Boosting ATOM with ICS income

Conversation Tokenomics
1

Using ICS Revenues from Consumer Chains to Create Buying Pressure on ATOM

Context

Today, consumer chains that benefit from the security of the Cosmos Hub (via PSS Top-N or Opt-in) compensate the Hub by sharing a portion of:

  • their native inflation,
  • their revenues generated on their own chain (transaction fees, MEV, etc.).

Some chains even go further by integrating mechanisms such as buyback & burn on their native token or other tokenomics strategies in favor of ATOM.

Idea

I’d like to open a discussion on the possibility of integrating—either directly into the protocol or via economic conventions—the following:

  • That the ICS revenues paid to the Hub are partially or entirely converted into ATOM on the market.

Each ICS consumer chain would remit its revenues to the Hub in native tokens or stablecoins.

These revenues would be used (in whole or in part) to buy back ATOM on the market.

The purchased ATOM could then:

  • be burned to create scarcity,
  • be staked to strengthen the economic security of the Hub and generate yield for stakers,
  • be redistributed to consumer chains as an additional incentive.

The idea is to create continuous buying pressure on ATOM, generate a virtuous economic circle, and reinforce economic alignment between the Hub and consumer chains.

Governance:

  • Should this mechanism be mandatory?
  • What portion of revenues should be allocated to buying back ATOM (e.g. 10%, 25%, 50%)?

Timing and Automation:

  • One-time purchases or DCA (Dollar Cost Averaging) to limit market impact?
  • Should specific modules be developed to automate these operations? Implementation via Stride Dex? Intento?

Exploring hybrid models where chains can choose:

  • The portion to be paid in ATOM,
  • The portion in stablecoins,
  • The portion in native tokens.

In the new vision where the Hub is not merely a security hub, but a home for the interchain economy, my view is that we must refocus value into the native token of our home, namely ATOM.

That’s why, personally, I’m in favor of hard-coding economic deals between chains aligned via ICS. Of course, nothing prevents fully sovereign chains from deciding on their own economic strategies that favor ATOM.

Thank you for your participation. Let’s keep bringing interest and value back to ATOM.

Guinch

9 Likes