Make ATOM great again

Hub Proposals
1

MAKE COSMOS GREAT AGAIN

The situation for ATOM is dire. It’s died at least 3 times before, but unless ATOM changes soon (not next year, not next month, today) it will fade into irrelevance.

ATOM’s first death was In 2020, when the core Cosmos team split up and left AiB, but AiB kept most of the pre-mined ATOM. Its second death was in 2022, when ATOM 2.0 failed. Finally, in 2024, ATOM died when it was declared dead by the rest of the world.

But ATOM isn’t dead, because there’s still a passionate community surrounding it.

While ATOM’s alive, the situation is dire. We’re watching ATOM grind down to 0, and without drastic change NOW, this won’t change. As of August 14, 2024, ATOM is hovering around $4.7, while SOL is at $145. 1.5 years ago, they were the same price. The situation has never been worse for the Cosmos Hub; builders use the SDK but distance themselves from the Cosmos brand, and neither venture nor retail investors want to touch Cosmos tokens. The final nail in Cosmos Hub’s coffin is that ecosystem leadership lacks the force of will, the incentive, or both to make the required changes.

Cosmos inspired a generation of builders, and the Cosmos SDK and Tendermint are still widely used today. Will we sit idly by, and watch the Cosmos Hub fade? Or will we Make Cosmos Great Again?

Let me state it clearly: we have one last chance to MAKE COSMOS GREAT AGAIN.

Cosmos Hub’s strengths

Cosmos Hub’s greatest strength is its passionate community. The Cosmos SDK, Tendermint, and IBC are widely used today, and inspired some of the best developers in crypto. IBC is frequently the top bridge by 24 hour volume. The market cap of Tendermint/Cosmos SDK chains was once over $50B, and it may well reach that high watermark again. Celestia, Berachain, even Polygon build on forks of Cosmos technology!

Cosmos’ tech is good, and the community is passionate and still here (even if many in Cosmos don’t hold ATOM).

Cosmos Hub’s weaknesses

Cosmos Hub’s greatest weakness is its unwillingness to adapt and take risks. It’s a stagnant, slow moving chain, with no PMF.

Cosmos Hub has other issues (organizational incentive misalignment, terrible governance, too many committees, products built that have no proven PMF), but it’s unwillingness to adapt that is the largest problem.

Smart investors have exited the ATOM token.

Can we Make Cosmos Great Again?

Luckily all of the pieces are in place to Make Cosmos Great Again.

Here’s what we know: powerful blockchain+vibrant community=success. It’s really that simple.

I propose 3 simple changes to the base layer to achieve this:

  1. Target staking APR of 2-4%. ATOM’s staking APR is way too high, and staked ATOMs need to be unstuck. The exact curve / parameters do. not. matter., because if we change nothing ATOM will die. Inflation needs to be lower, 2-4% seems like a good range (in line with Ethereum).
  2. Lower block times to 1.5s (Osmosis proved this can be done for free). This provides a best-in-class UX.
  3. Permissionless CosmWasm. Self-explanatory. If ATOM can’t attract builders, it won’t attract investors. CosmWasm is a good VM and lots of developers know how to use it.

Cosmos Hub is an infra layer, so products can be built on top of it. Products don’t need to be dictated by a central organization. We know fast blockchains have PMF, and ATOM has a strong enough community that apps would be deployed literally the day after adding permissionless CosmWasm. Ethereum has dedicated itself to the L2 roadmap, and has too much inertia to turn the cargo ship around and optimize the L1 (even though it wishes it could). Solana is winning. Other L1s lack either the passionate community or the technical team that Cosmos enjoys. Isn’t it obvious? All of the pieces are in place to Make Cosmos Great Again.

We need to give people a reason to hold ATOM today. Let’s make these changes, and let’s MAKE COSMOS GREAT AGAIN!

I look forward to your feedback.

6 Likes
2

Hey, I’m just passing by because I was curious to see if my tweet would spark a reaction haha.

I am no longer in ATOM today, but I feel like the chain has to take some necessary risks if it wants to try to be relevant again.

