Recently questions have been raised on Telegram. This article will address a number of them and give some further clarification.

Visionary contributors past and present

From its inception in 2017, the founders of Phantasma had the vision to create “a fast, secure and scalable blockchain solution that allows for interoperability with other blockchains while maintaining a decentralized governance system” as per the whitepaper. Compared to other blockchains, Phantasma is not just a blockchain but an ecosystem in itself, providing those who use the Phantasma blockchain and its suite of tools with products such as on-chain DAO and Voting functionality.

Six years on, this vision hasn’t changed. During these years Phantasma has gone through bull markets, bear markets and hacks. Looking at the crypto market as a whole, Phantasma is proud to still be here while other projects have given up. This wouldn’t have been possible without a passionate, committed and dedicated group of people that believe in the original vision and are determined to make that happen. Originally, the project had been driven by the Phantasma Team which has gradually been replaced by a group of active community members who are referred to as contributors. Some contributors have been putting time and effort in Phantasma for years, others started doing this recently, while others have moved on, some of which have returned after a period of absence. 

Focus and appreciation of effort

These contributors are spending time on Software Development, Ecosystem Growth or Community Management. Without them, Phantasma would not be where it is now and would not progress any further. For this they receive a modest compensation in SOUL tokens paid for by the annual inflation as laid out in the Phantasma Whitepaper. This includes the inflation that goes towards the Block Producers. The inflation distributed to the Block Producers is therefore not going to a select number of persons or entities as has been suggested in a number of posts on Telegram recently. 

The only exception to the modest compensation is that some contributors working in Software Development receive a higher compensation due to market conditions which require them to be paid a (near) market rate remuneration. Phantasma and its token holders can count themselves lucky that it has this group of contributors that accept a modest compensation (and in some instances a very modest or even no compensation at all). This is rather unique in a world where those involved in projects enrich themselves at the expense of those who have put money in buying the project’s tokens. To be fully transparent, a total of 265,000 SOUL has been paid out to 20 contributors early July for their work during the second quarter of 2023. This equates to 13,250 SOUL on average (amounts vary based on the level of involvement and responsibility) per contributor per quarter or 4,417 SOUL per month or $485 per month. Bear in mind that for this very modest compensation the contributors put a lot of time and effort in and carry a huge responsibility. This all to the benefit of Phantasma and therefore to the benefit of all token holders. 

Phantasma has deliberately chosen not to accept any VC funding but be self-sustainable instead. Accepting VC investment comes with giving up freedom and is at odds with the vision of decentralization. A consequence of this is that Phantasma must be prudent in spending. Please note that things like external code audits have run into the hundreds of thousands of dollars, total exchange listing fees exceed $100K, running costs of servers, subscriptions, grants to projects developing on Phantasma, charges and fees all add up. 

You are the decentralized Phantasma

The progression of abolishing the Phantasma Team and moving to a group of contributors has been the first step towards a further decentralization as per the original vision. The next step will be that software development on the core Phantasma blockchain will be frozen. Prior to that a number of planned improvements will be implemented and the stability of the code and supporting infrastructure must be ensured. Any further changes to the code will be governed by change proposals. Parallel to this, ecosystem growth will not be driven centrally but decentralized. This is where you as community members can play an important role. Instead of making suggestions that others must execute (which amounts to fostering a centralized structure), you can execute your own suggestions. Either by building dApps on our shared chain or encouraging others to do this. We must distance ourselves from the notion that others will do the heavy lifting. This has been done for many years. Now is the time for the community to brainstorm and action every valuable idea put forward, in support of the shared goal of making Phantasma a household name and growing its user base and dApp ecosystem

This is what decentralization is about, token holders taking initiative themselves to grow the ecosystem. An example of this is where a group of token holders in Southeast Asia have decided to start an initiative to make Phantasma a household name in their region. They have banded together and are making and executing a plan to achieve this. A Phantasma website targeting the Southeast-Asia region will be launched soon. 

An initiative such as this is getting us closer to the goal of decentralization. We must keep in mind that the journey to decentralization is a gradual one and will take time. We are entering uncharted territory. Even the end-result cannot be clearly defined at this stage. How far can decentralization go? A certain degree of coordination will remain required, who can decide what, when does asking the Stakers DAO for permission become ineffective and hinder ecosystem growth? There are numerous challenges ahead when moving towards a decentralized environment. Decentralization is not that everyone must know every little detail of what’s going on. That is impractical and counterproductive. It is, however, all about the hive mind of the collective pitching in and executing initiatives based on common interests and the greater good.

On a steady path

One of the steps towards decentralization is the recent initiative where Phantasma DAO Stakers have been asked to submit voting proposals on topics that they think will benefit Phantasma. Our on-chain DAO and Voting functionality will be used to execute this initiative.

Another aspect of decentralization is a move to having initially 10 active Block Producers (BPs) and 15 standby BPs and increasing the number of total BPs by 3 every year as per the Whitepaper. Currently the BPs are under control of the Software Developers. This centralization has been necessary for ease of management of the BP servers where software upgrades are more easy to deploy. We are now approaching a stage where the number of BPs can gradually be increased and are outside the direct control of the Software Developers. More information on this will be shared at a later stage.

As mentioned above, the journey towards decentralization is and will be a gradual one – which must be executed in a responsible manner. The speed at which this will be achieved is highly dependent on the SOUL & KCAL token holders. The more active they are  – and the more initiatives they execute – the sooner this goal will be achieved

Phantasma belongs to all of us, and we can all make a positive difference. Our shared future will be heavily influenced by the efforts of the hive mind – of which you are an important part!

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