Controversy Erupts Within the Atom Community Over Lack of Transparency From Interchain Foundation

Atom community concerns over the Interchain Foundation's lack of transparency has led to a proposal for greater transparency. This highlights the importance of fair governance in blockchain projects and community involvement in project governance.

· 12 min read
Controversy Erupts Within the Atom Community Over Lack of Transparency From Interchain Foundation

The Interchain Foundation (ICF) has found itself at the center of controversy within the Atom community, as members have come forward to express their concerns about the lack of transparency and reporting to the Cosmos community on the ICF's activities over the past two years.

The Controversy

The controversy came to a head with the recent proposal titled "Formally request full financial transparency from the Interchain Foundation" which has been put forward by Jacob Gadikian from Notional Labs, where he seeks to formally request full transparency from the ICF. The proposal argues that some teams applying for grant funding have been informed that funding is not open to non-incumbent teams, which could be seen as favoritism towards others. It also states that the ICF received around 10% of the total supply of ATOM at the ICO which adds to the controversy, as some members of the atom community may feel that the ICF has not kept its side of an unwritten promise to the community.

The Options

The proposal gives three vote options: vote YES to formally request full transparency from the ICF, vote NO to allow the ICF to continue operating in financial opacity, or vote NO WITH VETO if the proposal is deemed to be spam or disproportionately infringes on minority interests. Voters can also abstain if they wish to contribute to the quorum but decline to vote either for or against the proposal.


The uproar within the atom community over this proposal highlights the importance of transparency and fair governance in blockchain projects. Without transparency, blockchain projects risk losing the trust and support of their community, which can lead to fragmentation and a loss of momentum.

The ICF's lack of transparency and reporting to the Cosmos community over the past two years has raised concerns among some members of the atom community. This has led to calls for greater transparency and accountability from the ICF, as well as greater involvement from the broader Cosmos community in the governance of the project.

Jacob Gadikian - Interview

Jacob reached out to us after the article was published, stating he wanted to expand on a few answers, which we have updated.

We reached out to Jacob, the proposal submitter, to get the story from his viewpoint.

Q: Hi Jacob, who are you and why should the atom community care?

Hey I am Jacob Gadikian.

I am the CEO and founder of notional, we are a software engineering, validation, relaying, and consulting firm in Cosmos. I used to be a history teacher, and then became very obsessed with all forms of cryptocurrency. I began working in cosmos around 2016, but then had a pretty lengthy bitcoin mining hiatus where I didn't really do too much stuff in cosmos.

With regard to proposal 787, the community should not care at all who I am. Nothing about me really matters with respect to this proposal.

Q: Can you explain what made you post prop 787?

...I have been playing with different versions of something like proposal 787 for about a year. I want to give credit where it is due: it was moonboy84, a friend of Jae's -- and mine -- who really listened in detail to what Jae was saying about the foundation.  Then I spoke with both JK and Moon boy.

Absolutely I disagree with JK and his company AIB on a bunch of things.  I'm absolutely more than a little pissed off about the whole let's go and sue Grace Yu thing.  But this is one of the unfortunate realities of the ICF opacity situation, there's a division of Cosmos into two distinct camps when we should not be suing former employees in federal court because they think someone else's contract is overly restrictive. it's very very much let's just call it legally overzealous without getting into the details, which I'm sure you can find all over my twitter. I find that lawsuit to be highly spurious, and the tweets of mine cited were made when I had not even spoken to Grace Yu.  As such I am looking for representation who will work on my behalf on a contingency basis, relatively autonomously, to make claims against MoFoLLP and AIB, for making false statements in a federal court.  I am also making reports to the New York and California bar associations, which license the attorney representing AIB. Lawyers (supposedly) have a duty to fact.

Another way for the lawsuit crap to end is for MoFo and Aib to drop the lawsuit and reply to this tweet, " yields to @notionaldao and deeply apologize for promoting the idea that you conspired with someone that you did not know in order to defame and disparage AllInBits, and commit to donating at least $150,000 each to and $50,000 each to CosmOSSDAO.  We made untrue statements about Jacob Gadikian in a complaint made to the Eastern District of New York federal court.  " on behalf of Notional.  Blue dragon rescues people from slavery, among other things.  That is the true meaning of "based, red pilled as fuck."

This is the tweet where they can do that:

Yielding is not complete until lawsuit is dropped AND donations have occurred.

I mention the above, because what we've seen happening is "you don't like the lawsuit, you must be an icfooooor." and "you want the icf to be transparent, you must be an aiboooor."  It may work like that for some, but for myself, I think we all have an obligation to fact.

787 is about the foundation's obligation to fact.  Must live up to that.

