Update: Revised Tokenomics & Liquidity Alignment
Following feedback from validators and ecosystem participants, we’ve updated the proposal to address the primary concern around ATOM minting and better align incentives during the transition.
Key changes
1. Removal of ATOM minting
The proposal no longer introduces any new ATOM supply.
The acquisition is now structured to still be funded primarily from the Cosmos Hub Community Pool, but with the remaining portion sourced over time through protocol revenue.
2. Revenue-backed acquisition model
Any remaining conversion will be funded using revenue generated from both:
- the Cosmos Hub DEX deployment, and
- the legacy Osmosis chain during the migration period
This revenue will be used to purchase ATOM on the open market to fund OSMO → ATOM conversion.
This introduces a performance-linked structure, where part of the acquisition cost is funded through realized protocol activity.
3. Extended conversion window
The conversion window has been extended to one year to allow:
- gradual, user-driven migration
- sufficient time for revenue to fund the remaining conversion
- a more orderly transition overall
If the full conversion is not completed within that period, remaining OSMO will not be converted.
4. Clarificiation on legacy chain revenue alignment
To clarify, it has always been the intent of this proposal that liquidity remaining on the legacy Osmosis chain continues to contribute to ATOM value accrual. We have added language to make that more explicit.
Protocol revenue, which previously purchased and burned OSMO or accumulated assets in the Osmosis Community Pool, will instead be redirected to purchase ATOM on the open market.
This ensures that even if liquidity migration is gradual, economic activity across both the Cosmos Hub deployment and the legacy Osmosis chain contributes to ATOM value accrual.
This alignment persists beyond the transition period, as all remaining Osmosis infrastructure and its associated revenue streams operate under ATOM governance following integration.
Summary
These changes are intended to:
- remove inflation concerns
- bound the total cost of the acquisition
- tie remaining conversion to real economic activity
- ensure that value flows to ATOM regardless of migration speed
We appreciate the feedback that led to these improvements and welcome continued input as the discussion progresses.