AtomOne: Fulfilling the Original Cosmos Vision
Disclaimer: All of the information in this blog post is tentative and subject to change.
TL;DR:
- The Cosmos Hub community has been falsely led to support highly speculative proposals that could potentially compromise the security of the Cosmos Hub: #69 CosmWasm Integration, #82 ATOM 2.0, and #848 $ATOM Halving.
- In response, Cosmonauts who understand the risks of the status quo are initiating a community-driven hard fork to build AtomOne: a security-conscious, minimal IBC/ICS Hub for the interchain.
- Onbloc will actively support the infrastructure development of the AtomOne initiative to contribute to its mission of delivering a secure IBC token hub and solving ICS scaling via the sustainable VaaS (Validator-as-a-service) model, which will power experimental & killer applications needed to fulfill the original vision of Cosmos.
0. Intro
The Cosmos Thesis for scaling blockchains, as outlined in its original white paper, aims to build an ecosystem of parallel blockchains that consists of routers (Hubs) that seamlessly connect a vast number of appchains (Zones). Zones are designed as an environment for innovation, in which to experiment with virtual machines (VMs), games, or DeFi applications. Meanwhile, Hubs are designed to offer the highest degree of security and neutrality to ensure the liveliness of interchain connectivity and guard against potential hostile takeovers, which could impact all of the connected Zones.
The core development initiatives of the Cosmos Hub, including the implementation of IBC & ICS and increasing the validator slots have solidified the Hub’s fundamental values: minimalism and decentralization. As a result, the Cosmos ecosystem has blossomed into a multi-billion dollar network of interconnected blockchains.
Throughout the years, the Hub has demonstrated resilience in safeguarding against attempts to undermine its core principles. However, an arbitrary change to the $ATOM’s tokenomics, falsely marketed as a “Halving” event, has found its way through, compromising the security of the Hub.
1. The Fundamental Value of Cosmos
What purposes does the Cosmos Hub serve?
- The Cosmos Hub is an IBC Token Hub for thousands of blockchains to be built with the interchain stack. The Hub & Spoke architecture stands out as the most efficient method of connecting sovereign, parallel blockchains. Without a Hub, the number of connections required increases exponentially with the growing number of Zones. The Cosmos Hub plays a pivotal role in scaling the interchain ecosystem as a reliable “router” that facilitates communication, particularly IBC token transfers, between Zones.
- The Cosmos Hub is the most secure Interchain Security (ICS) Provider. Two major bottlenecks of launching PoS blockchains are 1) setting up a globally distributed set of quality validators and 2) increasing the cost of attack by achieving a high token staking ratio. The business model of the Cosmos Hub is to lease its Validator set to consumer chains, receiving a portion of transaction fees in return. One could call this a Validator-as-a-Service (VaaS) model. The effectiveness of VaaS is that it can adopt any kind of innovations in the space, such as new smart contract languages, VM implementations, or virtually any consumer application in parallel, while capturing value.
What purposes does Cosmos NOT serve?
- The Cosmos Hub is NOT a smart contract platform. Experiments and innovations are meant to take place on Zones. Smart contracts on the Hub would create competition against Zones and introduce additional attack vectors, undermining its value proposition.
- The inflation of $ATOM, the Staking Token of the Cosmos Hub, is NOT a revenue stream for stakers. Instead, it should be regarded as a penalty in the form of a tax applied to non-stakers, taking effect by diluting their shares in the network through value redistribution.
- $ATOM is NOT a monetary token. A staking token is designed to be illiquid and slashable. These traits make $ATOM undesirable as a store of value — an essential trait for an asset class to function as money. Rather, $ATOMs are like shares of payment processors like Visa or IBM that capture value from interchain transactions for the security and stability offered by the Hub.
2. Lack of Security Consciousness and Neutrality
How does the $ATOM Inflation Actually Work?
The Cosmos Hub is a minimal blockchain that excels in providing the best-in-class PoS security. This is achieved through a dynamic inflation rate that shifts between 7~20% to reach the target staking ratio of 2/3:
- Below 2/3 of $ATOMs staked: The inflation rate increases to draw more stakers.