There are people involved in this community who I know would be heavily against these propositions, but mostly for the wrong reasons.

You either give the market what it wants or you go to zero. This is a direction voters can decide on today. As for me, I’ve already made my choice months ago.

3

Thanks for your input. I look forward to hearing all perspectives, especially from those opposed.

Once this has been sufficiently discussed, I will be moving forward with onchain proposals.

4

Hello, MCGA.

Firstly want to applaud the enthusiasm, as I mirror the energy.

  1. If the result of inflation being lowered to 10%, via “The ATOM halving” (prop#848), hasn’t help push user adoption, why would 2-4%? If it hasn’t been implemented already, why not completely remove the 7% minimum bound and have the CP tax increased? By Transitioning to 10%, we’ve seen:
    • 2.0’s trojan horse advance and achieve Steady governance takeover
    • ATOM’s stashed into separate, centralized treasury pools outside the Cosmos Hub
    • increased control through leverage, such as through (risky/unproven) liquid staking
  2. Lowering block times sound great
  3. Why can’t Permissionless CosmWasm exist and fully thrive outside the hub as an ICS chain? Not only would this continue to help promote ICS as a Cosmos Hub product, it would achieve the broader, collective mission to onboard users, maintain the integrity of the Cosmos Hub, all the while naturally accrue value back to ATOM.

Though the intention sounds great, this unfortunately sounds like yet another sly pivot to take from the staking incentive (earning transaction fee’s + rewards) to benefit the select few, ultimately making a mockery of the Cosmos Hub governance system.

Please help me understand, if i’m wrong.

2 Likes
5

Hello @MAGA ,

Thank you for sharing your thoughts on the state of the Cosmos Hub and recognizing its strengths and weaknesses. To provide some perspective, we will elaborate on your statements and propositions.

To share some context to this review, we would like to emphasize that we have been Cosmos contributors since 2020, we have team members working at all levels of the technology stack, infrastructure (we operate the PRO Delegators’ validator), governance (with the Govmos Initiative account you’re reading now), technical support to project, and financial & strategy advisory for teams.

Through these various interactions with the Hub, we have developed a thoughtful vision of its strengths and weaknesses. While our analysis reveals different conclusions, we will share a summarized version of it, hoping to provide additional perspective for you and other readers of this thread.

Strengths

You correctly pointed out that the Hub’s community is great. You mentioned we have survived multiple crises, and we agree. On the technical side, the Hub has managed to deliver on the 2017 promises and beyond. The adoption is significant, and the pace is still strong. Cosmos is one of the rare ecosystems that has managed to grow adoption through the bear market without requiring millions of dollars in external incentives. We believe today’s crisis is just another one, with a different shape. This one might only be price-related as people constantly question the value capture of the Hub, and we will later explain why this might be an illusion and a trap to avoid.

Weaknesses

People often call the Hub’s governance its greatest weakness, and you did too. Some mention the constant power struggle and internal ego battles, gripping the system to evolve too slowly compared to others. We entirely disagree. The criticism we see is similar to people complaining about government inefficiencies compared to the private sector. Nevertheless, real-world economics prove that government is needed and that centralized control is detrimental to societal prosperity. Despite being praised for profit-making, the private sector is terrible at managing complex public affairs.

The Hub is arguably a public entity, and we should praise the power struggles and dramas, reflecting a working democratic system with multiple unaligned participants. This requires consensus to progress, a slower and less efficient model than centralized governance. Many cryptocurrencies operate centrally like the private sector. They do not share the properties of decentralization, yet people compare them with the Hub. Always remember that anything moving fast is generally centrally controlled. We should be honored to be slow-moving and lack a single vision. Embrace decentralization’s weaknesses, as there is no way to be decentralized without degrading execution speed and adding committees.

External Factors

Whilst researching for potential real causes of the Cosmos Hub’s lack of performance, we have uncovered a few things you didn’t mention and are worth pointing out.