.... And I don't disagree with Jae on this thing, not even a little bit. The foundation is fully opaque.

I bet I probably disagree with him on what to do next but when I looked into this stuff I found what Jae and Moonboy were telling me about ICF delegations and reporting to be 100% true.

The thing that made me finally put it on chain was having a series of personal experiences with the effects of ICF opacity over the course of about 2 years. I don't think it's a terribly accountable organization, even though there are many great people who work there. I think that there has been a lot of misconstrual about my opinions of the people who work at the foundation and that is really unfortunate.

I guess that the last straw was getting the feeling that ICF funding's opacity was harming the work environment for both my own team and others.  No one even knows how the icf prices work.  And this is surely not to claim that the icf is on balance objectively a bad or evil org.  I just think that the community deserves transparency.

In fact, just like I don't matter to proposal 787 the people at the foundation don't matter to proposal 787 all that actually matters is that Cosmos has a foundation that claims transparency but does not deliver it, and 787 attempts to correct that.

Furthermore, anyone who really pursues that, does experience retaliation. I have.

The unfortunate reality of the situation is that if you pursue these matters, instead of admitting the reality of opacity at the foundation, foundation members are going to talk about you and it's not necessarily going to be super nice.  The foundation knows that their words are heard with additional gravity, and from the privileged position, they attack those who present plain realities like:

  • HackerOne wasn't checked for years
  • There is no clear security incident triage process, and so team leads are burdened with also being a point of contact for security
  • The foundation is opaque
  • Opacity at the foundation harms the quality of conversations in the community because it is categorically impossible for anyone to have fully informed conversations.

I don't think that proposal 787 should have been necessary at all, but with circumstances as they are, there was no choice

Q: What has been your past experience in dealing with the ICF?

Dude it's basically been awful. When I was a relatively new validator, that's when I began to speak to moon boy and I looked into the claims that he was making about the state of the cosmos have validator set, driven by ICF delegations and all of that was true and more. Later on I learned that there was this bizarre well for lack of a better term mexican standoff, you know that's where like you've got one guy with a gun and another guy with a gun and another guy with a gun and another guy with a gun and they're all aiming the guns at each other well apparently that's the true nature of the interchain foundation.

Allow me to explain please: what I've learned over time is that the reason the ICF claims that there are no transparency reports, is that their contracts with fenders prevent them from releasing transparency reports, now on the flip side of this, vendors with relationships with the ICF claim that ICF NDA contracts prevent transparency reports both sides are pointing at each other, and it's really not okay. But now I need to mention, those vendors do not have an obligation to transparency. The foundation does. In fact, I don't think that I would have a problem with their opacity, if and only if they did not continually claim to be releasing a transparency report next week. Trouble is, they've been saying a report is imminet for at least a year.

As I mentioned in the governance proposal, ICF funded teams fear retaliation if they comment on the ICF situation.  I don't blame them for that, so I am not going to identify them.  What I can tell you for sure though is that the ICF knows that these teams fear retaliation, and they know for certain that teams do fear retaliation, because I discussed that with them and those teams. That is to say, I have very clear proof of this.

I have also given the ICF 100% permission, just like I have given you, to share any commentary of mine in any form provided that i have the same privilege, but they have not accepted, and because I am running a business in cosmos i am unwilling to violate that. I suppose that could change his time goes on and if I were to get permission from those other teams but I want to assure you that these are rather heated, rather unreasonable, and absolutely challenging situations.

Repeat: the icf knows who these teams are, because it was a conversation between my team, and a team fearing and feeling retaliation.

Notional is very grateful to the hub community for recognizing our work in prop 104, and for funding it.  We still fear retaliation, but don't need to fear it nearly as much as foundation funded teams.

I have also given the ICF 100% permission, just like I have given you, to share any commentary of mine in any form provided that i have the same privilege, but they have not accepted, and because I am running a business in cosmos i am unwilling to violate that. I suppose that could change his time goes on and if I were to get permission from those other teams but I want to assure you that these are rather heated, rather unreasonable, and absolutely challenging situations.

It also means that our funding is transparent, as is our work product.  We also make transparency reports on the hub forum.

Q: What areas do you see the ICF failing at?

My friend, I don't think I actually know due to the lack of transparency reports. Genuinely I know very little. One of the areas where I am most disappointed has been security reporting but I don't want you to think that that's the biggest issue, because I strongly believe that the biggest issue is the lack of transparency at the foundation.

If there was transparency at the foundation I believe that the vast majority of the other issues could much more readily be solved or at least worked on.  In the present state I do not believe that's possible.

Q: What would you like to see happen should prop 787 pass?

