COSMOS NEWS: ATOM, NAMADA SHIELDED EXPEDITION, KUJIRA ROADMAP 2024, TIA, SEI, DYDX V4, AKT & MORE!!
Hi Cosmonauts! ⚛️
Welcome to the Cosmos ecosystem news roundup, here are the top stories in Cosmos in the 2nd half of January:
COSMOS HUB AND CONSUMER CHAINS: Discussion to improve replicated security with Partial set security, upcoming enforcement of the minimum 5% commission with the v15 upgrade, Stride and Neutron news and more. Everything you must know about ATOM and the Cosmos hub is in this episode
NAMADA: Shielded Expedition started and tasks revealed, what are the different tasks? What are the prizes and who is eligible? Watch closely because the potential value of the rewards could be very significant. Learn also about Park’s forum discussion regarding a new Namada community architecture based on RPGF funding
DYDX v4: Interchain Accounts have arrived, learn the implications of this regarding DYDX liquid staking, also learn all the details regarding the dYdX Foundation $30 million funding request
OSMOSIS: Updates regarding the grants program, a new customer support service and Milkyway milestones
KUJIRA: watch this episode to learn the most important highlights of the upcoming Kujira roadmap 2024
CELESTIA: A CIP discussion on the forum started by Stride regarding ICA on Celestia and more
SEI: What is SeiDB? Learn all the details in this video and also a new project bringing liquid staking to Sei
PERSISTENCE: Imminent launch of stkDYDX, a new validator selection for stkATOM, USDT from Kava on Persistence and many other exciting news from the Persistence ecosystem
SECRET NETWORK: Winners of the new grants program cohort one, integration with Polygon and several other important news
AKASH: A forum discussion about a $5 million funding to incentivize more high-density GPU supply on the network, what feedback did the community provide and what are the next steps? AkashEDU also announced on the OmniFlix TV, all the details in this video
OTHER ECOSYSTEM NEWS: The OmniFlix Hub v2 has arrived, what are the main highlights and implications?
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)
There is a discussion on the Cosmos hub forum regarding Partial Set Security. This would offer several advantages for validators compared to Replicated security. Consumer chains with partial set security could launch permissionless without a governance proposal and then validators could choose whether to validate a consumer chain or not. Or another option would be a voting with a low quorum and only the validators who vote yes would opt-in to validate that specific consumer chain. In this scenario validators wouldn’t be jailed for downtime on the Cosmos hub but opted out from that consumer chain for some time period.
For some consumer chains that require a minimum level of security the idea of the top-n is discussed. In this case, the top-n validators would be required to run a consumer chain, and when n is 100% this would effectively be replicated security. Moreover, in the case of this top-n design in the case of downtime validators would still be jailed on the Cosmos hub.
Additionally, it is discussed that consumer chains could add a cap on voting power for individual validators to avoid a few large validators controlling certain consumer chains.
Informal and Hypha will meet with their 2024 Oversight Committee quarterly to go over plans and reflections for each quarter. This is related to the passed proposal 839 to fund Informal and Hypha. From the latest meeting there are some interesting highlights. Firstly, in the upcoming v15 upgrade of the Cosmos hub, the previously passed proposal 826 for the minimum 5% fee and the proposal 104 to clawback funds from Notional will be implemented. The implementation of the minimum 5% fee in the Cosmos hub could likely lead to an important increase of liquid staked ATOM, since all those staking with validators with a fee lower than 5% will search for additional sources of yield.
Regarding consumer chains, the potential launches in 2024 could be Aether, Noble or EntryPoint. Noble initially said they would delay joining as a consumer chain given the infra costs concerns and low revenues of current consumer chains. However, a signalling proposal is expected soon to gather an overview of whether validators and the community want Noble to join as a consumer chain. If the signalling proposal has a majority of yes votes then Noble might join soon as a consumer chain. Noble issues native USDC for the Cosmos ecosystem, with the demand mainly driven by dYdX v4. Noble also announced recently that they are bringing Real-World Assets (RWAs), and the first product to be issued will be USYC to offer tokenized returns backed by short term U.S. government debt.