First, we need to stress the importance of the disastrous aftermath brought by the Terra collapse, which has damaged both the reputation of Cosmos and the ecosystem’s liquidity. Tokens available on CEXes (mostly ATOM at that time) were used as a proxy to exit the illiquid supply of Luna. Most people tend to forget that THIS event liquidated most ATOM traders and brought us below the critical $11 support that triggered the rally to $40 earlier. To this day, the ATOM price has failed to recover and still hovers around that critical threshold.

Secondly, the range we formed since that day follows the exact pattern of a Wyckoff accumulation: a sudden drop with enormous volatility followed by a flat structure below a critical technical level with volumes and volatility dropping significantly.

image
image860×516 57.6 KB

image
image3209×1790 477 KB

This pattern involves a significant psychological impact on inexperienced traders and investors, as described in the renowned book associated with that strategy. This pattern has a reputation for falsely implying a bearish sentiment, forcing assets to be transferred from weak, impatient, and speculative hands into more methodical and patient, strong hands.

According to this mechanic, we would currently experience the “spring,” which is the culminating point of bearish sentiment, corresponding to the bottom of the structure. If we are correct, this is where the last transfer of value will happen before the structure reaches final completion as volume raises back up along with prices. This is the point of “maximum pain” inflicted on weak hands, so we are not surprised to see posts like yours mentioning the impending death of ATOM. We see quite the opposite.

Conclusion

To summarize, we have reasons to believe that the bearish sentiment the community is experiencing now is testimony to the violence of psychological impacts involved by a two-year-long Wyckoff accumulation. This would explain why we have one of the most adopted technology stacks in the blockchain industry while we experience one of the highest levels of pain on price.

We would even argue that the recent speculative pump in early 2024 has only worsened this sentiment, as some tokens, arguably more centralized, have seen significant price gains while ATOM remained locked in the accumulation scheme. This has led the dominance of ATOM to fall to historical lows, driving all the questioning from the community about the future trajectory. We shall not let private securities and artificial pump-and-dump schemes be compared to true decentralized blockchain technologies.

Overall, we think this is all just good old market psychology. People look at the price, feel the emotion, and create all sorts of ideas about what could explain the depression. Reducing inflation has often emerged as the guilty cause of ATOM’s price death spiral. We see no evidence of such a spiral, just a Wyckoff spring inflicting maximum psychological pain. In reality, trading volumes are extremely low (indicating that capital isn’t moving), a sign of Wyckoff maturity. You argue that block time should be lowered to match competitors. The Hub doesn’t need that, it is a security hub with instant finality blocs, not a fast execution layer-1. Permissionless CosmWasm isn’t needed either; we have Neutron for this. You also mention the price reflects a lack of product-market fit, whereas we see dozens of consumer chains reaching out to launch with the new Partial Set Security upgrade. To us, the Hub has only vegetated since the Terra’s collapse, never really recovered, awaiting to deliver the ICSv2 which is the market fit product of the hub. Now that we have it, the best is yet to come; we should wait until the last weak hand capitulates and true legitimate adoption kicks in. If we are correct, volumes should start to rise again, along with prices and real legitimate adoption. Be patient, padawan!

On behalf of the Govmos Initiative, we hope this reading was interesting to you, if you want to support our volunteer job, you can delegate to our reference validator service PRO Delegators.
pro-delegators-sign

15 Likes
6

A modern and centralized government has historically been good for a nation’s prosperity, so I’m not sure to understand that logic.

In the cryptocurrency market, centralized organizations have been much better at building a strong ecosystem (eg: Solana) versus Cosmos, as the one Solana chain dwarves the 50 Cosmos chains in terms of users and economic activity.

As for you technical analysis argument, you are making a risk/reward proposition. In such a trade, you need to know what’s your invalidation point. So at what price would you consider your argument null ?

Thank you.

7

After stagnation and progress being stopped, I see signs of mindshare surrounding the Hub trying to make up for lost time. It’s not perfect, and there are legitimate criticisms for some of the ideas being brought to market, but it’s moving forward with a concerted effort from multiple teams. These v1 products will turn in to v2’s, and we’ll see if that’s enough for the Hub to carve out some important niches for the ecosystem.

