This is the twelfth of Hub Weekly Thursday recaps, straight from the Hub Unit team, per the cadence we committed to in the From Chaos to Stability to Growth post.
Every Thursday, we will call out significant Cosmos Hub updates on the forum, with a short companion thread on X, recapping announcements, live events like validator or community calls, and ecosystem updates!
For more info, see the linked posts, and contact @RoboMcGobo on Telegram to submit news for the weekly.
The Weekly took two Thursdays off: one for the first Cosmos Quarterly, and one while most of the team was in Korea for the Hub roadmap working sessions. We are back on cadence, and there is a lot to catch up on.
This week: the Hub product direction, the ICS deprecation upgrade, tokenomics Phase 2, and Injective USDC.
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Hub product direction: three hypotheses went to Korea, and one came back as the direction we’re most excited to test, validate, and develop into a roadmap
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Injective USDC: the two-click migration flow is live on testnet, with Skip Go mainnet support targeting next week; most critical work begins
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ICS deprecation: the Gaia v28 advance notice is out, and the upgrade is running on the public testnet
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ATOM tokenomics: Phase 1 is wrapped, and Phase 2 mechanism design has kicked off with Gauntlet
Hub Product Direction: Three Hypotheses Went to Korea, One Came Back
Most of the ecosystem team spent the first week of August together in Korea with one job: come to consensus on a product direction that we could begin validating as part of the Hub’s new roadmap.
Since this is the update many of you have been waiting on, we will walk through it one level at a time: which hypothesis shows the most promise, where the Hub fits within it, what happens between now and the roadmap, and what the timeline looks like.
A note on this update: what we are sharing here is preliminary. It is an early look into a direction, shared early because we committed to building out in the open. When the roadmap is ready, we will do a proper announcement with the full vision and the product shape, in its own dedicated comms, of course!
Three hypotheses: where could the Hub matter most?
As a refresher, the audit and problems phases of the roadmap process examined the strengths and weaknesses of the ecosystem and aimed to identify where the strongest opportunities exist for the Hub to leverage those strengths and weaknesses. That process produced three broad problem spaces that the Hub could potentially solve, which we laid out publicly on the July community call:
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Real-world assets: Finance and RWA chains are the heaviest IBC users today, but tokenized assets get stranded on their issuance chains, compliance frameworks don’t travel with the asset, and distribution is largely absent.
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Interoperability: No ecosystem handles this better than Cosmos, and the gaps that remain are real: cross-chain privacy is close to nonexistent, and cross-chain trust keeps failing expensively.
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Payments: The youngest of the three, with early signals from intra-company flows and the Korean market.
The ecosystem team came to Korea armed with three different product hypotheses for how the Hub could solve some of these problem spaces:
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Bridging the gap between DeFi and TradFi
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Interoperable privacy
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Liquidity as a service
Coming out of the trip, the team is most excited about the first of these hypotheses: the Hub as an intermediary between traditional finance and onchain finance, solving problems such as RWA distribution, access to DeFi for TradFi and vice versa, and the on-chain issuance of assets that DeFi cannot reach today.
The Broader Idea We’re Excited About: The Hub as the Gateway Between TradFi and DeFi
Traditional institutions and DeFi are converging on the same infrastructure: blockchain. A market is forming in the middle, and each side wants what the other has.
Banks, private credit lenders, and other institutions are tokenizing their deposits and moving their stack on-chain, and they want to reach the assets, users, yield, and applications that live in DeFi to offer them to customers. DeFi, on the other hand, has been driving innovation with many new financial primitives in lending, perps, and more. DeFi wants to offer these to TradFi: access to capital, distribution, as well as use of traditional finance assets in DeFi.
In this scenario, the Hub is not trying to be the center of the Cosmos ecosystem or the only rail for interoperability. It is trying to be a useful connection point between these two worlds. A Hub in the IBC network worth connecting to because it solves problems for the broader IBC network across TradFi and DeFi.
Bridging that gap is a distribution, access, and composability problem, and Cosmos is uniquely positioned because we are enabling both sides of that market:
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The enterprise pillar is commercializing the Cosmos stack for institutional finance and helping banks tokenize
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The open source pillar is making IBC the interoperability standard for on- and off-chain finance
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And the Hub sits in between two sides that cannot properly reach each other today.
There has been a lot of discussion about how the work of the enterprise and open source teams (see the Cosmos Quarterly) can impact the Cosmos Hub.
