SIP 0085 - Thoughts

Bitocracy
1

SIP 85 has proven controversial. I’d like to offer my own personal thoughts on the process.

Proclamation SIP and Threshold Requirements
Broadly speaking votes which require higher quorum and vote participation (Admin) are required only for contract changes. I would usually think that SIP 85 should not require the higher threshold. However, SIP 85 is actually a rather important vote, and so I appreciate Sacro’s decision to fix a higher threshold.

What makes SIP85 a particularly important vote is that it is perceived to be a decision to distribute assets that Sovryn does not yet have, but that might be of overwhelming importance. If, as many seem to believe, the majority of Sovryn’s future assets would be in the form of BOS, the decision to distribute them as per SIP85, represents a decision for a partial liquidation of Sovryn and should not be taken lightly.

Further, given that BitcoinOS token distribution has not yet been decided, not to mention distribution, a decision taken now that would be incompatible with what other stakeholders decide to do would mean Sovryn’s version of BOS would effectively fork off from the rest of BitcoinOS. This too is a decision not to be taken lightly.

UI bug?
In the V1 dapp UI it is easier to select Admin vs Owner votes. In V2, per John Light’s design spec, Proclamation SIPs default to Admin votes. I think this is incorrect and should be corrected to default to Owner.

Voting Distribution
People have correctly pointed out that the majority of addresses voting ‘NO’ on SIP85 are long term holders, including tokens that originate from founder allocations. Some people think that this is unfair. Everyone has their own personal view of subjective view of fairness. I put more stock into the objective facts:

  1. The fact that anyone is staking means they are long term committed to the project. The fact that founders are still staking is exactly what you would want to see.
  2. Founder allocation was always a minority of total allocation. But founders and team tend to be more active and thus a larger % of any active vote. This too is exactly what we desire from committed contributors.

In other words, this is the system we all signed up to, working as designed.

Does Bitocracy favor larger, longer, more active stakers? Yes, by design.
Do founders and active contributors have tokens earned through their contribution? Yes, by design.
Do these founder allocations represent the majority of tokens available for stake? No, not even close.
Do these founder allocations have a majority of VP? Also no, not even close. As designed.

Timing
I have two concerns about the timing of SIP85.

First, I think the SIP itself was premature. There is not yet a final or close to final plan for the distribution of BOS tokens. Sovryn is a privileged party, as it has a fairly certain allocation before any other party - around which all other parties and all other aspects need to be negotiated. SIP 85 proposes to introduce additional unilateral terms, without the context of the rest of the project, distribution plans, GTM, ecosystem bootstrapping requirements, etc.

In what way was this SIP urgent now - in the absence of key context? To me it seems rushed.

Second, the text of all SIPs should be published well before a SIP to allow for debate. Here there was a debate that preceded any text - then the text was published just hours before the SIP. The details of the specific text must be debated and here there was no opportunity for that. As a general rule I think anything but an emergency/highly time sensitive SIP should be rejected on these pro-forma grounds alone.

SIP Announcements
There is a debate about whether all SIPs should be announced on Twitter. Some people feel that the Twitter account should focus on ‘marketing’ and communication for the purposes of user acquisition. Many (most?) SIPs should not be of interest.

My view is all SIPs should be announced on key channels, including Twitter. These channels inform the user and staking community.

3 Likes
2

It is good to see you being active in the forums.

Yes it is the system that we signed up for. A system that doesn’t recognise all those years of shinny words as it is designed to apply the votes based on VP. It is not a fair system as one will have to invest 100times more to get to the same VP as those founders wallets. In fact normal people who bought their allocation at $10 $20 $30 $40+ stacked in the same system as you described. These people are not zero cost basis elements as some people from your team want to assume. The zero cost basis freeloaders here are those people who stay in the shadows with their almost no risk allocation as they got it in cheap and have the power to accept and reject SIPs. Yes it is the system we signed up for and it works in the favour of the team.

Let’s be honest, you don’t need any from the community to pass any SIP. Those founders have enough VP to do whatever they want. Therefore the role of community is not important. However, in the last SIP the vote was pretty clear. 64% voted in favour of 8% airdrop to stakers and 2% to go to the exchequer/treasury. The requirements for a proclamation SIP are met. You want to stay hidden behind a bug? Sure. The message was pretty clear however no matter the shinny words and community massage that is going to happen. If those founders want to have bigger BOS allocation, they can buy SOV from the market and stake it for max years. It’s very simple really.

