A couple of weeks ago, the DCF initiated a discussion dedicated to Inter Protocol. Our objective was to offer a strategic plan for the future and test the community’s attitude towards potentially sunsetting the protocol.
After receiving a predominantly positive response, we launched a signaling proposal discussion, including a detailed wind-down plan. This secondary discussion will remain open until April 26, 2025, when a governance vote will determine the final outcome.
This blog post is another element of our efforts to make this process as open and transparent as possible. Inter Protocol has always been community-owned and governed, and no action will proceed without strong community consensus. Thus, we’re committed to sharing the reasoning behind DCF’s proposal and assisting Inter Protocol users in this transition.
Inter Protocol’s raison d’être
From its inception, Inter Protocol represented an ambitious effort to launch a community-owned decentralized stable token that could thrive within the Cosmos ecosystem and beyond. It was a tool designed to rejuvenate DeFi across the Interchain, and provide additional utility to Cosmos assets and LSTs.
Moreover, serving as the native fee token for the Agoric platform, IST plays a crucial role in enabling seamless transactions across the Inter-Blockchain Communication (IBC) network. It was also instrumental in realizing Agoric’s vision for ensuring that gas fees remain stable.
Unfortunately, both market conditions and regulatory climate for decentralized stable tokens have significantly worsened over time. In addition, Agoric has come to the realization that its native BLD token needs to be strengthened, in order to capture the potential growth opportunities arising from Orchestration.
We all had hoped to see IST emerge as a top-tier stable token. However, after extensive deliberation with key Agoric stakeholders and Inter Protocol’s Economic Committee (EC), and taking the arguments above under account, we were forced to reconsider our direction.
Why Sunset the Inter Protocol?
To a large extent, this pivot was influenced by community sentiment. Feedback across channels has consistently highlighted concerns around IST’s competitiveness compared to major stablecoin players and role in Agoric’s tokenomics. Allow us an attempt to summarize the factors that informed DCF’s proposal:
- Evolving Market Conditions: Although once considered cutting-edge, the landscape for decentralized stablecoins has shifted significantly, with fewer users actively seeking alternatives to centralized solutions. Regulatory advancements like the EU’s Markets in Crypto Assets (MiCA) act have contributed to this state of affairs.
- Operational Demands: Maintaining Inter Protocol has required considerable human and financial resources — resources that could be reallocated to initiatives with higher impact and clearer alignment to Agoric’s long-term vision.
- Tokenomics Alignment: By sunsetting IST, the role of BLD will be clarified and strengthened, positioning it more effectively as the core store of value and medium of exchange within the Agoric platform. We believe that a cleaner focus, without the complexities introduced by IST, will provide the foundation to improve and evolve BLD’s utility and value.
What Happens Next?
The positive community reaction we observed so far motivated us to develop a comprehensive wind-up plan, and share it as part of the signaling proposal, now in discussion period. It includes:
- Proposal scope and components
- Clear timelines and cadence for sunsetting
- Additional recommended actions
- Risk factors
All stakeholders are currently invited to review, engage, and comment. The proposal will be followed by a vote in alignment with Agoric’s governance process. Should the signaling proposal pass, a 60-day sunsetting period will begin.
Striving to provide users and ecosystem members with as straightforward information as possible, an Inter Protocol Community Call will be organized on April 23rd on Inter Protocol’s X account. Everybody is welcome to attend and ask questions.
An Invitation to Engage
The Agoric ecosystem has always been grounded in transparency, collaboration, and community ownership. This moment, while bittersweet, is an opportunity to refocus and reinvest in what makes Agoric unique: programmable orchestration powered by a robust, unified token, BLD.
Your voice matters. We encourage you to join the discussion and share your perspective as we chart the best course forward, together. Thank you for your continued support. We look forward to hearing from you.
Follow DCF’s blog and subscribe to our monthly newsletter to stay up-to-date with all DCF activities and publications.
