HIP-00XX: Re-allocate locked funds to a fund controlled by a trusted multisig

[NetOpWibby]

THIS PROPOSAL FAILED TO REACH CONSENSUS SO IT IS CLOSED

Naysayers are content with doing nothing, so nothing it shall be.

---

Overview

We have a LOT of HNS locked up, for no reason at this point. The developer airdrop at Handshake's launch was intended to kickstart the ecosystem. Four and a half years on, it's clear that failed.

890,407,839.90 HNS in airdrops and 188,346,476.73 HNS in claim rewards, making a grand total of 1,078,754,316.63 HNS (one billion). Using Coinbase's HNS > USD calculator, that comes out to $15,106,020.07.

This proposal is not a new idea. Chjango proposed the idea of a "clawback" at least a year ago and Andrew Lee recently shared similar sentiment in his proposal for Handshake V2.

Even if we ignore the claim rewards (leaving only the airdrops to clawback), why are we sitting on $10m+ and not doing anything about it?

These funds should be re‑allocated for bounties and proposals to help further the mission of Handshake: a truly decentralized naming system.

The major concern that most people have is misuse of funds. The crypto industry is rife with scammers and grifters so with this in mind, Jesse (Handshake Jesus), has proposed this list of people:

1. NetOpWibby
2. eskimo
3. Michelini
4. nathanwoodburn
5. crymzyn
6. nodech
7. rithvikvibhu
8. pcfreak30
9. falci
10. Durendil
11. pinheadmz

Few things to note:

• Notably, not everyone on this list is a developer. This is intentional as it ensures an inclusive worldview. Developer‑only groups are myopic and Handshake's vision is grand.
• Multi-sig owners are not deciders, they're executers. They confirm the will of the community. This is not a "power role."
• This list is not exhaustive, it's a starting example.

The people on this list are trusted OGs in the Handshake community and have spent the past four years building on Handshake and educating the world on its merits and functionality. However, Handshake needs more enthusiasts and builders to join its ranks. A fund is a fantastic way to incentive such. Look no further than Nouns, Cardano, &c. Funding the community via a community‑owned fund.

What could be funded?

Excellent question. Here's some ideas:

• Funding browsers integrating DANE, mobile wallets, a handshake node that isn't nodejs (so exchanges would actually consider adding HNS), paying listing fees for exchanges, etc.
• Write a Handshake full node in Go/Rust
• Host hackathons for students in your community (where they'll design/build websites/infra for Handshake)
• Pay a security company to do an audit on hsd/hnsd/whatever to ensure our blockchain is super secure
• Fund a DEX integration
• Fund browser/OS integrations
• Improve Fingertip and potentially evolve it
• Fund actual core developers to maintain hsd and other repos, improve the chain, and add R&D the community thinks is important.

---

THIS PROPOSAL FAILED TO REACH CONSENSUS SO IT IS CLOSED

Naysayers are content with doing nothing, so nothing it shall be.

[eskimo]

Agree with everything to do with this proposal, besides the fact that multiple namebase employees or multiple people in a single project or organization should be disallowed.

[Falci]

Everyone in this list has contributed to Handshake individually (which is why NB hired must/all of us).
To suggest we should not be allowed because we are currently working in the same company is kind of offensive. Do you believe I should be in this list if I would consider Namebase over the Handshake community's interest?

[eskimo]

Everyone in this list has contributed to Handshake individually (which is why NB hired must/all of us). To suggest we should not be allowed because we are currently working in the same company is kind of offensive. Do you believe I should be in this list if I would consider Namebase over the Handshake community's interest?

As I said, specifically because of the namebase thing. Namecheap/namebase shouldn't have more percentage voting value. It could create a situation where things are skewed in a certain direction for their own gain.

[Falci]

My point is: I don't see Namebase in that list. Nobody there are there because they represent/current work for Namebase.

[eskimo]

Just like 3 people from impervious shouldn't be in that list, neither should 3 people from namebase. The whole point is to keep it fair without 1 group having more say than another group or individuals.

[PapoDisco]

I actually proposed the list on discord off the top of my head, and didn't have Namebase in mind. I was thinking simply of people who I could trust, who made contributions over the years, and who I believed would have the best interest of Handshake in mind.

[AndreiChyrych]

Please add Matthew Zipkin to the list.

[eskimo]

I'd agree but not sure if he'd be open to it at this point?

[AndreiChyrych]

We should reach out and wait for the reply.

[eskimo]

@pinheadmz

[NetOpWibby]

Good point!

