COSMOS NEWS: ATOM, NAM, AKT, FLIX, OSMO, DYDX & MORE!!

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

COSMOS HUB AND CONSUMER CHAINS: The GovGen chain launched, what is it? How is it related to the AtomOne upcoming fork of the Cosmos Hub? Watch this episode to learn everything you need to know about GovGen and AtomOne

NAMADA: The first batches of S class tasks reviewed and points awarded, which validators are currently winning the Shielded Expedition? Learn also about the upgrade from v0 to v1

DYDX v4: Upcoming upgrade to support the authz module and other features and modules

OSMOSIS: Native wrapped BTC has arrived on Osmosis, learn the implications in this episode

KUJIRA: Partnerships announced with Confio and Persistence, what is the goal of these collaborations?

CELESTIA: Learn additional details and eligibility requirements about the new Celestia foundation delegation program

SEI: A new xERC-721 NFT standard developed, what are the advantages and innovations of this NFT standard?

PERSISTENCE: stkOSMO becomes the first ever OSMO LST to go live in Quasar, all the details in this episode

SECRET NETWORK: Partnerships with Union and Obi announced

AKASH: Merit-based listing on Coinbase and additional projects reducing costs thanks to Akash

OTHER ECOSYSTEM NEWS: Happy 2nd year mainnet anniversary Flix Fam! We recently started releasing our videos also on OmniFlix TV with interactive quizzes. OmniFlix 2-year journey since the mainnet launch 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)

Following the passing of the Cosmos Hub proposal 848 a few months ago to reduce the maximum inflation parameter from 20% to 10%, Jae Kwon mentioned an upcoming fork called AtomOne for those who voted against proposal 848. There seems to be some confusion about the GovGen chain launched on February 27th and AtomOne. To clarify, AtomOne wasn’t launched yet, and the GovGen chain is a different governance-only chain with the goal of defining and finalising the constitution of AtomOne before the launch of the AtomOne chain. In other words, in preparation for the future launch of the AtomOne chain, this governance chain called GovGen has been launched to help create and confirm the constitution of AtomOne. So the AtomOne chain didn’t launch yet, and GovGen is just a governance tool to help in the launch preparation of AtomOne.
More especifically, the GovGen chain is built using the Cosmos SDK as a fork of the Cosmos Hub version v14.1.0 with several modifications as you can see here. Many modules like IBC, Interchain Security or liquid staking have been removed since the goal of GovGen is to be only a governance chain to shape the AtomOne constitution. Also, sendTx is disabled meaning that no transfers are possible and the GovGen tokens can be used only for governance.
Regarding governance itself several changes are introduced compared to the Cosmos Hub governance. For example, in GovGen validators can only vote with their own stake meaning they don’t inherit the voting power from their delegators. In GovGen it will also be possible to add different voting periods for different proposal types. There will also be a mechanism to keep similar voting power for all validators, with some automatic staking, including automatically staking to a higher number of validators for accounts with a larger amount of tokens.
Regarding the GOVGEN governance-only token, it will be distributed to ATOM holders who voted or inherited a vote of NO or No with veto on the Cosmo Hub proposal 848. The GOVGEN token will never be transferable and can be used only for governance in the GovGen chain. It is also mentioned that validators who voted Yes on proposal 848 are totally excluded from joining GovGen, however other validators may qualify for example those who voted Abstain.
Some proposed AtomOne core features which will be subject to GovGen governance are the following. Firstly, Hub minimalism meaning that smart contracts and VMs will not live on the Hub itself but on consumer chains. An optimised version of Interchain Security is also mentioned for efficient intra-hub communication while maintaining security and leveraging Linux container technology. The AtomOne constitution will also be a key feature, and this constitution will also include the incentives for validators running consumer chains to ensure they are properly incentivized.
Additionally, it seems that some validators who participate in the GovGen chain launch may be eligible for contribution recognition based on their operations and conduct on the GovGen chain.

The Cosmos Hub v15 upgrade is upcoming and a major highlight will be the enforcement of the previously approved minimum 5% commission. All validators with a commission lower than 5% will be automatically updated to a 5% commission once the v15 upgrade is implemented. A possible result of this is that all delegators previously staking with validators with a 0% or very low commission will look for additional yield and a clear option is liquid staking. So it seems probable that the enforcement of the minimum 5% commission will lead to an increase of the amount of liquid staked ATOM with Stride ot pStake.

The Cosmos Hub proposal 867 passed on January 23rd 2024 to provide the vesting NTRN to Cosmos hub validators as an incentive and alignment. At the beginning of February Neutron provided an update in the Cosmos Hub forum mentioning that ‘the proposal has been approved. Transactions and smart-contracts to provide the validator incentives are being prepared’, however no further update was provided during the whole month of February. The community is waiting for updates about the implementation of this governance approved proposal 867.

