The Cosmos Hub is a Battlefield

Disclaimer: The opinions in this article reflect that of the authors only. The authors are not affiliated with any group or company actively working in Cosmos. This article is brought to you by concerned community members.

No nation, dictator, or political party has risen to power with the snap of a finger. Nation building and gaining political power is a game of chess. For better or for worse, those that rose to positions of power did so by convincing the masses that they could “fix” certain problems in society. This usually takes a considerable amount of time however.

Similarly, in the Cosmos ecosystem (for better or for worse), there is a group of politically motivated actors, who are selling the idea that the Cosmos Hub has no useful purpose. If the masses wish for Cosmos to be successful then we must vote to centralize power on the Cosmos hub and give it to those that are promising to make our ATOMs more valuable. Many in the space have been convinced that centralizing the Cosmos Hub is actually in the best interest of the ATOM staker. In fact, it might be our “only hope”!

Sure, you could argue ATOMs already are a security as they are used by the community pool to fund certain objectives. The point is, the treasury/council gives the SEC more surface area to work with. BTW, I like this twitter user very much. This Welding fella is pretty cool. He is open to dialogue and is usually buzzing about recent developments within the ecosystem. He just happens to be my example in this case. The authors behind Prop 82 have successfully convinced many in The Cosmos that they will lead us to the crypto promise land, if we just hand them the keys to the Cosmos economic engine.

Prop 82 was successfully “vetoed”. Cosmos governance works in such a way that if 33.4% or greater of the voters vote “no with veto”, then the proposal is rejected. This governance system was put in place to protect minority interests that feel that certain proposals would be harmful to the network to such a degree that they would exit the network if the proposal passes. This in theory, will incentivize the proposers who have failed to get their proposal passed, to have dialogue with those that feel the proposal is dangerous. However, this doesn't seem to be the case in the aftermath of Prop 82. But, we could’ve probably seen this coming.

Prop 82 was not something that was just put into voting with the snap of a finger. This attempt, much like political power moves throughout history, was just another move on the chess board (albeit, a very bold one).

It appears that the authors of Prop 82 knew that there would be several influential and/or high profile folks in the Cosmos ecosystem that would be strongly opposed to their 2.0 whitepaper. Let’s take a look at Prop 75 which was put up for voting a few months ago in August. This prop titled “Establishing a definition of NoWithVeto”, contained some wording that was concerning to say the least:

Because voting is not private, ‘NoWithVeto’ voters (who likely hold a minority opinion) make themselves potential targets for being forked out of the chain in order for the majority to pass a proposal. Therefore protection of minority interests comes with the acceptance of the risk of being forcibly forked out of the protocol.

The TLDR of the proposal implies that “No With Veto” voters are putting a target on their back for voting against the groupthink majority. It also implies that if “yes” voters feel just as strong, if not stronger than “No With Veto” Voters, the “yes” voters will have a stronger incentive to fork the Cosmos Hub chain to get rid of the “No With Veto” voters who are holding them and their ideas back. This Prop 75 set the stage for some of the aftermath of Prop 82 being vetoed:

While all of the Prop 82 “yes” voters, who felt that a NWV vote on Prop 82 was blasphemy, could theoretically fork the Cosmos Hub chain and call it something else, airdropping their new token to all “yes” voters, and telling them to dump their ATOMs for the theoretical new Cosmos Hub fork token, they will most likely not use this approach as a Plan A. While there is a possibility of a future fork, the actors behind Prop 82 would only use that as a last resort. This forking threat appears to (at least for now) be just a bluff. But let’s just call this theoretical Cosmos Hub fork “the LFG Hub” from here on out.

