The following content may include opinions and thoughts that represent but no one but myself, LPX. Although analysis and due diligence was conducted on behalf of the DAO, conclusions may not be wholly representative of the Evmos DAO, the Evmos Community, or any other party.
Pangolin DAO has opted to give ownership of all contracts deployed on Evmos to the Evmos Community, essentially making the DEX a public good.
Pangolin DEX was originally launched by Ava Labs, the foundation behind Avalanche, in early 2021 - ownership of the thriving DEX was given to the community in November of that same year, and is now 100% community owned.
After a deep dive into Pangolin’s history and current status, the initially baffling proposition made more sense - and we will do our best to continue the legacy and see the DEX be 100% community owned in due time.
The contracts will temporarily be held by a multi-sig managed by one Pangolin member, one Evmos DAO member, and a Notional DAO member.
Long term incentives, tokenomics, and the decentralization process will become clearer soon, but for now all we can do is keep the community informed and make decisions together.
Ultimately, this is a huge win for the Evmos community in many different aspects and should be seen as a gift from our newfound friends at Pangolin and the Avalanche community.
Currently exploring options to fully decentralize the DEX, airdrop not out of the question.
Pangolin began as “the” DEX of AVAX-C deployed by Ava Labs, but eventually lost the top spot in Avalanche to Trader Joe. They are still one of the top DEXs in one of the largest EVM chains.
4th or 5th largest, depending on the data source - with only giants like Binance Chain ahead (and Ethereum, obviously). Incredible for a chain that is only few years old.
Ranked 3rd in the number of protocols launched on-chain. More protocols = more active developers on the chain. Larger communities, and of course tons of activity.
Avalanche’s massive growth in not only community but more importantly developers is also backed up research by a16z.
Pangolin is fully community governed by PNG token holders
Avalanche and Cosmos are actually similar in some ways! Both believers in the app-chain thesis to some degree; ever wonder why we interact with “AVAX-C” and not just Avalanche? [Whitepaper for the nerds 🔗]
Launched in early 2021, the Pangolin DEX was launched for the AVAX-C chain by Ava Labs with the aim of creating a fast, efficient, and user-friendly DEX for the rapidly growing network. Ava Labs, the foundation behind Avalanche, deployed the UniV2 DEX with the intention of handing off ownership of the DAO to the community - something common in early stage DeFi projects. Staying true to their word, the Ava Labs team soon launched the PNG governance token, with zero tokens allocated or vested to themselves - something uncommon in DeFi projects.
The initial tokenomics of PNG was dead simple - 95% for liquidity incentives and a 5% airdrop to Uniswap and Sushi users. In November of the same year, Ava Labs officially transferred all ownership and control to the community after a governance vote to elect the future leaders of the Pangolin DAO. Keep in mind, this was during a raging bull market and Pangolin DEX was nearing half a billion dollars in TVL, generating an estimated $200K to $400K a week in revenue - all of which would go straight back to liquidity providers, i.e. the community.
Since then the PNG tokenomics have changed through a series of governance proposals (as expected - DAOs need to support contributors) conducted by the PNG holders. Avalanche-C has also grown to be one of the most successful chains with blazing speed, with only Ethereum and a few giants ahead of them.
Why do I bring up these “old and boring” governance and ethos-related topics? Because without context on Pangolin’s early foundations and roots, the decision to simply hand over ownership of all contracts does not make sense without financial incentives or ulterior motives.
Since discussions began with the folks at Pangolin and Evmos DAO members, we’ve been scratching our heads trying to figure out what “the catch” was. It was one of those "too good to be true” suspicions that we all know very well, which led me into this Pangolin deep dive. In an attempt to be frank and move on to the next topic, the short answer is: I found Pangolin’s decision to give ownership to the Evmos community as a long term play to be spread across more and more chains while building relationships and mutual respect with said chains. Not a bad strategy.
A successful community owned and governed Pangolin DEX on Evmos (and other chains) that can maintain self-sustainability is an indirect but huge win for Pangolin (of course, as well as the Evmos ecosystem).
What better way for an EVM-based DAO to get their toes wet in IBC than to gift an entire chain and community the tools and exposure needed to jump-start the ecosystem? IBC and ICAs will soon lead the way for DeFi 3.0, and a lot of Ethereum DAO’s have taken notice and interest.
The collaborative mentality of Etheruem / EVM DAOs - having spent quite some time in the Cosmos ecosystem, I can without a doubt state as a fact that the two ecosystems (Ethereum/EVM vs Cosmos/IBC) are currently in completely different stages of philosophical thinking when it comes to decentralized communities and decision making. It should come as no surprise, however, as the two ecosystem are very different in intended chain theory, and the fact that the Ethereum DAO ecosystem has been around considerably longer. Ethereum’s biggest strength, in my view, is the entire ecosystem of innovators and collaborators that drives protocols, projects, and DAOs to work together for capital and labor efficiency.