For a long time, the main percentage of the TVL of Stride was ATOM and OSMO. However, shortly after launching liquid staking for TIA with a multisig like Milkyway while waiting for ICA on Celestia, stTIA is now the largest liquid staking token for Stride with a TVL even higher than for ATOM. Another new liquid staking token with great success has been stDYDX which is now the 4th largest liquid staking token of Stride by TVL. Stride was previously mentioning upcoming liquid staking tokens such as stTIA, stDYDX and stNAM. So far, stTIA and stDYDX launched and they had a great success, therefore it seems likely that stNAM could also have a similar success when it launches in the coming months, since the Namada mainnet launch is expected in April. Stride has been selective recently and focusing only on the major mainnet launches such as Celestia, dYdX v4 or Namada.

Namada

The Namada Shielded Expedition keeps progressing with the Namada mainnet expected in April 2024. On the 17th and 20th February there were two halts of the Namada shielded expedition, but the team quickly fixed the issues with the v0.31.5 release on the 19th February and the v0.31.6 release on the 22nd February.
The halt on the 17th February was related to a bug that reordered ABCI messages, where the state machine returns an incorrect validator set update to the consensus machine. The halt on the 20th February was related to a bug that returned non-deterministically ordered validator set updates.
Regarding the ROID points and the ranking of validators in the Nebb, major changes happened when the points for the Batch A and B of S tasks submissions were awarded, including all S tasks submissions up to the 20th February. For all the tasks in the Shielded Expedition there is a total amount of ROID which are shared amongst all the validators who complete each task. This means that easy tasks that most validators complete will give a low amount of points, while challenging tasks that very few complete will give a lot of ROID points. This is why towards the end of February the top 2 validators in the Nebb completed one very difficult S task each and had almost 70 billion ROIDs while the 3rd ranked validator had around 13 billion ROID. However, as more S tasks submissions are evaluated the ROID will be diluted so finishing in the top of the Nebb ranking will be very challenging. It will require doing all the tasks that most validators are doing and also some difficult tasks that few are doing. Overall, we think this incentivized testnet is the best so far in terms of the amount and talent of participants, the point system and the different task categories. Namada mentioned this incentivized testnet was inspired by the Cosmos Game of Stakes but much more elaborated with many tasks categories and a complex points system. As a recap, in the Game of Stakes metrics such as uptime or never jailed were measured, and the two winners won because of finding some bugs or performing some attacks on the network. However, compared to the Game of Stakes, the Namada Shielded Expedition is orders of magnitude more complex, with uptime or vulnerabilities findings being just a few of many more tasks to complete. Also, the incentive to participate and win in the Namada Shielded Expedition is very significant. Only the top 100 pilots and crew members will receive prizes in NAM tokens. For those ranked from 11th to 100th the rewards are important, but for those who manage to finish in the top 10 and especially in the top 3 the value of the rewards could be very significant.
For governance proposals to pass in the Shielded Expedition a high quorum is required, so for example the proposal 197 to upgrade the Shielded Expedition to v1 to enable PoS and PGF rewards didn’t reach quorum and a new proposal had to be created. Some discussions started about potentially lowering the quorum requirement.

dYdX v4

Great news for dYdX with the upcoming upgrade to version 4.0. In this upgrade the authz module will be included. This is very relevant since it allows to delegate voting or other tasks to other accounts for better efficiency, and also it could enable endorsed delegates from dYdX v3 to participate in dYdX v4 governance and collaborate with validators. Another important upgrade will be the Community enabled slashing which is very relevant regarding MEV. Thanks to this new governance feature, the MEV slashing committee will be able to create governance proposals to slash malicious validators performing MEV. The Cosmos SDK will also be upgraded to v0.50.3 in this new version of dYdX v4. There will also be an IBC withdrawal rate limiting introduced, similar to the Osmosis IBC rate limiting previously introduced for enhanced security, and with default limits for Noble USDC. Additionally, in this upgrade the subaccount withdrawal gating will also be introduced, which blocks transfers and withdrawals for 50 blocks under certain conditions for enhanced network safety. Several other improvements and new features will be introduced in dYdX version 4.0.