Neutron is solving the low revenue and high infra costs issue of consumer chains for themselves by using NTRN unclaimed from the airdrop and sent to the Cosmos hub community pool to reward and incentivize validators running Neutron. We initially created a twitter poll asking the Cosmos community whether part of these unclaimed NTRN should be used as revenue for validators running Neutron, and the majority voted yes in our poll. Also, in our forum discussions about this idea, Jehan also greatly supported and liked our idea. We are happy that the proposal to incentivize validators with NTRN was approved and now the multisig will distribute the NTRN to validators running Neutron with vesting during 12 months.
With the Stride v17 Leo release support for stDYDX was included, amongst several other improvements and new features. While 10 initial dYdX validators were selected, a total of 32 validators need to be selected. The Stride Association is requesting Stride governance to allow them to have authority temporarily to select and manage the dYdX validator set. This authority will be reverted when the 32 validators are selected or on May 31st 2024, whichever is sooner. The plan is to add 3 new validators every 2 weeks until 32 validators are reached.
Another proposal is requesting 9 million STRD that were previously earnmarked for incentives. These incentives will be used to bootstrap the adoption of stTIA, stDYDX, stDYM and other additional upcoming liquid staking tokens.
Namada
The genesis of the Namada Shielded Expedition was on the 30th January at 17h UTC. A total of 10,469 Pilots and 129,238 Crew Members will be competing, but Pilots and Crew members will have different tasks and prizes, meaning pilots compete against each other and separately crew members compete against each other. There are some important remarks however. Pilots and Crew members who didn’t submit the applications on time before the 2nd January 2024 at 9am UTC can still participate but won’t be eligible for prizes. For the eligible Crew members, only the top 100 will receive rewards. Regarding Pilots, although almost 10,500 pilots can compete for prizes, there are only 256 validators slots in the active set. This means that the selected 100 pre-genesis pilots with a larger NAAN allocation will be able to remain in the active set and perform the tasks. The other over 10k validators received a much smaller NAAN allocation and they will need to compete to remain in the active set. Only the top 100 Pilots, similarly to the top 100 Crew members, will receive rewards. However, from the total 30 million NAM which is 3% of the total NAM supply, around 20 million will be for pilots and around 10 millions for crew members. Both pilots and crew members in the top 10 will receive very significant rewards, for example 3 million NAM for the top pilot and 1.5 million NAM for the top crew member. The Shielded Expedition will last for around 2 or 3 weeks in total.
Regarding the asteroids or tasks in the Shielded Expedition, there are four categories, C, B, A and S. For all these tasks the points will be allocated amongst those who complete the tasks, meaning that difficult tasks that very few complete will provide a very large amount of ROID points. A tasks are also special because they are unknown and to find them it will be required to continuously search and experiment with the protocol. The class S tasks are also special because unlike tasks C, B and A, the class S tasks evidence needs to be submitted manually through the Nebb. In the Nebb dashboard the ranking in real time of pilots and crew members and statistics from the Shielded Expedition will be shown.
Park, the Namada community head, shared an interesting forum post titled Proposing a Namada community architecture based on RPGF funding. Following the first Namada Community Builder RPGF round, feedback was collected for further rounds and this forum post is related to this.
The structure would consist of Public Goods Funding Stewards (PGFS), Working Groups (WG) with Working Group Members (WGM) and Working Group Leaders (WGL), and Community Builders.
In particular, PGFS will decide on a quantitative retroactive allocation for the Namada Community on allocations for each 6 week period.
Working groups have focus areas and working group leaders, which are re-elected every 6 weeks. In addition, every 6 weeks eligible community builders are vouched into a working group. This is very interesting, and there could be for example a working group focused on video content and youtube, and we would be really happy to be in this group and collaborate with other creators.
Community builders will complete different bounties to try to be accepted into one of the working groups.
Park is suggesting to implement this structure on February 12th, 2024. The initial set of working group members and leaders will be selected by early leading members of the Namada community before the 12th February.