You mentioned about Twitter and marketing and SIP. Correct me if I am wrong but most of the time I don’t see anything related to Sovryn either from Sovryn’s account or from your account. Your attention is focused on BOS and any other matters apart from Sovryn. I might be harsh but this is the picture that you give me and I wouldn’t be honest if I don’t share it with you. I do agree that all SIP must be announced in all media, in the last one we had to actually ask team in telegram to make an announcement about the SIP with already 10 hours into the voting process, surely you will agree with me that this can play a role if the communication is not there. Who knows, if community haven’t mentioned about it, maybe a post would have never been published. That’s not the right way to do things.

3 Likes
3

Wow.
So it’s
‘either give it to treasury, or we bankrupt’

4

How does holding vesting BOS in treasury for 5 years generate income for Sovryn?

1 Like
5

I would go with you if that would have been a vote that just mattered to Sovryn. The problem is that most of community thinks (perception!!) there is a huge conflict of interest as a lot of Sovryn founder wallet holders will benefit directly from a vested BOS token. Especially if their token gets liquid before the ones at sovryn. As Armando has clearly stated that there are parties with a 3 year vesting already on board (contradicting what you are writing that nothing is clear yet) community sentiment is pretty rough and you will be very hard pressed to find community members outside of team on board with any kind of vesting.

The SIP was “Rushed” to capture the moment to actually have an impact on SOV price. I don’t know if you recently have looked at the SOV chart but there is not much hope to drag this thing out of the mud. Most in the community thought that capturing the moment the BOS marketing actually had an impact on a bigger constituency - the weeks of the initial announcement - would be a great - maybe even last - oppertunity to capture any kind of attention and have people staking SOV for long term to get a BOS allocation - and in return help the SOV price recover and get some eyes not only on SOV but also on BOS. Community was ready to go into the trenches for BOS - this moment has now completely been ruined.

Maybe team doesn’t understand how bad the decision to go against this SIP (for whatever reason) was. Will be hard to get non team community on board with anything from here on out. We have talked and debated this SIP very thoroughly over the two weeks leading up to it and agreed to give it a go. It was a very nice team spirit in the community that I have not seen for a long time. Team voted it down. It seems it aint really matter what we want or think. (perception) Its devastating. I mean we would be all fine and rosy team overruling us if project was well off token price rising with the market and we have a future - but every decision in the past (free zero SIP, BOB etc) that team rammed through has proven disastrous for token price and projects future. It does not make community very confident that going with teams ideas is the best way forward for them.

2 Likes
6

can you please point to where I mention 3 year vesting for certain BOS related parties? I’m not aware of any such vesting so if I said this it was in error.

7

You said 3-5 yes (some 3 some 5)

But it’s ok if it was just a Freudian slip.

8

How very comical to see Yago complaining about rushed SIPs. What a farce.

1 Like
9

I feel authenticity in the Sovryn community. However, there is a growing disconnect between avid investors/community and those spending most of their daytime working on the project. As investor it’s frustrating to see why concerns are brushed off, not taken seriously and the decisions taken and outlook are so incredibly vague.

An example viewpoint from an investor perspective:

2021 - Decentralization in finance absolutely necessary for freedom. Bitcoin the ideal network for that. Bitcoin L2s not ideal yet, Rootstock is the best shot and Sovryn is being built. Launched into a hype market followed by the bear, SOV drops +90%.

2022/23 - Rootstock limitations become clear. No uptake of defi on Bitcoin by Bitcoiners. But Sovryn is biggest defi on Rootstock, still super small, no good trading software and token options. SOV price continues dropping during bear market. Building continues, dapp and website get better. Zero is being launched with such a great idea! But the execution is not suitable for most people and can’t be recommended as it is. 1000%+ collateral ratio is only for already wealthy Bitcoiners, who usually are hodlers for a reason. Result, Zero with no more than 100 credit lines for ~3 years. Zero users were caught off-guard and their Bitcoin force-sold, which Zero was supposed to avoid. Let’s not talk about MYNT. But the rest of the dapp works well. So, hope remains that once Rootstock gets better or an alternative is being developed, Sovryn the defi platform will work as intended. The potential is still enormous, still so early!