I think the title pretty much says it all, if 787 passes, I would like for the ICF to release their full financial details so at least the community has some clue what's going on. Please note that while I know a lot more than most people and probably a lot more than most validators or even most engineering teams, I assure you I know positively jack shit, and that's because they do not fulfill their mandate for transparency

Q: What would you like to see happen should prop 787 fail to meet quorum?

I would like to openly and readily admit, with apology, that I made two errors in 787. 787 references the genesis allocation of tokens that the ICF has. Because of spending, their allocation has dropped from 10% to about 4%, and in addition to that, I made a procedural error by defining the no vote as something other than nil. Mainly that was to protect my own interests and time. I'm really sick of dealing with this.

I do expect that 787 will meet quorum, but I really have no idea if it will pass, which is quite frankly a bit surprising to me. I thought that it was a no-brainer. It's possible that I would put it up again, without the errors that I mentioned there, and maybe even just as a single sentence, because one thing that was really clear is that ICF team members were attacking myself and our team at Notional on procedural errors relating to a governance proposal, when they have not released a transparency report in nearly 3 years, while insisting, as they have been for over a year, then a transparency report is right around the corner.

I think that greater transparency at the ICF would improve countless things in cosmos .

I would also like to mention that there's probably a case for additional operational transparency. I had a somewhat delicate issue that I wanted to discuss with the ICF about 2 weeks ago and so I created a group with the ICF and the ICF technical advisory board and it was in there that I learned that the technical advisory board no longer exists.

That is why the ICF published this:

But the TAB hasn't existed since January, and was formed in November.  I hold the TAB members in very high regard, and the only one whose character and contributions I can't endorse is Zarko, but nothing bad happened between him and I -- just I"ve never worked with him.

Apparently that's been the state since January and they simply neglected to tell anyone. Given the power dynamic of very large Swiss foundation and a bunch of nerd entrepreneurs, and the fact that I absolutely know that the ICF has let's just say that maybe a little bit vengeful, I don't blame the TAB members for saying nothing, and furthermore it's not their job to say anything. That is the ICS job just as it is their job to prepare transparency reports. They're not doing it. Actually they did do it but that wasn't until after I created the most ludicrously uncomfortable chat of all time where like basically well let us simply say that there may have been significant tension between ICF and TAB, and let us also note that TAB was literally formed in the month of November 22, I do not for a second believe that the TAB was designed to be a temporary thing, and I genuinely don't know every detail. I would like to request for the sake of the nerds, that anyone seeking information about the TAB incident, that first the community ask questions of the ICF, I'm sure that the nerds will confirm or deny the accuracy of that information.

It is my understanding that TAB members advice was not heeded, their time was wasted, and that they are quite frustrated.  I believe that the TAB acted in good faith, and have evidence and reasoning behind that.

.....therefore I'd put a proposal on-chain with the title:

"Formally request full financial transparency and far greater operational transparency from the interchain foundation"

and the description:

"The interchain foundation has failed to deliver transparency reports for over two years and recently summarily dissolved its technical advisory board after ignoring their recommendations.  Vote yes to formally request full financial transparency and far greater operational transparency from the interchain foundation."

I would not wait a week on the fourm because there is no such requirement on the cosmos hub.  I would not write definitions for the other vote options since that is a trap, and the vote options are clearly defined in the software and its documentation.

Q: How do you feel about the large amount of validators that have voted abstain?

I think that they are looking after their own rational self-interest as business people and teams with families to feed and I have no problem with their abstentions whatsoever.

Additionally, we must call to mind that validators now have two additional reasons to abstain in gov:

Most DAOs just have to worry about legal risk from governments.  In cosmos we have to worry about legal risk from governments and founding companies.

I hope no one will criticize validators for abstention.

Delegators to validators who have voted abstain can always override their validators vote, and delegators to validators who have voted no, can always override their validators vote, when I was less experienced I might have said that delegators to validators who have voted no should just relegate but the reality is if it's a single governance vote that there's disagreement on, just override it if you like your validator.

On the flip side of this, there are 82 validators currently who have not voted, and I do have a problem with that. I think that is an abandonment of a very important role that we fill as validators in cosmos.

I think that stakers should be strongly encouraged to vote at all times.

The Outcome

As of writing, the outcome of the vote remains to be seen as the quorum has not been met. A lot of validators have voted abstain, perhaps due to wanting to remain impartial as some have received grants from the ICF. Even if this passes, it would only be a signal to the ICF as this is just a text proposal. It is important for all stakeholders to work together to find a solution that promotes transparency, fairness, and community involvement in the governance of the project. Hopefully a solution amenable to both parties will arise.

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