COSMOS CRYPTO NEWS: ATOM, AKT, NAM, OSMO, SEI, TIA, DYDX, LAVA & MORE!!

Hi Cosmonauts! ⚛️

Welcome to the Cosmos ecosystem news roundup, here are the top stories in Cosmos in the 2nd half of April:

COSMOS HUB AND CONSUMER CHAINS: v6 release and implementation of Cosmos Hub proposal 867

NAMADA: Shielded Expedition winners and upcoming mainnet launch

DYDX v4: dYdX Foundation delegations

OSMOSIS: Improved website and new tabs in the Osmosis dApp

KUJIRA: Cosmic Validator 6th largest Kujira validator, months after joining the active set

CELESTIA: Upcoming round 2 of the Celestia Foundation delegation program

SEI: Updates about the Sei $10 million Creator Fund

PERSISTENCE: 1.25 million OSMO for stkOSMO and delegation program round 3 updates

SECRET NETWORK: Collaboration with Lava network announced

AKASH: Learn about Akash and earn AKT now on Coinbase Learn

OTHER ECOSYSTEM NEWS: Dymension 2D upgrade, LAVA tokenomics and more

Focused sections about the Cosmos hub and consumer chains Stride and Neutron, Namada, dYdX, Osmosis, Kujira, Celestia, Sei, Persistence, Secret Network, Akash and Crypto regulations and compliance updates with MME

All this and much more in this episode, and now for today’s top stories:

Cosmos Hub and Consumer Chains (Neutron & Stride)

Union will connect Polygon’s Aggregation Layer (AggLayer) to the IBC ecosystem. This integration will allow amongst all connected networks seamless message passing, asset transfers and UX. It will also allow developers to build across networks, aggregated users, shared liquidity and more. Agglayer uses zero-knowledge proofs to allow sovereign chains to safely share state and liquidity. Cosmic Validator is part of the Union testnet and we are proud that we were amongst the first selected validators last year in 2023 to join the Union testnet.

The Cosmos Hub Gaia v6 release was announced. Some highlights are the Cosmos SDK v0.47.12-ics-lsm, which is a Cosmos SDK branch with support for ICS and LSM. Other highlights are the introduction of the IBC rate limit module with some initial rate limits enabled, and other new features such as IBC Fee module, ICS epochs and more.

A main difference between Stride and Lido is the number of networks in which they focus. Lido is mostly focused on Ethereum now and has an established and elaborated selection process for validators to join the Lido validator set for Ethereum. Stride used to be mostly focused on the Cosmos Hub and Osmosis and now it is expanding to many other networks. While this is great for their TVL growth, it is important to remember that Stride is a consumer chain of the Cosmos Hub and its TVL growth is possible only thanks to the security provided by the Cosmos Hub. Therefore, Stride should strongly consider the opinion of the Cosmos Hub validators and stakers for any major changes they want to implement. For example, regarding the selection process of validators for Stride, this is significantly different in each network. In the Cosmos Hub there is an established and detailed selection process involving several governance proposals on the Cosmos Hub and Stride. In other networks, they use a default selection of the top 30 validators or so. For dYdX v4, they made an exception of this top 30 default rule and instead carried out a selection process although very different from the Cosmos Hub selection process where anyone could apply to be part of the evaluating committed and with governance proposals on the Cosmos Hub and Stride to approve the evaluation committee as well as the selected validators. There is now a new validator selection idea suggested by Stride called ‘copy staking’ which basically means to replicate the current voting power distribution. We think this is a terrible idea and will explain the reasons for this. In general, there is a centralization issue in most networks where voting power is concentrated in the top validators and this centralization leads to governance risks since decisions are very centralized and also to security risks given that it is easier to halt or even attack these networks. With the copy staking idea, Stride would just set in stone and further exacerbate the centralization issue, which is really bad, since precisely a major job responsibility of liquid staking providers is to properly select top performing validators to support increasing decentralization. The copy staking idea we think that it is not only lazy but dangerous since it could accelerate the centralization of many networks so we are totally against this idea and we think that a decentralized and well structured selection process like in the Cosmos Hub should be the standard. This is because it encourages validators to have great uptime, governance participation and contribute to the host chains to be selected. With the copy staking, validators would contribute much less and not focus on performance metrics since there wouldn’t be any incentives to be selected. We think that the standard and best approach should be the selection process done for the Cosmos Hub. Other strategies like Persistence’s automated delegation selection are also interesting since this encourages good performance also and increases decentralization. The copy staking is just a bad idea, since the outcomes will be an increase in centralization and a removal of incentives for validators to maintain great performance and contributions. The copy staking idea is only based on one single metric, the voting power or centralisation. And what the copy staking idea does is reward and further increase centralization, the opposite of what liquid staking providers should do.

