After reviewing the comments in the forum over the (US) holiday weekend, we want to respond to the common themes below. We’re genuinely excited about this partnership; ATOM sits at the center of the most active interoperability layer in crypto, and we want to tell that story to our clients and expand the addressable market of instittuions and individuals who can be as bullish as we are. We’re pushing the voting period to September 10th EOD to allow more discussion first. The themes fall into three buckets: Distribution v. Demand, Breakdown of the Fee Structure, and Adoption Insights. The original forum comments are quoted above each response.
1) Distribution v. Demand
“If Coinbase, Revolut or other existing players already provide similar institutional access, it would be useful to understand exactly what additional value Paxos brings.”
As a tangible example, there are traders on Charles Schwab who will never touch a crypto exchange. Institutional distribution goes far beyond crypto natives: total crypto market cap is $4T, against the roughly $500T+ of assets sitting on traditional venues (Securities, Bonds, etc.) Paxos has received OCC approval (not conditional) and operates as a national trust bank. We have our own proprietary trade execution engine that is built to service the demand of other financial institutions. It’s a different category of infrastructure from Coinbase or Revolut, who predominantly serve crypto natives.
“As the upside for the ATOM team is larger than what we can offer today” — what exactly do you mean by this?
Paxos has the fewest brokerage clients it will ever have, today. Every day we bring more institutions onto our platform, and in a year we expect to scale our brokerage clientele significantly, and ATOM will be available to every one of them as an option on Day 1 of their integration. The “upside” is that compounding distribution curve, which is worth more to ATOM long term as adoption scales.
“I largely agree with Scott’s distinction between distribution and demand, as well as with TRAVE’s concerns regarding accountability.”
This is the classic cold-start problem, and here’s how we are investing to support both sides. ATOM tokenholders are investing in Paxos: an institutional custodian and trading engine that predates Ethereum, trusted by MercadoLibre, PayPal, and Charles Schwab, the largest brokerage in the world. Being positioned among the ~50 assets these platforms can list puts ATOM squarely in their target zone as regulatory clarity accelerates their crypto adoption. Cosmos Hub’s own team just published its August 2026 roadmap direction, and independently landed on the exact same thesis, positioning the Hub as the gateway between TradFi and on-chain finance, because RWA and finance protocols are already the heaviest users of IBC today. We’re not asking ATOM holders to take our word for where this is headed; the Hub is building toward it too. We will be creating demand as new tokens create an opportunity for us to position these assets to our clientele, and help them understand the ecosystem beyond the headlines, and give them a reason to consider listing this asset. This is not a list it and forget it model, we are actively working with our partners to get feedback on the token and push parties to list it based on narratives and technicals- We’ve already solved the risk piece by running ATOM through our standard risk procedure.
“Can you share which brokerages have integrated tokens like ATOM, which sit 20 spots above or below it, and the volume they generate?”
We have tokens like RENDER (#87) listed by brokerages like CMC. Memecoin adoption has been low on our end because our partners are prioritizing L1 tokens and utility assets driving real on-chain volume, targeting the Top 100. ATOM was in the Top 60 when this conversation started, and we expect the bull market to make it a demanded asset for clients. The bigger story: ATOM is the governance token at the heart of IBC, and Cosmos’s institutional footprint is real and growing entirely independent of this proposal. Wells Fargo is building its tokenized deposit engine on Cosmos. Japan’s Progmat megabank consortium chose Cosmos for tokenized deposits. Figure’s Provenance Blockchain, the largest public blockchain in RWA, runs on the Cosmos SDK. And Project Pax has already brought MUFG, SMBC, and Mizuho into the interchain. That’s the surface area that can put ATOM on our top clients’ radar, but we have to do the education work, and make the token available. We’re gated on client-specific trading data due to confidentiality, but we’ll share listing counts as they grow.
2) Breakdown of the Fee Structure
“It would be better if we see a more detailed breakdown of how the funds will be used.” / “I urge the Paxos team to provide a clearer breakdown of this one-time cost (engineering hours, regulatory compliance, legal clearance) alongside defined integration milestones.”
The 300,740 USDC covers three things: engineering to bring ATOM onto Paxos’s custody and trade execution infrastructure, regulatory and compliance clearance specific to listing a new asset under our OCC trust charter, and relationship-management effort to actively advocate for ATOM with our brokerage clients ahead of any proven trading revenue. Concretely, that’s roughly 200 to 300 hours of engineering, risk, and compliance work, plus the harder-to-quantify (but very real) cost of our relationship managers pushing this asset before revenue materializes. To be direct: if our large brokerages started demanding ATOM on their own,trading revenue would become self-evident and we likely wouldn’t be seeking listing fees. That’s exactly the gap this funding closes, and candidly, our team has a proven track record of educating our clientele around where the needle is moving with respect to digital assets.
“Funding must be structured strictly in milestone-based tranches: each deliverable should be verified before its corresponding tranche is disbursed. Funding should follow delivery, not promises.”
Paxos has already committed real engineering, risk, and compliance hours in good faith, on the understanding that this structure is standard and would be well received. Our risk procedure is already greenlit and product teams are on standby to launch custody/trading enablement this month. Restructuring against deliverables would be moot as we plan to deliver this across our enterprise offering imminently, and can follow up here once it’s live.
“No individual brokerage is committed to activating ATOM, and Paxos has explained that payment cannot be conditional on KPIs.”
Correct, and that’s not a loophole, activation guarantees create broker-dealer concerns we legally cannot navigate around. What we can and will commit to: quarterly reporting of total listings as they happen.
3) Adoption Insights
“Post-launch reporting: what does Paxos plan to share with the Hub after launch?”
As new partners support ATOM, we’ll share updates in this thread, publicly announced and easily accessible. We can’t share client-specific flow or custody data for privacy reasons, but we are happy to share listings as partners make ATOM available to their clients.
“I don’t think staking should be ignored, as it has serious implications for concentration of voting power.”
Staking isn’t being ignored, the design space is just wide, and we’re not committing to a model prematurely. What we can assure the community: none of our clients will run their own validator node through this integration, so we’re not introducing large counterparties who could usurp the network’s controlling stake. If Paxos ever runs our own validator, we’ll bring that back to this forum first.
“The community pool is paying for this, there should be some accountability to it… I would nominate @Guinch_Roze, @klendhaar, or @TRAVE.”
Already in touch with validators, and glad to bring another community voice into the loop. We will update the proposal with the following changes:
- Committing to Quarterly updates around number of listings
- Push the Go live date to Sept 18th and give us through tomorrow to continue the discussion.