- Exactly 2/3 of $ATOMs staked: The inflation rate remains constant.
- Above 2/3 of $ATOMs staked: The inflation rate decreases, as there is reduced need for new stakers.
Simply put, the inflation rate is designed to work towards reaching the target staking ratio driven by the market demand. Data from the 24 months before Proposal #848 demonstrates that this design has shown resilience despite market volatility, proving that the original model worked perfectly needless of changes.
However, the Proposal has introduced arbitrary changes, supported by arguments with misleading and fundamentally flawed logic.
- Claiming that the inflation rate of $ATOM is disproportionately high overlooks the fact that it is entirely driven by market decisions. Such assertions would only be valid if the current staking ratio were significantly above 67%, which is not the case. The current rates are below the target, indicating that the market is, in fact, demanding a higher inflation rate.
- The “we can simply revert back if it doesn’t work” logic undermines the primary selling point of the Cosmos Hub: Security. How are Zones to rely on a Hub that compromises security for the sake of stakeholders’ interests? The proposal is gambling with the stability of the Hub for a short-term price appreciation.
The Bias of the ICF
Proposal #839 set a bad precedent, in which the Cosmos Hub community was pressured to vote in favor of a funding request of ~$5.7M worth of $ATOMs with a bonus of 100K $ATOMs from Informal Systems, following their public announcement of how they would “wind down their work” on the Cosmos Hub development.
In reality, these teams should have been fully funded from the ICF, an organization that exists to “contract with entities and their agents for the development of the Cosmos Essential Software and Services (CESS)”, as outlined in the Cosmos Plan in the cosmos repository.
Ludicrously, after Informal Systems claimed ~20% of the entire community pool, the ICF announced its plans for the 2024 Funding Program, which allocated an additional $8.5M to the organization ($3.5 for general engineering, $3M for CometBFT, and $2M for Hermes and ibc-rs) on top of the already secured funds. In total, this resulted in roughly $14M of funding for a single year.
Whether the ICF is fairly distributing a reasonable amount of funding without bias is worth questioning.
Considering that the ICF still remains a significant stakeholder of $ATOMs, it is logical to part ways and carve out their influence through a fork as a community aiming to build a secure, neutral Hub.
3. The AtomOne Hard Fork
Disclaimer: Plans for the AtomOne project are subject to change via the GovGen chain governance.
GovGen: The Governance-Only Chain for Decentralizing the AtomOne Genesis
GovGen is an independent, governance-only chain, which exists to gauge the sentiments of the future AtomOne community. Its purpose is to decentralize the Genesis of the AtomOne chain, such as its initial chain parameters and token distribution, via governance from community members who have proven their alignment with the original vision of the Cosmos Hub by voting No or No With Veto on Proposal #848.
The GovGen chain is a fork of the Cosmos Hub v14.1.0 with some modifications. Initially, the chain will launch with 30 validators securing the network and remove modules irrelevant to its purpose such as IBC/ICS-related modules and the Liquid Staking Module.
The $GOVGEN Tokenomics
$GOVGEN is the non-transferable staking token for the GovGen chain. It is designed to have no monetary value, only providing voting powers in the GovGen governance.
The distribution of $GOVGEN is based on the amount of staked $ATOMs that voted No or No With Veto on Proposal #848, as detailed in the relevant issue (#71). The snapshot was taken at the block in which Proposal #848 was finalized (Block #18,010,658).
- 56,667,011 $ATOMs voted
No - 11,669,549 $ATOMs voted
No With Veto
The turnout will result in a total supply of 68,336,560 $GOVGEN, distributed to the voters pro-rata to their staked $ATOMs.
AtomOne: The New Minimal Hub for the Interchain
AtomOne is a security-conscious fork of the Cosmos Hub, meant to deliver its original promise: the minimal, reliable IBC/ICS Hub. The table below depicts a high-level comparison between the Cosmos Hub and AtomOne.
Key Features
- Tendermint2: AtomOne will be powered by Tendermint2 (TM2), a consensus engine based on the Tendermint Core v0.34, the longest-running version on the Cosmos Hub. As a successor of the most proven and battle-tested iteration of Tendermint, TM2 will focus on minimalism and modularity for maximum security.
