A team introduction, Q3 delegations, the Injective USDC migration, Gauntlet’s Phase 1 findings, and Cosmos EVM on the Hub
The following is a recap of the July 8, 2026 Cosmos Hub validator call. These calls occur once per month, and recaps like this one are posted on the Cosmos Hub forums following each call.
This was the third validator call, and it followed the same shape as last month’s: a set of ecosystem updates, a topic of the month, and an open Q&A. This month’s topic was Cosmos EVM and what it could look like surrounding the Cosmos Hub. The question on the table is how the Hub should host EVM, not whether to adopt it, and two options were presented for validator input.
Validators have a new point of contact
Dan Bryan, technical programs manager at Cosmos Labs, is taking over much of the day to day for the delegation program and validator inbound from me, and he will be the new point of contact for a lot of this work moving forward. He will also begin leading the validator calls. Any validators who would like to schedule time to chat and bring him up to speed on what you are working on, now is a great time to reach out to Dan in the validators channel on telegram.
Dan introduced himself at the top of the call. He has been around Cosmos for a while: he ran infrastructure for the Rujira team, worked at Strangelove helping manage their validators, and was involved with Ethereum before that, with a background spanning more than twelve years across infrastructure, cloud, security, and automation. He has operated validators across more than thirty Cosmos chains, covering launches, upgrades, monitoring, relayers, and incident response. He has also been a Cosmos ecosystem grant program recipient himself, and he is hoping to use his experience from both sides to help ensure a smooth process. Outside of work, he is usually with his three dogs.
Beyond the delegation framework, Dan is focused on two things this month. The first is getting ready for the USDC move to Injective and making sure Skip Go delivers a one-click experience, working with our new engineering team on the transition. The second is mainnet operations for Gaia: Hypha handled this in the past and is now focused solely on the testnet under the proposal that recently passed, so Dan is coordinating the handover to our internal engineering team while continuing to work closely with Hypha to make sure everything gets tested before it rolls out on mainnet.
Delegation program: the Q3 cycle is in progress
The Q3 cycle is in process. The list has been prepared with the help of Range, whose validator dataset has been pulled and QA’d, and it has been reconciled against Hypha’s Q3 testnet participation list. The relevant data now needs to get to the ICF council. The final list is being handed to the ICF this week, and execution likely takes another couple of weeks while the custodian admin gets sorted. A public blog announcement is being drafted now.
The big new filter this quarter is testnet participation: any validator that qualifies for the delegation program now needs to qualify for the testnet. That has cut the numbers down significantly, and expectedly so. 54 validators qualify this cycle, down from the roughly 80 that qualified last quarter. These numbers are not fully final and may still shift, though probably by two to three validators at most.
The benefit lands on everyone who participated in the testnet. The same 13.5 million ATOM total from last cycle is being delegated, plus additional accrued staking rewards, and it is now being split over about two thirds of the validators it covered before. That works out to roughly a 50% increase in delegations over the last cycle, give or take.
Next quarter, active testnet participation will be required: six testnet points via Hypha for qualification. For everyone that qualified this cycle, that should not be much of an issue. If you have questions about how the testnet ceremonies work and what earning points requires, reach out to Lexa at Hypha.
Injective USDC migration: a staged rollout
This is one of our top priority workstreams: we want any blockchain, wallet, or app currently on Noble USDC migrated over to Injective as soon as possible. The big blocker is getting this enabled on Skip Go in a one-click flow, preserving the user experience Noble users have today. That requires an ICS20 EVM precompile to be shipped to Injective, which in turn requires a chain upgrade. We are handling the PR with the Injective team to make that go as quickly as possible, but the estimated timeline points to September.
In the meantime, we are building out a two-click flow for anyone that wants to migrate early, with a loose target of early August. Chains that take it will have to accept a temporarily degraded user experience: bridging in from Base to Osmosis, for example, would mean signing one transaction to bridge and a second for the forwarding from Injective, which gets messy with L2s since it can sometimes take several minutes. It is not ideal, but it gives optionality to anyone who wants to migrate immediately, and it keeps us moving as quickly as possible.
Once the Injective upgrade is live, Skip Go migrates to the precompile solution and end users get the same one-click USDC experience they had with Noble.
