After a busy week of amazing conversations with others in the community, I realized I never actually shared my thoughts on the SIP here.
tldr: I’m for it, this is a key part of growing Stacks into a Top 10 ecosystem and fulfilling our mission of making Bitcoin programmable and usable. But it can be better, so I’m rolling up my sleeves
Thanks for the amazing level of engagement in Twitter, in spaces, and on the forum post here it’s clear that some meaty updates are needed to it and so ’m working with @codeonedotzero (aka tripnmonkey) on proposing a revision of the SIP that incorporates a bunch of changes based on all the discussion. Informally, I’m calling it SIP 31.1 and assuming we pull these things in we’ll also then add ourselves as co-authors to the SIP.
My goal is to discuss what people think of these updates or anything else we need on the Foundation space on Tuesday and then will draft those actual updates to the SIP and post that after.
With that said, here’s what we thinking about right now:
Clarify the Intent Behind Supporting All Builders & the Role of DeFi
Off the bat, the current SIP draft has a feeling of an over-emphasis on the resources being used for DeFi with other aspects of the ecosystem ignored. That’s not the intent and the strategic vision that has been discussed (at least in all the conversations I’ve been in) is that we want to be the home of the entire bitcoin economy and pushing defi right now is the means to get us the users and liquidity to do that (aka, our way of differentiating).
To that end, we’ll revise the language throughout to clarify this strategic approach of using Bitcoin DeFi as the hook to build the liquidity and user base that allows us to build the entire Bitcoin Economy on top of Stacks. We’ll specifically underscore that the SIP structure will provide funding, incentives, and support for a broad spectrum of builders— NFTs, gaming, consumer apps, AI, infrastructure, content creation, and entirely new innovations.
To me this is the single most important aspect of the SIP because everything else flows from whether we are all on the same page as a community and feel included in the overall vision of the chain.
Add an Explicit “Community Marketing & Engagement” Allocation
We’re still working on the exact format that this should take, but the general idea is that we should add a specific “Community Marketing & Engagement” allocation that is deployed at the discretion of the Stacks Community Marketing Working Group in order to grow the Stacks community and community driven marketing for a diverse range of Stacks projects. Think memes, twitter spaces, art collections, a memecoin fund, etc.
Add a “Reputational Risks” Section
We all know that there’s obviously some amount of risk to how people will perceive this move - we should capture that specifically discussing
Potential risks to include:
- The ultimate point of this is to execute on product and market growth and there is execution risk inherent in that - we may raise the money, avoid any of the other issues, but still not be successful
- Releasing more tokens could affect the STX price which would affect the ability of the endowment to reach its fundraising goals
- Opening to criticism from others that Stacks is “money-printing” and there is no limit to how much may be printed in the future.
- The appearance of the ecosystem becoming overly centralized
- While many other ecosystems have changed emissions schedules or created treasuries to fund growth, there is no exact 1:1 corollary we can look to of an ecosystem with Stacks’ unique history and position in the market to predict how this will ultimately be viewed.
Add More Detail around Reporting Expectations
While there are commitments made in the SIP around reporting, there is not enough context as to why those are chosen or what some of the larger communication should be. In order to balance both operational efficiency with clarity for the community we should clarify both the minimum requirements as well as general principles that the reporting should follow.
Including:
- A detailed annual report, similar in depth and content as US based non-profits issue, reporting on all monies raised and spent over the past year, the activities engaged in, the impact of those activities, and expected priorities for the future year.
- A shorter quarterly report, similar to the Stacks Foundation’s current reporting, on progress against the years goal and priorities
- All funds from the Endowment will flow through the primary mint address on chain so ever STX is traceable by looking at the public blockchain
- The Endowment and Operational Entity staff should hold public engagement sessions (whether through X spaces, livestreams, forum posts, or others) and at least a monthly basis to ensure they’re always up to date with community thoughts and priorities.
Add Criteria for Evaluating Token Burns
The size of the emissions were chosen to ensure that the endowment has the resources that it needs to grow Stacks for the next few years while also building a base for the future. But if Stacks overperforms the model in the economic report (especially if it goes to $10+ /token), then the endowment will likely be sufficiently equipped without needing all of the planned emissions and a burn can be setup. This will also depend on the performance of some of the value accrual mechanism (like sBTC gas fees) that would provide more funds that could be used for burns.
To that end, we will propose language that will instruct the Endowment that, when the size of the endowment’s total liquid assets exceeds $1b USD, it will evaluate other options for use of the remaining emissions, including burning them, and conduct a public vote of the options.
Clarify Limitations on the Endowment
The SIP already contains a restriction on the Endowment not voting with its tokens on SIPs, but we should make sure this is clear enough and add that it will not Stack its tokens either in order to ensure it remains neutral and to remove any potential effect it would have on the BTCY yield for Stackers or the governance process.
Other Misc Updates
There’s a bunch of other small clarifications and things based on comments in this thread that we’ll also address when running through it, but focusing on this for now.