[HNSbroker]

This is a discussion/poll that concerns coin holders, miners, Namecheap and the founders,. Take it to X please.

[NetOpWibby]

X is not a real place for functional discussion.

[pcfreak30]

Ditto. If you want 4chan for crypto, CT fits. Not the right place otherwise.

[PapoDisco]

@HNSbroker we need to publish this link on twitter so everyone knows it is happening here.

[PapoDisco]

@HNSbroker you are right, it does involve everyone and we need to make sure that everyone is aware and can contribute in a single location. This discussion has been happening in multiple places for years. Bringing it here is an attempt to bring it all together into one place.

[pinheadmz]

1. What is the federation expected to do with this HNS?
2. Is there even enough liquidity on exchanges to sell a billion HNS? Consider what happens to the price when you sell that much into a dry market, your $15M needs to be recalculated.
3. Since this is a hard fork you will need consensus or you will have to deal with a split chain, divided hash power etc. not to mention a second namespace!

[PapoDisco]

1. Only to hold it, and do the will of the community. These are just the proposed signers on the multisig.
2. No there is not. However, no one has advocated selling it all on the open market. And, it would never be dispensed all at once. We have discussed bountying specific projects that benefit the community.
3. Yes. We need to seek consensus in the discussion for anything to happen. That said, A.Lee (Purse.io) recently proposed a re-allocation (in the Pow Wow telegram), and a few other things that created some alarm in the community. It could also create a split. Obviously, if there is no consensus, we should stay as is. I think I can speak for most in saying that the fear is that the coins will wind up in the wrong hands, and folks would rather do nothing, and therefore , do no harm, than do the wrong thing. However, the original intent of the airdrop was to engage developers and encourage development. If we could arrive at a consensus that a re-allocation was a good idea, this could catalyze the growth that was originally intended.

[pinheadmz]

"Bounties" "proposals" "will of the community" ... doesn't sound like there is actually a point to this discussion. How do I as a key holder decide to sign a transaction or not?

[NetOpWibby]

We would all meet and decide? If it's not a unanimous vote, don't sign?

[pinheadmz]

3. That said, A.Lee (Purse.io) recently proposed a re-allocation

Has anyone asked any of the founders what they have done with the 100,000,000 HNS they were allotted that does actually exist in the circulating supply right now/

[PapoDisco]

"Bounties" "proposals" "will of the community" ... doesn't sound like there is actually a point to this discussion. How do I as a key holder decide to sign a transaction or not?

This is the exact question we were hoping to get to... The point of the discussion is to determine if there is a reason to move on to the specifics like, what would we want to bounty, and what might a proposal look like. If the idea to Softfork and then Hardfork for a reallocation has legs, then moving on to the specifics makes sense, like you are asking to now. We obviously have to discuss and determine the specifics for bounties, and a proposal process. for any bounty or proposal to be funded, there would have to be a consensus that it were to be funded. The transaction itself, the signing, would be the result of finding/arriving at consensus on a determined bounty or proposal. The "will of the community" is the consensus. How we arrive at consensus, and on what bounties/proposals, is the continued discussion.

[HNSbroker]

We do have a lot of coins locked, and this was by design. The airdrop was never meant to be fully claimed. This approach respects the interests of miners and investors.

[NetOpWibby]

What are the interests of miners and investors? AFAICT, the investors just want Handshake to succeed.

[eskimo]

We do have a lot of coins locked, and this was by design. The airdrop was never meant to be fully claimed. This approach respects the interests of miners and investors.

That's not true. The founders have admitted the airdrops have been a failure. 100% weren't expected to be claimed, but at least 50% were, not .1%

[pinheadmz]

From a technical POV this is really two things:

• a soft fork to disable any more airdrops (claims are already gone forever right?)
• A hard fork to inflate the amount of HNS generated by each block, with the caveat that the extra HNS does not go to the user that did the work.

IMO the first half of this is a lot easier to execute and its effect on the price would help inform how effective the second half would be.

[PapoDisco]

Got it. Thank you for this.

• Funny enough, the dev airdrop has never been well marketed and this obviously is part of the issue in low percentage of claims. This soft fork could be a marketing event, and a last chance for folks to claim. And, as it was conceived/discussed, yes, this would end those claims.
• It is common in other chains for a percentage of the block reward to be reallocated to a dev fund. Zcash, for instance allocates 20%. This is controversial, BUT for HNS, wouldn't actually be a deduction for the current miners, it would be an addition which is allocated to the dev fund (if I am understanding you correctly). I imagine that this gives a greater chance of consensus among the miners and could be a key factor in preventing a split.