The implementation of the Cosmos Hub proposal 867 for the NTRN vesting allocations for validators was finally completed with the 6 proposals approved in the DAODAO sub-DAO to manage the vesting allocations. Each of the 6 proposals is to implement the vesting allocations for a group of 30 validators, with a total of 180 validators with the 6 proposals. The starting day for the vesting allocations was the 28th April 2024 and it will last until the 28th April 2025.

Namada

After the Namada Shielded Expedition (SE) incentivized testnet ended on the 11th April several important developments happened. First of all, initially it was mentioned that the broken Nebb ranking wouldn’t be fixed and instead the final scores would be shared in a separated list. However, finally the Nebb was fixed showing the scores from the task categories C, B and A. There were still the updated S tasks pending to be added for the final results.
Then, it was announced that many approved vulnerabilities or protocol improvement tasks were not really serious vulnerabilities or protocol improvements after a more detailed review. Therefore, it was decided to do an auditing again of all the submitted vulnerabilities and protocol improvement tasks and only approve serious vulnerabilities or mathematically proven protocol improvements. The consequence of this was the following. Before the auditing there were around 20 tasks approved for both vulnerabilities and protocol improvements for pilots. Following the auditing, only one protocol improvement task was approved, and only four vulnerabilities. For those who had previously these tasks approved, it was recommended to provide a bounty of different magnitudes. A total of 24 previously approved vulnerabilities or protocol improvement submissions were recommended for a normal bounty, a total of 8 submissions for a medium bounty and 3 submissions for a large bounty, one of these 3 from Mandragora.
The implications of this is that some pilots who used to be in the top 10 during the SE dropped from the top 10 and those who had the vulnerabilities or protocol improvement submissions approved moved to the top. The only protocol improvement submission for pilots approved was for gnosed, who also had a vulnerability approved and hence likely top 1. The other 3 pilots with vulnerabilities approved were Zenode, Hkey and Namadaguru, completing the top 4. For the Crew participants only one vulnerability was approved and this Crew participant was the winner of the Crew category. However, many pilots were surprised that Mandragora was not top 1 and winner of the SE.
Mandragora did all the C and B tasks and had the most points for the A tasks category. Regarding the S tasks, he was the first one to complete an IBC tx and he built Undexer for the category ‘Building Namada ecosystem integrations & tooling’ which impressed everybody including the Namada team, given they built Undexer on their own in a short period of time. Moreover, he built a shielded app with so many different functionalities that the demo of the shielded app was over 30 minutes long. Regarding the vulnerabilities and protocol improvements, he was one of the only 3 who had his previous submission changed from approved to large bounty, all the other previously approved submissions were recommended for normal or medium bounty, only 3 for large bounty. This seems quite unfair, because with a vulnerability approved Mandragora would be the first and win the Shielded Expedition or at least 2nd, but instead they recommended a large bounty and didn’t approve the submission, putting him likely out of the top 3. In addition, some of Mandragora’s vulnerabilities and protocol improvements submissions were added to the github milestones for the Namada mainnet phase 1 launch. Mandragora participated also previously in the Namada first Community Builders round, which rewarded retroactively long-term contributions to the Namada testnets and community, and he won the first community builder round by a large margin, indicating the many contributions done since the start of Namada.
Given that only 4 pilots were approved for the vulnerabilities or protocol improvements S class tasks, the rest of the top 10 was determined by those who did the shielded app. This is because most pilots did the RPC, relayer or explorer tasks, but only 16 had their shielded app approved so this gave an important amount of additional points. Amongst those with shielded apps approved, since they had the same other S tasks approved, and also they did more or less the same C and B tasks, the extra points to finish in the top 10 was mostly due to the hidden A tasks.
Regarding the upcoming Namada mainnet launch in five different phases, as you can see here there is great progress already to complete phase 1 with over 70% completed. Before the mainnet launch, the Anoma Foundation will include in the genesis block all the NAM token allocations for the Namada airdrop, the first Community Builders round, the Shielded Expedition winners and all the other token allocations.