Reason 1A, that the Prop 82 authors are not going to attempt a fork, is because of the network effects and weight of the brand that is the Cosmos Hub. As we saw in the 2017 Bitcoin forking wars, getting users to believe that BCH or BTG was the “real Bitcoin” proved to be difficult and unsuccessful. Would ATOM stakers (who voted yes on Prop 82) dump their remaining ATOMs after receiving an airdrop of LFG Hub tokens, to add to their newly acquired airdrop bag? In order for the treasury/council idea that was put forth in the ATOM 2.0 Whitepaper to work, the newly forked LFG Hub’s success would depend on just that. The main purpose of the treasury/council idea put forth was to oversee the debasement/liquidation of newly minted ATOMs to pay for developers to create new consumer chains. In theory, this would drive value back to the hub that is sponsoring these new consumer chains. But if this is done on the LFG Hub, which doesn't hold as high of a market cap as the original Cosmos Hub ATOM token, then the LFG Hub would have to debase their token much more aggressively, or cut back on funding to a degree that would significantly slow the hypothesized pace of development that would’ve been possible if this idea was implemented on the original Cosmos Hub.

Would the politically-disinterested ATOM staker, who voted “yes” on Prop 82 because their favorite influencer told them it was what we must do, actually dump their ATOMs to buy LFG Hub tokens? Probably not.

Would the ATOM staker, who voted “yes” on Prop 82 because they believe it will send their ATOM bag to the moon, stick around on the LFG Hub once they discover how aggressively their LFG Hub tokens are being debased and liquidated to pay for development? Maybe. Maybe not.

Would the developer, who is chomping at the bit for a grant from the LFG Hub treasury, stick around when the pace of development needs to be slowed down to try to keep the price of the token stable enough to have the community maintain faith in it? I don’t know.

I believe the authors behind the ATOM 2.0 whitepaper understand this.

Reason 1B that the Prop 82 “yes” voters threat of forking the chain is a bluff (for now), also has to do with network effects. More specifically, connections that the authors of the 2.0 whitepaper have to the ICF and their attacks on the Cosmos Hub. There have been moves seen on the Cosmos Hub battlefield that imply the 2.0 authors (with the help of the ICF) have been trying to create an environment on the Cosmos Hub that would’ve allowed the transition to ATOM2.0 much easier. In other words, they’ve been softening up the Cosmos Hub and getting it ready for their big takeover.

Now, the ICF has every right to act in their best interest (which is money), but it’s important to know about personal and/or business connections that the ICF has to entities like:

Stanford Law School:
Hey isn’t that where SBF’s parents made their careers? Sam was even born on Campus grounds. Interesting!

the World Economic Forum:
Their head guy said that China is a model nation for the future. The same place where citizen are locked in their homes, and need a QR code to access daily life. Sounds fun!

Blackrock:
They are so rich that they’re essentially a rogue nation-state.

Some interesting folks who have ties to the ICF, also have ties to these enterprises. These are entities that are part of the “machine”. Now, The Cosmos, in its own way, is also a type of machine. A machine that promotes decentralized coordination and sovereignty. Check out Map of Zones if you don’t believe me.

These ICF associated actors are intending to hijack the machine that is The Cosmos. These folks understand that The Cosmos will be a big part of cooperative & permission-less finance in the future. The authors of the 2.0 whitepaper are trying to legitimize the Cosmos ecosystem under the direction of the SEC, so that they can lock in their supremacy over the ecosystem. Thus creating the surface area needed to handle regulators, so that they can secure their own wealth. Was this the real motivation behind the ATOM 2.0 whitepaper?

The role of the ICF is to fund development of the Cosmos ecosystem. But it appears they only want to fund the things that they propose. This way, they’ll have influence and control over the chains that they’ve created.

At the end of the day, whose interests does the ICF put first? The community? I’ll let you decide.

And what will potentially be the 1st Cosmos Hub consumer chain? USDC Chain. USDC, the product of Circle, with strong connections to the SEC and Blackrock. USDC Chain in The Cosmos, is both exciting and terrifying. You can probably understand why.

But is Circle really interested in being a consumer chain for the long term? Or is this just an effective way to test-pilot a CBDC? This is essentially a Dollar coin having its own blockchain. Is this really much different than a CBDC? We should keep an eye on the validators if USDC Chain opts to spin up their own validator set. A Cantillon Effect could be coming to The Cosmos. If USDC Chain doesn't want to use ICS, that’s fine. But would this mean that they aren’t here to take part in Cosmos? Are they instead looking to take over?

