Proposal: Add support for Golem Network Token (GLM) (updated version)

HELLO ALL!

EDIT: We acknowledge that our previous application did not follow the template, so please find here a new iteration following the community template.

Sentence Rational

Golem Network is a marketplace for idle computing power. It enables providers and requestors of computing power to connect in a trustless peer-to-peer network enabling both application owners and individual users (“requestors”) to rent resources from other users’ (“providers”) machines.

References

Link to:

Paragraph Summary

Description of the proposal in a paragraph <200 words

We’d like to make a proposal for Aave to support our token GLM as a collateral asset. We think being able to trade GLM on Aave would open new paths for decentralization and would be beneficial for both Aave and Golem.

Motivation

Golem Network is a marketplace for idle computing power. It enables providers and requestors of computing power to connect in a trustless peer-to-peer network enabling both application owners and individual users (“requestors”) to rent resources from other users’ (“providers”) machines.

These resources can be used to complete tasks requiring any amount of computation time and capacity. Nowadays, centralized cloud providers are in control of these services, these platforms are constrained by closed networks, proprietary payment systems, and hard-coded provisioning operations. Golem proposes an open-source, decentralized and user controlled alternative.

Specifications

  1. What is the link between the author of the AIP and the Asset?

María Paula Fernández is advisor to the BoD of Golem Factory Gmbh.

  1. Provide a brief high-level overview of the project and the token

Golem Network is a marketplace for idle computing power. It enables providers and requestors of computing power to connect in a trustless peer-to-peer network enabling both application owners and individual users (“requestors”) to rent resources from other users’ (“providers”) machines.

GLM is the utility token, to be used to access the Golem Network, and is the currency used in peer-to-peer transactions for renting idle digital resources including spare computing power.

  1. Explain positioning of token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?

Golem Network is a marketplace for idle computing power. It enables providers and requestors of computing power to connect in a trustless peer-to-peer network enabling both application owners and individual users (“requestors”) to rent resources from other users’ (“providers”) machines.

GLM is the utility token, to be used to access the Golem Network, and is the currency used in peer-to-peer transactions for renting idle digital resources including spare computing power.

  1. Provide a brief history of the project and the different components: DAO (is it live?), products (are the live?). How did it overcome some of the challenges it faced?

2014 – First presentation in DEVCON0

2015 – Golem Network’s CEO presents Nanopayments in Ethereum in DEVCON1

2016 – Originally to be funded by DAOis

  • November – Golem Network becomes one of the first projects to crowdfund for building

2018 – Becomes one of the first apps to be launched into Ethereum mainnet

2020 – Presentation and launch of the new Golem platform

  • Begins token migration to the ERC20 standard
  • Becomes one of the first dApps to implement Layer 2 payments

2021 – Golem mainnet launches for the second time

In 2019 we decided to improve the former iteration of Golem, and since from the original vision (2014 - whitepaper in 2016) to date, many things had changed, including technological advancements that benefited the project. Therefore, after working on a new, modular and cutting edge architecture, we set to building it: an entirely new architecture + codebase. In 2020 we published the first releases and in 2021 launched to mainnet the current implementation.

  1. How is the asset currently used?

Golem went mainnet (for the second time!) and GLM is used to exchange resources on Golem.

  1. Emission schedule

We held a crowdfunding in on November 11, 2016 and ended in 29 minutes. Total created 1.000.000.000 GNT. GNT they were migrated to GLM an ERC20 token, migration started on November 19, 2020

  1. Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?

It is an ERC20 token. There is a multisig, signers are the individuals responsible for the original Golem Factory crowdfunding effort

  1. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Market Cap $391,913,800

Fully Diluted Market Cap $378,438,478

Volume24h $15,807,946

Volume / Market Cap 0.04032

Circulating Supply 1.00B GLM

Total Supply 1,000,000,000

  1. Social channels data (Size of communities, activity on Github)

Twitter: 159k followers

Reddit: 30k

  1. Contracts date of deployments, number of transactions, number of holders for tokens

The old token GNT was migrated to GLM on November 19, 2020. All tokens are circulating

Technical Specifications

Token details can be found here

Security Considerations

Audits can be found here https://github.com/golemfactory/gnt2/compare/add-audits

9 Likes

Vote. Golem is one of the first ICO in the crypto space. Solid team with 50+ coders. Working application.

3 Likes

These guys are holding how much? 260 000 ETH? They are more prosperous than Jesus :D We should watch them closely. I am sure that they will surprise everyone.

2 Likes

Golem is a rising asset with a growing community of providers and requesters. This would help the growth of the platform as well as give AAVE a legitimate growing asset with a bankroll and a growing market share in the community. GLM isn’t a fad so time used to invest will go to good use

2 Likes

Looking forward to where this proposal goes! :)

2 Likes

I’ve been following Golem since 2016 and would love to see this proposal get some traction!

Adoption is growing! Keen to make my GLM work in AAVE!

How is this token note added yet. One of the largest icos, a working and growing product in an increasingly evolving marketing. Please add Golem!

Golem is one of the best projects in crypto!

Is a chainlink oracle in the works? I believe AAVE requires one for any asset to be listed. Also, I think this proposal would have a hard time passing with GLM as collateral. From what I’ve observed, it’s customary for new assets to start with 0 LTV with collateral support added later down the line after the stability of the asset in the AAVE market is proven.

2 Likes

Hi we are in touch with Chainlink and working on the oracle price feed.

1 Like

There is a Chainlink oracle now. https://twitter.com/link_hound/status/1462977169139781641?s=20

Are there any other prerequisites?

