Proposal: Comdex Lazarus Upgrade - The Revival of Comdex
Introduction:
At present, Comdex is facing challenges in onboarding users and generating consumer excitement for its products. With the introduction of Syndicate to the Comdex ecosystem, we aimed to develop a mutually beneficial product for all parties involved. However, trust between the community and the development team has been strained. As an application within Comdex, it is our responsibility to engage with the community and establish open communication to bridge this gap.
Part 1: Identified Issues:
Geoblocking of Products: Geoblocking has been criticized for discriminating against users to protect the team from legal issues. To address this concern, Syndicate is working with Akash to create decentralized front-ends, allowing all users access to the ecosystem.
Mismanagement of Incentives: Some projects have inflated APY/APR to attract users, resulting in disappointment and the misuse of CMDX as a farm token. This issue must be addressed, particularly as CMDX will no longer be used for minting synthetics in the short term, and a solution to increase capital efficiency of CMDX.
Tokenomics and Value Accrual: The obscure and difficult-to-find information on Comdex tokenomics poses a significant challenge. We must improve transparency to attract investors who can contribute ideas and products to the ecosystem.
Losing Identity: The whole idea of the Comdex ecosystem was commodities, we have forgotten about what differentiates us from other chains. We need to focus on doing 1 thing and one thing only really well, the focus should be shifted back to commodities. Currently, we are no different than any other L1 Blockchain.
Part 2: Proposed Revelation Upgrade Changes and Updates:
A. Refocus the Development of Synthetics:
Further develop the Synthetix model for sUSD (CMST) in the commodities sector.
Implement supply caps and risk management modules to prevent exploits and predatory arbitrage loops (White Whale can assist), also incentivize low liquidity.
Explanation of why development was stopped:
“In the devnet we realized there were a bunch of problems with the pool model we were pursuing, as in the major issue was the closing of the arbitrage loop for a commodity let’s assume CMST as a commodity and equivalent on chain asset USDC can be used to close the arb loop, when a natively issued asset which does not have a proper on-chain market is issued the peg and stability does not work properly due to no other direct arbitrage mechanism
Low liquidity environment was another problem and we did not want this assets to be tied up with the amount of liquidity, and we also needed to incentivize the liquidity
The next problem is there is no proper oracle available to be trusted and chainlink does not support Cosmos
One model was issuing the assets the way SNX does it and the SNX stakers would be the counterparty and all the commodity asset minters would be in a singular debt pool pvp. This we thought would not be the correct PMF and due to these and also the obvious regulatory problem we stopped the development in devnet.
We would resume work on it once we have sufficient CMST liquidity and clarity about the mechanism.”
- Comdex Team
In order to introduce commodities, the model must be sustainable which can be done through rolling releases of commodity products, and not all at once to prevent illiquid price execution and negative feedback loops.This should be priority #1 of the Comdex team, since the protocols are live.
B. Value Accrual Adjustment:
Explore options for value accrual and network security, such as allowing users to earn tokens from other projects. Similar to ICS, possibility for applications on Comdex to create value back to the stakers and validators.
Example: CMDX stakers receive yield from Harbor, cSwap, Commodo, and Syndicate.
Note: Liquidity mining incentives should be exclusive to app users, not stakers.
C. Tokenomics Updates via Inflation and Fees:
Address the current subpar tokenomics of Comdex and adjust them to better serve the community. Add a transparent link to the current tokenomics, and adjusted tokenomics. Also, the arrival of CMDX LSDs can increase capital efficiency.
Examples: Proposed Tax, fee burn and Semi-distribution to stakers, non-binary staking reduction (set to 25% right now)
*Note that this is a rough idea of proposed ideas.
D. Maximize the use of Harbor Emission/Token:
Abandon the Locker Module, fee share should be recursive and be directed to stakers and protocol users. CMST should have products that are built on top of it such as strategy vaults, LP managers, and Arbitrage. The Risk-Free yield for locking CMST disincentivizes CMST leaving the eco and growing the use case. Also, Harbor will have natural buy pressure from distribution of fees to stakers and Comdex Stakers.
E.Treasury Management Council/Advisory Board:
Format a group of individuals or outside 3rd party (not syndicate team members) to manage the treasury funds to be able to have runway to onboard developers, maximize incentive programs, fund new ventures and support current projects. The Council will also be responsible for consulting Abhishek and Siddarth regarding VC and institutional investor deals which should be made clear to the community and investors.This is an idea that was brought to light when Andre Cronje did it for fantom, as well as Atom Accelerator DAO for the hub.
This will provide clarity to investors and community members, and will also take the workload off of the team. This should be a governor elected council that works like the Synthetix Council mechanism.
Outlook if the Above is Accomplished:
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Increased Trust in the Team: Users are more likely to align with the mission of the Comdex team and applications built upon the Comdex ecosystem. This is very important and if not the most important factor, without a growing community/consumer, the business is destined to fail.
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Realignment of the Value Proposition: Commodities was the main focus on why a lot of users got excited (Syndicate included) and we believe it makes Comdex unique and a competitive advantage over other chains, realignment back to the original goal will give Comdex a better opportunity to win back market share and have steady growth in the future.
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Sustainable Runway: Thus, with the proposal of restructuring the tokenomics and a treasury manager to earn yield like a business, it is easier to pivot and invest in new ventures such as infra and partnerships to grow the chain and support Dapps. As of right now, the token is on a death spiral with zero organic buy pressure or use case. If a solution is presented to solve this issue, it will be easier in the future to grow the ecosystem and support the team and products built on Comdex.
What is the Syndicate’s role in all of this?
Syndicate and suggested team collaborators want to be on the same page as the Comdex team and avoid what happened on Arbitrum via proposal AIP-1, we hope to reach agreement and alignment with the Comdex team and other applications that are built on Comdex to further the success of the chain. Syndicate’s role in the ecosystem is as a solutions provider and advisor via products and governance assistance, this proposal follows these guidelines.
*IMPORTANT: This proposal serves as a rough draft, subject to further refinement as fees and the direction for the Revelation Upgrade are finalized. We encourage all Comdex users to provide feedback on how we can improve the Comdex user experience.
Note from Syndicate Team: We appreciate how welcoming the Comdex team has been to Syndicate, and it is in our benefit that Comdex succeeds, we don’t want this to come off as malicious! But, we need to earn back the trust of the community and investors and redirect our alignment back to the true identity if we want to succeed in the future and in this competitive space. This is just some ideas that will be fleshed out in multiple parts with an actual proposal.
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