Sure, liquidity flooding the Cosmos ecosystem could stimulate growth, but we do have a plethora of other stable coins that exist natively in the ecosystem as well. Kava’s $USDX, Juno’s $ULTRA, Kuji’s $USK, Agoric’s $IST, Secret Network’s (via Shade) $SILK to name a few. My personal fear is that after the $UST implosion, many will still opt into USDC, thinking it’s a safer option. But will USDC come with a different set of risks?

Perhaps us Cosmonauts can coordinate Zones and Hubs that create a Bitcoin standard, or a Monero standard. Something that can act as “money” that is not issued by a central bank, or a derivative of a currency issued by a central bank. Will this be important to the long term success of the Cosmos ecosystem?

ATOM 2.0 beginning to roll out just as USDC Chain is rolling out? I wonder what would’ve been coming to our ecosystem next? Perhaps, Stanford crypto lawyers? More red tape and bureaucracy?

The ICF wouldn’t have to pay for the development of new consumer chains AND they get to pick the winners + make sure those winners are playing ball with the SEC? Sounds like a good deal for them. Especially if their end game is money and control over the ecosystem.

So for these guys, forking the chain is not Plan A. Plan A is implementing Atom 2.0 in slow motion. One Prop at a time. Perhaps at some point, they try another bold prop such as 82. Jab, jab, cross? just as they did with Prop 82?

Remember Prop 69? That was one of the jabs that came before Prop 75 which I mentioned earlier. The idea here was to introduce CosmWasm complexity on the hub, in an attempt to weaken it. Prop 69 was rejected. Here’s a bit of verbage from Prop 69:

This is a signaling proposal to include CosmWasm in the v8-Rho upgrade. The Cosmos Hub team at Interchain GmbH has done technical feasibility research by speaking with CosmWasm core contributors and validators to understand the burden of integration and believe it is technically feasible with resources in Interchain GmbH and Lido as well as regular advice meetings from Confio.

Who does Lido have connections to? Keep in mind, Lido has approximately 40% of the staked ETH. Are they cornering Ethereum from a regulatory standpoint? Do we want the same for ATOM? Did Lido get money from the Cosmos Hub Community Pool from another jab in Prop 72? Is liquid staking really in the best interest of the Cosmos Hub? What would Lido + Circle having big roles to play in the Cosmos ecosystem mean for the future of the regulatory capture in The Cosmos?

Proof of Stake Chains are already ripe for takeover from big entities if there is no diverse and active community to stop them. But what happens if liquid staking becomes a wildfire that burns out of control? The authors of 2.0 whitepaper have insisted that liquid staking won’t be dangerous because there will be competition amongst liquid staking providers. But even if there are half a dozen liquid staking providers to choose from, what stops one company from coming in and buying out these protocols? We would then only have the illusion of competition much like we see in the legacy system that exists today.

Do you remember Prop 79? This was about funding non profit Adan, who is fighting for “sound crypto regulation”. They have open dialogue with organizations like the FATF. Were we getting the Cosmos Hub ready for something big?

In September, the main source of excitement of Cosmosverse in Colombia was the announcement of the 2.0 whitepaper. Another coordinated jab to soften Cosmonauts up for Prop 82. ATOM 2.0 was extensively shilled at Cosmoverse. When Cryptocito asked how the ATOM 2.0 vision makes ATOMs tokenomics more sound, Ethan shrugs off the question and insists that it’s the most boring part of the whitepaper. Zaki & Sam attempt to answer the question by insisting that the building of consumer chains, and giving the Cosmos Hub treasury “working capital” is what really matters.

So what can we expect from here? Probably more moves on the Cosmos Hub battlefield.

That’s exactly what we are seeing with Prop 87, which is in its voting period at the time of writing. Prop 87 appears to be a prop that would decrease the chances of something like Prop 86 from happening again.

Prop 86 was put up during the Prop 82 (ATOM 2.0) voting period. Prop 86 summarized the realities of the dangers of implementing Prop 82. It was an effective way for those who were adamantly opposed to the ATOM 2.0 whitepaper to broadcast their organized view to fellow Cosmonauts. This undoubtedly helped tip the vote on Prop 82 towards “No With Veto” (as did the Juno whale). To the authors of the ATOM 2.0 whitepaper, was Prop 86 blasphemy?