[Falci]

I'm glad to be considered to such list. But I'm against the proposal.

We don't have $15 mi. Those coins were burned and their value diluted among the remaining.

IMO, no matter how good is your intention, bringing those coins back could damage Handshake image and the market wouldn't have liquidity anyway.

[PapoDisco]

I'm glad to be considered to such list. But I'm against the proposal.

We don't have $15 mi. Those coins were burned and their value diluted among the remaining.

IMO, no matter how good is your intention, bringing those coins back could damage Handshake image and the market wouldn't have liquidity anyway.

As far as damaging the image, I could see the opposite happening... I can see a news worth event wherein Handshake shows signs of life rather than complacency. I could see a cointelegraph headline reading, "Handshake Community comes alive and reclaims unclaimed dev airdrop worth 15M." The image of Handshake right now is arguably less than favorable.

[Falci]

So, Handshake Experiment was a success in a few points, including decentralisation.
Now the proposal is to create a small group and grant them coins. Seems contradictory to me.
I believe the success of the "experiment" was precisely because we didn't have a treasury/DAO to manage.

This sizable airdrop was expected to have been claimed shortly after launch and in circulation.
Was it? So why the consensus rule didn't expire them?

• I prefer avoid fork, specially the hard ones.
• I would prefer not to change the money supply.
• IF we were to change the money supply, the most I would be ok with would be prevent future dev claims (aka burn).

[pcfreak30]

@Falci generally speaking that means do nothing and hope outside people bring money into the ecosystem?... which from my POV we have stagnation and that isn't working out.

[Falci]

Also, with the current supply and demand the Handshake price is really low. Increasing the supply won't help.

If we want to fund a group, we should convince miners to split their reward.

[faltrum]

So, Handshake Experiment was a success in a few points, including decentralisation. Now the proposal is to create a small group and grant them coins. Seems contradictory to me. I believe the success of the "experiment" was precisely because we didn't have a treasury/DAO to manage.

This sizable airdrop was expected to have been claimed shortly after launch and in circulation.
Was it? So why the consensus rule didn't expire them?

• I prefer avoid fork, specially the hard ones.
• I would prefer not to change the money supply.
• IF we were to change the money supply, the most I would be ok with would be prevent future dev claims (aka burn).

I'm reading all opinions and POV, finally I'm comfortable with the Falci and Matt arguments. Don't touch the code or burn the future dev claims.
Thnk you all.

[NetOpWibby]

According to McKie, only the 890,407,839.90 HNS is truly locked:

if they’re never claimed they don’t exist functionally and are never spendable. Sure you could hardfork and attempt to reallocate them, but then you’d flood the circulating supply and drop the assets value to basically nothing.

That's still $12,190,641.04 we're sitting on, doing nothing with.

EDIT: None of it exists: https://twitter.com/Steven_McKie/status/1816245381136802247. This is what happens when you refuse to join a discussion.

[pinheadmz]

@PapoDisco so who is going to accept 10,000 HNS for an hour of their time? Who is that person and why do they want to trade their time for those tokens?

[eskimo]

@PapoDisco so who is going to accept 10,000 HNS for an hour of their time? Who is that person and why do they want to trade their time for those tokens?

Obviously you will accept to work for HNS if you believe HNS can/will grow?

[PapoDisco]

@PapoDisco so who is going to accept 10,000 HNS for an hour of their time? Who is that person and why do they want to trade their time for those tokens

Isn't that about $130 an hour at these prices? That's a pretty good hourly wage.

[pinheadmz]

But that person also needs to think it has value, and as discussed, there is no liquidity

[PapoDisco]

But that person also needs to think it has value, and as discussed, there is no liquidity

Yes... there is little liquidity, not "no" liquidity. And, yes, I would imagine whomever was working for it would see value in it.
](https://coinmarketcap.com/currencies/handshake/)

[pinheadmz]

Respond to this comment if you have an idea of how money (from any source) could be spent on Handshake. "bounties" is too vague. Even "marketing" is too vague. Pretend I have money and you want some. What do you say to me?

[PapoDisco]

• I want to write a Handshake full node in Go. This will allow for a single binary that can quickly be deployed on any platform.

cant tell if your quoting me or not, but i actually want to do this myself, with a million other ideas and have stated this in discord, but ATM thats a far future for it to happen.

There are other folks interested in building the Go node. In this case, if the Go node was something that the community determined we wanted to "bounty" we could have a "Request for Proposal" and we could review multiple proposals from multiple teams for this bounty/task.

