A New Major Product Idea for the Cosmos Hub

[Govmos]

Thank you, @Noam, for this thorough and high-quality work. Binary Builders has once again delivered ideas and content that we take great pleasure in reviewing. We will share our feedback using our standard three-step process: context, analysis, and conclusions.

Context:

The concept of funding a decentralized sequencer deployed as a consumer chain leveraging the Cosmos Hub’s security is certainly worth exploring. Whether the product will achieve market fit is a separate question, which we will address by outlining the pros and cons in our review. Nevertheless, this discussion should primarily focus on “how” and “when” rather than "if." To address these critical questions, we will analyze the design choices and conclude with strategic recommendations aimed at maximizing the likelihood of successful market adoption.

Analysis:

Let’s begin by examining the proposed design choices, as quoted from the author:

@Noam

This is how you can avoid the waiting period and have instant withdrawals: some third party essentially sees your bridging request and says, “I’ll check the transactions and execute the block myself. If it looks good, I’ll front the money for the user and wait until the waiting period is over, for a small fee.”

We completely agree with this statement and have long been critical of the inherent inefficiencies in Optimistic systems. Their primary strength lies in operating at marginal costs, with relatively low technical overhead, allowing operators to process a high volume of inexpensive transactions. However, the trade-off comes in terms of security and centralization. Optimistic rollups often require external Data Availability (DA) layers, introducing third-party dependency risks and security assumptions. Many rollups mitigate these risks with extended withdrawal (or challenge) periods.

The proposal to have a third party front the money and wait out the withdrawal period is a sound economic solution but still introduces third-party reliance. It also necessitates centralized sequencing compromises to maintain low operating costs. Striking the right balance between these factors is crucial. We believe that introducing enforcement mechanisms, such as protocol-level censorship detection or subjective proof submission, could significantly benefit Halo. Leveraging the ICS slashing mechanism on the Hub would incentivize validators to ensure neutral and efficient sequencing. This is an area ripe for innovation, with the Hub’s instant finality slashing feature offering a solution that current EVM-based rollups can’t match, unless Ethereum successfully implements Single-Slot Finality (SSF). A feature that is highlighted in the Ethereum roadmap, but still in an early design stage.

@Noam

This is exactly how we want to do settlement on Halo in the near term. We want to employ optional attestors, which are essentially rollup nodes that post the same state root to Halo as the “official” rollup node. Once enough attestations come in, we can consider the block final and allow the rollup to bridge to other networks.

Halo’s instant finality slashing should be used to incentivize rapid attestations. We envision a system where revenue is distributed based on how quickly valid attestations are provided. Incorrect submissions would be slashed on the Hub, creating a balanced short-term risk-reward system for validators to sequence efficiently. This mechanism should be combined with a long-term protection system to mitigate risks of censorship and MEV.

@Noam

This essentially formalizes how Optimistic rollup networks currently work in practice. When ZK tech is ready, we migrate to that system.

Ethereum researchers have expressed a preference for ZK scaling, and we at Govmos fully agree. ZK technology, combined with the instant finality properties of Cosmos’ consensus, should be a key long-term consideration. Design choices should account for this future migration to avoid technical debt. We would appreciate Binary Builders’ input on developing a roadmap that minimizes this debt, optimizing longer-term migration efficiency.

Conclusions:

Our review highlights key strategic considerations. The product must be innovative and competitive, especially in the crowded rollup ecosystem where constant innovation makes it difficult to stay current. We believe the Cosmos Hub’s instant finality and slashing consensus mechanism is a powerful asset that can give Halo a competitive edge. However, Ethereum’s roadmap, which includes similar future developments, makes timing critical for Halo’s success.

We believe that the proposed Q3 2025 mainnet launch should be expedited to Q2 2025 to secure an advantageous market position. We look forward to hearing from the technical team to determine whether this timeline is feasible and whether additional resources might help accelerate the delivery process, thereby increasing the likelihood of success.

@Noam

What Halo essentially offers is a low-cost middle path between launching a smart contract and a full-blown layer 1 blockchain. We expect many projects to “upgrade” as they grow, and we plan to offer very clean migration paths to our users.

Marketing will also be crucial. While EVM-based rollups have heavily invested in marketing, Cosmos has a reputation for lagging in this area. To justify the development costs of Halo, substantial marketing efforts will be necessary to drive adoption and ensure the investment of community funds is worthwhile. Low-cost rollup transactions will only turn profitable if large transaction volumes are attracted.

We fully support the structured approach proposed for integrating Halo into the Cosmos Hub’s broader product suite. This strategy is smart, and we are aligned with that vision. We simply request more precision on the effective methods that could be proposed.

@Noam

Another key step here would be finding better EVM wallet support for Cosmos chains so that users coming from EVM-based networks are never stuck when they arrive in Cosmos, similar to how Osmosis recently approved Lite EVM. A partnership with the EvmOS team seems like a logical step to take here, and we are already in talks with them about how to offer this to our users.

We absolutely agree with this and recommend the partnership. We encourage the teams to formalize this agreement and include it in the future funding proposal.

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Summary:

In summary, we fully support this project. The team has proven itself to be highly capable, and we believe they are well-suited to design and implement these proposals. From a strategic perspective, timing and marketing will be key to success. Our analysis suggests that the roadmap should be shortened by at least one quarter to ensure competitive positioning against Ethereum’s SSF evolution. Marketing efforts should also extend beyond the product suite, emphasizing ease of migration into the proposed design.

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Thank you for reading,
Govmos.