We’re excited to be supporting Archway in its journey to paving the way as an incentivized smart contract platform that prioritizes dApp developers as first class citizens.
stakefish has always been an early and enthusiastic supporter of the developer tooling ecosystem of Cosmos– from the smart contract tooling suites (CosmWasm) to generalized wallet software (Keplr; Chainapsis). The features of cross-chain dApps in the Cosmos ecosystem, greater decentralization, and developer accessibility are key to the types of fundamental building blocks of a growing platform.
A highlight of what makes Archway an exciting protocol to be supporting is its model of incentive alignment with both the L1 and app layer. It is not necessarily a well kept secret that the velocity of value accrual for underlying L1 token value and dApp token value are not always aligned. We have seen quite often, L1 token value being distinct from the app layer. An alignment on the upside of both can support a virtuous cycle–especially with retention and incentivization of developers.
A brief look into the economic designs of how Archway can support its application layer can be broken down into the flows of inflationary rewards and gas rebates. Typically on chains, rewards are distributed to validators (or miners for PoW) exclusively. Allowing portions of both transaction fees and inflationary rewards to dApp developers and teams gives extra emphasis for supporting the native ecosystem itself and benefit from the generalized upside. This represents a mechanistic implementation of “a rising tide lifts all boats” which is exciting to see.
In addition to its economic mechanisms, the choice for governance reward redistribution from the app layer addresses one of the most significant issues that Proof of Stake (PoS) chains with exposed on-chain governance face today–staker/delegator governance participation.
An ideal direct democracy of one-token-one-vote supposes all governance token holders are informed and attentive to the types of governance proposals and directions involved with the ecosystem. These assumptions are in fact quite far from reality. Archway’s efforts to turn governance tokens into productive, yield generating assets shared between the L1 and app layer with the traditional PoS staking mechanisms now offer an exciting opportunity for attention and participation to be incentivized.
Defined loosely, “good behavior must be incentivized and cannot rely on altruism”. In this case, desired governance participation from delegators/stakers with their validators is paramount to effective PoS security and efficient execution of decentralization (where there is important ‘voting with your feet’ in redelegation action).
Finally, the alignment of a well resourced L1 protocol’s core development with a growing application layer ecosystem within the confines of decentralization is a very key mechanism that Archway has hit right on the head. The principle of decentralization often comes at cost to enabling the resourcing of core development. These financial pressures often are alleviated at the expense of decentralization by centrally funding core teams with any vast range of ulterior motivations, which then promises and platitudes of progressive decentralization and are often stymied by the variety of leadership directions that exist.
We have often seen the burn out of core development support from conservative funding that seeks to ensure the conservative approach of maximizing decentralization. However, enabling funding to cycle from the protocol’s dApp rewards explicitly to core development exemplifies a virtuous cycle of resource distribution that benefits all parties: core development benefits from the upside of often lucrative dApp usage/rewards and dApps benefit from the continuous strengthening of the core protocol they are built on.
Overall, we are excited to be supporting Archway and its explorations into effective and efficient mechanism designs to nailing the secrets to positive network effects. As a professional validator service provider with experience in many flavors of PoS networks, we are ready to support the Phi Labs team building Archway and engage as stewards to the ecosystem.
Archway is a smart contract platform that rewards developers. Designed for flexible development and easy deployment to Cosmos, Archway enables scalable cross-chain dApps that reach as many users and assets as possible. Learn more at https://www.archway.io/.
stakefish is the leading validator for Proof of Stake blockchains. With support for 10+ networks, our mission is to secure and contribute to this exciting new ecosystem while enabling our users to stake with confidence. Because our nodes and our team are globally distributed, we are able to maintain 24-hour coverage.