The ibc-rs v0.50.0 was released and it includes the ICS-721 NFT transfer application implementation built by Heliax, enabling the transfer of NFT packets across chains that support this capability. Stay tuned for Shielded NFTs.
dYdX v4
The dYdX Chain Software Upgrade v3.0.0 was successfully implemented. The main highlight of this upgrade is the Interchain Accounts (ICA) Host Module because this will enable liquid staking of DYDX via liquid staking providers such as Stride or pStake. Regarding pStake’s stkDYDX they already announced the full list of selected validators, while Stride announced only the initial 10 validators and will keep adding more until a total of 32 validators are selected.
For stkDYDX, pStake mentioned that there will be a 0% liquid staking fee, a No-click USDC and DYDX rewards auto-compounding, flash stkDYDX unstake and also custom-built to decentralize the dYdX chain.
For the next upgrade, the withdrawal rate limiting is in development. This is a safety feature to rate limit asset withdrawal from the dYdX Chain, and it is similar to the IBC rate limit module on Osmosis.
The dYdX Foundation holds currently $4.8 million in cash and short-term treasury bills, and 2.6 million DYDX tokens, of which 2.3 million are staked with dYdX chain validators. Given their current expenses, the cash runaway is around 6 months. The expenses have been mainly compensation for global talent, marketing, legal, accounting and tax. To fund the Foundation for an additional 36 months, the Foundation has requested $30 million in DYDX. These funds will be mainly used to hire and retain top talent, scale the adoption of the dYdX chain and support the decentralization of the dYdX ecosystem.
As a reminder, the dYdX Foundation is a Swiss Foundation and governed by its council members, Arthur Cheong who is the CEO of Defiance Capital, Rebecca Rettig who is the Chief legal and policy officer at Polygon Labs and Markus Spillmann who is a Swiss based person supporting to launch Swiss foundations for crypto projects.
Some previous highlights from the dYdX Foundation include the introduction of ethDYDX in 2021, a governance token allowing the community to govern certain aspects of dYdX v3. The Foundation also designed a DAO structure that was helpful and implemented by the dYdX Grants Trust and also the dYdX Operations Trust.
The Foundation also supported with the transition to dYdX v4, for example with the development and open sourcing of an Ethereum smart contract allowing to bridge DYDX tokens from Ethereum to the new dYdX Chain on Cosmos.
Osmosis
The Osmosis Grants program run by Reverie was renewed for 2024, called OGP v3. The OGP is great in sourcing projects for specific RFPs and Reverie also manages the dYdX grants program.
The new Osmosis chat live support is great, in fact it is as the Kraken live chat support used to be, with answers almost instantly. Now Kraken asks you to wait several hours for an answer. The community says that the new Osmosis support is the best they have seen so far, better than any CEX support.
Milkyway reached over $30 million in TVL driven by TIA liquid staking. Osmosis mentioned that Milkyway has now become the third largest dApp by TVL on Osmosis.
Kujira
Kujira released an article about the upcoming roadmap for 2024 and here are some main highlights. Kujira mentioned that work on the SDK 50 with new price oracle is nearly completed and this will enable launching Perps but Kujira will launch a high-leverage forex platform rather than another crypto platform. This is possible because the Cosmos SDK v0.50.0 introduces Vote Extensions which allows validators to submit data on-chain, every block and without Tx overhead.
Furthermore, Kujira is working with the SDK and Kado teams to make Sonar a seamless wallet experience thanks to the upcoming Passkey support, meaning that wallet setup will no longer require a seed phrase. Kujira also mentioned that in the chain upgrade direct IBC connection to Polkadot and Near will be introduced, as well as Interchain Accounts and Interchain Queries.
Celestia
Stride mentioned in the Celestia forum that MilkyWay is based on a multisig and this is not really healthy for Celestia, given the known risks of multisigs, including potential theft of funds, lack of decentralized governance, complexity and multisig signers not being slashable amongst other risks and issues.