We believe this direction can answer that question and make the connection tangible. Bringing more institutions on-chain grows one side of the market, reaching more of them over IBC grows the other, and the Hub turns those connections into products for both sides of the market.
That is one of the reasons we believe this is a powerful angle for the Hub; it has great synergies with the work that the Enterprise and Open Source pillar are doing. As a whole and across every pillar (enterprise, open source, ecosystem), Cosmos becomes a key player in merging the worlds of TradFi and DeFi on-chain.
Why not pursue any of the other problems we’ve shared about?
We won’t cover them all today here, and can talk more about them in the community call. However, solving private interop as a standalone vision sits too far from the pillars’ work and is a hard sell to enterprises on its own; in the context of TradFi using DeFi, it matters, so it can keep a role inside the “Hub as a gateway” idea. Permissionless interoperability as a pure vision is won by the open source IBC work itself, not by a hub-and-spoke model; but where interop serves access and distribution, the Hub has a real role to play with interoperability solutions like Eureka.
We will go deeper on the other hypotheses on the next community call, rather than packing it all into the weekly recap.
Where We Start: What We Can’t Do Yet, and What We’re Exploring First
The TradFi<>DeFi gateway idea-space holds several problems worth solving for the Hub. These are some that we are looking into in product form:
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Connecting TradFi institutions into DeFi as buyers, so their customers can reach on-chain opportunities they couldn’t access before
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Integrating banks with DLT infra to provide them better access to on-chain finance
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Issuance and distribution of assets between both worlds: traditional assets into DeFi, and on-chain assets out to new venues and buyers
We believe sequencing matters, and we want to be honest about it.
The first two cannot start yet: they depend on work still maturing across the other pillars. What we believe we can start on now is the third space: issuance, distribution and access, in both directions.
Even a small start can prove demand, build the distribution network and the asset library, and infrastructure. After that, there are many other problems we could solve, such as compliance, privacy, or liquidity as these assets move. When the tokenized deposit space matures, it can tap into this day 1.
We are confident in this front, and excited about the timing. Tokenized assets today cover only a fraction of what a normal investment portfolio holds; they are poorly integrated across chains and venues, and our research kept finding that they barely spread or trade beyond the chain they are issued on.
These are distribution, access, and integration problems, and Cosmos is well positioned to integrate both worlds horizontally. Finance and RWA protocols are already the biggest users of IBC, and every product we own has a job here: the Hub issues/settles/routes/aggregates, Skip routes and services access, IBC and Eureka act as the transport layer, and Mintscan is the data backbone. Either side (TradFi/DeFi) can be the customer.
One thing we will not do today is talk about specific product shapes. We are validating them first, and we will only speak about products we can stand behind.
Next steps: how we’ll get from a thesis to a roadmap
We are validating a set of product ideas, legally and technically, before we name or commit them to the roadmap. Validation means answering a few key questions that can make-or-break their implementation, and change their design drastically:
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Legal and operational: What implementation fits best with regulation, and what setup do we need to operate it?
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Technical design: Which of the product shapes is most technically feasible today, to get to a fast MVP?
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Hub design: What changes (EVM, account, liquidity) does the Hub need to implement for them and how?
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Market: What side of the market do we focus on first?
In many cases, things outside our control, such as regulation, can change the entire user-experience design and how long an MVP can take, so we want to ensure we run through a quick due diligence process before starting. All the explorations around EVM and the liquidity layer stand and will be part of the technical roadmap. We are also getting feedback from the ecosystem and community as we come back from Korea to polish our ideas. This is a shorter sprint for us.
Timelines: “wen roadmap?”
As things stand, we plan to publish a public-facing roadmap by the end of September. If that changes, we will let the community know. As we’ve been doing so far, we’ll continue to work on this in public: if parts of the work validate sooner, we will share rougher product shapes earlier, and we will keep posting updates as validation progresses.
It’s important to note that we are in the middle of a massive effort to migrate the Cosmos Ecosystem’s USDC from Noble to Injective. A large part of the Ecosystem team will be dedicated to ensuring that goes smoothly before kicking off work in the roadmap post-publishing. This work is extremely important for the existing DeFi in Cosmos.
Injective USDC: Skip Go Mainnet Support Targets Next Week, With the Migration Flow Rolling Out Soon After
The USDC workstream moved meaningfully over the past two weeks, and the sequencing is now concrete.
