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Again posting here to give my thoughts on the most important things to consider for the merge, as one of the core devs for the past nearly 3 years, and nearly 6 in cosmos land.
COSMOSIS Acquires Real ATOM Sinks
One thing I want to highlight that I think is being underweighted in this discussion: this merger doesn’t just bring revenue to the Hub — it brings permanent supply sinks for ATOM and a taker fee revenue sharing model that can be pointed directly at institutional partners. That’s a fundamentally different economic primitive than what the Hub has today.
How ATOM Gets Taken Off the Market
The Osmosis fee infrastructure has three built-in sink mechanisms that would directly apply to ATOM post-merger:
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Taker Fee Burns — Taker fees can be distributed to stakers and the community pool, or burned. Osmosis governance currently burns 70% of OSMO taker fees and 52.5% of non-OSMO taker fees by sending them to a null address, permanently removing them from supply. Applied to ATOM, every swap on the Hub DEX would permanently shrink ATOM’s circulating supply.
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ProtoRev Burns — The ProtoRev module captures cyclic arbitrage (MEV that would otherwise leak to external searchers). Native token profits are burned. More volume = more arb opportunities = more ATOM destroyed.
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Non-Native Fee Buyback-and-Burn — When taker fees are collected in non-ATOM denoms (USDC, ETH, etc.), the protocol can either distribute them or swap them to ATOM and burn them. The burn path creates constant buy pressure and removes the purchased ATOM from supply.
All of these parameters are governance-configurable — the Hub community decides the split. Protocol revenue can be used to stockpile ATOM in the community pool or burn it outright, as outlined in the numbers below.
Against ATOM’s current ~10% max inflation (~39M ATOM/year on ~390M supply), these sinks directly offset emissions. At sufficient volume, ATOM moves toward net-deflationary.
Taker Fee Revenue Sharing — The Institutional Flywheel
This is the piece I think deserves the most attention. Osmosis already has a production-ready mechanism called Taker Fee Share Agreements, built into the poolmanager module. Here’s how it works:
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- Any token issuer (institution, DAO, protocol) can enter a revenue sharing agreement with the chain.
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- They receive a configurable percentage of all taker fees generated from any swap route that touches their denomination.
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- Fees accumulate on-chain and are distributed automatically to the partner’s address at the end of each epoch.
This isn’t a grant. It’s not a one-time incentive. It’s perpetual, programmatic revenue sharing — as long as people trade the asset, the issuer earns. That’s a pitch you can bring to a TradFi desk: “List your tokenized asset on the Cosmos Hub DEX, and the protocol pays you a share of every trade, forever.”
The Hub is already pursuing institutional adoption through IBC v2, RWA infrastructure, and the Cosmos Stack licensing model. Taker fee rev share gives those conversations a concrete economic hook that doesn’t exist elsewhere.
One Institution, Concrete Numbers
Say the Hub onboards one institution that deploys $10M in liquidity for an RWA or stablecoin pair, and that pair does $1M in daily trading volume. At the current 0.1% taker fee with a 10% rev share agreement:
|
Per Day |
Per Year |
| Taker fees generated |
$1,000 |
$365,000 |
| Taker fee rev share to institution (10%) |
$100 |
$36,500 |
| Remaining for ATOM ecosystem |
$900 |
$328,500 |
| ATOM burned (52.5% burn rate) |
$472 |
$172,463 |
| Stakers + community pool |
$428 |
$156,037 |
The institution earns a passive $36.5K/year — programmatically, no human in the loop — simply because their asset is being traded. The ATOM community gets the rest, and over half of that is permanently burned. (Note: native ATOM taker fees currently burn at 70% — the 52.5% figure above uses the non-native rate as a conservative baseline.)
Three Core Pools — What Even Modest Activity Looks Like
This point may be redundant but wanted to highlight as well. Consider just three pools — ATOM/USDC, BTC/USDC, ETH/USDC — each with $100K in liquidity and $1M in daily volume. At 0.1% taker fee:
| Pool |
Daily Volume |
Daily Taker Fees |
Annual Taker Fees |
| ATOM/USDC |
$1M |
$1,000 |
$365,000 |
| BTC/USDC |
$1M |
$1,000 |
$365,000 |
| ETH/USDC |
$1M |
$1,000 |
$365,000 |
| Total |
$3M |
$3,000 |
$1,095,000 |
That’s $1.095M/year in taker fees from just $3M in daily volume across three pools — with only $300K in total liquidity. At the current 52.5% non-native burn rate, roughly $575K in ATOM gets permanently removed from supply per year. And this is a conservative baseline.
Now scale that:
| Institutions Onboarded |
Annual Taker Fees |
Taker Fee Rev Share Paid Out |
ATOM Burned/Year (52.5%) |
| 10 |
$3.65M |
$365K |
$1.72M |
| 30 |
$10.95M |
$1.1M |
$5.17M |
| 50 |
$18.25M |
$1.8M |
$8.62M |
| 100 |
$36.5M |
$3.65M |
$17.25M |
At 30 institutions, you’re looking at over $5M in ATOM permanently removed from supply per year, while simultaneously paying out $1.1M in taker fee rev share to institutional partners — funded entirely by trading activity, not inflation. And that’s before ProtoRev burns are factored in — native ATOM fees burn at 70%, which would push these numbers even higher.
IBC Eureka + the DEX — Another Flywheel
Speaking from experience running Osmosis: one of the biggest ongoing headaches has been bridging. Managing multiple bridge providers, dealing with liquidity fragmentation where you end up with three different versions of the same asset (polygon.ETH.axl vs ETH.wh vs ETH.axl), building alloyed assets to paper over the differences — it’s a constant drain on engineering time and a source of UX friction. We’ve spent a lot of cycles on this problem.
IBC Eureka changes the equation entirely. With the Cosmos Hub acting as the central router — one connection to Ethereum, Solana, Base, and the rest of the Cosmos ecosystem — bridged assets flow through the Hub natively. That means assets land where the DEX lives. No extra hop, no third-party bridge to trust, no fragmented liquidity. A user bridging ETH from Ethereum through Eureka arrives on the Hub and can swap immediately.
This is another flywheel: Eureka brings assets in, the DEX generates volume and taker fees from those assets, taker fees burn ATOM and pay out rev share, and the institutional revenue sharing attracts more assets — which brings more volume through Eureka. The bridge feeds the DEX, the DEX feeds the sinks, and the sinks feed ATOM value accrual.
And from a development standpoint, this is a huge unlock. Instead of the Osmosis protocol team splitting its focus between being a DEX and bridge maintenance — while Eureka handles the cross-chain plumbing. The bridged assets take care of themselves through IBC and can transfer anywhere in the ecosystem from there.
On the Team
I want to close on something that I know matters to people evaluating this: continuity. Most of the core team will be moving on to other projects, but we’re not disappearing. We’ll be checking in on how things are progressing, and if we ever need to hop on a call to work through something — an upgrade, a design question, whatever it takes — we’ll do it. Open source is how we’ve always operated, and I think if any team in Cosmos has proved they can rally when it counts, it’s Osmosis. We’ve done it time and time again.
Beyond that, individual engineers can also discuss support contracts directly with OGP, so it’s not like the expertise vanishes. We’re people with lives, we chat often, and the door is always open.
I’m still going to support Osmosis whether the merge goes through or not — just wanted to shout into the ether before the vote is finalized. I genuinnally think that the Omsosis DEX protocol deployed on the HUB will be amazing for the community and the ATOM, that’s why I’ve taken the time to outline my thoughts on things that may have been missed in the discussion.
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