- ICS1.5: ICS1.5 is an improved shared security model based on Replicated Security (ICS1). The validator incentives of ICS1 are poorly structured. As rewards from consumer chains are distributed proportionally to the voting powers, tail validators are running at a loss. Based on the current voting power distribution, “over 74% of Cosmos Hub validators risk becoming unprofitable with less than six consumer chains (source)”. Ensuring the profitability of all validators is pivotal for the sustainability of the VaaS model. ICS1.5 aims to enable ICS scaling by introducing a new taxonomy in which 80% of transaction fees on consumer chains are equally distributed between validators. Specification and definition of ICS1.5 is still under discussion.
- Sophisticated Governance: AtomOne will support multiple proposal types and extended voting periods based on the significance and dynamics of proposals. Furthermore, only direct voting from delegators will be allowed on AtomOne to minimize the political influence of validators. However, validators will retain their delegation-based voting powers for urgent infrastructure proposals, which is reasonable given their technical excellence. These changes are expected to drive engagement from individual $ATONE holders to actively participate in governance.
- Liquid Staking for $ATOM: AtomOne will offer a liquid staking consumer chain for $ATOMs. The liquid-staked tokens will be called $phATOMs, which will function similarly to existing liquid staking derivatives such as $stATOMs or $pATOMs. The goal of providing a liquid staking service is to use the liquid-staked $ATOMs to make voting decisions on the Cosmos Hub to guide it to its safety. In that sense, AtomOne also serves as a conservative political base of the Cosmos Hub governance.
The $ATONE Tokenomics
$ATONE is the staking token of AtomOne. The distribution will be an “opinionated fork of the $ATOM holdings”. This implies that individuals or organizations that have voted in favor of proposals that are adversarial to the core values of Cosmos are to be slashed. Additionally, 10% of $ATONE is pre-mined for contributors and on-chain DAOs as follows:
- 1% to general pre-launch contributors & adopters
- 1% to IBC contributions & adopters
- 1% to ICS1.5 contributors & adopters
- 7% to subDAOs
$ATONEs can be liquid staked to $PHOTONs, its deflationary representation which consumer chains of AtomOne are required to accept as a fee token.
Roadmap
The roadmap of AtomOne is divided into 4 phases. Key milestones for each phase are defined in the image below.
- Pre-IBC: Define governance specs and implement IBC.
- Post-IBC: Fix liquid staking and validator incentives.
- ICS1.5 scaling: Fix ICS and build killer apps for mass adoption.
- Maintenance: Develop the ecosystem with education and project incubation.
4. Call to Action
The release of the IBC Protocol in the Cosmos Stargate upgrade in February 2021 opened the floodgates to secure cross-chain communication between blockchains. In less than 3 years, the vibrant Cosmos ecosystem now processes millions of messages worth billions of USD in volume each month between 80+ zones with 0 recorded exploits.
With an exponentially increasing number of zones, the Cosmos ecosystem will soon realize the need for a minimal Hub which they can mutually connect to, that will drastically reduce the complexities of interchain communication. AtomOne is designed to capture this demand and position as the most secure, canonical IBC/ICS Hub of the interchain.
As followers of the original vision of Cosmos, Onbloc is committed to actively supporting the AtomOne project as a validator and an infrastructure provider.
If you resonate with our mission, we invite you to join this initiative at the atomone-hub repository and contribute by writing code or sharing your valuable insight.
Our nearest objective is to launch GovGen on Tuesday 27th at 2 PM UTC. If you wish to join the Genesis validator set, carefully follow the instructions below.
- Find the GovGen Genesis file in the Readme.
- Submit your `gentx` by this Saturday 24th, at 10 AM UTC. Follow the instructions and make a PR to add yours to the `gentx` folder.
- Register your validator on the GoveGen/AtomOne validator PR.
There is a pre-launch call on Monday 26th, at 2 PM UTC (24h before launch). Join the call using the links below:
- Direct link to the call on Monday: https://meet.google.com/fai-dnbv-vbb
- Public Calendar for all future meetings: http://bit.ly/govgen
Links
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