dYdX v4

The dYdX Foundation announced a new round of delegations, with a total of 15 new validators selected. The delegations were not however equal for each validator, instead most delegations were in the range of 100k-300k DYDX. However, a few delegations were considerably larger and in particular we would like to highlight two issues. Strangelove has been jailed 4 times already since the dYdX v4 mainnet launch a few months ago, he maintained one of the worst uptime and governance participation rate and in some major upgrades they were absent, jailed and remained jailed for a long time after the upgrade. Despite this, he received one of the largest delegations from the foundation which seems quite unfair and difficult to justify. Another issue we would like to highlight is that Blockdaemon joined the dYdX v4 active set a couple of weeks before the dYdX Foundation delegations were implemented. This means that for the whole Q1 of 2024, Blockdaemon was not in the active set of dYdX v4 and hence there is not enough data about his performance, uptime, MEV activities and all other metrics. But again despite this he was selected and received a delegation from the dYdX Foundation. Again we think this is quite unfair, given that other validators who supported dYdX in many areas since early 2022 and joined the network from genesis were still not selected by the dYdX Foundation. We hope that the dYdX Foundation can be more transparent about their eligibility criteria and that the selected validators indeed reflect these eligibility criteria.

Osmosis

Osmosis launched a new and improved Osmosis Zone website and also a new assets tab in the Osmosis app. If you check the new Assets tab you will see a list of upcoming assets on Osmosis and there you will see Namada. The Namada and Osmosis teams are actually very close. ValarDragon is a co-founder of Osmosis and one of the best devs in the Cosmos ecosystem and crypto in general who found and prevented some major bugs previously. ValarDragon has been contributing to Namada since the beginning and he continues to contribute to Namada as you can see here advising about the Mainnet launch plan of Namada. Given how close the Osmosis and Namada co-founders are it is clear that the Namada NAM token will be supported on Osmosis fully from day one and will be one of the assets with the most volume and liquidity on Osmosis.

Kujira

Just a few months after joining the active set of Kujira we are now the 6th largest validator on Kujira with over 2 million KUJI staked to our validator, thank you so much to the Kujira community for the trust and support! Our stakers on Kujira benefit from a low 3% fee, a top performance and also the possibility of being whitelisted to new NFT collections. Stay tuned for further upcoming updates for our KUJI stakers.

Celestia

Celestia organised an event in Dubai with Union, Polygon and Berachain. Union is working to provide interoperability for the Cosmos IBC ecosystem including Celestia and also the Polygon Agglayer ecosystem. We are excited to be supporting Union in the testnet in the road to the Union mainnet launch.

Remember that Celestia recently announced the selected validators for the round 1 of their delegation program. The applications for the cohort 2 will open on the 1st of June and after one month the applications will close on the 1st of July. Then, the selected validators for the second cohort will be announced in August. Some of the selected validators in the cohort 1 will need to reapply depending on which category they were selected and they may or may not be selected for the second cohort.

Sei

Sei recently announced the $10 million Sei Creator Fund and over 200 applications have already been received. Sei mentioned that there are no deadlines to apply, instead the applications will be reviewed on an ongoing basis and teams that applied will be contacted soon.

Sei partnered with QuickNode which offers high performance RPCs. Given the speed of the Sei chain, standard RPC providers were not suitable. QuickNode offers low-latency and robust nodes for users and builders to better leverage and benefit from Sei network’s speed.