Stride is suggesting that Interchain Accounts (ICA) are important and urgent to be activated on Celestia, and thus allowing Stride to launch a safer and more aligned TIA liquid staking than MilkyWay. Furthermore, Stride mentioned that as new technology such as SNARK accounts and zk-IBC becomes available, Stride will continue to improve stTIA’s trust-minimization. Stride said on the Celestia forum that they intend to submit a Celestia improvement proposal (CIP) to activate ICA on Celestia on an accelerated timeline.
Stride also discussed three possible ways to select the Stride host chain validators for stTIA. The first option would be to inherit the Celestia validator set distribution and rebalance frequently. The second option would be stTIA holders electing a council who would evaluate and select the validators. And the third option would be Stride governance selecting the Celestia validators, with veto power given to stTIA holders.
Sei
With the V3.6.1 upgrade, the highlight was the integration of SeiDB into the Sei Chain. SeiDB modifies how state access, state commitment and state storage works.
Some of the improvements brought by SeiDB are a reduction of the active state size and the historical data growth rate, improvement of state sync times, block sync times and block commit times, faster state access and state commit.
To develop SeiDB, the Sei Labs team has built on the Cosmos SDK team work related to ADR-065. The diagram here shows the state commitment and the state store, this is decoupling the data into two layers rather than storing everything in one database.
The state commitment layer represents the current chain state as a memory-mapped IAVL tree using MemIAVL. The state storage layer is designed to store and service historical chain data.
The Silo launch was announced to bring liquid staking to Sei, you can now liquid stake your SEI and receive iSEI to benefit from staking rewards and additionally DeFi yield.
Persistence
The dYdX Chain Software Upgrade v3.0.0 introduced Interchain Accounts (ICA) allowing the launch of stkDYDX by pStake. In particular, stkDYDX benefits from some unique features: 0% liquid staking fee, No-click USDC and DYDX rewards auto-compounding, Custom-built to decentralize the dYdX chain and Flash stkDYDX unstake. Furthemore, pStake already selected 30 dYdX chain validators for the liquid staking of DYDX. To select validators several metrics were considered such as uptime, governance participation and more.
pStake also announced that it will apply the new automated delegation strategy focused on decentralization to update the selected validators for stkATOM and the redelegations to the new selected validators will be completed in February.
There is a forum discussion to deploy $500k POL on the XPRT/OSMO pool jointly from the Persistence and Osmosis Community Pools. The steps would be to put a governance proposal on Persistence for $250k worth of XPRT to a multisig, then a proposal on Osmosis for $250k worth of OSMO to a multisig, the third step would be an IBC transfer of XPRT tokens to Osmosis and finally deploying $500k liquidity on the XPRT/OSMO pool on Osmosis.
Persistence announced 1-click USDT transfers from Ethereum to Persistence. This brings several advantages such as Yield opportunities on Dexter with XPRT/USDT and USDC/USDT pools, deepening liquidity for native tokens like USDT, onboarding of new users like traders and LPs into Persistence and more.
Secret Network
Secret network announced an integration into the Polygon Solution Provider Network. This is great news facilitating the interaction between Polygon developers with additional tools and infrastructure support. This collaboration is part of Secret network’s privacy as a service strategy.
The winners of the first cohort of the renewed grants program were announced. The selected projects are focused on the following use cases: private governance tooling for EVM chains, a decentralized and privacy-preserving casino platform, web2 traffic verifiable using zero-knowledge proofs and enabling users to generate verifiable credentials from any of their online user profiles. Additional use cases funded are a mechanism for securely sharing confidential documents on a blockchain with specific recipients and a dApp that will enable a user to own published content assets and transact with those assets on public EVM-based blockchains using Secret Network. The opening of applications for the Q2 2024 cohort will be announced soon.
Congratulations to Serenity Shield for winning the Hackernoon Startups of the year 2023 for the Asia region.
The hackathon called Hacksecret 2024 will happen from February 1st to March 3rd 2024 and it was announced over $15k in prizes.
Akash
There is a discussion to distribute $5 million in AKT to incentivize more high-density GPU supply on the network. If this proposal is approved, the expectation is an additional 1,000 NVIDIA A100 equivalents that will be offered at $0.79 per hour.
