A Note on the Future of the Cosmos Hub

Conversation Essays
41

Also, I’m not really clear on the exact mechanism that you are proposing. How and when the committee is chosen, etc.

Could you lay out your proposal for an impartial global governance committee here in simple terms? Maybe also nominate some members. Let’s see how this thing could work.

Unfortunately there’s not a concrete proposal I’m ready to make yet. I think more research should be done (eg into successful DAOs like Maker and Lido) and more conversations had with community members who have a lot of context on history, culture etc (like yourself @jtremback and @ebuchman )

I think the time spent getting this right though is time well spent.

Although I don’t have a concrete proposal the desiderata I have in mind are :

  1. A vision as the north start (eg interchain Money and Security)
  2. Clear intermediate objectives defined, and a system (or policy) by which they can be collaboratively refined when new information comes in
  3. A system (or policy) for accountability by which people are rewarded for success with respect to the predefined (or previously unforeseen) objectives. And also not rewarded for a lack of effectiveness in the predefined (or unforeseen) objectives.

Qualities of a desirable system that come to mind :

  • Flexibility : it should adapt to new information efficiently
  • Trustworthiness : voters trust the process has the right balance of checks and balances

Although the two (flexibility and trustworthiness) have some tension, ideally we pick a good point along the tradeoff curve.

If y’all have anything I missed, happy to add to the list.

42

I want to avoid funding recipients getting an edge by schmoozing with the right people. There is some degree of that now with validators in governance votes, but I think this is relatively OK, or at least as good as you are going to get in a democracy because the validator set is quite diverse.

I also want to avoid creating a much-heralded governance system which then loses the trust of the voters and is torn down. The system needs to handle failure and change well. The per proposal committees do that because they do not pretend to be a perfect global system.

1 Like
43

Editing out the post because I accidentally sent the same thing twice oof :sweat_smile:

44

I also want to avoid creating a much-heralded governance system which then loses the trust of the voters and is torn down. The system needs to handle failure and change well. The per proposal committees do that because they do not pretend to be a perfect global system.

I think this is a really good point. We want to have as little complexity as we can, without sacrificing other desirable properties. It’s worse to restart repeatedly than to iterate on something working.

That said I’m only making suggestions based on what I see the incentives as being and have never pretended to have proposed a perfect global system.

45

The fact of the matter is a great* system can only ever be neared by proper trial and error. By making a tweak, collecting data and then drawing conclusions.

This is why I called the policy suggestions I made “interventions” in the original post. Not because I was proposing an ossified roadmap for perfection, but because what I was proposing is akin to an intervention in an A/B testing*

46

That’s part of it. But the community pool also never even had enough funds to consider funding core development until early this year, after the percentage was increased from 2 to 10. Of course just because it has the funds doesnt mean it has the structures, or as you say the policies. We need to build those up.

Yes this has been a major focus for the ICF, but there are naturally constraints on what it can do. There was also an initial separation of concerns between ICF and AiB, with AiB expected to lead organization of Hub development, as the ICF nurtured the Interchain. With AiB fallout, that all collapsed back on the ICF. A big part of what the ICF had to do the last 3 years was figure out how to re-organize a Hub team in the first place, after the original team and incentive structure broke apart.

The ICF is probably not the right body for ultimate accountability of the Hub’s core development teams - that would be better served by the Hub itself. Of course we need to build the policies and structures to enable that. But that’s not to say the ICF doesn’t have many other ways to support the Hub and the growing AEZ, and having the Hub take over responsibility for its own development will allow the ICF to focus on other means to support the Hub.

Of course, and they are. Historically this has been difficult to define in the absence of a Hub team. And there has been significant demand on the interchain stack from a diversity of projects across the interchain. We need to find ways for these projects to meaningful support core development of the stack they depend on and currently use for free, and to define the relationships between core stack development and the Hub. The interchain stack also does not have unified technical organization, which makes coordination across the layers more challenging. That said there are new directions for the Hub like AtomicIBC that will for instance drive requirements in CometBFT.

Absolutely. We even wrote a guide on a language for accountability called workflow: https://workflow.informal.systems/ . We strive to use it internally to get better at making and managing promises. I’m sure it could help here too :slight_smile:

1 Like
47

Appreciate the response.

I liked your framing for this paragraph in particular.

Of course, and they are. Historically this has been difficult to define in the absence of a Hub team. And there has been significant demand on the interchain stack from a diversity of projects across the interchain. We need to find ways for these projects to meaningful support core development of the stack they depend on and currently use for free, and to define the relationships between core stack development and the Hub. The interchain stack also does not have unified technical organization, which makes coordination across the layers more challenging. That said there are new directions for the Hub like AtomicIBC that will for instance drive requirements in CometBFT.

Corollary question : What kind of process would you like to see for defining roadmaps ?

48

Hey Ethan, thank you for getting involved in the thread.