Persistence

Osmosis approved 1.25 million OSMO for the stkOSMO/OSMO supercharged pool on Osmosis. This helps to diversify and decentralise liquid staking for OSMO and avoid too much centralization on a single LST provider. Moreover, thanks to pSTAKE’s automated validator delegation strategy the OSMO is staked with 75 Osmosis validators with a focus on performance and decentralization metrics. There is also further upcoming adoption of stkOSMO in Quasar, Levana, Mars and other protocols.

The deadline to apply for the Persistence Foundation delegation round 3 was on the 15th April. It seems likely that the results will be announced in May. A highlight of this round 3 is that certain infrastructure providers with a high centralization of Persistence validators won’t be eligible for this round 3, meaning that those Persistence validators running their validators in these providers won’t receive delegation in the round 3.

Secret Network

Lava announced support for Secret Network and this means that RPC providers can join now and serve RPC for Secret on the Lava testnet. What Lava is offering is an access layer for rollups and chains to bootstrap their API and RPC infrastructure. If you are a Secret network provider, how would you benefit from joining Lava? You would reach more developers or access tools to optimize your performance and setup. Secret network provides a confidential computing layer and unlocks new use cases on Ethereum EVM L2 or Cosmos IBC dApps thanks to encrypted data.

Akash

Great news for Akash, since following the listing on Coinbase now the first set of Akash lessons are live on Coinbase Learn. This is incentivized learning since you could earn AKT tokens by exploring the network and learning about the Akash supercloud.

Brev announced support for Akash GPUs. Brev is focused on facilitating the development with leading open-source AI models and deploying on the GPUs in the cloud. Thanks to this collaboration with Akash, developers can now with just one click from the Brev console deploy NVIDIA H100s, A100s and more at a really competitive price on the Akash supercloud.

Other ecosystem news

The Dymension 2D software upgrade was implemented which brings permissioned RollApps to the Dymension ecosystem. Furthermore, the first ever rollApp proposal went already on-chain for voting.

Several exciting updates about Lava which is a project that we have been covering since 2022 in our videos. Lava released their whitepaper and also the tokenomics for their LAVA token. A total of 31% of the supply will be for ecosystem and R&D, then 15% will be for future initiatives like an airdrop for example, 3.4% for Lava validators, 6.6% to incentivize providers and then 27% for core contributors and 17% for early backers. Lava also mentioned that the LAVA token has no inflation and the supply is capped at 1 billion with a deflationary burn mechanism adjusted based on demand.

Crypto regulations & compliance news with MME

On April 30,2024, Changpeng Zhao, commonly known as “CZ,” was sentenced to four months in prison by U.S. District Judge Richard Jones, in a Seattle courtroom for violating U.S. Anti-Money Laundering laws, concluding years of investigation.

A brief chronological review:
In 2018, the Department of Justice launched an investigation questioning the compliance of the exchange with the U.S. Anti-Money Laundering laws and sanctions.
In 2023, the Department of Justice launched another investigation questioning this time the compliance of the exchange with the U.S sanction regime against Russia.
In July 2023, facing multiple investigations by the Department of Justice, the Commodity Futures Trading Commission, and the SEC, CZ stepped down as CEO of Binance. CZ and Binance agreed to plead guilty and pay a hefty fine to the U.S. authorities.

U.S. prosecutors had recommended a 36-month sentence for CZ, which is more than double the guideline range for the associated crime (between 12 and 18 months). However, CZ’s lawyers argued against any prison time, highlighting his willingness to come back from the United Arab Emirates — a country without an extradition treaty with the U.S. — and noting that no one has previously received prison time for similar violations of the Bank Secrecy Act.

Conclusion

And that is all for today’s Cosmos ecosystem bi-weekly review so if you enjoyed it Cosmonauts remember to click that like button, subscribe button and bell icon too. Thank you so much for watching and I’ll see you Cosmonauts very soon in the next episode!

Youtube video version: https://youtu.be/L-ybfTFzL0w?si=1kEj1sulxSbKKq_4

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