The Terran Standard for protocol launches
I am proposing to create a project launch standard set of rules for the Terra community. As a decentralized community, we need to hold our actors and new protocol developers to the standard we expect. We can’t rely on central authorities like Terra Form Labs, or large “whale” investors to ensure good actors develop on the Terra blockchain. In fact, we are only decentralized if we are creating and enforcing such a standard. Without such a standard, we are not a true decentralized community or organization.
Regulators have clearly shown a distaste for anything centralized within the blockchain space, especially stablecoins. Rightfully so, as a centralized organization acting in the manner of a blockchain/exchange is operating outside of, or in direct violation, of current laws and rules. To protect ourselves, we need to take control and assert our authority as a decentralized community. We set the standard, and we enforce its rules. Accountability is on us, as a community to decide how a project should disclose its parameters, “tokenomics”, marketing agreements, early investors, and other relevant information. Current securities laws revolve largely around disclosure, and we need to come forth and prove we are a decentralized organization that properly discloses relevant information and risks. More importantly, we need to prove we have the ability to protect the community from bad actors before and after they launch.
Recently, we have had the normal growing pains that come with new launches and increased awareness and demand. Some have been hugely successful and show great promise. Others have been less than transparent and rife with poor or inadequate disclosure. Currently, we stand on the precipice of an explosion of new dAPPS on the Terra protocol. As an investor in the Terra blockchain, this is exciting and exactly what we should all want. As a decentralized organization, without a clear standard for how a project should launch, we should be concerned. A clear, simple standard for how a project discloses information, communicates about timelines and investors, operates its launch, and how it will function and operate once launched should be a paramount concern. To that end, I am proposing the following 6 rules for project launches, to be met before a project can launch on the Terra blockchain:
- A projects parameters need to be clearly, and in plain simple terms, disclosed prior to approval for a launch
- Functionality of the proposal requires a full white paper, published publicly laying out the protocols function and the biggest risks should the function fail prior to the community accepting the protocols launch.
- Tokenomics need to be fully and completely disclosed, summarized within the white paper and separately detailed in a “Tokenomics” document for community to review.
- Tokenomics include
- The total fully diluted pool of tokens being created
- Ownership of those tokens and how they are or will be distributed
- Vesting periods for any pre-sale tokens
- Airdrops: amount, schedule, how distribution is determined
- How tokens are earned
- How tokens accrue value or are used in governance
- Tokenomics include
- Marketing agreements must be disclosed in full pre-launch
- Must disclose who is compensated to market the protocol and how are they being compensated
- If they are fully vested or if they have a lock up period
- Early Investors must be disclosed in full
- How many tokens they were allotted
- How those tokens are vested and when
- What they paid for the token allotment (their investment and price of investment)
- What if any privileged access they have to the ICO
- Approval vote
- Establish a community vote to approve the launch of all new projects/protocols
- Vote date can only be set once other standards have been met, no incomplete protocol documentation will be allowed to launch
- Token holders representing more than 1% of the circulating supply of tokens can only vote in support or against but cannot contribute tokens to the vote “anti whale” clause.
- Project launch votes require a minimum 50% yes votes to pass (simply majority). Protocols should work to meet the standard and engage the community to encourage voting.
- Establish a community vote to approve the launch of all new projects/protocols
- Enforcement mechanism
- Ability to disband or takedown a protocol, by 2/3 majority vote (66%) within the “anti whale” clause should they violate the standards post launch, or prove to have violated what they published pre launch.
I welcome amendments and addendums to this set of rules. Feedback, criticism, etc. If we want Terra to be the standard for decentralized money, we as a community need to ensure it sets the standard for the blockchain space. Projects launching into our community need to meet that standard, and it is incumbent upon us, the community to set and enforce that standard. We need a mechanism and standard by which to do that. I understand this is similar to the community pool spend committee, but these standards focus specifically on project launch, and require the community to participate, not a centralized committee. They would be enforced post funding and before the terra community would be able to invest or participate in the protocol.