I’m not sure the ideas in this post would really move the needle. Atom has a demand issue, not a supply issue. If these ongoing developments work out, some confidence and demand should return over time. Undoubtedly a tall task when we’re in the pit of despair, but I think enough people care about the Hub to not just let it wither away.

What we really need right now is more people getting involved. If other sectors of the ecosystem contribute and try to help the Hub live up to its potential, things could look a lot different a year from now.

A strong Atom is a stronger Cosmos.

1 Like
8

Thank you for your response, you raise good points. Let me respond to each.

  1. My initial post wasn’t clear - I think we should target a staking APR of 2-4%. Staking APR is still at 15.10%! There are two massive problems with this.

First, the funding rate to short ATOM is generally positive, and when it’s negative, it’s less than the staking APR. That means, many existing ATOM holders are likely staking, hedging out ATOM exposure, and selling staking rewards. Leeches! Lower inflation neutralizes this strategy.

Second, 15%, even 10%, is too high a staking reward to incentivize usage in defi. We want the ATOM token to be loved, and used! It’s been a staking token for 5 years. What’s that gotten us? The dispersion in returns tells a clear story. We ran the experiment, and SOL won. The path forward is clear; the market wants fast L1s. Even Ethereum is starting to realize this, with pushes to fix defi on the L1.

This is perhaps the most important point, because the other points follow from this one. I expect pushback on this point from two groups, farmers bleeding ATOM dry (described above) and validators. To validators, I say this: ATOM has the potential to go to $100, which would make your business much more valuable. Think long term.

  1. Agreed. Snappy block times are free, and there’s no reason we shouldn’t do this today. It’s an easy technical change, the validators can do it without a chain upgrade.

  2. We can’t outsource the L1 because it won’t help ATOM. The only way to save ATOM is to save ATOM. Neutron’s success accrues value to the NTRN token. That’s fine, and I’m taking no position on the Neutron team or token. This is about ATOM. It’s about cleaning our house, before worrying about others.

Here’s the truth, shared security has weak PMF. Restaking protocols are mainly points farms right now, and while there’s a lot of upside potential, it’s an unproven model. Performant blockchains with strong communities have high PMF. We should keep ICS around, but Cosmos Hub needs to save itself, before saving others. Or it’ll be bled dry.

I own 0 ATOM tokens, and don’t have a vested interested in any organization that does. I’m not interested in benefiting a select few, I’m interested in making ATOM an attractive asset to hold. I find it personally sad, and tragic, that the ATOM token has so much potential, and the changes to unlock its potential are so small, but we are unable to make them happen for silly reasons.

So I’m going to try to make it happen, through force of will, and reason.

Can you elaborate on this point? I don’t follow.

this unfortunately sounds like yet another sly pivot to take from the staking incentive (earning transaction fee’s + rewards) to benefit the select few

2 Likes
9

I’m glad we can agree on one point - that the Cosmos Hub community is its strength.

Your other views are deeply misguided. I’m going to focus on two

  1. Cosmos Hub’s governance “weakness” being a strength
  2. The Wyckoff TA

First, I didn’t say Cosmos Hub governance is its greatest weakness. I said its inability to adapt to changing conditions is. Governance forum gridlock is a symptom of not having strong leadership to put forward new ideas.

Disorganization is not decentralization. The Cosmos Hub network can remain decentralized, without having a disorganized forum and considering all viewpoints. Do you know what happens when you take the average of everyone’s viewpoint. Nothing!

Second, TA is nonsense. What drives price is innovation and adoption, not patterns on a chart or the stars in the sky. If we’re patient and do nothing, ATOM is going to die.

Consider this, why would anyone buy ATOM today? Shared security has low PMF, and Cosmos Hub has strong competition running points programs, pre-TGE. Cosmos Hub can continue iterating on ICS, even put development resources towards it, and at the same time move into a much bigger market, in which it can compete, today, by reducing inflation, speeding up blocks, and adding CosmWasm.

10

Strongly disagree. ATOM has demand! Look how active governance forums are. Cosmos has an extraordinary group of developers, and a passionate community.

