Introduction
In my last post, I detailed the current benefits and shortcomings of the Cosmos Hub’s Replicated Security (RS) framework.
RS faces a unique and complex challenge that can simply be referred to as the RS Incentive Problem. This trilemma encapsulates the divergent, often conflicting interests of three primary stakeholders: ATOM stakers via the Cosmos Hub, consumer chains, and validators.
Each group operates with distinct self-motivated interests, creating a nuanced relationship. The interwoven dependencies between stakeholders require careful balancing for the successful implementation of shared security models like Interchain Security (ICS) and Replicated Security (RS).
- ATOM Stakers via the Cosmos Hub: ATOM stakers, driven by the pursuit of higher yields, naturally favor an increase in consumer chains. Their preference to extend economic security stems from a perceived lack of accountability - they do not bear any direct costs when voting to support additional networks. Their inclination is to consistently vote in favor of integrating more consumer chains, viewing each addition as an opportunity to increase their yield without incurring proportional costs.
- Consumer Chains: Emerging chains, seeking to leverage the established economic security and align with the Cosmos Hub community, are inclined to join shared security solutions. They prefer to minimize their security budget, desiring robust security at a lower cost than would otherwise be required to bootstrap independently. This desire for cost-efficiency drives consumer chains to propose terms favoring the consumer chain with an emphasis on minimizing their financial contribution through revenue sharing agreements and/or fee splits.
- Validators: RS offers Cosmos Hub validators additional revenue streams in return for supporting new consumer chains. This should reduce the business development typically necessary to win new delegations from stakers on newly launched proof-of-stake (PoS) blockchains. RS requires validators to support consumer chains approved through Cosmos Hub governance. Once live, non-support of a consumer chain risks delegators’ staked ATOM being slashed. Validators are socially pressured to support consumer chains with questionable economic incentives. Each new consumer chain (or sub-network, as defined in Felix’s article) creates additional devops responsibilities and increases the overall cost to support the Cosmos Hub. Validators typically approach each decision to support a new network with an investment mindset, weighing the potential benefits against the time, attention and costs required to operate. Throughout the bear market, many validators have taken a more cautious and selective stance towards adding support for new blockchains.
This dynamic generates a notable discord between the Cosmos Hub community and its validators, introducing a form of tension that was previously non-existent. Specifically, this tension arises from a misalignment of incentives and a lack of accountability, widening the gap between appchains’ need for dependable services and the operators’ motivation to effectively service consumer chains in the manner originally envisioned by Replicated Security. The current structure of RS forces validators to support new consumer chains, regardless of economic benefits and creates situations where validators will inevitably operate at a loss. This imbalance in the incentive structure calls for a reevaluation and restructuring of the shared security mechanisms within the Cosmos ecosystem.
Proposal to Change Replicated Security’s Economic Model
We propose a series of modifications aimed at re-aligning incentives across the entire class of stakeholders engaged in the Replicated Security framework. These changes are designed to ensure that each party’s interests are fairly represented and considered, creating a more sustainable and mutually beneficial ecosystem for ATOM stakers via the Cosmos Hub, consumer chains, and validators. The following sections explore these proposed changes, outlining a path towards a more equitable and effective shared security framework within the Cosmos ecosystem.
1. In-Protocol Economic Changes
- 1.1 - Minimum Commission Fee for Cosmos Hub Validators
- 1.2 - Dynamic Commission Adjustment with Consumer Chain Integration
- 1.3 - Flexible Opt-in/Opt-out Mechanism for Validators in Replicated Security
- 1.4 - Implementation of Interim Evaluation Period for Onboarded Consumer Chains
2. Governance and Process Standardization
- 2.1 - Post-Interim Period Application Process for Consumer Chains
- 2.2 - Prioritizing and Developing Replicated Security v2 (Partial Set Security)
- 2.3 - Funding Development of RS Monitoring Tools for Enhanced Transparency and Accountability
3. Community Engagement and Outreach (Loftier Goals)
- 3.1 - Streamlining Consumer Chain Application Processes and Learning from Past Experience
- 3.2 - Fostering Economic Collaboration and Resource Sharing in the AEZ
4. Strategic Marketing and Ecosystem Growth (Loftier Goals)
- 4.1 - Leveraging Replicated Security for Business Development and Ecosystem Expansion
- 4.2 - Funding Research & Development via Grants and RFLs (Request for Liquidity)
5. Alternative Approaches and Considerations
1. In-Protocol Economic Changes
1.1 Minimum Commission Fee for Cosmos Hub Validators
Proposal Overview
We propose setting a minimum commission rate of 5% for Cosmos Hub validators. This initiative is grounded in a comprehensive understanding of the validator economics within the Cosmos ecosystem. Research previously performed by Blockworks on ATOM Break-Even Pricing offers insightful benchmarks, suggesting that a 5% rate is both reasonable and sustainable.
