Announcing Granada

My conversation began and focused on the optics, and how this protocol change can negatively affect that. you decided to compare, exclude and throw shade because you didn’t agree with me. It is good and healthy to having differentiating opinions. But now because i responded and made some points to your response i have an hidden agenda and im negative part of the community. Sad. If we cant look within we will never be able to look outwards. I hope this change ends up being great and positive for Tezos. Leaving it at that.

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The problem is your ‘optics’ argument is based on anecdotal evidence that has no merit except on how you feel. You also have admitted that the only metric you care about is a token price. Based on that logic, should Tezos no longer deliver on upgrades and just promise great things in the future with a roadshow?

I’m more interested in hard evidence, math, and the net results on the effects of this type of change. The net results mean more liquidity for Tezos holders and faster finality for dapps which means an increase of adoption. This applies to any tech that a person is building, you build products to have a positive impact for the user, not because you care about optics.

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Time will tell, and we will either pat ourselves on the back or scratch our heads. At the end of the day everyone here who is actively questioning or bringing up concerns whether pro or con is on the same side. We want to see success in what we have invested our time, finances, and effort into.

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Why support Bitcoin instead of a stablecoin? Isn’t a fiat gateway more important?

2.5 XTZ per block so that is roughly ~$5 million paid out to liquidity providers over six months if I estimated correctly.

Isn’t that a bit high?

Does the foundation have any plans to be a liquidity provider in this pool? It would mean everyone else would receive way less rewards from the dilution.

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This is incorrect and has been answered above.

There is no less rewards. Bitcoin is chosen because of its global availability and a liquidity tool. Until there is a decent stablecoin like usdc, tzbtc is the most neutral. In the near future, another coin can be added in future upgrade.

No entity or company benefits from this except for a miniscule minting fee to a consortium which is 0.22%.

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Just to answer @murbard in good faith:

Clearly you do not.

I am not arguing against liquidity baking. I am arguing against the parameters chosen. I work on smart contracts on Tezos that need liquidity. It’s a neat concept and a great experiment. I commend the team on their work, and I think the feature is well thought out (from escape hatches to economics). I am, personally, thrilled to see the care and thought that went into this feature.It may seem trivial, but the engineering work from the protocol to the smart contracts is well done and thought out.

I take issue with the fact that (1) the asset is chosen in a top down way and (2) a controversial feature is tightly coupled to improvements that will obviously pass with an overwhelming majority (everyone wants fasters blocks and cheaper gas). This is the core concern I have. I’m simply surprised to see it coupled tightly in a way that we have to uptake it, and I’m worried about the precedent being set that a slate of assets aren’t being presented.

I don’t think the folks who are debating economics and implementation details of liquidity baking are in the right here. The specs for liquidity baking were finalized prior to this. However, the actual asset (just like the experiment length, amount of votes needed to shut it down etc) are simple constants in code and readily interchangeable. I’m surprised (and now somewhat concerned based on the pushback) that we don’t think options here are useful. Especially since it seems like the current governance period is explicitly build for this sort of debate.


Happy to answer your questions:

  1. If you care so much about alternative proposals and think they add value, why don’t you inject them? Why does someone else have to do it for you?

I think it’s poor form (and would be rather disrespectful to the hard work of the core protocol devs) to inject things without forming a broad consensus (even though we are in a permissionless space). In software, often agreeing on the path forward takes longer than actually writing the code to get there, and that’s why we’re here having this discussion. If we can agree on the path forward, I’m happy to write the code (and I did state in the original post that I was happy to lend a hand to make this happen).

I do think that it’s important that this injection comes from (or at least with the blessing of) the same team(s) who injected the original proposal, since the point I’m making is that the core dev team shouldn’t be in charge of choosing winners and losers. I feel relying on the community to offer counter proposals to a controversial proposal with no alternatives states that team’s position that they should be in charge of choosing. That’s not a great look, IMO.

With that point articulated, I have looked into how we could provide bakers with alternative assets or a non-liquidity baking upgrade. I have identified the following:

To change the asset that is subject to LB, we simply need to update the token contract here :

To remove Liquidity Baking (uncleanly, but successfully) we could just set sunset level to 0. This effectively means liquidity baking exists, but is never turned on. We’d update that constant here:

Both of these changes are non-invasive and one line changes.

I still have some outstanding questions (feel free to chime in!):

  • I’m not sure the exact steps to compile from protocol alpha to proto_010
  • I’m not sure if the asset can be an FA2 token, or if we’re limited to FA1.2 only

I’d welcome help from folks closer to core dev in answering these questions or if there are cleaner / easier ways. Both of these could be used to offer a la carte proposal offerings to bakers and let them decide the outcome.

