ATOM-Backed Stablecoin and Lending Protocol Proposal (Built on Elys Network)

Hub Proposals
1

Summary:

This proposal aims to strengthen the Cosmos Hub’s economic foundation by introducing an ATOM-backed overcollateralized stablecoin and a lending/borrowing protocol built on Elys Network. The ultimate goal is to establish Cosmos not just as a provider of security, but as a sustainable and productive DeFi hub in the broader ecosystem.

⸻

Rationale:
1. While NFT markets have stagnated, Cosmos Hub’s recent focus on NFT-related integrations is unlikely to provide long-term sustainable growth.
2. Cosmos excels in infrastructure — IBC, Interchain Security, and governance — but lacks a native stablecoin and lending layer, which are essential for liquidity and user retention.
3. Competing chains (Ethereum, Avalanche, Arbitrum) have grown by anchoring liquidity around native or integrated stablecoins like USDC, USDT, and DAI. Cosmos needs a native DeFi primitive to remain competitive.
4. An ATOM-backed stable asset would directly increase ATOM demand and transform the token from a governance/staking asset into the backbone of economic activity.

⸻

Implementation Plan:

  1. ATOM-Backed Stablecoin
    • Overcollateralized model with a minimum collateral ratio of 200% (initially for safety).
    • Collateral assets include ATOM and staked derivatives such as stATOM or qATOM.
    • Suggested naming: USDA (USD-ATOM) or cUSD.

  2. Lending & Borrowing Layer (on Elys Network)
    • Built on Elys Network, which offers smart contract execution, perpetual trading, and ETF-style index vaults.
    • Users can deposit ATOM as collateral to borrow stablecoin or vice versa.
    • Lending engine includes risk management, liquidation, and fee structures.
    • Protocol revenues can be routed to the Cosmos Hub community pool.

  3. Key Integrations
    • Elys Network: DeFi infrastructure and execution layer
    • Stride / Quicksilver: For integrating staked derivatives as collateral
    • Osmosis: For USDA liquidity pools
    • ICQ: For cross-chain collateral management and oracle validation

⸻

Funding Request:
• Initial funding of 200,000 ATOM from the Cosmos Hub community pool to support:
• Research and design of the stablecoin model
• Development of smart contracts and frontend
• Testnet deployment and security audits
• Launch incentives and liquidity bootstrapping

⸻

Expected Outcomes:
• Cosmos Hub gains a natively integrated DeFi layer and stablecoin.
• ATOM’s utility is significantly enhanced, encouraging long-term holding and usage.
• A clear revenue model emerges for the Cosmos Hub treasury.
• Cosmos retains liquidity and activity within the ecosystem instead of exporting it to EVM chains.

⸻

Conclusion:

“ATOM should not only secure the network — it must also power an internal economy.
A native stablecoin and lending system is the next logical step in Cosmos’ maturity.
We don’t need more NFTs — we need native money, lending rails, and a sustainable DeFi economy.”

2

While we await a formal announcement from the Interchain Labs team regarding the upcoming Atom Aligned Apps program, we believe it is premature—and ultimately inappropriate—to request direct funding from the community pool at this stage.

We kindly encourage applicants to defer their proposals until a new grant management entity is officially established. Once operational, this structure will provide a more consistent and transparent framework for evaluating and allocating funding.

On behalf of the PRO Delegators team and our broader community, we want to state clearly that we will be voting against all interim grant requests during this transitional phase. This is not a reflection of your proposal’s merit—which we actually find quite promising—but rather a matter of timing and process integrity.

Thank you for your understanding.
pro-delegators-sign

3

Fully against this. No reason to launch yet another stable token that has no mathematical modelling provided.

Maybe do and publish research first, then o some A/B testing on a small scale. I still dont see any benefit in this. Sorry