COSMOS CRYPTO NEWS: ATOM, NAM, TIA, STRD AIRDROPS, AKT & MORE!!

Hi Cosmonauts! ⚛️
Welcome to the Cosmos ecosystem news roundup, here are the top stories in Cosmos in the 2nd half of March:

COSMOS HUB AND CONSUMER CHAINS: IST proposal and NTRN vesting updates

NAMADA: The Shielded Expedition is ending soon, why the Namada mainnet launch will have a similar magnitude as the mainnet launches of Bitcoin, Ethereum or Cosmos IBC?

DYDX v4: Stride and Persistence’s pSTAKE proposals

OSMOSIS: Volume and liquidity overview

KUJIRA: Sonar updates and Awesomwasm

CELESTIA: Blobstream and the Space Bazaar global hackathon

SEI: Fast finality and trade-offs overview

PERSISTENCE: Delegation program round 3 and pSTAKE TVL growth

SECRET NETWORK: SecretPath and HackSecret 2024 winners

AKASH: AKT added in Coinbase for trading and custody

OTHER ECOSYSTEM NEWS: Dymension RollApp Standards

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)

In the Cosmos ecosystem there are now several native fiat backed stablecoins and overcollateralized stablecoins. USDC is the clear leader with significant volume on Osmosis for both native USDC and also bridged USDC. Native USDT also has an important volume on Osmosis. Amongst the native overcollateralized stablecoins the highlights are IST, USK and SILK. USK has most of its volume on Kujira Fin with a marketcap of around $8.5M, SILK has most volume on Shade Protocol and a marketcap of around $4.2M and IST has the majority of the volume on Osmosis with a marketcap of around $1.3M.
Agoric recently shared a proposal in the Cosmos Hub forum regarding IST. In summary, they are requesting a total of 10% of the ATOM in the Cosmos Hub community pool to liquid stake these ATOM with Stride and Persistance’s pSTAKE, to then obtain stATOM and stkATOM, and then deposit the stATOM and stkATOM into IST vaults to mint IST. Then, these IST will be used to provide liquidity in several LP pools on Osmosis, Astroport, Shade or Quasar. The % for each pool and the different pools are indicated here. A total of 30% will be for the Osmosis IST/USDC concentrated liquidity pool, so considering the efficiency of concentrated liquidity this pool will be the main focus of this proposal. Agoric mentioned that this will provide a yield of around 18–19% for the ATOM community pool but this needs to consider several risks also. IST is backed by crypto assets which are volatile, not by a fiat asset like USD. To lower the volatility risk, IST requires overcollateralization. However, the marketcap of IST is currently low, so any large selling of IST could significantly impact its peg and add additional risks and LPing also has certain risks. A higher reward means higher risk, so a yield of around 18% has considerable risks. Stablecoins or stablecoin pools are seen as low risk, but a high yield of 18% indicates that significant risks are involved so these should be carefully analysed since 10% of the ATOM in the community pool is a significant amount.

The top 5 LSTs for Stride are ATOM, OSMO, TIA, DYDX and now also DYM. For stDYM, there is an ongoing airdrop lasting 120 days for a total of 250k STRD. To be eligible, your stDYM must be on Stride, Dymension, Osmosis or the stDYM/DYM pools on Osmosis or Dymension DEX. The TVL of stDYDX is expected to increase soon with 20 million DYDX from the dYdX v4 community pool to mint stDYDX.
Stride also announced a partnership with Astria rollup network and previously also with Eclipse with both of these rollups connected to Stride. These partnerships as well as the Hyperlane partnership will allow bridging stTIA from one rollup to another. In other words, Stride and Hyperlane will provide cross-rollup bridging for Eclipse and Astria and other connected rollups, and Stride will become a routing hub for stTIA.

Neutron finally provided an update about the NTRN vesting for Cosmos Hub validators previously approved in an on-chain governance proposal. Neutron mentioned that the delay was caused by several issues of multisig UI implementations for cosmos sdk multisigs and also signer coordination limitations. However, it seems that these issues have now been resolved and the NTRN vesting allocations should be completed shortly. Moreover, Neutron will work on a solution to update the allocations to reflect validators joining or leaving the active set. As a reminder, a total of 10k NTRN over 12 months for each Cosmos Hub validator was approved in the on-chain governance proposal. More frequent updates from Neutron would be appreciated, since previously to this update the latest one was almost two months ago, and this new update was provided after asking several times on the Cosmos Hub forum, not directly by the Neutron team.