Lastly, I just want to state loudly: It strikes me as worrying that the powers that be don’t trust the bakers (who are the ones securing the whole multi billion dollar network) to make this decision correctly. If we truly cannot trust that bakers are able to correctly choose from a slate of options, we have bigger problems the second a malicious actor gets enough rolls.

  1. You refuse to engage on the object level, but pragmatism matters. What do you personally think of the proposals you outlined, on a scale of one to ten. I get that you’re trying to make a meta point, but I think the object level is relevant in shedding some light into what is actually at stake.

The question I am trying to answer is solely: “Do / should the core Tezos developers get to pick winners and loser that receive first class support”.

I think the answer to this question, especially from the bakers, should be a resounding “No” because it sets a bad precedent and makes it okay to do this again in the future. Worse, accepting this with zero pushback makes it clear that there’s more room for more flexibility in the future and that future proposals can continue to push the boundaries. Where is the line?

My opinion is that Bakers should be presented with an option which doesn’t contain a tight coupling of controversial features [1] to common sense ones and that other assets should have the option to elect different assets, and that that power lies with the validators of the network alone. Giving people choice in a decentralized, permissionless network shouldn’t be controversial.

The specific question you are asking is orthogonal and isn’t relevant to the discussion. It feels as if you’d like me to critique assets and then the debate gets shifted away from “Do the core Tezos developers get to pick winners and loser that are baked into the protocol” to “What is the merit of asset X”. If TzBTC is clearly the best choice (which I take no opinion on) it should be easy to articulate that to bakers and the community. If we truly think a super majority of bakers may pass a proposal for a suboptimal asset, perhaps we should recalibrate what we’re optimizing for. I think there’s a zero chance that bakers pass $meme-coin for liquidity baking, and I think that bakers will make largely the right choice - they just need to be given the right choice.

After a protocol G is passed (or voted down), I am happy to offer you opinions on these assets, and how Tessellated Geometry would vote if my proposed slate of assets were presented. If there’s interest from more than a few folks, I can write up a response, and post the hash here and reveal after the dust has settled, as Arthur did with Babylon’s hard fork.

I’d also like to note that it seems that the narrative seems to be “go ahead and pass this, it’s an experiment, we can always change the asset and turn it off later”, and at the same time this question suggests there’s a lot at stake. I’m having trouble squaring those statements in my mind.


I also want to make it really clear that I have a tremendous amount of respect for Arthur, the Core Developers and the community. My opinions offered here are in good faith, and I just want to make it really clear that I do not have interest in delaying protocol G. The broad strokes of a useful protocol are here - we simply need to iron out the details. I’m actively presenting options to get us to a place where bakers can decide the flavor we are going to uptake.Unfortunately, it is my opinion that this proposal represents a poor precedent to set at current time but I would love to see us do some reasonable leg work here so I can support it.


Lastly, I want to re-iterate my questions above which I don’t think have been answered by the project docs, blog posts or this thread. I think these are basic pre-requisites to accepting this sort of a change, and they should be by and large be soft-ball questions to the Tezos Foundation and core devs. They represent easy wins to provide reassurance to folks who may uptake this proposal.

  • Does anyone at Tezos Foundation or associated entities have an ownership stake or business relationship with a company in Bitcoin Suisse? Presumably the Tezos Foundation has a custody agreement and grants with the entity (CMIIW). Can we state, in good faith, that there are no conflicts of interest?
  • Is there a UI for the new CFMM contract? Who will maintain it? Or is this feature only available to users who can work on a CLI?
  • I understand that the fork of the Dexter contracts were audited and formally verified. The contracts being presented on chain are forks of those contracts. Are the contracts that are about to be presented on chain also security audited / verified?

[1] And at this point we have 83+ Agora Posts, reddit / twitter chatter, and alternative proposals being injected. LB is a controversial feature - regardless of how little or much the community made that known.

(Edit: Tag Arthur by username to avoid confusion / increase visibility)

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It’s obvious the only issue some have is choosing tzbtc.

How about instead, people just position themselves if this is good for Tezos as a whole?

More liquidity, faster blocks, and cheaper gas significantly upgrades Tezos. We are also in a race against other blockchains, Tezos needs to keep pushing forward to be ahead of the competition. Days matter, and delaying it over trivial details like tzbtc will create more harm than good, especially since there is a feature that bakers can turn off liquidity.