Rationale
The primary objective is to prevent a detrimental “Race to Zero” in validator commission rates. Such actions invite unsustainable economic business practices among validators, potentially threatening the network’s integrity and long-term viability. Some view near-zero commission rates as an attempt by validators to buy political influence through anti-competitive pricing. Validators, under financial pressure, might compromise on service quality or exit the ecosystem, leading to centralization and security vulnerabilities.
Economic Implications
A 5% commission rate ensures validators are adequately compensated for their services. This rate is designed to balance the interests of all stakeholders - validators, ATOM stakers, and the Cosmos ecosystem at large. It recognizes the increased complexities and costs validators face, especially with the advent of Replicated Security and the need to support additional consumer chains.
Impact on Network Health
By setting this standard, we aim to enhance the economic sustainability of the Cosmos Hub. It encourages validators to maintain high operational standards and invest in upgrades, ensuring the network’s resilience and efficiency. Moreover, this proposal aligns the economic incentives of validators with the long-term health and growth of the Cosmos ecosystem.
Statistical Justification
Current data indicates that a 5% commission rate falls below the average rate charged by a significant proportion of active validators. This benchmark is not only fair but also strategically positioned to encourage quality service without imposing undue financial strain on delegators.
The average commission rate of the 180 validators is ~8.2%. Four validators in the active set charge 100% commissions. If we remove these outliers from our calculation, the average commission rate of the 176 remaining validators falls to ~6.12%. This means that setting a minimum commission fee of 5% doesn’t result in gauging ATOM stakers. It’s below the average commission rate currently being charged by Cosmos Hub validators.
On average, increasing the minimum commission rate to 5% would increase the average commission rate charged by the 180 validators and 176 validators mentioned above by less than 1%, resulting in average commission rates of ~9.2% and ~7.11%, respectively.
For those who believe setting a minimum commission fee of 5% is deemed too high, statistically speaking, you’re in the minority. Furthermore, delegating to a validator with a commission set to 5% still ensures you are delegating to operators that charge 1% below the average commision rate charged by the majority of validators.
TLDR: Instituting a 5% minimum commission rate lays a solid foundation for a balanced, economically viable, and secure Cosmos ecosystem. It represents a small step towards aligning the interests of validators with the overarching goals of the network, ensuring its prosperity and sustainability.
1.2 Dynamic Commission Adjustment with Consumer Chain Integration
Proposal Overview
We propose a dynamic adjustment feature to the existing commission fee structure for Cosmos Hub validators, linked directly to the addition or removal of consumer chains within the Atom Economic Zone (AEZ). This change will dynamically modify the minimum commission rate charged to ATOM stakers based on the evolving consumer chain landscape.
Proposal Details
- Incremental Minimum Commission Increase/Decrease: The Cosmos Hub’s minimum commission rate will increase by 100 basis points (or some agreed upon amount) for each new consumer chain added to the AEZ. Conversely, the rate will decrease by the same 100 basis points if a consumer chain is removed.
- Interim Period: Newly approved consumer chains will enter a 1-year interim period, during which they are guaranteed economic security from the Cosmos Hub in exchange for the 100 basis point increase in the Hub’s minimum commission rate increase (the “Interim Period”). This period serves as a probationary phase, allowing for a comprehensive assessment of the consumer chain’s integration and performance.
- Commission-Free Consumer Chain Rewards: During the Interim Period, Cosmos Hub validators will charge 0% commission on rewards ATOM stakers earn from consumer chains. This approach ensures that ATOM stakers directly benefit from the inclusion of new consumer chains by receiving 100% of the consumer chain rewards earned by the Cosmos Hub.