I’ll let you decide. Here’s a bit of Prop 87 verbiage:

Proposal to Increase Deposit Amount:

By the time of writing and at the current token price value, the minimum deposit costs 64 ATOM or approximately 640 in USD equivalent, which currently appears to be inadequate at preventing spam proposals and may not be high enough to encourage more thoughtful approaches towards proposal submissions.
With the passing of this proposal, the minimum deposit will be increased to 250 ATOM or approximately 2,500 in USD equivalent.

Personally, I don’t consider this to be a flagrantly malicious proposal. But I do consider it another move on the Cosmos Hub battlefield. One that will continue softening up the Cosmos Hub for another ATOM 2.0-like proposal. Keep in mind that the ATOM 2.0 movement comes from a centralized group of players like the ICF and Informal Systems. The ATOM 2.0 resistance comes from a group of decentralized ecosystem builders and participants. I consider Prop 87 another mild push for a hyper-financialized hub which I more broadly discussed in a previous post. If ATOMs appreciate into the future, we are increasing the barrier for entry. Is this what a healthy ecosystem should strive for?

All of this is not to disparage the authors of the 2.0 whitepaper. They are important builders of the ecosystem. We need builders. Personally, I just don’t wish for them to be the centralized planner of The Cosmos. I don’t wish for them to cozy up to the machine that crypto is trying to side-step. I am not convinced that they care more about the ecosystem than their own pockets. I am not convinced that if the ATOM 2.0 idea was implemented and blew up in our faces, Terra Luna style, that they would care all that much. “whoops! it’s crypto, guys! It’s risky! We try stuff out!”

While big crypto influencers on YouTube, such as Coin Bureau, say that “in-fighting” in The Cosmos is a problem, I’d say the opposite. In-fighting and politicking in The Cosmos is a feature, not a bug.

Regardless of the destiny of the Cosmos Hub, we should be optimistic about where we are headed. This ecosystem is here to stay for the long run. But please be aware that there is a battle that is taking place on the Cosmos Hub. It may seem as simple as two sides arguing, but if you look beneath the surface, there are many strings being pulled.

“Eternal vigilance is the price of liberty”, a quote most often attributed to Thomas Jefferson, reigns true in The Cosmos as well.

British author Graham Hancock has hypothesized that the Amazon Rainforest is actually man-made. Underneath the thick jungle lies the ruins of ancient civilizations. According to Hancock, these were agricultural societies. After the citizens of these civilizations were eradicated from European settlers bringing smallpox to the continent, the agriculture they cultivated, now left unchecked, grew into something that is now one of the most well known natural existences in the world. Now the Amazon Rainforest is one of the most biodiverse ecosystems on the planet.

The point is not whether this is actually the origin of the rainforest or not. The point is, this analogy can be used in The Cosmos. We can build something, and let nature take its course. Maybe The Cosmos, like the Amazon Rainforest, becomes 2nd nature and organically falls into the life of everyday users and the community. Perhaps it will one day holds the most diverse set of economies, philosophies, and communities.

Here’s one last analogy for you: While centralizing things such as food production makes food more readily available, it has zapped the nutritional density of our food. Government subsidized crops have depleted our soil, and made our food into industrial sludge. If you’ve ever grown your own strawberries, you know what I’m talking about. It makes store bought strawberries taste like cardboard. Crack open an egg from a free-ranging chicken that gets vitamin D from the sun, and that eats bugs, greens, and fruits it can find (its natural diet). Notice the golden-orange happy looking yolks. Now crack open an egg from a chicken stuffed into a hen-house. A place where it never sees sunlight it its life, and is fed a diet of industrial sludge. its yolk is an opaque clear-yellow. Gross.

We must break free of consolidation. It’s a nasty human habit. Decentralization is the fight against human nature, and getting back in tune with mother nature. All of mother nature is decentralized. If we take good care of nature, it takes good care of us. This could be the ethos of The Cosmos. But we must actively strive to keep it that way. Keep this in mind when voting on Prop 87, and all future propositions.

Disclaimer: The opinions in this article reflect that of the authors only. The authors are not affiliated with any group or company actively working in Cosmos. This article is brought to you by concerned community members.