Cosmos Hub Proposal 29

Certus One is voting YES on the Genesis Atoms Recovery Proposal on the Cosmos Hub (29) after careful consideration and internal discussion.

The proposal suggests that unclaimed fundraiser atoms whose seed phrases are lost be returned to their owners. Ownership is proven by demonstrating possession of the BTC or ETH address that made the fundraiser contribution. Seven specific cases have been identified, and it is proposed that when the next major Hub upgrade happens, a manual migration is done that returns those funds. Iqlusion has made the proposal and volunteered to implement the migration without compensation.

A number of arguments were made in opposition of the proposal, therefore, we feel like it deserves a blog post to explain our choice.

Here’s an attempt to summarize the main opposing arguments:

1. The assumption that the owner of the BTC address is also the rightful owner of the ATOMs can, in theory, be false. Examples can be custodians/exchanges or stolen private keys. This could lead to theft of ATOMs by whoever controls the key (“false claim”).
2. Risk of reputational damage to the Cosmos Hub by demonstrating willingness to alter state other than by a valid signature.
3. Risk of an ATOM price drop if the recipients immediately sell their recovered ATOMs.

The full discussion can be found in the forums. It’s well worth a read and a great example of the kind of constructive, civil discourse which the Cosmos community is known for!

As for (1), we acknowledge that it’s fundamentally impossible to completely exclude this possibility. However, it is sufficiently mitigated by a number of factors that make it a negligible risk:

• The proposal has been discussed and widely publicized for more than a year, giving ample opportunity for anyone to speak up.
• The seven transactions in question include written justifications, the team working on the proposal has been in direct communication with the owners, and most are well-known and very active Cosmos community members that worked alongside Iqlusion to make this proposal.
• The process is fully manual, allowing for due diligence to be performed by the community. We are very confident that sufficient due diligence was done on this proposal.
• No binding precedents are set, the proposal is limited to specific cases.

As for (2), the “sanctity of state” argument comes naturally to anyone who has been around for the Ethereum DAO recovery controversy and the subsequent Ethereum Classic fork. However, it’s a very different situation and not at all comparable to what is being proposed. The proposal does not propose to override a conflicting state transition, there is no ambiguity as to who owns the tokens, and is very explicit in not setting a future precedent.

As such, the proposal demonstrates the value of well-informed and benevolent governance rather than risking the project’s reputation.

As for (3), today’s ATOM trading volume, according to Coingecko, is 83M ATOM. The proposal proposed to recover 1.3M ATOM. A sell-off is unlikely, given that most of the beneficiaries are long-term Cosmos community members, but even if it happened, the impact would be minimal.

We are convinced that, if possible, erring on the side of empathy and compassion is the right thing to do. The proposal makes a statement on the Cosmos community’s core values and we’re proud to support it.