- Annual Reassessment Period: The economic relationships with consumer chains are structured as agreements to be reassessed on an annual basis. This structured review ensures that both the Cosmos Hub and consumer chains remain mutually beneficial partners within the AEZ.
Rationale
- Aligning Stakeholder Interests: Everyone has skin in the game. A dynamic adjustment mechanism aligns the interests of ATOM stakers via the Cosmos Hub, validators, and consumer chains. It addresses the upfront financial costs associated with adding new consumer chains to ICS and compensates validators for the increased overhead and risks to their Cosmos Hub delegations.
- Encouraging Thoughtful Expansion: Tying economic incentives to the addition of consumer chains, the Cosmos Hub encourages careful consideration and due diligence before expanding the Atom Economic Zone (AEZ). This strategy mitigates the risk of overextending operators and ensures that new integrations are economically viable and beneficial.
- Balancing Rewards and Responsibilities: This model balances the distribution of rewards and responsibilities among all parties. Validators are compensated for their increased responsibilities, while ATOM stakers are incentivized to support sustainable and promising consumer chains, consumer chains negotiate directly with ATOM stakers.
Long-term Vision
- Sustainable Growth: The proposal aims to foster a balanced, sustainable model for the growth of Replicated Security. It ensures that expansion efforts are economically justified and that the AEZ evolves into a robust network of mutually supportive chains.
- Economic Security and Incentives: The reassessment process ensures that consumer chains continuously contribute positively to the AEZ, justifying their economic security. There may be consumer chains that ATOM stakers wish to support despite their direct economic output. This system allows consumer chains that add extrinsic and intrinsic value to the AEZ to grow organically, reducing the external pressures to offer high inflationary rewards and encouraging long-term stability.
- Community-Driven Decision Making: The Cosmos Hub community is empowered to make informed decisions about the inclusion and support of consumer chains. This decentralized approach to governance ensures that the AEZ remains dynamic, responsive, and aligned with the community’s collective vision of the AEZ.
1.3 Flexible Opt-in/Opt-out Mechanism for Validators in Replicated Security
Proposal Overview
We introduce a flexible opt-in/opt-out mechanism for Cosmos Hub validators regarding their participation in Replicated Security. This proposal allows validators to make informed decisions on securing consumer chains, based on their capacity and their own self-interests (regulatory, financial, etc.).
Proposal Details
- Regular Decision Points: Validators will have the opportunity to review and/or adjust their participation in Replicated Security on a regular basis (possibly quarterly, semi-annually, or annually).
- All-or-Nothing Approach (optional): Initially, the choice to participate in Replicated Security will be an all-encompassing decision, requiring validators to either support all consumer chains or none. While not absolutely necessary, my hope is that this approach simplifies the validator onboarding process and minimizes technical complexities until a more flexible solution is made possible.
- Future Granularity: As the Replicated Security model evolves (particularly with the development of Replicated Security v2), the onboard/offboard process may allow validators to make consumer-chain-specific decisions, offering greater control and customization of their responsibilities.
Rationale
- Operational Flexibility: Validators vary in their capacity and strategic focus. This proposal respects their autonomy, enabling them to decide which networks align with their capabilities and business models.
- Financial Considerations: The opt-in/opt-out mechanism acknowledges the financial implications validators face when adding new chains to support. It allows them to manage their operational costs effectively and ensures that they are not excessively burdened by the addition of new consumer chains.
- Risk Management: By enabling validators to choose their relative degree of participation, the proposal mitigates the risk of overextending finite resources and makes sure that validators are not exposed to unsustainable levels of economic risk.
Additional Considerations
- Economic Security of Consumer Chains: Validators opting out may lead to a concentration of responsibilities among fewer operators, potentially affecting the economic security across the AEZ. ATOM stakers may decide to delegate away from validators that opt out of consumer chains they wish to support. This necessitates additional considerations and careful monitoring.