2024 - Defi on Bitcoin is being seen, even by Bitcoiners. BOB is developed, “stand in the river of money swooshing over from Ethereum”. BOB is still Ethereum. Spice is being handed out as if it was a precious resource in many hyped “seasons”. But nobody knows what Spice is. Bitocracy voting between other Sovryn chains and Rootstock Bitocracy is unclear.

  • Runes are coming, Runes are the better Ordinals, they are gonna be traded on Sovryn the biggest Bitcoin defi. POWA is our rune! And what do we see? No significant runes trading on Bitcoin. So much community effort put into POWA, and it’s performing horribly.

  • BUT: BitcoinOS starts being researched/built and first announcements made. YES, it’s coming, the L2 that will enable the perfect Sovryn over time. Defi on Bitcoin will finally make sense. And not just defi, a whole professional economy may be built on the BOS architechture. Its connection with Sovryn remains foggy, but surely it’s a fantastic project and our Sovryns are doing it, yeah! Slowly the news creep in that BOS will be the “financial operating system of the future” not Sovryn itself, which may just be a defi layer on BOS. Alright, fair point, BOS is bigger and can’t be captured by Sovryn alone. BOS needs a token? But it’s for making the mechanism and architecture of ZK-proofs actually manageable in the background, alright, makes sense.

  • Cooperation with Cardano is announced. It’s happening, the long conceptualized future is becoming real, everything is merging onto Bitcoin, BitcoinOS is the mechanism for it? ADA is pumping, SOV drops.

  • In a recent community call we hear that since all the other long-standing chains with defi applications are likely coming to BOS, it’s possibly no longer attractive for Sovryn to be a defi platform. What else can Sovryn do instead? Decentralized schooling, healthcare, energy infrastructure … Wait, but we have stakes for building a defi layer on Bitcoin, on an L2 called Rootstock, that’s not being used. And now Sovryn isn’t interested in being a defi platform on BOS, THE new architecture, any longer?

  • Well, we’ll see, we got a Bitocracy, haven’t we?! And we can vote for Sovryn’s future. The Sovryn community and in particular the long-standing supporters and stakers will receive a 10% share of the initial BOS token release. The new hope is here, the Sovryn investors are still seen and receive their share for carrying forward the torch of freedom and defi on Bitcoin. The Sovryn team needs resources to carry on the work through the next bear market, so yes, 2% goes to treasury. 8% for stakers, yes, let’s make it happen! But are Sovryn stakers to be trusted? Don’t we need long-term locks and vesting periods for the BOS token just as the other commercial BOS funders? Doesn’t seem appropriate, so let’s take it to a vote. Vote requires 70% approval for some reason and fails despite more than 60% support votes. So 8% are not going to stakers as of now. So, maybe we need a vesting compromise after all? Then Yago, after not having participated in the discussion on the BOS token distribution SIP, suddenly comes with a suggestion to prop up SOV long-term by holding BOS tokens in the Sovryn treasury for the most part, quoting Michael Saylor’s MSTR example. But BOS is not the hardest, most trusted money and network in the world. It’s a utility token with yet unknown tokenomics.

So what are we Sovryn investors to make of all that? It feels like we are being taken on a ride. We are not being trusted. At the same time we are being hailed as the only working DAO. Something feels way off. And after having listed all these happenings … I have a hard time recommending Sovryn to anyone. I can recommend Cardano now. I can say that BOS has potential. But what I want to recommend most of all is: Just HODL Bitcoin and live! How do we expect Sovryn to grow in that situation? No increased lofty blabla marketing will help us here. The foundation has to be clear. Sovryn investors are so convinced of the idea of financial freedom, which isn’t being taken up properly elsewhere in the Bitcoin community, they are patient and trusting. And I also believe and know that Yago and the developing team are.

But isn’t it understandable that there is frustration and that the vague snippets for the way forward are absolutely not satisfying? And please don’t bring this argument that everybody is free to contribute to Sovryn etc. There are people who have put so much life energy into it, without receiving a salary, just with the ideal of building financial freedom … and financially they have received minus in return. So, they had to and will have to move on with their lives. I think the Sovryn community is much less stable than the team working daily on Sovryn wants to believe. This is the disconnect. And I think we have little time and few opportunities left to piece it back together.

4 Likes
10

and sadly no one will care about your message or answer the criticism that is totally legit & sound.

2 Likes
11

Yes, I realize. Now it’s up to each one of us what to do with that.