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On this page
  • Status
  • Summary
  • Context
  • What is "community tax"?
  • Community tax collection
  • Community tax distribution
  • Decision
  • Consequences
  • Backward Compatibility
  • Positive
  • Negative
  • Neutral
  • References

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  1. Architecture
  2. List of ADRs

ADR 006: Community tax

This is the suggested template to be used for ADRs on the cheqd-node project.

Last updated 2 years ago

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Status

Category
Status

Authors

Alexandr Kolesov

ADR Stage

ACCEPTED

Implementation Status

Implemented

Start Date

2021-09-08

Summary

The aim of this ADR is to define how will work on cheqd network.

Context

What is "community tax"?

communityTax is a value set in genesis for each Cosmos network and defined as a percentage that is applied to the fees collected in each block.

Tokens collected through this process accumulate in the community pool. The percentage charged as communityTax can be changed by by the network.

Community tax collection

From :

The community pool gets community_tax * fees, plus any remaining dust after validators get their rewards that are always rounded down to the nearest integer value.

communityFunding = feesCollectedDec * communityTax
feePool.CommunityFund += communityFunding

Community tax distribution

To spend tokens from the community pool:

  1. community-pool-spend proposal can be submitted on the network.

    1. Recipient address and amount of tokens should be specified.

    2. The purpose for which the requested community pools tokens will be spent should be described.

  2. If proposal is approved using the voting process, the recipient address specified will receive the requested tokens.

  3. The expectation on the recipient is that they spend the tokens for the purpose specified in their proposal.

Decision

  • cheqd's network will keep the communityTax parameter enabled, i.e., non-zero.

  • The value of communityTax, based on a review of similar Cosmos networks will be set to 2%.

Consequences

Backward Compatibility

  • The behavior of communityTax is the across Cosmos SDK v0.42 and v0.43.

Positive

  • The cheqd network will have a pool of tokens that can be used to spend on initiatives valued by the community.

Negative

  • N/A

Neutral

  • cheqd's Governance Framework should provide guidance on how to submit proposals and recommended areas of investment in community efforts.

References

More information about fee distribution is available in the documentation.

"community tax" as described in the Cosmos blockchain framework
making proposals on the network and voting for acceptance
Cosmos SDK documentation, distribution module
End Block section of Cosmos's distribution module
Cosmos SDK distribution module parameters
Cosmos SDK governance module