- Stakeholder Communication: Clear communication channels between validators, ATOM stakers, and consumer chains are crucial. As the AEZ increases, it may be necessary to create dedicated resources to coordinate efforts among these stakeholders. One potential option is the creation of a neutral third party representative for the Cosmos Hub to negotiate SLAs on behalf of the Cosmos Hub. Their purpose is to understand the changing landscape of shared security and act as a representative of ATOM stakers and the Cosmos Hub.
- Governance Implications: The proposal may influence the dynamics of governance within the AEZ, as validators’ decisions to opt-in or opt-out could affect their voting power and influence on the network.
Long-term Vision
- Adaptive Network Resilience: The proposal aims to foster a resilient and adaptive network where validators can dynamically adjust their involvement based on the evolving needs and opportunities within the AEZ.
- Balancing Decentralization and Efficiency: While promoting operational flexibility for validators, the proposal also seeks to maintain a healthy degree of decentralization and economic security, avoiding excessive concentration or influence among a select few validators.
- Encouraging Sustainable Growth: By allowing validators to align their participation with their capacity, the Cosmos ecosystem can grow sustainably, ensuring that each addition to the AEZ contributes positively to the overall health and stability of the network.
2. Governance and Process Standardization
2.1 Post-Interim Period Application Process for Consumer Chains
Proposal Overview
Develop a structured application process for consumer chains once the “Interim Period” has concluded. This process allows consumer chains to renegotiate the terms of their economic participation and validator compensation in the AEZ. We outline a proposed framework for renegotiating economic structures post-Interim Period, focusing on sustainable validator compensation, economic alignment, and the adaptability of the economic model within the AEZ.
Proposal Details
- Application for Economic Structure Revision: After the Interim Period, consumer chains can propose modifications to their Replicated Security Service Agreement, particularly concerning the commission fee structure.
- Proposal for Commission Fee Reduction: Consumer chains can apply to decrease the Minimum Commission Fee for Cosmos Hub validators by 1%, conditional upon compensating validators with the consumer chain’s native tokens.
- Financial Viability Assessment: The feasibility of this commission reduction is contingent on the consumer chain’s ability to equitably offset the increased 1% commission (paid in ATOM tokens) with its native token rewards. The evaluation of this proposal will consider the 90-day Time-Weighted Average Price (TWAP) of the consumer chain’s token (or some alternative benchmark).
Rationale
- Sustainable Validator Compensation: The proposal aims to maintain a fair and sustainable compensation model for validators, balancing their efforts and risks with appropriate incentives.
- Economic Alignment: By linking compensation to consumer chain tokens, validators are incentivized to support the chain’s early success, aligning their interests with the long-term viability of the consumer chain.
- Dynamic Economic Model: This approach introduces flexibility and adaptability into the current economic model, allowing adjustments based on the performance and growth of individual consumer chains.
Additional Considerations
- Application Standardization: A standardized application should be drafted to evaluate such proposals. Its format should be simple to complete and comprehensive to ensure all relevant information is included before any decisions must be made.
- Risk Evaluation: Validators and ATOM stakers must assess the risk of accepting consumer chain tokens as compensation. This involves a thorough analysis of the chain’s market performance, growth potential, and overall stability.
- Governance Participation: The approval of any proposed changes would require active participation from the governing body to ensure any decisions made are approved by the community and in the best interest of the AEZ.
- Market Fluctuations: The proposal should account for market volatility and the value of consumer chain’s token. This could involve setting guidelines or caps on how fluctuations in consumer chains’ underlying token value and potential impact his will have on validator and ATOM staker compensation.
Long-term Vision
- Adaptive Economic Relationships: Encouraging a dynamic economic relationship between stakeholders and reflects the evolving needs and capacities of interested parties.
- Enhanced Validator Engagement: Tying validator compensation more closely to consumer chains they support once consumer chains have been validated by the market, validators may become more engaged in the success and governance of these chains.
- Strengthening the AEZ: This process aims to remove uncertainties in validator support and enhance the overall resilience and attractiveness of the AEZ. We hope this makes Replicated Security more appealing for existing and prospective consumer chains by managing expectations of all parties and targeted KPIs.
2.2 Prioritizing and Developing Replicated Security v2 (or Partial Set Security)
Overview
Focusing on the evolution of Replicated Security into the future. The next iteration, known as Partial Set Security, should address some of the current economic and operational inefficiencies in v1 and better align incentives across the AEZ. It underscores the importance of resource allocation, comprehensive documentation, and effective BD efforts to foster sustainable growth and attract diverse projects to the AEZ.