Osmosis

Osmosis and BitGo announced the launch of native Wrapped BTC on Osmosis. BitGo provides public verification that each Wrapped BTC is backed 1:1 by actual BTC. What are the differences of native WBTC on Osmosis compared to the previous bridged wrapped BTC? The key difference is that now it won’t be necessary to bridge via Axelar the WBTC from Ethereum and instead it will be issued directly on Osmosis as a Cosmos based token. Wrapped BTC already existed before on Osmosis, but it came via Axelar from native WBTC issued on Ethereum. Now the bridging step has been removed thanks to native WBTC on Osmosis. However, whether WBTC is issued on Osmosis or bridged from Ethereum, there is still one centralized custodian, BitGo, and KYC and AML are still required. Nomic’s nBTC in contrast is decentralized and doesn’t require any KYC procedure. In a previous episode we covered in depth the comparison between wrapped BTC and nBTC, make sure to watch that episode if you would like to learn all the details.

Kujira

Great news for Kujira with a collaboration with Confio. Remember that Confio’s Ethan Frey is the father of Cosmwasm and Confio organises the Awesomwasm event. Thanks to this collaboration, Kujira will receive dedicated support from the best Cosmwasm experts, even advising on the Kujira roadmap. Moreover, Kujira will have access to the latest and newest Cosmwasm tooling developed by Confio.

Another great partnership was also announced with Persistence. The collaboration will consist of Persistence’s pStake liquid staking tokens being integrated into Kujira’s DeFi ecosystem. In particular, stkATOM was already launched as a collateral on Ghost to borrow USK and USDC. The next step of the integration will involve USK minting using stkATOM as collateral and the addition of other pStake liquid staking tokens such as stkDYDX, stkXPRT and more.

Celestia

Celestia recently announced the new Foundation Delegation program and there are some important eligibility requirements. The most important is either running a Celestia active set validator and a bridge node that is connected and reporting to the Celestia Labs OTEL collector, or an active Mocha testnet validator and a bridge node on the testnet, in both cases for at least one month before the application deadline of each 4 month delegation cycle.
Regarding slashing or jailing, it seems that to be eligible, validators must have no slashings or jailing events in the last 6 months in all the networks they are validating. Celestia validators in the top 10 by voting power are not eligible and also exchange and custodian validators are not eligible. The commission has to be below 10%. In addition, validators based within the US, or within any country subject to economic sanctions, or within any other prohibited jurisdiction are not eligible to apply.
The Celestia Foundation values the quality of the infrastructure and the location of validators to improve the decentralization. Technical and community contributions will also be important for the evaluation. Regarding the criteria for undelegation, slashing and jailing events will lead to undelegation as well as failing to upgrade within 24 hours and other additional criteria.

Sei

Thanks to proposal 50 titled ‘Update Global Minimum Prices’ now gas on Sei is 5 times cheaper or an 80% reduction.

Sei has collaborated with Omni to develop the new xERC-721 NFT standard, to help unify NFT liquidity across the Ethereum ecosystem. In particular, xERC-721 is an upgrade to the existing ERC-721 standard, offering tokens the ability to securely move across multiple domains without the introduction of risks or third parties. Moreover, xERC-721 token contracts are extended with mintBatch and also burnBatch function interfaces. For existing NFT collections, they can seamlessly upgrade to xERC-721 with the deployment of a new portal contract.

Persistence

Great news for pStake since stkOSMO will be the first ever OSMO liquid staking token to go live on Quasar. Thanks to this integration, an important TVL growth is expected for pStake, Quasar and Osmosis. In particular, the Quasar stkOSMO/OSMO Dynamic S+ strategy deposits into the stkOSMO/OSMO supercharged pool on Osmosis and this strategy dynamically updates the range at which liquidity is provided to optimize and maximize yield. Remember that supercharged pools on Osmosis allows to provide more liquidity depth with a lower amount of tokens in the pools and this is thanks to optimizing the liquidity range. For normal users this optimization is complex, so that’s where Quasar offers great value. If you are holding OSMO, you can now liquid stake your OSMO via pStake to obtain stkOSMO and then you can get additional DeFi yield on top of staking rewards with the stkOSMO/OSMO supercharged pool. This pool has 200k PSTAKE LP incentives as well. In addition to this major news for stkOSMO, there has been great progress too with stkDYDX with continuous TVL growth, placing now stkDYDX as the second largest liquid staking token for DYDX just behind Stride’s stDYDX.

Secret Network

Secret network announced a partnership with Union. Thanks to this collaboration Union will provide a new cross-chain communication solution for Secret’s Privacy as a Service capabilities. The advantages of this will be increased optionality for developers and enhancing Secret network’s reach to additional blockchain ecosystems. Union is focused on trustless and decentralized bridging between L1s, L2s and appchains and leverages zero-knowledge cryptography.