Shouldn’t that be clearly communicated by the ICF so the Hub community knows what it is expected of it ? I don’t remember the Hub’s on-chain governance being really aware of the ICF’s intentions and plans in the past.

The hub can certainly take responsibility and accountability by deciding the direction the AEZ takes and the ICF could provide support to push in that same direction ?

2 Likes
49

Not sure how useful an answer I can give in this comment. Some collaborative process to align product, engineering, and funding with strong leads and regular community input and feedback. Clear organization of features/directions according to level of development and acceptance by the community with strong standards of acceptance and means to deliberate and decide priorities. Ethereum seems to do a pretty good job.

Yes ICF has been publishing more about its funding and activities. It should get better at coordinating with community pools.

Hub should fund its own direction and development. ICF should support.

1 Like
50

A simple ‘‘support’’ stance would make sense in the context where there is an entity dedicated to the Hub, but there is a void there. Your solution is that the Hub fills its own institutional void. I appreciate the consistency because you basically had the same opinion 30 months ago (February 2021) when you published this under the ICF blog :

‘‘Today the Hub has a minimal set of facilities for decentralized organizing, but these coordination capabilities will need to be expanded significantly to become a premier venue for developing interchain products and services, and bringing them to market. A self-improving social and technical infrastructure will enable the Hub to become a nexus for a wide variety of individuals, collectives, companies, institutions, DAOs, and autonomous agents to work together, aligning incentives toward a common goal.’’ (The Cosmos Hub is a Port City. A vision of what comes next for the… | by Interchain | Interchain Ecosystem Blog)

Not much changed since then imo. The Hub is still quite disorganized while the ICF seems to be waiting for that to solve itself, while acknowledging that organizing is the hard part. The disputes at Tendermint, AiB, ignite etc. are regularly used as excuses as to why the Hub doesn’t have the economy that it should, 4.5 years after the genesis block.

There are people who seriously care about bootstrapping the AEZ, but it is hard to do so with both hands tied in the back. The ICF is the one that holds the vast majority of financial resources (that were given to the ICF by the Hub’s original believers). I think it is naïve to think an economy can start democratically and in a decentralized matter right away, it needs a centralized coordinator at first.

I know this won’t change, but it’s getting exhausting to follow.

51

Did you not read the thread? Everything has changed since then!

In that time, IG, Hypha, and Informal all built teams dedicated to the Hub (none of which existed at the time of that blogpost!), and the IG and Informal Hub teams merged. Its only really since the start of this year that we finally had a stable, organized, and focused Hub team, and the launch of ICS is a testament to that.

You might also recall that much of ATOM2.0 was about better governance systems for the Hub. Alas.

Its not an “excuse”, its history. I’m not trying to dwell in the past or blame anything, but I think the history is important for understanding - rebuilding a team from scratch after a major organizational fallout is hard, time consuming work. We finally got there, but it took 3 years. In the meantime we also shipped IBC and built one of the most compelling ecosystems in the entire industry …

Yes the ICF put a lot of energy and resources into rebuilding a Hub team to get it to the point its at today. Things are much better now. Its now the time to align with the Hub community itself on taking things to the next level. That’s my understanding of what this whole conversation is about at least …

Tell me about it :wink:

4 Likes
52

Assuming we will drastically reduce inflation. If the Liquid Atom will be limited to , say 25%, then how the stakers should be incentivised to stake enough ATOM to provide enough security for the Hub and the Atom Economic Zone?

53

i guess there is some brainstorming around that currently.

one solution seems to be a tax on liquid staked Atom, which would make stakers earning better rewards than liquid stakers.

my take is this is not a sufficient incentive, but who knows what’s being cooked.

2 Likes
54

With proper LSD implementation (including voting proxy), LSD Atom will be always more practical and useful than native one. You can stake LSD Atom in a DeFi and earn double rewards for example (native staking + yield farming).

55

@Spaydh and I just collaborated on a follow-up post on the role Neutron can play in this process. Feel free to check it out and provide your thoughts.

1 Like
56

Thank you for your message and your suggestions.
since everyone agrees that focusing on a common goal is the best thing to do. It seems that shared security is part of this path.
If I followed the validators’ conversations carefully, it will be difficult to have more than 10 consumer chains in the AEZ.
What we can see from the current revenues of STRIDE and NEUTRON is that we are very, very far from the mark. Being a small holder with only 6000 ATOM, since the launch of NTRN I have received 0.4 NTRN, or 0.12 dollars (for 42000 invested).
Let’s add this STRD with 0.3 or 0.27 dollars for more than a month.
Promising blockchains like duality which was supposed to use ATOM as fee gas and is found on NTRN (where stakers will only receive 25% of the fees and no ATOM used as fee).
Even with a massive influx of liquidity and activity * 100 my 42,000 euros of investment only brings in 40 dollars/month. We all agree that this is ridiculous.
If we want ATOM inflation to be close to 0, we need additional income to that of simple staking
My question is simple: what are the solutions for AEZ to make ATOM a profitable blockchain?
Is it possible to increase the maximum consumption chains from 10 to 100?