Tokenomics: Gauntlet’s Phase 1 report is complete
As most of you know, we have an ongoing engagement with Gauntlet for a two-phase tokenomics overhaul for ATOM, with Phase 1 targeted mostly at understanding what the ATOM purchase and sale landscape looks like today. Phase 1 is now complete. We have received the report and are going through it, and it has been shared with the ICF. We expect to release it publicly to the community on Friday, July 10, via the forums and likely a post from the Cosmos Hub X account as well. The central finding is that ATOM sell pressure is not one issue: it is event-driven repricing, recurring reward realization, and concentrated address-level routing to centralized exchanges.
On reward realization, 42.6% of withdrawn staking rewards reached a sell route within the same week they were earned. Across eleven weeks of data from January to March 2026, 8.18 million ATOM was withdrawn; 27.7% of it was re-staked and 29.7% stayed liquid. The overall impact on sell pressure is not as large as we originally thought. The structural footprint is larger than peer networks, though: roughly 0.153% of supply reaches a claim state on Cosmos each week, about 3.6 times NEAR at 0.027% and 5.7 times Ethereum at 0.042%, so Cosmos exposes more liquid reward per unit of supply than peer proof-of-stake networks.
Phase 2 will look at options for addressing inflation, and we want to be very careful about how, because the data also shows what happens when inflation is touched. The main event where that happened in the past was prop 848, the ATOM halving that decreased max inflation from 20% to 10%. The event itself was not entirely surprising, but the scale of the reaction was: 10.25% of the circulating supply of ATOM was sold in the week that prop 848 passed. That is the largest event on record, 2.6 times the October 10 liquidation cascade and 17 times the reaction to the original forum post. Large holders move on finality, not discussion. For comparison, about one and a half percent of supply was sold when Terra collapsed and roughly 3% when FTX collapsed, so this one governance event, without any macro driver, caused more ATOM sales than those macro sell events combined.
On channels and cohorts, about 97% of ATOM sales occur on centralized exchanges, with sell pressure routing directly to exchange deposit addresses; the other 3% happens on decentralized venues like Osmosis, Neutron, and Injective, so DEX swaps are negligible. Whales and mega-whales drive roughly 79% of event-window selling, and 44 wallets account for the bulk of measured pressure over five months. From here, Phase 2 points toward smoothing or delaying reward realization, lowering liquid emissions relative to supply, and risk dashboards covering centralized exchanges and security.
Topic of the month: Cosmos EVM and the Hub
As we roll out changes to the ATOM roadmap, we are going to end up building a number of products on the Cosmos Hub, and we are now thinking through what that should actually look like. Most people would agree that CosmWasm is probably not the ideal approach for building these products: it lacks the developer tooling that EVM has, the forkable primitives, and general developer adoption, and potential market makers and integrators are familiar with EVM. Cosmos EVM already ships in production across the ecosystem, so the question is not whether the Hub adopts EVM but when and how. We have converged on two possible options.
The first option is to deploy EVM directly on the Cosmos Hub, resulting in a multi-VM Hub running CosmWasm and Cosmos EVM on the same chain, with the same validator set and the same ATOM economics. This very likely requires a migration of addresses, though not of assets: users would not transfer their ATOM anywhere, but existing accounts would sign a transaction that links a hex address to their existing keys. What you get is EVM natively on the Hub without many wallet-level changes, with MetaMask now working alongside Keplr, Trust Wallet, and other options, and wallets and dapps that already know the Hub continuing to work with minimal changes. Everything lives on one production chain with one validator set, unified ATOM economics and liquidity, and programmatic fee accrual. It is also narratively cleaner. The Hub stays the Hub: no outsourcing of functionality to a second chain, no dual-chain value accrual story, no competing with another chain for Hub status, and far fewer multi-hop bridge scenarios.
The trade-offs are significant. We assume the migration will be very confusing for a lot of people, and while nobody would lose their assets, someone who stakes their ATOM and steps away for a year could come back not knowing where it is, which is exactly the outcome we want to avoid. Cosmos and hex accounts are not interchangeable, so exchanges, custodians, and saved deposit flows all need updating before hex users are first-class. Handling ATOM at 6 versus 18 decimals creates confusion and issues for smart contracts, running EVM beside CosmWasm widens the attack surface, and the Hub’s existing tech debt cannot be isolated from any of it.