Its supply issue is this: there’s no incentive aligned way to build on ATOM. ICS doesn’t benefit ATOM the token.

but it’s moving forward with a concerted effort from multiple teams

We got the report card for the past two years, and ATOM is flat while Solana is up 15x. Objectively, this is not the case.

The world can be surprisingly malleable, why are you afraid of trying new things? Are you happy with the status quo? Do you wake up every day, excited about ATOM? I do, and making these changes would light a small fire, bringing back talented folks that want to bet on ATOM. We’d have to tend to it, of course, but a small fire is better than none.

12

Why not MAGA? Make Atom Great Again sounds better.

2 Likes
13

I appreciate your thoughtful response @MAGA

Having misunderstood your point to reduce staking inflation ties into the last portion of my initial response. Understandably, ones guards are up towards these alleged insider groups, who seemingly continue maneuvering their way to increase their governance control OUTSIDE the Cosmos Hub.

I still believe, if changes are to be proposed, is modifying the CP tax and if not already implemented, removing the 7% (edit: minimum inflation) bound.

14

MAKE ATOM GREAT AGAIN is better. Done!

15

Hi, @MAGA.

Since you shared that you are not a holder of ATOM, nor have vested interest in any org that does, curious to know if you’re an advocate of liquid staking, i.e. Stride? This is by no means a way to discredit Stride, in any way shape or form, however in relation to maintaining ATOM’s decentralized governance ON the Cosmos Hub, I am led to ask.

Maintain Atom’s Greatness Always.

Cheers

EDIT RE the CP tax. It does seem to have been updated through Prop#88 from 2%-10%. By increasing this % rate further, reverting the current 10% max inflation limit via Prop#848, and leaving the staking rate alone for now, should be the path forward, especially if the concern is to rid fishy “leeches,” from any camp.

16

I am not sure that this is true. On map of zones over the last 30 days, ATOM doesn’t even show up on my screen as a top IBC hub. The first 7 or 8 chains are not ATOM. A couple of years ago ATOM was the top IBC hub.

IBC is doing well without ATOM.

17

Uhh, yeah. Atom’s not strong right now, so people aren’t using it as much. By far the most widely distributed and liquid token in the eco. If the tide turns on the fundamentals surrounding it (and the sentiment repairs itself) obviously more people will be using it like they used to.

18

Don’t have a strong opinion on liquid staking or Stride. A pushback to adding CosmWasm on Cosmos Hub is that it’d disadvantage Stride and Neutron, as ICS chains. The opposite is probably true. As ATOM goes up, more users enter the ecosystem, and chains connected to Cosmos Hub (Stride, Neutron, also Osmosis and other IBC chains) do better.

As an example, look at how Osmosis benefited from Terra (pre-collapse) in 2021.

EDIT RE the CP tax. It does seem to have been updated through [Prop#88] from 2%-10%. By increasing this % rate further, reverting the current 10% max inflation limit via Prop#848, and leaving the staking rate alone for now, should be the path forward, especially if the concern is to rid fishy “leeches,” from any camp.

My proposal doesn’t address the community pool tax

1 Like
19

There is no market for CosmWasm on the Hub. There is already permissionless CosmWasm on Neutron and Neutron is secured by the Hub so from a technical standpoint you have CosmWasm on the Hub already. But it is even better than CosmWasm on the Hub because failure of Neutron doesn’t halt the Hub.

If you don’t understand the above paragraph, you hardly understand anything about the Cosmos Hub.

The problem is nobody is using Neutron. People had all these visions of developers jumping to use CosmWasm in 2020 and they aren’t. It is not 2020 anymore. Then both Cosmos and Solana (and Polkadot) were new chains offering Rust smart contracts and could claim to get all the developers. Not today. It is now 4 years later and all the Rust smart contract developers have chosen Solana. Neutron doesn’t have any meaningful competitive advantages vs Solana.

People should also stop extrapolating Terra’s “success” that could potentially happen at Cosmos Hub. There was no success at Terra. It was a fake US dollar, fake liquidity, fake everything. It was all out of thin air. It wasn’t real.

4 Likes
20

Absurd statement.