3 Likes
57

Hi all,

I think one of the hub’s greatest strength as it has entered the security provision market is being opiniated.

Ethereum cannot afford to be opiniated, because its very value proposition is credible neutrality. It can’t support a rollup project or team. It can only adjust its roadmap in ways that support all rollups. This has fairly deep implications. For example, it is likely to completely prevent Ethereum from ever implementing some of the opcodes that would make rollups a lot easier and efficient to build, simply because there exists enough different implementations today that making an opcode that benefit them all equally/converging towards a standard is impossible.

Cosmos Hub, on the other hand, not only has a reason but also has the means to be opiniated.
Replicated Security is horizontal scaling, today, its cost increases linearly with the number of consumer chains. While this might be vastly improved moving forward, this constraints means that, at least in the short term, there is an upper bound to the number of consumer chains that can run before breaking the status quo. As a result, to maximize its expected value, the Hub should try to attract to Replicated Security projects that feature the most upside, the most potential. E.g. the Hub is forced to select, to be opiniated.

My argument is that this is a feature, not a bug. To maximize its expected value, the hub needs two things: to attract the most promising projects, and to secure the best deals possible. To do so, it needs leverage - being opiniated is the best way to achieve this:

By “opiniated” here I don’t mean “picky”, or at least not only. I mean having a strong vision for what the AEZ needs/should look like, selecting the most promising projects, and throwing the entire weight of the Hub behind the projects it has picked to ensure that those become 10-100x more successful than any competitors. Doing so sends a strong signal that the Hub is the place to be for the most talented and ambitious builders, therefore generating dealflow for the Hub. The more dealflow, the higher the chances that the Hub gets to pick really good builders.

To be successful in this approach requires on-chain governance, which Cosmos and the Hub has pioneered. While on-chain governance has been fairly broadly criticized for its volatily, lack of resistance to conflict of interest or corruption, solutions exists, and the fact of the matter is that the entire industry, due to Ethereum’s rollup-centric roadmap, is headed towards relying more and more on on-chain governance bodies than on immutability.

More specifically, except for Fuel V1, every single bridge rollup today is upgradeable, and most are controlled by some flavor of a multisig. This is motivated by the necessity to have some means to respond to vulnerabilities and such, but it does lead us to a state where most rollups can be rugged by a fairly small group of signers. Long term, there are two solutions to this problem: immutability (improving the rollup/fixing a vulnerability requires deploying a new rollup and migrating everything to it) or governance. While some projects will certainly opt for the former, I expect most will go the governance route.

Ensuring the Hub becomes the most established and best governance system in the industry therefore benefits the hub in two ways:

  1. It maximizes the Hub’s expected value by selecting better consumer chains and securing better deals,
  2. It allows the Hub to compete with Optimism on a ground where it has the upper hand and potentially become the “supreme court” of the industry, providing governance/arbitration as a service for the rollup-centric rollup.

For this to happen, the hub must focus on improving the quality of its governance: not simply on. improving decision quality, but also on improving the stability and reliability of its governance decisions (e.g. ensuring the hub upholds the commitments it has previously entered in, etc).

In any case, I think we have as a community intuitively been moving in the direction of the “opinionated Hub” so far with Replicated Security, but I wanted to put this roughly on paper to explain why I think this is the most reasonable approach.

It is strongly differentiated from EigenLayer and Ethereum, and it creates a powerful feedback loop: good team → good project → support of the hub → tremendous project → more dealflow → better teams → better projects → more dealflow → repeat

It also, imo, highlights well what the hub’s priorities should be:

  1. Iterating and improving on Replicated Security (improve the tech, build better cultural and economic alignment etc),
  2. Iterating and improving on how the Hub can use ATOM as its ultimate weapon to make its consumer chains the most successful projects in the industry and generate revenue for itself doing so (tokenswaps, liquidity providing, liquidity as a service/lending, etc), and finally,
  3. Iterating and improving on governance, and striving towards decision making excellence.

Just my 0.2c but hope that will be helpful and inspire further conversation

7 Likes
58

This has all been so great to read & think about.

Briefly,

My thoughts keep returning to voting. How can community governance work while votes are by nature/design bought & paid for?

And now with the LSM; some votes can be bought (Atom) & then almost immediately sold (stAtom). They could even be malicious outsider votes.

Nothing governance does will be trusted by the community if the community perceives voting to be nothing but a whales & top wallets game.

Quadratic voting looks like something worth examining. (Axelar has an interesting write up on their version of it in their Security Overview docs.)

I’m sure there are many other examples of mitigations that I’m not even aware of.

What are they? Because this is step one.

Even the best governance framework and policy set in the world has to rest on a foundation of voting & elections that anchor trust & fairness.