1 Like

Hi @liked75201

Good to see your proposal. It is essential to keep growing the protocol.Really interesting project

It would be good to see the risk assessment as described here New Asset Listing - Governance

And my personal favorite - the risk methodology Methodology - Risk

I am curious to know as well - do you know how much GLM has been paid to providers of computing power since the start of the project. The stats on the website https://stats.golem.network/ has total earnings of around 1200 GLM which is about $1000 USD worth at today’s prices. That would be less at historical prices. That is one eight hundred thousandth of the market cap and about one millionth of the circulating supply. I figure those stats must be for only an hour - would be interesting to know

3 Likes

I believe the number is 67214.49 GLM (upper right of the stats site).

Concerning the listing process:

Don’t get me wrong guys, but I’ve been looking at the numbers doing a little bit of head math - I highly doubt that the numbers support listing GLM as collateral. Market risk could be very high here.

2 Likes

@neptune
Thanks for that. I see it now
12.46 GLM (9 USD) in last 24 hours

@neptune @JeremyKeating
Risk was estimated at B+ here: Proposal: Add support for Golem Network Token (GLM) - #8 by snowdot

There’s also a new use-case (thorg.io) which uses GLM. The stats page for that is still in creation although already transfers are over 170,000 since September: Golem Network Token (GLM) Token Tracker | PolygonScan

That risk assessment is from March. And also wrong.

Smart contract risk doesn’t transfer if you migrate to a NEW smart contract. It’s a new contract that needs to be tested and that is exactly what needs to be evaluated. This smart contract is <365 days old with 116,912 transfers.

It also doesn’t have 100k holders. According to this $0.78 | Golem Network Token (GLM) Token Tracker | Etherscan it has just 14k holders.

There is very little on chain liquidity and volume. Which is a huge problem. If one of the whale holders decides to park their GLM in AAVE and borrow against it, even with a 10% LTV, it might be favourable to selling on the market if you don’t find someone who buys it OTC.

I made a few tests yesterday via Paraswap. Selling 250.000 GLM yesterday would have had a price impact of 4%. 500.000 GLM moves the price 7.14%. Trying to liquidate a million GLM 13.17%. And that is with the most ideal path, with multiple intermediaries. No liquidator will take on that risk. And these are not really big numbers.

This all needs to be taken into account. That “risk analysis” is just plain wrong.

It also doesn’t help that it feels a bit like a “dead” project. I don’t want to offend anyone really. But they had their ICO in November 2016, made 820k ETH and after 5 years are still in beta? I’m not a developer but that seems slow to me.

All in all, considering a fair risk analysis, I don’t see it as collateral. Maybe as a lending asset, but although there may be growing use cases - there are not really a lot right now.

Maybe it can be listed in v3 with a borrowing cap, I doubt it’ll make it to v2.

2 Likes

Okay, so the way forward would be to add a large amount of liquidity to SushiSwap or Uniswap (v2 / v3) to reduce the risk for liquidators? Do you have a value in mind for what a realistic amount (for liquidators to consider taking on the risk) would be in the range of?

That is not the only issue. I don’t want to dive too deep into this (I don’t have the time) but counterparty risk is also an issue.

The Top 10 addresses control 56.69% of the supply of GLM. The top three holders are a private address, which is anonymous. A Gnosis vault multisig (the team, maybe?) and then the Golem treasury multisig. The rest is mostly CEX wallets. I can easily see a scenario with the current distribution in which the Top 2 wallets (27.73% of supply) dominate the governance and basically have single handed control over the protocol.

That would be a problem. Though I don’t see it become one, because I can’t find ANY governance setup whatsoever. It seems like there is no decentralization effort. No voting. Nothing. It seems to me like the company Golem Factory GmbH has full control over it.

Like I said. There are a lot of problems.

2 Likes

The protocol and application of Golem are mostly off-chain where GLM is used for payments on-chain on the Golem Network (there are payment drivers for Ethereum, ZkSync and Polygon). Golem is very different from Aave, for example, where on-chain governance is much more beneficial (since many of the components are on-chain). Golem is a bit more comparable to geth and nodes running the geth implementation. Naturally in that comparison, users similarly have the opportunity to decide not to run an update / upgrade. Geth development itself doesn’t necessarily need governance when anyone can fork or decide not to run an upgrade. The Golem Network can be governed by social consensus comparable to Ethereum and Geth.

The main on-chain governance potential for GLM would be in the token contract. Golem Factory GmbH does not have any control over the token contract. The community does in a sense since they can migrate their GNT → GLM by using the migratory agent which has no ownership (i.e. decentralized). Ownership was renounced prior to the migration start announcement and migration is purely opt-in, based on the consensus of the community (here are the stats for migration).

It’s also important to keep in mind that any holder of GNT has the potential to migrate that GNT to GLM at any given point in time (migration is permissionless and censorship-resistant, based on smart contracts). So let’s say a DAO was created in the future, any GNT holder would have the potential to instantly migrate (within the blocktime of Ethereum) and vote on said DAO, therefore the GNT distribution can’t be ignored in a potential DAO or in a scenario that governance was to be created.

Golem Factory has control over the GitHub repository in a comparable way to the Ethereum Foundation has control over Geth, which is open to be forked or releases can not be upgraded to if the community deems that the prefer an upgrade not to be representative of the community. In the Golem Stats there are users who decide to upgrade or not to upgrade from previous versions. Social consensus and the ability to fork at any time is as an important factor in Golem as it is in Ethereum. The Golem Network has 14% (426) of the number of nodes as Ethereum (3003) so social consensus should be considered very significant.

These are still great points to take into account around Aave and great to be exploring so the full picture is available. I believe your point around liquidator risk is very valid and an important concern to be addressed! :)