Ultimately it all comes down to a long-term mission towards greater decentralization, building relationships, and of course, brand exposure. And this goes both ways.
A strong case can be made with pure numbers and network activity. Just by having Evmos farms and future incentives listed on Pangolin’s website, the Evmos network is likely to catch the attention of many active DeFi users in the EVM world, and is particularly significant for EVM developers who may not be aware that they can deploy their contracts on Evmos and be introduced to a whole new audience of IBC members -- with more convenient bridging in the works, the DEX will also provide a much more convenient gateway to the Evmos network.
As the number of EVM-based chains continues to grow, it is becoming increasingly difficult to attract and retain talent. With the Pangolin DEX, the Evmos Community has a a unique opportunity to bring new ideas and solutions to the decentralized finance ecosystem through the association of the Avalanche chain. We need the expertise and innovation of seasoned Solidity developers to truly push the limits and boundaries of the coming DeFi 3.0 evolution. With Interchain accounts on the horizon and the potential for completely new concepts and applications, the need for skilled developers has never been greater. We must begin preparing now for the new possibilities that will open up as we continue to build a more decentralized and interconnected financial system.
DeepDAO’s current data, lists Pangolin as rank #45 in Governance Token Holders with 32.5K unique addresses, and a social media following of over 100,000 users. With these impressive rankings and following, we believe that the deployment of Pangolin on Evmos network has the potential to attract a range of contributors and partners. By harnessing the power of DAOs and their associated communities, we can work towards building a more decentralized and transparent financial system that is more responsive to the needs and interests of its users.
As one of the top DEXs on the Avalanche network, Pangolin has had a strong track record of attracting high trading volumes and liquidity from users across different blockchain networks ($16bil in total volume to date). Although Trader Joe has taken the #1 spot, Pangolin is still seeing around $20mil weekly transaction volume - nothing to scoff at during a brutal bear market.
In recent events, Pangolin’s deployment on the Hedera chain brought in over $7mil in liquidity in just weeks. And while TVL and volume doesn’t necessarily show a network’s health as a metric itself, the community must fight to keep the liquidity that we do attract.
The deployment of Pangolin on Evmos, a sustainable incentives programs, community involvement, and easier bridging, gives the Evmos network huge leverage that no other chain on Cosmos can.
The transfer of ownership of the Pangolin DEX contracts to the Evmos community represents a massive leap forward in the ongoing efforts to build community-owned liquidity. As owners of the contract, the Evmos community is now able to generate revenue through a range of methods, including swap fees, vault creations, bonds, the revenue module, and other countless ways. Moreover, this ownership transfer is a testament to the potential for greater community ownership and governance in the development of DeFi applications and platforms, which are becoming increasingly important in the context of a more decentralized and democratized financial system. By building community-owned liquidity, we can create a more inclusive, fair, and resilient financial system that can better meet the needs of users across different parts of the world.
Absolutely not. Our long term goals remain the same, and we are moving forward with more plans for Community Owned Liquidity and Treasury Diversification. Pangolin will likely be a huge boost and first steps in achieving full decentralization and self-sustainability of the DAO, but these tricky long term goals that must be carefully coordinated by the DAO, Community, and Core team.
Just like any other protocol or projects that are interested in building on Evmos, we welcome Pangolin with open arms and will support them in any way needed. This includes the early planning of how to get Pangolin on Evmos to a level of self-sustainability in which the Evmos Community can have full control of its future direction and treasury.
The use of off-chain governance protocols like Snapshot as well as on-chain (but not Cosmos on-chain) contracts have the track record and proven that a much more efficient and community-involved governance process can be achieved. When the Evmos community is ready the temporary multisig will no longer exist, and the contracts will be controlled by governance smart contracts like GovernorBravo.
We will obviously continue to work closely with Pangolin and figure out the best way forward for the Evmos community. We must see this as empowerment and not abandonment.
Stick around for a part two; we’ll cover some important topics in more detail like:
How DEX contracts work - what does contract ownership even mean? 🔑
What will the Pangolin team’s role be in Evmos without ownership? 🤔
Will there be a Evmos Pangolin governance token? Things to consider… 🪂
Various routes the DEX can take to become fully self-sustainable 💰
Dangers of premature decentralization 😈
Common safeguards and practices that DEXs utilize to protect against malice ⚔
Why Evmos DAO did not accept the offer for ownership, and how we plan to assist the community in the process of all the necessary steps before full decentralization can safely happen ⚖
New to Evmos? For developers and teams looking to build on Evmos or deploying on Evmos, we would love to get to know you! Don’t be shy to introduce yourselves on our forum.
Looking to stay up to date with Evmos DAO news? Join our Telegram announcements channel, or find us on the official Evmos discord under “DAO Announcements.”
Interested in governance and/or contributing? Join us for our weekly governance calls on Thursdays in our Discord.
Have any questions, requests, concerns, etc., feel free to PM me on Twitter @EvmosDAO.