[Proposal #794] [VOTE ONCHAIN] Stride to join ATOM Economic Zone and adopt ICS

Maybe better not to assume to speak for everyone here…
Lot of questions to clear up first


For example:

  1. According to the STRD tokenomics, STRD staking rewards (I assume these are the inflationary staking rewards) are reduced by 50% every year on September 4th. That halvening schedule would remain in place, but in addition there would be a special 50% staking reward reduction when ICS was adopted.

How does this effect the STRD staking rewards in the offer?
Will those be: 15% x0.5x0.5= 3.75% staking rewards in couple of months just after joining? is it supposed to go to 0% because of ICS?
In that case the 15% of STRD inflationary staking rewards in the current offer are worth very little.

  1. “While the Stride blockchain does not currently collect transaction fees or MEV revenue, these will both be significant sources of revenue within roughly three months.”

Can you give some estimates of the significant source of revenue so that we can value the 15% offer better? Does SRTD intent to implement the collection of fees before or after joining? What risk is there if it fails, is it voted already YES by the SRTD community or can it also be voted NO? Will ICS still be implemented in that "NO"case when there are no fees to share? pls give the possible scenarios and concequences of those.

This is just what I came up with after 5 min researching. I could have misread or misjudged the STRD tokenomics. Pls explain further so that I can have better understanding of the benefits for both Cosmos and STRD.

Excited to see this proposal for Stride to hopefully become a fellow partner chain soon!

Think I may be able to add some context on a few questions raised by the community, but of course I’m not part of Stride and therefore will speak under their control and possible correction :slightly_smiling_face:

There a multiple ways to implement governance on a consumer chain. Neutron’s approach is not “standard” for a Cosmos SDK chain because it moves governance to the smart-contract layer and uses the admin module to grant the DAO the power to make changes to the network. Alternatives exists, including using the SDK’s democracy module.

I believe Stride is going for the SDK approach, hence the existence of “governors” which can be seen as representatives of their delegators. The proposal mentions that governors would “do everything a validator does except producing blocks” therefore we can assume that governors would provide additional services to the chain (perhaps running some of the infrastructure (full nodes, oracles, relayers?)).

The Cosmos Hub, through the AADAO and/or Timewave’s trustless solution, would own the LP tokens which represent the rights to the share of the liquidity provided by the Cosmos Hub. The ratio of tokens (ATOM/stATOM) is likely to evolve over time as stATOM auto-compounds (e.g. each stATOM token becomes worth more ATOM as staking rewards are claimed and restaked). Barring an exploit, “emptying” the pool should not be possible: to take a token, you need to deposit a corresponding value of the other token. But since both of these assets represent ATOM, impermanent loss should be minimal: even if the pool was somehow critically imbalanced, it would still either contain a lot of ATOM, or a lot of stATOM, which should be redeemable for ATOM.

I believe the proposal is to take half of the 450K ATOM and stake them through stride to mint stATOM. This stATOM would then be matched with the remaining ATOM and deposited to the pool. I think this approach makes sense.
For context, Liquid staking providers don’t control the assets they facilitate the staking of (e.g. ATOM), they only get some through the liquid staking fee, so it usually isn’t possible for them to provide large amounts of the corresponding derivative.

Stride is proposing to bootstrap ATOM/stATOM liquidity using Astroport on Neutron. This would certainly be beneficial to Neutron and Astroport, and imo it makes perfect sense that ATOM liquidity should sit within the ATOM Economic Zone.

The code is ready, yes. It is an amendment to Replicated Security, not a different iteration (ICS V2 is “opt-in security”). It’s been used in a few Neutron testnet already without hurdles (Rehearsal-1’s halt was unrelated to the soft opt-out). We’ll be conducting at least two more rehearsals with this feature (today and on Monday the 17th) so it should be fairly well tested by the time Stride’s proposal goes on-chain :slightly_smiling_face:


I support most of the part but why the liquidity pool only on Astroport’s Neutron?
we saw UST event on Osmosis.
why do we need to use only one app?
we shouldn’t use only Astroport, more like Osmosis,Wynd Crescent etc

Cause Neutron will use RS, so it makes sense to use a dex which is also secured by the HUB. This is literally 1 pool…

I support the proposal, this is beneficial for the HUB and STRD.


Excellent sir! Thanks

No live blockchain has ever adopted interchain security. Stride blockchain will potentially be the first.

How can Stride ever be the first one live since it is relying on Neutron’s Astroport ?

@lexa did a wonderful essay for Neutron with ‘detailed’ estimated costs etc… I deeply think need that kind of accessment for Stride.

  • With Neutron we 've seen that’s it is going to be pretty hard to match validators costs and the essay takes into account the appreciation of generated $ATOM rewards to validators to compensation the lack of revenue from Neutron which is IMO wrong and should not be considered at all in the math.