Namada

The Namada Shielded Expedition (SE) will end soon and the Namada mainnet is expected in April. For the S class task category, there are over 2k submissions from validators and crew members. The hardfork to move to v2 of the SE happened on March 27th. Only 79 validators signed the first block so this could be a good amount of ROID points for this specific C category task. Regarding the uptime task, only a few validators maintained over 99% uptime so this could also give an important amount of ROID points, an amount which could be larger than some popular S tasks like RPCs or relayers. It is important to note that before S class points were added to the Nebb, the validators winning were those who did the most A tasks. Then, the top 10 changed and the validators here were those who did difficult S class tasks. However, if many validators submit S class tasks, points may be diluted a lot and A class tasks may become more relevant again if these points are not diluted.
Before Namada, privacy in crypto was fragmented at different levels, meaning shielded pools were fragmented. For example, there was fragmentation in the quantity of an asset with unique shielded pools for each amount of an asset. There was also fragmentation by asset, by application level or by network level. This fragmentation led to a smaller shielded pool size. Namada will be the only cross-chain privacy solution with a unified and asset-agnostic privacy set. The privacy strength of a shielded pool is proportional to its size, so before Namada privacy protocols were directly competing with each other for assets given the fragmentation of privacy at different levels. But Namada offers a single, unified shielded pool for any asset type (both fungible or non-fungible) created on any platform.
Satoshi was already concerned about privacy because in crypto the data is transparent by default but at that time there wasn’t a clear solution for privacy. Zcash then appeared but it was limited to the Zcash blockchain, what Namada is enabling is offering eventually all crypto users the option to access privacy for their assets or transactions. This topic is very relevant, because corporations and institutions have regulatory and data protection requirements, so since until now data was transparent by default in crypto this could have been a major reason preventing them to adopt and benefit from blockchain technology but Namada will finally change this. Following Bitcoin, Ethereum and smart contracts and Cosmos and IBC, Namada is likely the next major breakthrough in blockchain technology fostering a wave of new users and use cases.

dYdX v4

A signalling proposal to provide 20 million DYDX from the community pool to mint Stride’s stDYDX was approved and the implementation proposal is expected soon afterwards. The goals of this proposal is to increase the security of dYdX v4 and the decentralization of the validator set. A Stride upgrade was also implemented with the proposal 235 to introduce a community pool fee rebate to enable the dYdX chain community treasury to receive 2.5% of staking rewards in USDC. Stride mentioned that 30 validators will be part of their set, but so far only around half have been selected. Moreover, some of the selected validators are questionable, for example Strangelove and some other selected validators have one of the worst uptime and performance on dYdX v4, a low governance participation and some were even recently jailed. The community hopes that the validator selection process for stDYDX will improve and the validators with the best performance, governance participation and contributions will be added soon.
pSTAKE presented a similar proposal but for a lower amount of DYDX of just 5 million rather than 20 million. Moreover, initially only 3.5 million DYDX will be liquid staked, with 0.75 million additional DYDX liquid staked following security audits from the dYdX community complementing the existing audits from Halborn and Oak Security. The remaining 0.75 million DYDX will be liquid staked once the total stkDYDX TVL crosses $20 million.

Osmosis

While Osmosis has around $200 million in liquidity, far from the peak of around $1.7 billion, thanks to concentrated liquidity, the existing liquidity is much more efficient meaning a low slippage for swapping even with a lower total liquidity. Spot focused DEXes like Osmosis focus on providing liquidity for many low liquidity assets. For Osmosis to be useful there has to be enough liquidity, meaning enough users participating in LPing, so that swaps can be performed with a low slippage. Regarding the volume, in the recent months since November it increased to around $1.2 billion monthly volume, this is still far from the peak monthly volume of around $3.2 billion but a significant improvement since mid 2022.
Celestia and liquid staking for Celestia added important new liquidity and volume to Osmosis, other assets contributing to the recent volume increase are native USDC, Dymension, native USDT and native wrapped BTC.