Proposal Details
- Improved Replicated Security Model: Transition from the current model (v1) to a more sustainable and balanced version, v2 (Partial Set Security).
- Contributions from Consumer Chains: Prospective and current consumer chains are encouraged to allocate resources for the development and enhancement of Replicated Security v2 and beyond.
- Community and Developer Engagement: Emphasizing the importance of community and developer involvement in the evolution of Replicated Security features.
Rationale
- Addressing Current Inefficiencies: The current version of Replicated Security (v1) has exhibited several economic challenges, particularly in terms of incentive structures, making it crucial to develop a more sustainable version. Consumer chains can offer caps to the amount of economic security they want to share with the Cosmos Hub. This should improve the incentive model for active validators that opt-in to support a given consumer chain.
- Balancing Interests: v2 aims to create a fairer distribution of responsibilities and benefits among consumer chains, the Cosmos Hub, validators, and ATOM stakers.
- Encouraging Innovation: By involving consumer chains in the development process, the AEZ harnesses a diverse range of perspectives and expertise, fostering innovation. Increasing optionality and flexibility in the Replicated Security model will lead to greater experimentation and innovation across the AEZ.
Additional Considerations
- Resource Allocation: Consumer chains could commit dedicated development time, technical resources, and expertise towards the development of Replicated Security v2 and into future improvements.
- Documentation and Support: Ensuring that updated and comprehensive documentation is available, alongside support for teams interested in becoming consumer chains.
- Business Development (BD) Efforts: Cross-promotion that demonstrates and informs developers about the benefits of Replicated Security will attract more projects to the AEZ.
Long-term Vision
- Sustainable Growth and Development: Replicated Security v2 aims to solidify the foundation for a more robust and scalable AEZ.
- Enhanced Collaboration: Strengthening the collaborative ecosystem within the AEZ leads to more innovative solutions and a stronger community.
- Attracting Diverse Projects: By showcasing the improved RS model and its benefits, the AEZ aims to become a more attractive option for a wide range of projects, further enriching the ecosystem.
2.3 Funding Development of RS Monitoring Tools for Enhanced Transparency and Accountability
Proposal Overview
Allocating community resources to support the creation and maintenance of advanced monitoring tools dedicated to Replicated Security, with the aim of improving transparency and accountability within the AEZ.
Proposal Details
- Better Monitoring Tools: Encourage and fund the development of monitoring tools for both the Cosmos Hub and consumer chains.
- Transparency Dashboards: Creation of dashboards that provide real-time insights into various aspects of the Cosmos Hub and consumer chains, including economic metrics, validator activities, and chain health.
- Accountability Measures: Set standards and KPIs that consumer chains should be tracking to give updated insights into their growth and how the Cosmos Hub community can support them. We should focus efforts on creating metrics designed to improve network performance and efficiency of Replicated Security, enabling better assessment of its overall performance and economic viability.
Rationale
- Enhancing Decision Making: With more comprehensive data and insights, stakeholders can make more informed decisions regarding their investments and the governance of the AEZ.
- Identifying Opportunities and Risks: Monitoring tools will help identify areas of success and concern, allowing for proactive adjustments and improvements.
- Building Trust: Increased transparency and accountability contribute to building trust among stakeholders, essential for the long-term success of the AEZ.
Additional Considerations
- User-Friendly Interfaces: Develop tools that are accessible and easy to understand, catering to both technical and non-technical onlookers.
- Community Involvement: Involve the community in the development process to ensure the tools meet the diverse needs of the AEZ stakeholders.
- Continuous Improvement: Commit to the ongoing enhancement and updating of these tools to keep pace with the evolving nature of the AEZ and blockchain technology.
Long-term Vision
- Sustainable Ecosystem Growth: By providing clear insights, these tools will support the sustainable growth of the AEZ and overtime can identify areas of improvement.
- Promoting Active Participation: Improved transparency and accountability mechanisms encourage more active participation from all stakeholders in the governance and development of the AEZ.
