re encouraged by the renewed interest in this topic. We could draw significant inspiration from the foundation’s guidelines to establish our own community delegation program.

Stake Delegation Principles | dYdX Foundation

"Here’s our perspective: this program should be seen as a supplement to the existing agreement that the network has with Stride, rather than a substitute. The most fair approach, in our view, involves considering the views of all relevant parties, including the foundation, the community, and a aligned partner such as Stride.

To facilitate this plurality of contribution to stake distribution, only one component is currently missing: a truly autonomous community staking initiative. As the governance branch of the PRO Delegators’ validator, we believe the community might perceive a potential conflict of interest if we were to propose recommendations. However, if the community expresses a different view, we’re more than willing to engage in the discussion.

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Please let us know if you think we should abstain or contribute.
Govmos

[LeonoorsCryptoman]

@Govmos

To facilitate this plurality of contribution to stake distribution, only one component is currently missing: a truly autonomous community staking initiative. As the governance branch of the PRO Delegators’ validator, we believe the community might perceive a potential conflict of interest if we were to propose recommendations.

I think a healthy mix of community members, validators who are able to take a step back and make choices regardless of the impact for their validator and the team is a must to achieve the final solution.

However, it remains prudent that the team would respond and @antonio is awefully silent sadly…

[Govmos]

I appreciate your perspective to allow us into the discussion. We warmly invite some community members to step up and propose a potential framework defining objective guidelines in order envision a future community staking program.

Of course we would like to see qualitative parameters and decentralization in the forefront, but ultimately, this is not up to us to decide. We will be happy to take an advisor position in this discussion, directly proposing feels quite uncomfortable for the reasons we mentioned in the previous post.