  • There are also hints about the opt-out which has also high risks of making small VP validators’ life even more difficult since they would not be part of ICS and the diversified tokens it brings.
    Delegators would only focus on validators taking part of ICS.

Once again that’s aknowledging the bull bias in the essay that does ‘only’ consider the best case scenario if $ATOM goes up to $13.xx ish.

Numbers do not add up in my mind as of right now for Stride, we lack clear view of everything and how a clear estimate of the revenues generated through staking, MEV, LS, T.fees.
Astroport is presented as a $10 billion Trading volume platform in 2 years when it seems 99% of it’s liquidity pools are illiquid and it seemed to have relied on LUNA which does not exist anymore.

With 1/3 of OSMOSIS market cap and 30times less trading volume daily I hardly see how this is a good bet.

1 Like

And you do the exact opposite with estimating the worst case scenario before we even know how it will play out.

I don’t get this type of argumentation at all. So what exactly is your best case scenario if the proposal doesn’t pass? Hey the validators can continue to make money, but the chain has no real use case and will die slowly? Damn what a great deal! Absolutely no one benefits

On the other hand you actually get a sustainable long term plan with RS.

Can people just think about what happens if the proposals don’t pass?

  1. Atom will dump, hey the MC and the token price will go down ->you make less money
  2. ATOM split, it is clear that we should split the community if RS doesn’t pass, people who want the classic ATOM can go with ATOM classic, people who want innovation etc. go with the new ATOM. The Ethereum split has shown which direction is the better one, the classic chain will become irrelevant and the classic guys won’t make any money
  3. If ATOM splits, the entire ecosystem will be hurt, your heavy bags in other chains will get hurt aswell.

There is absolutely no scenario where you win if the proposal doesn’t pass.

1 Like

Hey listen, I am trying to understand and get a bigger detailed view of what’s going on.

Once again do not take any assumptions/bold statements as judgmental, they are here to be challenged so I can better apprehend my future vote via the governance :wink:

Let me know if I should put a trigger warning on every post I do.

Thing is we are here to discuss and personally, to learn.
I am all in for Cosmos ecosystem to strive and be sustainable and I strongly believe in it’s future.

Just as I am trying to understand how this would be beneficial and trying to understand all the risk involved either is passes or not, you are coming up by saying there are higher risks if this does not passes.

I hardly see how this discussion is mutually beneficial and help people to vote in the maximum understanding of what is at stake.

Is it a reason not to try doing some risk assessment and have some form of criticial thinking when such an impactful proposal will be voted on the governance?

So please if you have any answers to my questions, feel free to share them.

Let me know if I should put a trigger warning on every post I do.

Don’t worry, I just write in a specific way, nothing personal or with an ill intention.

Thing is we are here to discuss and personally, to learn.
I am all in for Cosmos ecosystem to strive and be sustainable and I strongly believe in it’s future.
Just as I am trying to understand how this would be beneficial and trying to understand all the risk involved either is passes or not, you are coming up by saying there are higher risks if this does not passes.
I hardly see how this discussion is mutually beneficial and help people to vote in the maximum understanding of what is at stake.

Yes, and I want to know what is your best case scenario here if it doesn’t pass. How do you want to generate value for the HUB, how will it affect the price of ATOM etc. etc.

To give you a different example:
It’s like a discussion if we should use a Tesla car and you point out all the arguments why we shouldn’t use a Tesla car, but the alternative to not using the Tesla car is walking

I am totally in favor of STRIDE benefiting from ATOM’s economic security, and I agree with what has been said about the mutual benefits for ATOM and STRIDE with this relationship. The amounts seem reasonable to me and we must not forget that in any case, a good number of STRIDE holders are also ATOM holders.

On the other hand, I wonder about the use of the hub’s background to consolidate pools on DEXs such as astroport, osmosis or others. We are in the early stages of proposals for the use of ICS and one can easily imagine that asking community fund will become the norm if we start doing so.

Is it really good from a security point of view to have big amount of community pool ATOMs on DEX and do we have enough to consolidate pools everywhere in the futur? I’m asking but in the same time i’m not totally against the idea …

Stride is a pre-existing (live) blockchain that’s migrating from sovereign to consumer - definitely the first time that’s happening afaik! Neutron isn’t live yet.

The devil in the details, you are right. The first (already) LIVE blockchain to adopt ICS.

I should read twice

Edit: Making a token edit to this post, hoping it becomes visible.

In roughly three months, transaction fees and MEV capture should both be turned on.

Currently, transaction fees are set to zero for the sake of user experience. Since users only come to Stride blockchain for liquid staking, it would create friction if each user had to acquire a small amount of STRD. In roughly three months, users should be able to pay their transaction fee using any currency, like on Osmosis. Once this is possible, the average transaction fee will target five cents, which is much higher than most Cosmos chains.