- Attracting New Projects and Investment: The availability of robust plug-in tooling and monitoring can make the AEZ more attractive to new projects and investors, looking for a transparent and accountable blockchain ecosystem.
3. Community Engagement and Outreach (Loftier Goals)
3.1 Streamlining Consumer Chain Application Processes and Learning from Past Experience
Proposal Overview
Implementing a structured and data-driven application process to onboard consumer chains into the AEZ, while integrating lessons learned from past experiences to enhance decision-making and sustainability.
Proposal Details
- Structured Application Framework: Establish a formal and transparent application process for consumer chains, including standardized formatting, clear guidelines, application requirements, and evaluation criteria. Setting up and contributing to move towards
- Data-Driven Decision Making: Utilize empirical data and analysis to assess the viability and cost-benefit of consumer chain proposals.
- Iterative Learning Process: Periodically review and refine the application process based on insights and lessons learned from previous admissions and operations within the AEZ. Changes to the process should be simple and ensure we have the ability to compare applications from different consumer chains at the same time.
Rationale
- Enhancing Evaluation Quality: A structured framework ensures a consistent and high-quality evaluation of consumer chain proposals, leading to more streamlined decision making processes.
- Risk Mitigation: By learning from past experiences and integrating those insights into the application process, the AEZ can better manage risks associated with onboarding new consumer chains.
- Promoting Transparency and Fairness: A clear and documented process enhances transparency and fairness, crucial for maintaining the confidence and trust of all stakeholders.
Additional Considerations
- Community Involvement: Engage the wider AEZ community in refining and updating the application process, ensuring it aligns with the evolving needs and expectations of the ecosystem.
- Feedback Mechanisms: Establish channels for receiving and integrating feedback from both applicant consumer chains and AEZ stakeholders.
- Benchmarking and Standards: Develop benchmarks and standard OKR/KPIs that consumer chain proposals can be objectively evaluated against, including technical, economic, and governance aspects.
Long-term Vision
- Building a Robust Ecosystem: A refined application process contributes to building a more robust and resilient AEZ, attracting high-quality consumer chains.
- Fostering Innovation and Growth: By setting high standards and learning from the past, the AEZ positions itself as a hub for innovative and sustainable blockchain projects.
- Enhanced Stakeholder Engagement: A transparent and participatory process for onboarding consumer chains fosters a sense of ownership and engagement among all AEZ stakeholders, driving collective success.
3.2 Fostering Economic Collaboration and Resource Sharing in the AEZ
Proposal Overview
Developing a framework within the AEZ to enhance economic collaboration, resource sharing, and mutual support among consumer chains, thereby establishing a more unified and prosperous ecosystem.
Proposal Details
- AEZ Community Pool: Create a communal economic pool contributed to by consumer chains, aimed at supporting various initiatives such as funding new projects, enhancing shared infrastructure, and ecosystem-wide marketing.
- Incentive Mechanisms for Mutual Support: Introduce structures to motivate consumer chains to support one another, potentially through shared staking rewards, joint development projects, or cross-chain initiatives.
- Resource Sharing Agreements: Establish formal agreements for sharing resources among consumer chains, covering aspects like security infrastructures, joint marketing, and collaborative R&D.
- Community-Driven Decision Making: Empower the AEZ community to democratically decide on the allocation of community pool resources, ensuring ecosystem-wide benefits.
- Regular Economic and Strategic Review Meetings: Facilitate periodic meetings with representatives from all consumer chains, validators, and the Cosmos Hub to discuss AEZ’s economic health and strategize future economic initiatives.
Rationale
- Economic Synergy: By pooling resources and fostering collaboration, the AEZ can enhance its economic strength and stability.
- Innovation Through Collaboration: Encouraging consumer chains to work together can lead to innovative cross-chain projects and initiatives, enriching the ecosystem.
- Empowered Community Engagement: A participatory approach in decision-making processes promotes a strong sense of community involvement and ownership.
- Attractiveness for New Projects: A collaborative and supportive environment can make the AEZ more appealing to prospective blockchain projects.
Additional Considerations
- Governance Structure for the Community Pool: Develop a clear and transparent governance model for the community pool, ensuring fair and efficient resource management.