[pinheadmz]

This is orthogonal to the discussion but keep in mind an alternative implementation will be a lot of work, like 3-4 full time developers for at least a year maybe? There's all kinds of wonderful hidden rules in hsd and undocumented subtleties that put consensus at risk. I'm not sure that's really what Handshake needs right now

[NetOpWibby]

That's merely one example. Everyone has differing ideas on "what Handshake needs" and they could all be true! Several things working in concert is what we need, IMHO.

[PapoDisco]

This is orthogonal to the discussion but keep in mind an alternative implementation will be a lot of work, like 3-4 full time developers for at least a year maybe? There's all kinds of wonderful hidden rules in hsd and undocumented subtleties that put consensus at risk. I'm not sure that's really what Handshake needs right now

I would say without a doubt that everyone here, no matter their perspective, wants the best for Handshake. As someone who knows as well, if not better than anyone, what do you think Handshake needs right now? In the future?

[pinheadmz]

what do you think Handshake needs right now?

Users, just like always. But I don't know if they exist, even in theory. I think single-purpose blockchains are an extremely hard sell to cryptocurrency people and blockchain based naming is a hard sell to legacy domain naming people.

Meanwhile I think it's price and volume is so bad that emitting more HNS can't possibly have a positive effect. It's not a money tree, it's not a magic fountain that sprays value up into the air that can be caught or re-directed. I think HNS is already squeezed dry and any new value must come from outside.

[pcfreak30]

Another opinion of mine. The 1 billion thing might be enough to grab headlines so ppl come here to talk... but if people are really concerned about the market, I think realistically we could actually hard fork and get out 1 million USD worth of coins or so (assuming the price doesn't crash badly?) as my view is 500k even, used frugally, can solve a shit ton of our current problems. Ive said as much on discord.

My experience as a grantee is you have to be very smart on what you do, and its a can vs should, and we should NOT repeat mistakes of daos on using money b/c we have it, and spending too much. Some projects have done some truly stupid grant proposals and got them funded.

Hard forks are hard for a reason, but I think the focus should be funding enough that gets the job done while being minimally disruptive.

...And ideally that will chill out people who are skeptical about it.

[Nathanwoodburn]

Some things to think about if this hard fork happens.

1. Do we actually want to put all the money into a multisig?
   It might be better to send a smaller portion to lower any risk. The downside to this is any further funds that we want to distribute will need another fork

2. What type will the multisig be? (eg. 5/11, 7/11, 9/11).
   There are different benefits to multisigs. In particular the lower the number of required votes the lower the chance of losing the funds due to account losses. But the easier it is for a smaller group to execute a proposal without larger approval.
   This is also 1 way we can combat the previous point about multiple signers being part of Namebase (here).

3. What say do the community have in the multisig proposals?
   Will the multisig proposals go through off chain community discussions? I personally would try to do this to try to stop the multisig from sending a transaction that will have side effects that none of the signers thought about.

4. Timing?
   Do we want to release the funds in a timelock type deal? So the multisig receives access to the funds over 5 years or something like that?

[pcfreak30]

After some discussion on discord some new ideas have come up that I will likely be making proposals as polls on tomorrow.

It all boils down to a multisig, but its more about how we raise the money.

[Nathanwoodburn]

Yes I think the idea is decent but it requires a bit more thinking through the options and process we will follow

[NetOpWibby]

1. I think Papo and Eskimo have good ideas about this. Something about trickling out funds over time after a year of holding the funds in the wallet.
2. I'm in favor of 7/11, since it's the middle-ground. A decent compromise between protection against account losses and reasonable approval odds.
3. The community should be involved as much as possible. We can look to use something like Prop House or build our own.
4. I'm all for using decentralized systems to automate things. For whatever reason, there's skepticism in the community about the trustworthiness of everyone involved. Anything we can do to alleviate distrust is welcome.

[pcfreak30]

FYI Prop House will begin sunsetting starting June 1st, 2024

[agaamin]

1 - Please add Ziplin
2 - We at Agaamin too would like to have a say.

[Nathanwoodburn]

Zipkin is the 11th signer in the proposed multisig (pinheadmz)

[Nathanwoodburn]

Oh forgot to mention in my previous reply. I'm pretty sure the plan is to have every proposal discussed with the community and the multisig is just the executors of the communities will rather than the people who decided on the proposals.

[galetaire]

I won't be discussing because I'm not code-wise, and I believe quality voices are not those who are able to talk the talk, but those who are able to walk the walk. This said, I voted in favor of exploring the idea.

[NetOpWibby]

Don't discount yourself! Thank you for participating.