Where things stand:
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The two-click migration flow is live on devnet. Testing has been going smoothly.
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Skip Go mainnet support for Injective USDC targets next week. This is the standard integration path: once live, teams and users can begin bridging Injective USDC into Cosmos chains, and AMM protocols can start standing up new pools against it.
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The dedicated migration flow rolls out progressively after that: first a purpose-built migration flow within the Skip:Go app that takes Noble USDC to Injective USDC, then a migration API that wallets and frontends can integrate directly, so users can migrate from the interfaces they already use.
A note on timelines: these are working targets, not commitments. As with every integration we have shipped this year, we will confirm each step publicly as it goes live.
In parallel, we are standing up direct communications with every Cosmos team, infrastructure provider, and frontend that touches Noble USDC, so that nobody finds out about migration logistics late. Concrete migration timelines and instructions will be published as they are confirmed. If your team holds Noble USDC, runs infrastructure that supports it, or builds a frontend that displays it, how you can help:
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Reach out to @RoboMcGobo on Telegram if you’re a Cosmos chain or infra team that uses USDC and are not already in touch with us.
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Join the USDC migration working group if you have not already
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AMM protocols: start planning your Injective USDC pool deployments now so liquidity is ready when the integration goes live
ICS Deprecation: The Gaia v28 Upgrade Is on Testnet, With the Mainnet Proposal to Follow a Two-Week Soak
The v27.6 upgrade proposal went on-chain at the end of July per the timeline we published, and the next upgrade is now in process: the removal of the Interchain Security provider module.
The advance notice for Gaia v28.0.0 was posted Monday, and the public testnet upgraded to v28.0.0-rc0 on Tuesday. The plan is to let the upgrade stay on testnet for two weeks for testing, covering a full unbonding period, before the mainnet software upgrade proposal is submitted.
What the release does:
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Removes the ICS provider module from Gaia. With Stride’s migration from ICS to PoA completed on August 4, the module no longer has active consumers, and removing it clears the main dependency blocking the Hub’s path to Cosmos SDK 54 and beyond.
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Aligns the staking module’s max_validators parameter with the provider module’s max_provider_consensus_validators parameter.
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Transfers the remaining balance of the legacy ConsumerRewardsPool module account to the community pool. These legacy consumer-chain rewards are denoms that were never registered in a distribution allowlist, so they have been stuck in the module account and would otherwise be lost. Moving them to the community pool preserves the balances.
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One API-breaking behavior change: queries for historical ICS messages, including MsgAssignConsumerKey, MsgCreateConsumer, and ConsumerAdditionProposal, will return empty stubs instead of historical data.
The release and changelog are up. Feedback from validators, node operators, and Hub users is welcome now, while the testnet soak is running and before the mainnet proposal is submitted. Validators will get direct notice at each step, as usual.
ATOM Tokenomics: Phase 1 Is Wrapped, and Phase 2 Is Underway
Phase 1 of the tokenomics research with Gauntlet is closed out, and Phase 2 kicked off at the end of July.
A short recap of where Phase 1 landed, all of it in the published outcomes thread and discussed on the July community call. Phase 1 set out to answer how ATOM moves, why, and when. The findings that shape the design work ahead:
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Roughly a quarter of unstaking withdrawals reach a sell route within the same week
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The staking-reward sell footprint runs several times Ethereum’s baseline
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The overwhelming majority of sell-like flows, above 90%, route through centralized exchanges
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Governance proposals touching inflation drive sell pressure at roughly 21 times baseline
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Independent validator commissions are not a major source of sell pressure; exchange-operated validators and exchange-owned stake drive most of it
Phase 2 is where analysis becomes design. The scope: model how different inflation mechanisms would actually behave against the Phase 1 behavioral data, evaluate mechanisms that address the outsized rewards accruing to exchange-operated validators, and produce actionable recommendations. Several mechanism ideas that came directly from community feedback on the Phase 1 thread are being looked into as part of the evaluation set.
That’s all for this week - thanks to everyone engaging across the forum, validator channels, and Telegram. Looking forward to next week’s update! Please let us know if you like the Weekly format, and what else you’d like to hear from us.
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Join the biweekly validator calls
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Join the next community call, featuring a dedicated ICF Q&A session: date to be announced on the forum. Register for the community calendar here