With regard to MEV capture, Stride contributors are working with Skip to build an auction module, which would allow for instant unbonding of stTokens. Due to market forces, the instant unbonding fee would converge to the slight negative premium of swapping an stToken to its unstaked version on a DEX.


Will the Hub be earning rewards for this LP position? My assumption would be yes, because we are still taking impermanent loss risk.

why is your post flagged… lol

Thank you for the proposal, first and foremost.

Due to the imminent RISKS that come from LSD’s, despite the admittedly enticing potential economic gains, this proposal is a NWV for us.

Look… STRD #'s look great, especially within it’s existing time frame, however LSD’s during this chapter of the crypto game are still a GREAT potential risk that specifically leaves our minnows/shrimps/smaller players vulnerable. Don’t tell me yall don’t care about the minority now :wink: We are here for everyone, ESPECIALLY for the ones with quieter voices. Every Cosmonaut deserves to be heard in the Cosmos Hub.

NWV specifically to protect the MINORITY INTEREST from major players who hold greater economic power to potentially perform a hostile takeover. Not saying STRD would, but it could be an easy feat, no? For folks to exchange their ATOM for stATOM allows for the LS Provider to gain extreme leverage via voting power.

1 Like

To answer each of your points:

1 - Stride and Neutron are different blockchains, so they have each proposed a different way to share their revenues with Cosmos Hub.

Stride is sharing revenue from four sources, while Neutron is only sharing from two sources. Also, Stride is a live chain, has achieved product market fit, and is already one of the top Cosmos chains in terms of revenue generation; whereas Neutron has not yet launched. In addition, Stride is offering to share inflationary STRD rewards, while Neutron is not. Most importantly, Stride is an appchain, while Neutron is not. That means Stride can share revenue from its core app, that being the Stride liquid staking protocol.

2 - Again, Stride and Neutron are different chains. If Stride were launching with ICS, perhaps its proposal would look more like Neutron’s, and vice versa.

When considering what to do about inflationary STRD staking rewards, the interests of many parties had to be considered: namely, Stride validators, STRD stakers, Cosmos Hub validators, and ATOM stakers. Stride’s proposal takes the path of compromise. Inflationary STRD staking rewards will remain, but they will be subject to a special 50% reduction to coincide with ICS adoption. It’s hoped that all parties can agree on this.

Your points about governors are partially correct. The 100 cap will be arbitrary - a vestige of when Stride was a normal Cosmos chain. But it’s not quite accurate that governors will have no costs. In order to attract delegations, with will likely contribute in various ways, like validators do. To reiterate, there are many parties involved in Stride’s transition to ICS, and some of them have conflicting interests.

3 - “Liquid staking rewards” refers to the proceeds of Stride protocol, the core app of the Stride appchain. Specifically, Stride protocol collects 10% of the staking rewards of all liquid staked tokens.


I see @Spaydh has already done a great job addressing some of your points. I’ll answer the others.

Stride’s proposal is to “share 15% of each following category with the Cosmos Hub: liquid staking rewards, inflationary STRD staking rewards, transaction fees, and MEV revenue.”

The first category would be shared in the form of various stTokens, as STRD stakers receive. The amount corresponds to Stride’s TVL, and the blended staking reward rate thereof. The second category would be in STRD. And then the third and fourth categories would be in various tokens - once those revenue sources come online, which will be in roughly three months.

1 Like

There will still be inflationary STRD staking rewards after Stride potentially adopts ICS, only they will be subject to a special 50% reduction. This is considered a compromise, which takes into account the several parties involved and their diverging interests.

This prop can only pass if Stride and Cosmos Hub governance both approve it.

The Stride blockchain is already live, and is one of the top revenue generating chains in the Cosmos. So Stride will be able to share significant revenues with the Cosmos Hub on day one. Over the long term, with the help of Cosmos Hub’s security and liquidity, Stride has the potential to be an increasingly useful and popular blockchain.

A “hostile takeover” scenario using liquid staked tokens is highly unlikely, because many people are knowledgeable about this risk and are taking steps to remove it.

Currently, the Stride blockchain controls just 0.68% of staked ATOM. While this is a far cry from the 1/3 threshold, Cosmos Hub governance is already considering security precautions to prevent that threshold from being crossed. Zaki’s LSM proposal would limit the amount of liquid staked ATOM at 25% of total staked ATOM.

And even putting the liquid staking cap aside, the Stride blockchain is governed by STRD stakers, and, for such a young blockchain, the STRD supply is already well distributed, and is getting better distributed all the time. One of the main goals of the STRD tokenomics is to effectively distribute the STRD supply, which contributes to the decentralization of the Stride blockchain. For example, the vast majority of the STRD currently in circulation has been airdropped to ATOM stakers and given to ATOM liquid providers.

With the Cosmos Hub working to safely regulate liquid staking and the STRD token supply already fairly well distributed, a hostile takeover scenario is highly unlikely.