Smart contract L1s have an exceptionally strong product-market fit. The real challenge lies in building a vibrant ecosystem of developers and liquidity around the token, especially in a highly competitive L1 environment. However, the Cosmos Hub has no shortage of potential developers, and ATOM is highly liquid—Cosmos Hub ranks among the top 5 chains in terms of developers and liquidity! Let’s not overlook the fact that app developers have been practically begging for CosmWasm on the Hub (prop #69).

Don’t be blinded by dogma.

Neutron isn’t Cosmos Hub, just as Ethereum L2s aren’t Ethereum. You don’t have CosmWasm on the Hub on a technical or social level. ICS and Neutron are great, but they don’t benefit ATOM directly in the same way that a thriving ecosystem of apps built ON the Cosmos Hub would.

Neutron is its own chain with interesting tech, but building an ecosystem takes time. It’s unreasonable to expect all developers who want to engage with ATOM users and liquidity to build on Neutron, or for all ATOM holders to migrate to Neutron.

We need developers building on ATOM, which draws attention to ATOM, which in turn attracts more developers, and so on.

The problem isn’t lack of users, the problem is that the system isn’t incentive compatible.

That’s not what I said. I used Terra as an example of how one IBC chain’s success can positively impact all others.

As an aside, CosmWasm on the Hub could serve as an excellent launchpad for smaller teams that may eventually graduate to ICS chains.

3 Likes
21

Who exactly are the developers that will absolutely not use Neutron and only use the Cosmos Hub? And whoever they are, they are retarded.

All of the things you are saying can be done today on Neutron. Neutron is not an L2, it is an L1 and it secured by Cosmos Hub validators. There is no practical difference between deploying and running a web assembly on Neutron or the Cosmos Hub itself. It is code that runs and is secured by Cosmos Hub validators.

Moreover Neutron can make changes that enhance its ability as CosmWasm execution environment while Cosmos Hub can make changes that make it better ICS engine. These are very difficult engineering tasks and it is not good to be combining them. It is good to split things in modules where the code runs separate. In this case, you have modularization by creating app-specific chains. CosmWasm chain is Neutron. Running CosmWasm is Neutron’s app.

It seems to me you don’t quite understand the app-chain thesis of Cosmos and keep falling into Ethereum style thinking (one global computer to rule them all). There is nothing wrong with that, but just like mainframe computers gave away to PCs and networks, monolithic blockchains will not be able to do it all.

In any case, 80% of ATOM holders will vote against a permissionless CosmWasm on the Hub. It’s a Quixotian crusade, dude. You think more like a marketer and I understand your arguments, but there is already Solana, Polkadot - there is a ton of Rust web assembly engines out there. I don’t think you understand the broad competitive landscape for this technology. Putting CosmWasm on the Hub doesn’t add any additional functionality that isn’t available today on Neutron, Solana or elsewhere. Neutron already offers a pathway for CosmWasm smart contracts to graduate to ICS chains.

I really don’t have issues with Cosmos tech. I have issues with its inflation management. It was ok to have 10-20% inflation in the 2019-2022 period because the Fed was printing money and US money supply was growing 5-20% per year. But since 2023, Fed is engaging in QT (quantitative tightening) and the money supply has been negative. If the ATOM token keeps printing at 10-20% inflation rate, its dollar price is headed straight down, all else being equal. If you want the $$ price to be stable, ATOM token inflation has to be more responsive to $$ supply trends. ATOM inflation had to be drastically reduced in that negative M2 period. All high inflation tokens are getting pummeled over the past year (DOT, ATOM, AVAX) and all the money is going to BTC because BTC’s inflation is more inline with what is going with M2. The ATOM community is not very financially savvy, very dogmatic in its approach and is not flexible enough to understand and manage the ATOM price based on ATOM’s business adoption and the overall macro trends. Big part of the problem is that the founder (Jae) and the clique around him doesn’t think ATOM price is something to be managed.

2024-08-20_062226
2024-08-20_0622261329×563 89.1 KB

2024-08-20_063543
2024-08-20_0635431102×396 116 KB

2 Likes