Make Atom the interchain gas fee token

Proposal: Funding Relayers by Refunding Fees Paid in ATOM (or any liquid staked Atom)

Context

The IBC network is essential to the Cosmos ecosystem, but its adoption is hindered by the costs borne by relayers. Currently, these costs are paid only by the relayers themselves, with no tx fees going to relayers to cover the cost of relaying at all.

Proposal

We propose a mechanism to fund relayers by reimbursing with community pool funds the fees paid in ATOM on any blockchain where the Cosmos Hub has a light client.

How It Works

  1. A relayer submits on-chain proof that they have execute an IBC transaction and paid fees in ATOM on a supported blockchain.

2- The module verify the proof on specifyed light client

  1. The Cosmos Hub reimburses these fees in ATOM, making relaying effectively cost-free.

  2. Blockchains can benefit from this mechanism only by accepting ATOM as a gas token on their network.

Benefits

:white_check_mark: “Free” IBC for blockchains
:white_check_mark: Increased demand for ATOM as an interchain gas token
:white_check_mark: Better relayer incentives and improved IBC reliability
:white_check_mark: Strengthening the Cosmos Hub’s role as the economic center of the ecosystem

From there, a wallet for the AEZ can manage fee payments by offering a simple way to buy ATOM (on-ramp) or by purchasing it on a DEX. It can also move the necessary ATOM for fee payments depending on the blockchain used.

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A viable solution presents itself to the community: acquiring Keplr with the CP and funding relayers in exchange for using ATOM as the gas token.

Keplr already integrates SKIP Go API and is the best Web3 wallet with the best UX. We could even add a button to “buy ATOM with a credit card,” serving as an incentive to pay gas fees on any chain. These chains would then operate for free, significantly reducing their costs.

MAGA.

3 Likes

I already dreamed about buying Keplr and adding many things that would suit ATOM and help the Cosmos even better , but how is this realistic ?

Do you both have estimation on how much it would cost to fund relayers (Victor proposal) and buy Keplr ? I guess we are talking about a lot of money , is it even possible ?

Edit : adding my comment of the other post here too, as it’s pretty much the same subject :

I think the best solution is to offer good infrastructures for IBC through a hub relayers for all chains as a service. IBC is open source so we cannot tax that and I still think it was a good decision as any chains can simply modify the code and delete this part. In the contrary, if the Hub offers something like a Relayer Hub as a service, for a small fee, playing with the “economy of scale” it could be a very good and elegant solution as it would cost way more for chains to set and manage their own relayers than paying a smaller fee for using the Hub ones.

The point would then be, not to make huge money on this, but rather placing ourselves as the center of IBC. Once links and partnerships of that kind are put in place between the Hub and all chains it will be more easy to make new products and services with them.

Note that, I think chains would still set their own relayers to not have a single point of failure, but, they would still want the Hub ones if they are more secure and professional.

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It’s very approximate, but according to Crosnest, on a given day a few days ago, about 80 ATOM in fees were paid by relayers on the Cosmos Hub.

Cosmos Hub likely has more IBC transactions than average, but let’s estimate an average of 50 ATOM per day per blockchain that accepts ATOM as a gas fee token.

  • 500 ATOM per day for 10 blockchains
  • 1000 ATOM per day for 20 blockchains
  • …etc.

Currently, according to my calculations, 9,480 ATOM are allocated to the community pool each day…

Relayers are clearly a public good. Simply reimbursing transaction costs may not be enough—they deserve to earn profits for their services. However, offering more than just reimbursement could incentivize spamming IBC transactions to generate profit.

5 Likes

I love the idea!

Anything that benefits Atom makes me and the rest of us happy. As far as I know (I don’t come from technical/developer side), we can’t really tax IBC transactions. Also, are you referring to relayers in what has been proposed as HALO ?

2 Likes

IBC operates thanks to relayers who submit transactions on our behalf.

In reality, what I’m proposing is not to tax IBC transactions, but rather to introduce a mechanism that allows relayers to get reimbursed for their IBC transactions, but only if the fees for these transactions were paid in ATOM.

Let’s take a concrete example:
A relayer facilitates IBC transactions between Osmosis and Stargaze, executing 10 IBC transactions. At the end of the day (for instance), the relayer submits proof on the Cosmos Hub that they have carried out these transactions on Osmosis and Stargaze. The Cosmos Hub can verify that these transactions actually took place using the light clients of Osmosis and Stargaze. If the fees for these transactions were paid in ATOM, then the relayer gets reimbursed for the fees they paid.

This allows Stargaze and Osmosis to have relayers for free, but for this to work, Osmosis and Stargaze must accept ATOM as a gas fee token.

It means that by doing this everybody will be able to use Atom as gas fee, not only relayers

4 Likes

Slight typo, fixed it for you:
“Currently, these costs are paid only by the relayers themselves, with no tx fees going to relayers to cover the cost of relaying at all.”

There was was work done on in-protocol fee revenue for relayers - i.e. when you make a transaction, you pay your tx fee (to the validators of the source network), and add an option tip for the relayers (to cover the relayers’ cost on the destination network, plus maybe a bit extra).

Afaik, no one has yet implemented that module. As i recall, it requires both chains to upgrade their IBC versions AND recreate the IBC channel between them, so heavy friction.


While I agree with “ATOM as Gas” throughout the ecosystem, the proposal here makes it sound like the ATOM Community Pool is picking up the tab for every IBC transaction…I’m not for that.


On the Cosmos Hub though, we do/did cover the cost of the Relayer Fees (via a CP proposal in the past and then an AADAO grant). Though I’m sure those funds are running low by now.

EDIT to incl:
Here is the Cosmos Hub Relayers Working Group docs, reports and onboarding instructions

This is the feegrant wallet - the wallet that’s covering relayer transaction fee costs only

4 Likes

Personally I think that we should just move the data that relayers currently move between chains to the peer-to-peer layer. But of course that would require actually dealing with the issues in the peer-to-peer layer. But then after that, even though there are many chains in Cosmos, there could be one giant peer-to-peer Network.

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Thank you Syed for the correction (Gpt is better than me in english but it’s far from perfect :slight_smile: )

You are right, what I am proposing is to cover the fees of IBC transactions in order to introduce Atom as the gas token. And you’re also right—the key question we should ask is: is this a profitable investment?

My initial idea, that I did not exposed here, was different. In fact, I don’t think Atom can simultaneously serve as both an interchain currency and a staking token ensuring network security.

I was rather imagining introducing a new token, which we could call $Money , that would be minted as needed to reimburse relayers fees paid in $Money, along with a payment system in $Money that blockchains could use to access these reimbursements. This payment would be burned.

If a blockchain wants to benefit from reimbursement, it would need to pay a percentage of its generated revenue in $Money to the Cosmos Hub at the end of the month (or year).

However, this is more complex to implement, and the benefit to Atom is more indirect.

To me, the key advantage would be that $Money (the interchain gas token) would be created on the Cosmos Hub, governed by Atom governance. And most importantly, we wouldn’t worry about minting it excessively because its purpose wouldn’t be to act as a store of value or secure the network. Its role would be to fund public goods beyond just securing the Hub.
And I think that IBC relayers is one of the most important public services of cosmos

EDIT : I also think we shouldn’t overlook the significant improvement in UX if Cosmos blockchains used the same gas fee token.

2 Likes

I figured out how to do it.

1 Like

There’s a workable way that I think other chains would gladly accept.