An Obi account is used to secure your crypto without the inconvenience and risks of seed phrases or private keys. Obi announced that they will be licensing technology for its all-chain accounts based on Secret Network’s TEE-powered private smart contracts. Obi’s all-chain account technology will use SCRT as the gas token for Obi’s core cryptographic operations to further align Obi with Secret network. To licence TEE technology, Obi mentioned that they will transfer 8% of the supply of the future Obi protocol tokens to the Secret Network Community Pool with vesting. In addition, SCRT Labs will also receive a smaller allocation of Obi tokens.

Akash

Akash’s AKT token was previously listed on Kraken without any listing fee, just based on the merit of the project. Now, Coinbase has also announced the upcoming listing of AKT, again based on merit and without any listing fee. This is an impressive achievement, congrats Akash team and Greg Osuri! We are proud that we have been early supporters for Akash, validating the network since early 2021, and also supporting and hosting our website in Akash since 2021 as well.

The Akash team was at Ethereum Denver including a booth in the main conference venue from the 28th February until the 3rd March. Additional great news for Akash is that Passage will launch its metaverse powered by permissionless GPUs on Akash and thanks to this they are reducing costs by up to 70%, and the first AKT/PASG pool is live on Osmosis. Additional supply of high-density NVIDIA GPUs to Akash was also confirmed.

Other ecosystem news

The OmniFlix mainnet launch happened on the 22nd of February of 2022. Happy second year mainnet anniversary to the Flix Fam! The OmniFlix team is a real OG in the Cosmos ecosystem, we have been partners with OmniFlix since 2019 and know the team from even before. The OmniFlix team is one of the most talented, friendly and helpful teams in the whole Cosmos ecosystem. Remember that the very first Cosmoverse conference in Lisbon in 2021 could be coordinated and launched with the global livestream thanks to the support from OmniFlix. The Cosmoverse 2022 in Medellin and 2023 in Istanbul happened also with the support from OmniFlix, not only for the livestream management but in many other areas like the ticketing platform accepting payments in ATOM or the in-person event registrations.
A recent upgrade of OmniFlix enabled now Cosmwasm and we can’t wait to see all the upcoming developments and releases of OmniFlix!

Crypto regulations & compliance news with MME

FSB sets out 2024 work programme

The Financial Stability Board (FSB) has proposed in a letter reporting format to the agenda for the year 2024 aligning with the priorities set by the Brazilian G20 Presidency.

The FSB is dedicated to fostering the exchange of information and encouraging international collaboration among financial regulators and the G20 Comprising 19 individual nations, the European Union, and the African Union, the G20 is a coalition with Brazil currently holding the presidency for the current year, succeeding India. Notably, India was the first leader within the G20 to underscore the importance of global cryptocurrency regulation.

Central components of the letter’s agenda is to involve recognizing and resolving vulnerabilities within the financial system, drawing lessons from the banking turmoil in March 2023, focusing on non-bank financial intermediation (NBFI), addressing digitalization and climate change impacts, and improving the effectiveness of cross-border payments.

A key focus of the FSBs chair is to harness the benefits of digital innovation while mitigating its risks. The FSB “will continue to closely monitor the financial stability implications of digital innovations, including in crypto-asset markets, tokenisation, and artificial intelligence (AI)”. Responding to the last years G20’s call to policy on a global regulatory and supervisory framework for crypto assets, the FSB chair “will deliver reports on the financial stability implications of the tokenisation of assets and of AI”. This work will complement the sector-specific work of the standard-setting bodies (SSBs).

In 2024 and beyond, the primary focus revolves around effectively implementing the FSB’s global regulatory and supervisory framework for crypto-asset activities and markets, as well as global stablecoin arrangements. This framework received endorsement from G20 Leaders during their New Delhi Summit. The FSBs chair is committed to advancing the G20 Roadmap in collaboration with SSBs and international organizations, aiming to facilitate the coordinated and comprehensive implementation of policy and regulatory measures. This effort extends beyond G20 jurisdictions, taking into account the unique risks associated with Emerging Market and Developing Economies (EMDEs). A status report on the Roadmap’s progress will be presented at the October meeting.

IMF recommends a cautious rollout for Pacific Island digital currencies.

The International Monetary Fund released a paper about the rise of digital money and implications for Pacific Island countries.

Pacific Island countries have distinct currency requirements, and the IMF suggests that digital currencies, if appropriately designed, can address these needs. However, the IMF cautions against adopting unsupported cryptocurrencies as national currencies.

Pacific Island countries represent small, varied, and geographically isolated markets, presenting specific challenges in terms of service provision and inclusion. These challenges include a significant reliance on remittances, susceptibility to reduced correspondent bank services, and the potential to violate international Anti-Money Laundering efforts due to inadequate controls.

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 reading and I’ll see you Cosmonauts very soon in the next episode!

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