PIP-66: Paloma Bridge Daily Transfer Limits for GRAINs

Governance
1

PIP-66: Paloma Bridge Daily Transfer Limits for GRAINs

Status: Proposed

Author(s): LARRY

Type: EVM Proposal

Discussions-to: PIP-66: Paloma Bridge Daily Transfer Limits for GRAINs

Created: 07/03/2024

Simple Summary

With Paloma v1.15.1, optional transfer limits for the Gravity Bridge were launched to Paloma tumbler mainnest. The limit per token is set via governance. This PIP aims to vote on the initial transfer limit for the GRAIN token only.

Abstract

With Paloma v1.15.1, optional transfer limits for the Gravity Bridge were launched to Paloma tumbler mainnest. The limit per token is set via governance. This PIP aims to vote on the initial transfer limit for the GRAIN token to enhance risk management for validators. Given that validators are being paid in GRAINs on the target chains, we want to protect their GRAIN exchange rates with the launch of Paloma pools by limiting GRAIN bridge transfers to a certain daily limit. As markets mature and increase in liquidity, we encourage new governance proposals to reduce this daily limit or remove it altogether.

Motivation

With Paloma v1.15.1 the Gravity Bridge transfer limit functionality was implemented. The limit

  1. is set from Paloma to target chain only
  2. is determined by governance vote
  3. can be voted on for any token

This PIP is aimed to set a daily transfer limit for the GRAIN token through governance.

Specification Overview

Set the grain transfer limit to 30,000,000 GRAINs daily or approximately 0.5% of the total supply on Paloma.

Technical Specification

  1. Run the governance command to deploy the smart contract to all evm chains
palomad tx gov submit-legacy-proposal gravity set-bridge-transfer-limit  \
ugrain 30000000000000 DAILY
--title "Vote to set a daily transfer limit for GRAIN tokens" \
--summary "PIP-66: Paloma Bridge Daily Transfer Limits for GRAINs" \
--deposit 10000000ugrain \
--fees 6000ugrain \
--gas auto \
--from <From Paloma Address> \
--chain-id tumbler \
--yes

If the proposal passes, the daily limit for all token transfers where the token has denom ugrain from Paloma to target chains will be set. Any attempted transfers above the limit will result in an error.

Rational

Given that validators are being paid in GRAINs on the target chains, we want to protect their GRAIN exchange rates with the launch of Paloma pools by limiting GRAIN bridge transfers to a certain daily limit. As markets mature and increase in liquidity, we encourage new governance proposals to reduce this daily limit or remove it altogether.