The second option is a dedicated EVM sidechain: a very lean, EVM-specific chain connected to the Hub over IBC, with ATOM as gas. It would probably use a lot of our Cosmos stack performance improvements and enterprise-licensed modules, run proof of authority, and potentially carry some new privacy solutions. With this option there is no migration to worry about and nobody gets confused about where their ATOM is; existing Hub users are simply unaffected. As EVM grows in complexity, the tech debt stays on the sidechain, and we can optimize around block times, pushing down into sub-second territory, which matters if we head in the direction of trading or settlement products. Anything that works on any EVM chain will deploy to this chain very easily, products can go out quickly with minimal customization, and this path lets us move more quickly overall.
The trade-offs cut the other way. The burden of maintenance of both chains falls on Cosmos Labs. It is hard enough to maintain one chain; maintaining two production networks indefinitely is a heavy lift and expensive. Some bridging becomes two hops instead of one, which introduces latency and new failure states. EVM-only wallets cannot reach the Hub, so someone using MetaMask on the sidechain cannot get back to the main Hub chain and their ATOM without a Keplr wallet, there is no recovery path for stuck IBC or Skip Go funds, and Hub balances do not show up in front ends; that UX friction needs to be thought through and resolved.
We are not deciding in a vacuum; networks across the ecosystem have shipped EVM in three different configurations over the past year. Sei initially launched EVM alongside Cosmos as a multi-VM chain and then chose to unify on a single EVM environment in 2026. Dual VMs meant dual maintenance, which eventually coalesced into a multi-year governance process and a major migration to move off multi-VM. Injective, on the other hand, looks like the current success case for multi-VM. It shipped native EVM on the main chain in November 2025, with a token standard that keeps one canonical representation per asset and a strong day-one dapp lineup, and its EVM works well. XRPL took the sidechain route: Ripple created a dedicated EVM sidechain, live since June 2025 and built on Cosmos EVM, that keeps the main ledger untouched. It has not seen a lot of direct adoption, and a lot of that seems to owe to it being a generic EVM chain in a market with plenty of those; growth has been gradual, and differentiation and a day-one liquidity plan are the hurdles.
Q&A themes
On the reward-selling figure, a validator asked whether the 42.6% covers validators specifically. It is not just validators; the figure includes ATOM stakers as well. The same validator suggested that if inflation changes are being considered, it would be worth embedding a minimum threshold so smaller validators can still sell to cover their costs. We certainly would not look at any of this as punishing validators, but to the extent that we change inflation, it does impact them, and we have been thinking through offsets, none of them guaranteed: a validator universal basic income along the lines of what Neutron did, or cutting the size of the set, since the set is too large right now and a cut would help redistribute stake if inflation came down. The report will also show that an overwhelming number of the validator-specific sales come from exactly who you would think: the centralized exchange validators, Coinbase, Binance, Kraken, and Upbit, with huge commissions and heavy stake weight concentration. They are the structural sellers, and we are looking at whether we can offset their specific sales rather than punishing the entire set for something those validators are doing.
On the POA sidechain, a validator asked whether the final comparison will include validator operating costs, compensation, selection criteria, and a long-term decentralization roadmap. Part of the reason a sidechain would run proof of authority in the first place is that we do not want to recreate ICS; we found those economics just do not work, and we do not want to force the validator set into running another chain. The cleanest approach would be contracting with a subset of the validator set, compensated through additional delegations or some other form of compensation for running that chain directly. In either option, the hope is that validator costs do not rise. It is possible the multi-VM option adds a bit of state bloat that could increase peering times, and that is something we would definitely look at.
On testnet compensation, a validator asked whether validators still receive rewards on the Hypha side for testnet participation. That was the case in the past, but part of the reason the testnet participation requirement moved into the delegation program is so that validators get compensated through it instead. If you are not running the testnet, you are no longer eligible for ICF delegations; if you are, that is what qualifies you, and the compensation comes in the form of the increased delegations, which as of this quarter are going to be fairly significant.
On cutting the validator set, a validator asked whether there is a timeline for when the discussions could reach the forum or governance. There is no concrete timeline yet, but we are watching the validator set very closely. A couple of validators are churning: Citadel One posted the other day that they are winding down operations, Chorus One is now Bitwise, and there are a couple of other teams we know will probably churn in the coming months. We are actively looking at validator health, and cutting the set seems to be one additional option that can help with validator profitability. If we had to guess, initial conversations start around August, maybe September, so be on the lookout for it in the next month or two. Any reduction would probably be gradual, since we would want to monitor the relative staking percentage that occurs with each cut.
Next steps
The next validator call will occur on August 12 at 9:00 AM ET. If you are an active set validator and have not yet joined the channel, message @totalspud or @robomcgobo on Telegram for an invite.