Kujira

Kujira and Neutron will sponsor AwesomWasm 2024 in Berlin on May 28–30. AwesomWasm is a Cosmwasm focused hackathon organised by Ethan Frey and Confio, the creators of Cosmwasm.

Kujira provided an update for BOW with USK multi-staking, meaning a set of incentives that is shared across multiple tokens. This single incentive pot is shared between USK paired LP tokens. Users can earn a share of this single set of incentives by staking USK-paired LP tokens.

A Sonar app update is available and several new features are introduced including Pilot now available, upgraded app icons, Quark and Eris LSD integrations, and additional improvements.

Celestia

Noble will post tx data to Celestia and this will enable Celestia rollups to permissionlessly interoperate with Noble assets. Moreover, as Noble evolves beyond Proof to Authority, expected to move to ICS secured by the Cosmos Hub, the Rollchains architecture will be able to still support Noble.

Celestia announced the Space Bazaar global hackathon with over $100k in prizes. The hackathon will consist of four tracks, three focused on builders and one for the community. The hackathon will be from April 2 to May 17 2024. The three categories for builders are UX, Core and Build whatever.

Blobstream is on-chain, with Base mainnet as the starting network. Blobstream is a one-way data attestation bridge enabling Ethereum L2s and L3s to use Celestia as modular data availability. Thanks to Blobstream, developers are now able to keep building in the same ecosystem, spinning up customizable, high-throughput blockspace and without the need to recruit a committee or use a centralized server for data availability.

Sei

Sei released an article covering how fast they achieve finality. In this article tendermint is mentioned although it was previously rebranded to cometBFT. The article describes two optimizations of cometBFT for intelligent block propagation and optimistic block processing. However, Sei mentions that the fast finality is achieved with some trade-offs. In particular, it is more difficult for Sei to increase the number of validators in the network since more validators will mean increased bandwidth and processing requirements due to quadratic communication complexity. Sei is clarifying that the fast finality is achieved in part because of the reduced number of validators in the network, much lower than most other networks in the Cosmos ecosystem.

Persistence

As described in the dYdX section, Persistence will request 5M DYDX from the dYdX v4 community pool to enhance the security of the dYdX chain and improve the decentralization of the validator set. This proposal will also enhance the diversification and decentralization of liquid staking providers for DYDX, since Stride is requesting a larger amount of 20M DYDX in a similar proposal. pSTAKE’s TVL recently surpassed $20M and there was an increase of around 80% just in the last month. Furthermore, the trustless native Bitcoin staking went live on the Babylon Testnet and Persistence will soon bring Bitcoin security via Babylon to the Persistence chain testnet and then to the mainnet. This will unlock the potential of Bitcoin to secure the Persistence liquid staking and restaking ecosystem.

Persistence announced the round 3 of their delegation program, which is open for applications until April 15th 2024 at 23.59h UTC. There are some minimum eligibility requirements like in the previous rounds related to uptime, governance participation and other parameters. There are several contribution categories including mainnet, testnet, community and other contributions. A highlight of this round 3 is that validators running on Heztner won’t be eligible since they will have a 100% delegation reduction.

Secret Network

The release of SecretPath was announced which is a trustless bridging protocol enabling EVM blockchains to communicate with Secret network. SecretPath is composed of relayers and gateways. SecretPath enables innovative use cases by facilitating access to confidential computation. Some of the use cases enabled are private voting for DAOs, secure random number generation, confidential data access control via NFTs, encrypted DeFi order books, sealed-bid auctions or storing encrypted data.

The HackSecret 2024 had over 30 entries and a total of 11 winning projects were selected. There were two tracks, the Cross-chain privacy and the Native secret dApps tracks. Some of the highlights in the Cross-Chain Privacy track are the following. Secret ICA which is enabling unique confidential computation use cases, for example private-membership DAOs controlling assets on other chains. Another project is SP lottery, which is a lottery dApp running on the Ethereum testnet, and it uses Secret VRF for secure random number generation, and leverages cross-chain capabilities using SecretPath. Another project, SovereignCast, aims to improve elections in Africa by turning smartphones into secure voting booths with a secure, confidential and accessible voting system. In the Native Secret dApps track the highlights are Albash, a privacy-preserving decentralized payroll application or OnChainID, a sybil resistant on-chain ID framework.