TzBTC is a fair choice and the most neutral thus far until a stablecoin like USDC is on Tezos. TzBTC has global availability and proper liquidity.

The only controversy of LB is centered around if baking rewards are less or why aren’t they using another coin which both come off as selfish narratives.

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I don’t think an alternative proposal would have any chance. And thanks to @Sebuh_Honarchian we see, that this is true.

Just injecting an alternative for the sake of having an alternative is wasting time imho.

I see your concerns and understand them. I can even agree on them but let me Quote @Felixls , who seems to have a similar mindset:

“We have to address this if we want to compete, and I think we don’t have the privilege to be fully politically correct and “win” the race at the same time, some trade-off and risk must be taken, at least for now while some other token get battle tested without the caveats of tzBTC.”

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WOW. I stand behind this. :clap: :clap: :clap:

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The constant hard_gas_limit_per_block is updated from 10,400,000 to 5,200,000 gas units.

https://tezos.gitlab.io/protocols/010_granada.html#emmy

Agree with this 100%. The data was out for like half a year! And now I feel like this was some last-minute injection.

Doesn’t the contract shutdown after 6 months and must be activated again by the bakers?

Why dont give it a try and see if this works?

It’s a question of whether the bakers make a decision or don’t

This is simply not true. tzbtc is not bitcoin. you can’t swap it without KYC.
Right now its liquidity is Dexter 4,488.18 XTZ + 0.4729 tzBTC, Quipu 15671.470264 XTZ + 1.64746452 tzBTC
Still it might be our best choise in terms of expected liquidity if some entities are happy to go through KYC and LP

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Although it’s true that only 94% of the block reward will go to the bakers, in effect they are not receiving less than before (besides the increased inflation that affects everyone in the ecosystem), as the block reward is increased for LB. I thus do not see this point as problematic at all.

I guess, i’ll vote yay at the end.

(besides the increased inflation that affects everyone in the ecosystem)

I hope the trading fee will be enough to offset diluting inflation, or even burning more that is being printed, so we actually get some deflation. And maybe in the future, when demand for trading the XTZ/tzBTC pair is high, we can even increase the trading fee to increase deflation. And make that one of our preferred deflationary mechanisms.

Unrelated to liquidity baking. To make TEZ a SoV, we can also look for other methods for burning TEZ. For example, Cross chain relays between Ethereum and Tezos that burns TEZ every time assets (including NFT’s) are transferred from one chain to the other, that could be another deflationary mechanism

That should be our main focus, make TEZ A SoV, but always without affecting the baker incentives of running a baking node.

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I have never claimed you were arguing against LB, there is nothing in what I’ve written that suggests I think that, but you keep repeating it to me. Superficially this looks like “explaining your position” but de facto it’s a way to misrepresent mine.

The asset was proposed and debated months ago on Tezos Agora. Comments on it were literally requested back in January. It’s disingenuous to represent this as a top down choice.

The proposal can also be copied and submitted with a different asset, the proposal can also be rejected. This is not an imposition by any stretch of the imagination.

It’s not tightly coupled the patches are largely orthogonal. But even then, the point of proposals is not primarily as a choosing procedure but as a ratification procedure. It simply does not scale to try and poll people with proposals. This is why the tzip process exists, this is why Tezos Agora exists in the first place, this is why feedback on the whole proposal, including the choice of tzBTC was actively sought for the past five months.

It’s unrealistic to assume the proposal phase is an adequate venue for polling. It exists largely in case irreconcilable differences between competing proposals exist, or in case there’s no clear consensus that a proposal is acceptable, it’s not a poll.

Every proposal is opinionated, there’s no precedent here. If you don’t like the proposal, make another one, you have more than enough technical know-how to do so.

On another note: you could easily have come out and said: oops, not enough people participated in the tzip process, let’s have competing proposals for those who missed this. You chose instead to present this as an ominous, power-consolidating, precedent-setting move by “the powers that be”.

By creating this confrontational framing, you’ve engineered a no-win situation where the development teams involved in this either don’t inject new proposals and are thus insensitive to “the demands of the community” (even though comments on the choice of assets were requested for the past 5 months), or they do, in which case they give the appearance that they were up to something nefarious until you bravely called them up on it. So if you think these proposals are relevant, inject them.

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Your point about the availability (or lack thereof) of TzBTC is the main issue I have with with the proposal, because as far as I can tell, the only people who can purchase a lot of it at this time are non-U.S. persons who are willing to undergo KYC.

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amen to this

I read the entire thread until here, flabbergasted…

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