Akash is quickly becoming the best place to acquire high-density GPUs. The original proposal was updated following the community feedback by separating the program into three different category pools.
The Committed Pool focused on tier-2 and higher data centers that provide a fixed capacity for one year. The Liquidity Mining Pool, where a fixed set of rewards is distributed to various configuration sub-pools in epochs. And finally the R&D Pool for next-generation chipsets, such as NVIDIA GH200 and L40s for example, to support the upcoming generation of AI workloads.
AkashEDU is live and it is the 1st sovereign implementation of the OmniFlix Network media infrastructure for a web3 protocol, namely Akash, in the context of education. The link to access AkashEDU is included in the description below. AkashEDU is kickstarting with four courses, there is a course access and completion certificates as NFTs, and it is built on decentralized media infrastructure powered by OmniFlix Network.
Other ecosystem news
The OmniFlix Hub v2 has arrived, what are the main highlights?
Thanks to the migration from the oNFT standard to the x/nft standard now seamless NFT interoperability is possible. Furthermore, interchain transfers are unlocked, meaning that you can now move your favourite NFTs across ecosystems leveraging OmniFlix’s infrastructure, and this includes also Injective’s NFTs. StreamPay was also improved with commission-based payment streams.
Thanks to the Token factory, you can now create your own token with just a few clicks. Moreover, with Cosmos SDK v47 the speed and security has also been enhanced.
Crypto regulations & compliance news with MME
EBA extends its Guidelines on ML and TF risk factors to CASPs.
The European Banking Authority (EBA) has issued extended Guidelines on money laundering and terrorist financing risk factors for crypto-asset service providers (CASPs). The legal definition of a CASP is a “person whose occupation or business is the provision of one or more crypto-asset services to third parties on a professional basis”.
The Guidelines are designed to assist CASPs in identifying potential risks by providing a comprehensive, but not exhaustive, set of factors. These factors can serve as indicators of a CASP’s susceptibility to varying levels of money laundering and terrorist financing risk arising from its customers, products, delivery channels, and geographic locations. Based on these risk factors, CASPs can gain insight into their customer base and identify areas within their business or operations that may be more susceptible to money laundering and terrorist financing. In addition, the guidance outlines the appropriate adjustments CASPs should make to their risk mitigation measures, emphasizing the use of blockchain analytics tools.
Considering the interconnected nature of the financial sector, the guidelines also provide advice directed at other credit and financial institutions that either have CASPs as clients or are exposed to crypto assets. The level of risk escalates when credit and financial institutions establish business connections with CASPs that lack authorization under the Markets in Crypto-assets Regulation (MiCAR).
The amending Guidelines will apply from December 30, 2024.
Crypto sector faces stricter AML regulations in EU.
Just days after the EBA issued extended Guidelines on money laundering and terrorist financing risk factors for CASPs. The European Council and the European Parliament found a provisional agreement on parts of the anti-money laundering package, with the aim of protecting both EU citizens and the EU financial system from the threats of money laundering and terrorist financing. The extended Guidelines include the transfer of private sector regulations to a new set of rules, leaving the directive to deal with the establishment of national institutional anti-money laundering and anti-terrorist financing systems in member states.
The agreement extends the scope of covered entities to include additional organizations. The updated regulations will cover a significant portion of the cryptocurrency sector, requiring all CASPs to conduct due diligence on their customers. This includes verifying details and information about customers and reporting any suspicious activity. Under the agreement, CASPs will be required to implement customer due diligence measures for transactions exceeding EUR 1000. The agreement also introduces measures to mitigate the risks associated with transactions using self-hosted wallets. The European Council and the European Parliament also introduced specific enhanced due diligence measures for cross-border correspondent relationships for CASPs. In addition, each member state’s financial intelligence unit (FIU) will have “immediate and direct access to financial, administrative and law enforcement information” including crypto transfers.
The texts will be finalized and submitted to the representatives of the member states in the Committee of permanent representatives and the European Parliament for approval. Once approved, the European Council and the European Parliament must formally adopt the texts before they can be published in the Official Journal of the EU and enter into force.
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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