Akash

Coinbase added support for AKT and trading started on March 19th 2024. The AKT/USD pair now has the largest volume for AKT. Also, AKT is trading in several other top exchanges such as Kraken with USD and EUR pairs. Furthermore, Coinbase Prime added support as well for AKT for custody and trading. Coinbase Prime is the world’s largest custodian and safeguards 90% of the BTC included in the ETFs, trusted by institutional investors such as BlackRock.

The adoption of Akash continues to accelerate with the daily network spend on Akash recently reaching a new all time high value as you can see here in this chart, indicating the dollar value of AKT spent on the network.

Other ecosystem news

Dymension announced the Dymension RollApp Standards (DRS) with Fraud Proofs to enable verification of RollApp state and standard chains. Dymension RollApp Standards (DRS) are governance-approved RollApp templates that can be verified by the Dymension blockchain. Dymension is focused on securing and connecting RollApps, and the ability to verify RollApps with ZK proofs or fraud proofs is required. Thanks to DRS, rollups can be non-custodial, secure and standardized. DRS-1 could be an EVM RollApp, DRS-2 could be a WASM RollApp and so on. Developers can use existing DRS or build a custom new DRS for Dymension’s approval.

Crypto regulations & compliance news with MME

ESMA Issues Consultation Paper Regarding MiCA

On the 25th of March 2024, the European Securities and Markets Authority (ESMA) issued a Consultation Paper containing 4 parts on technical standards and guidelines specifying certain requirements of the Markets in Crypto-Assets Regulation, known as MiCA:

The first part deals with arrangements, systems and procedures for detecting and reporting suspected market abuse in crypto assets according to Article 92(2) of MiCA.
The second part deals with aspects of the suitability requirements applicable to the provision of advice and portfolio management in crypto assets and the format of the periodic statement referred to in Article 81(14) of MiCA.
The third part deals with procedures and policies, including the rights of clients in the context of transfer services for crypto assets according to Article 82 (2) of MiCA.
The fourth part deals with the maintenance of systems and security access protocols in conformity with appropriate Union standards according to Article 14(1)(d) of MiCA.

In addition to that, the ESMA published two final reports specifying certain requirements of MiCA concerning investor protection topics and specifying requirements for cooperation, exchange of information, and notification between competent authorities, European Supervisory Authorities (ESAs), and third countries under MiCA.

Fake News in the Crypto Industry

A misinterpretation of comments from a member of the European Parliament caused waves of confusion in the cryptocurrency communities triggering reports claiming that anonymous crypto wallets and self-custodial payments would be banned. Here is a clear recap:

Under Article 58 of the Anti-Money Laundering Regulation, CASPs are explicitly prohibited to provide anonymous crypto-asset accounts or offering accounts allowing the anonymization or increased obfuscation of transactions, including through anonymity-enhancing coins. However, providers of hardware or software providers (e.g., Ledger) as well as self-custody wallets (e.g., MetaMask), which have no access to or control over users’ crypto assets are not subject to this prohibition (recital para. 93).
Under Article 15 of the Anti-Money Laundering Regulation, should customers opt to use a CASP for crypto-based transactions individually or combined exceeding €1,000 the CASP will need to apply customer due diligence measures.

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. The Namada Shielded Expedition will end soon and the Namada mainnet launch is expected in April. The Bitcoin mainnet launch was in 2009, Ethereum in 2015, Cosmos IBC in 2021, and now Namada will arrive in 2024. Satoshi Nakamoto’s response in 2010 to users suggesting ZK-proofs to raise the privacy of Bitcoin transactions was: ‘This is a very interesting topic. If a solution was found, a much better, easier, more convenient implementation of Bitcoin would be possible’. Thank you so much for reading and I’ll see you Cosmonauts very soon in the next episode!

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