- Metrics for Success: Establish performance metrics to assess the effectiveness of collaborative efforts and the utilization of shared resources.
- Feedback Loops: Implement mechanisms to gather feedback from AEZ participants, ensuring continuous improvement and responsiveness to the community’s needs.
Long-term Vision
- Robust Economic Ecosystem: Position the AEZ as an economically robust and resilient blockchain ecosystem, capable of adapting to changing market dynamics.
- Enhanced Cross-Chain Dynamics: Promote a culture of cross-chain collaboration, leading to a diverse range of projects and partnerships within the AEZ.
- Sustainable Community Growth: Through shared resources and collaborative efforts, foster sustainable growth and development within the AEZ, attracting and nurturing high-quality projects.
- Global Blockchain Leadership: Establish the AEZ as a leading example of a collaborative and economically integrated blockchain ecosystem.
4. Strategic Marketing and Ecosystem Growth (Loftier Goals)
4.1 Leveraging Replicated Security for Business Development and Ecosystem Expansion
Overview
Capitalize on the success of Replicated Security to position the Cosmos Ecosystem as a prime destination for high-profile projects and developers, focusing on economic security and building on its early momentum.
Proposal Details
- Strategic Business Development Initiatives: Establish dedicated teams to engage with founders and leaders of potential blue-chip projects, showcasing the advantages of the Cosmos Ecosystem and Replicated Security.
- Showcasing Success Stories: Utilize successful application-specific and generalized consumer chains within the Replicated Security portfolio as case studies to demonstrate the practical benefits and potential upside the Cosmos ecosystem has to offer.
- Addressing Governance Token Fatigue: Position the Cosmos Hub and Replicated Security as a solution to the existing limitations of traditional governance token models. App-chains offer a sustainable and value-driven alternative to worthless governance tokens.
Rationale
- Attracting Quality Projects: By showcasing the success and capabilities of the Cosmos ecosystem, more high-caliber projects may be encouraged to join, enriching the diversity and quality of the ecosystem.
- Promoting Economic Security and Interoperability: Highlighting these key features can attract projects seeking stable and interoperable blockchain solutions.
- Competitive Advantage: Leveraging the strengths of Replicated Security can give the Cosmos Ecosystem a competitive edge in the blockchain space.
Additional Considerations
- Marketing and Communication Strategy: Develop a comprehensive marketing strategy to effectively communicate the benefits of the Cosmos Ecosystem and Replicated Security to a wider audience.
- Partnership and Economic Collaboration Opportunities: Explore partnerships with other blockchain ecosystems and technology providers to expand the reach and influence of the Cosmos Ecosystem including cross-chain funding proposals and supporting ecosystem protocols within the AEZ.
- Community Engagement and Feedback: Involve the Cosmos community in the business development process, ensuring alignment with community values and leveraging collective insights.
Long-term Vision
- Building a Hub for Blockchains: Transform the Cosmos ecosystem into a leading hub for innovative blockchain projects, attracting a diverse range of applications and solutions.
- Fostering a Thriving Ecosystem: The influx of new projects and collaborations can lead to a more vibrant and dynamic ecosystem, fostering innovation and growth.
- Establishing a Benchmark in Blockchain Technology: Positioning the Cosmos and Replicated Security as leaders in the blockchain industry for shared economic security, scalability, and interoperability.
5. Alternative Approaches and Considerations (unexplored)
- Validator UBI
- Min/Max Caps on validator consumer chain rewards
Conclusion:
The proposed changes to Replicated Security’s structure are designed to foster a balanced, sustainable, and thriving shared security economy. By addressing the unique challenges of the Replicated Security Incentive Trilemma, these changes attempt to address the interests of ATOM stakers, consumer chains, and validators, ensuring that each group is fairly compensated and incentivized for their contribution to the ecosystem.
The proposed changes represent a shift towards a more integrated, collaborative, and innovative future for the Cosmos ecosystem. It’s a vision where every participant’s contribution is valued, the ecosystem grows through shared success, and the Cosmos Hub sets a new standard in the industry for shared economic security, interchain support, and sustainable growth.
If you made this far, my sincere thank you for reading and I owe you a beer at ETH Denver. Also, please share your feedback either in the comments or DMs are always open.
