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This proposal seeks Cosmos Community support for a FPI (Free Public Infrastructure) launched EVM to become part of the AEZ while being secured by interchain replicated security.
- Deploy an Atom stake holder aligned EVM that requests no sunk time or capital cost from Atom community pool.
- Align the development with the Cosmos Hub and the Cosmos Community.
- Accept the hierarchy of needs within the Cosmos. Atom stake holders are sovereign and deserve access to EVM tooling.
- Deploy established EVM DeFi primitives to strengthen the utility of ATOM and its liquid staking derivatives.
The document within provides details about Aether’s future and symbiosis to the Hub and advocates for Aether to launch as a consumer chain which utilizes replicated security. It also observes community feedback from EVMs which have failed to acutely capture market need, which is a byproduct result of the over reliance on venture capital and under reliance on the true spirit of crypto.
- Expand the activity of users on the Cosmos Hub via the integration of Aether EVM in the wider interchain ecosystem.
- Create a core public utility and good for Atom stake holders, expanding the use of FOSS and free public infrastructure.
- Incentivization of secular alignment for all Atom stake holders.
- Continue the development of the Ethermint SDK/modules (which were funded by ATOM community pool) with an open-source license.
- Increase the use of DeFi, CoFi, and TradFi in the Hub ecosystem.
This proposal seeks to deploy Aether on the Cosmos Hub with replicated security with redistribution of fees, MEV and other incentives.
The following items summarize the voting options and their significance for this proposal:
• YES - You agree with the terms of the proposed security agreement and want Aether to be secured by the entire Cosmos Hub validator set using Replicated Security.
• NO - You do not agree with the terms of the proposed security agreement and/or do not want Aether to be secured by the Cosmos Hub validator set using Replicated Security.
• NO WITH VETO - You consider this proposal (1) to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance. If the number of ‘NoWithVeto’ votes is greater than a third of total votes, the proposal is rejected and the deposits are burned.
• ABSTAIN - You wish to contribute to quorum but you formally decline to vote either for or against the proposal.
Cosmos is the most competitive product stack in the crypto currency ecosystem and there is enormous value creation ahead due to its unique network and social topology compared to other networks.
Many users have had the realization that most hype is a repackaged and white labeled Cosmos stack copycat or ideas pioneered by Cosmos long ago: bringing Cosmos tech to ETH is alpha, and everyone is using Tendermint/Cometbft or a derivative. Many of these chains had too much surface area risk due to their top-down management. The crypto ecosystem now sees the advantage to Cosmos bottom-up approach, which is similar order out of chaos regime like Bitcoin, or the Network State as defined by many cultural contributors of crypto. Whether you look at DxDy or many upcoming Cosmos chains, all of them have favorable interest in the Cosmos and the underlying strategy. Cosmos has the best grass roots and ad hoc network effect long term; especially when juxtaposed with the all the other chains out there. To keep it simple. ATOM’s lack of top-down management has created a true decentralized techno-social slack; the social topology is highly malleable and dimensional. The real utility in crypto and the number one discounted abstract asset is the interaction of social agents and formation of many interacting corpuses. The future of the Cosmos and the Hub is brighter than ever.
Aether was built as a consumer chain for the Cosmos Hub. Utilizing ICS for security is not a pivot but the goal. Aether seeks to onboard as many EVM devs as possible to the AEZ. EVM tooling is the easiest stack to develop DeFi projects on, there is immense amount of tooling resources and already existing libraries and code bases. By giving a chance to a new team, the Hub will show that its goal is to give opportunity to new actors without an established reputation in the Cosmos. This is the only way to truly become a neutral apolitical economic zone which prioritizes growth and economic activity. Cosmos needs new teams and not only people working on Cosmos SDK chains but also people deploying smart contracts, DeFi, TradFi, and CoFi products.
Expanding the utility of ATOM across the Cosmos Ecosystem is one of the goals of Aether. ATOM will benefit immensely by becoming the base asset for all the Aether DeFi primitives. Such as stable coins, borrowing and lending, collateral for perpetual swap products, p2p CoFi markets for discharging debt, and more. As ATOM gets adopted by chains for gas fees it will become the easiest asset UX wise to keep inside the wallet for multi chain IBC transfers.
Aether seeks to generate long term revenue for the Hub. The EVM will help strengthen ATOM’s position as the numeraire/NQA “No questions asked” species of security for the interchain thus helping position ATOM to secure itself as the benchmark in the interchain when compared to other assets and products in the interchain ecosystem.
One of Aether’s critical path goals is to avoid fragmentation of UX. Users will be able to interact with all major DeFi protocols launched on the chain through a single dashboard. This will have multiple beneficial effects. Users that come to use one app, are more likely to become users of other apps present on the same dashboard. It will also concentrate governance in a single easily accessible place, increasing user participation in the network, allowing power users to reuse assets and their derivatives in multiple parts of the protocol in an intuitive way. Imagine pooling ATOM/USDC on Aether DEX and then lending the LP token on an Aether lending platform all from a single dashboard in few clicks.
Aether upon launch will have a similar staking mechanism to Curve, which means users will be able to stake for longer and get a higher reward. This method was decided to reduce issuance by concentrating rewards to the longest duration staking contracts and reducing it for the lowest ones. A proper diametric yield curve is key to long term sustainable growth. The structure allows for the proper incentivization of the most fiscally responsible long term stakers which become the foundation of the network.
- 8 months lock 2.2% reward
- 16 months lock 3.3% reward
- 24 months lock 4.4% reward
- 32 months lock 5.5% reward
Airdrop clawback will be split 40% to the Atom Community Pool *vested over three years and 60% of the remaining clawback distributed to Aether Accelerator to launch TradFi, CoFi, and DeFi protocols and strengthen the development on the platform. ATOM will be backed by the unclaimed part of the airdrop thus strengthening its value proposition and assuring long term alignment between the Aether and its ICS provider. Aether hopes to collaborate with already existing entities such as the Atom Accelerator to signal that Aether’s goal is to become one of the strongest chains in the AEZ. The modus operandi of Aether is to create as much industry symbiosis and collaboration as possible with existing players.
One of the main complaints with ICS is that validators need to stomach the full cost of every new ICS chain they run. With Aether’s governance mechanism, delegators will be able to delegate to validators sharing part of the inflation rewards with them (similarly to how it works already on standard Cosmos Chains) with a key difference that these new entities called delegates will not be able to vote. We find this is the best way to focus validator contributions on services and contribution to the protocol or launching protocols on top of Aether, we hope delegates funding becomes a successful way to fund new market collaborations and projects.
Cosmos Hub validators will have to use additional resources for Aether chain, validators in the bottom 5% of voting power (roughly 65 validators) on the Hub would not be forced to run the chain but they would have the optionality to opt-out from validating for the Aether chain.
• MEV revenue: 33%
• Transaction fees: 100%
Aether looks to deeply incentivize the Cosmos Hub with this proposed revenue share agreement, to date this would be the highest distribution any live ICS chain has proposed for transactions fees and MEV, we are sure an EVM chain would bring enormous amount of revenue to the hub long term, and cannot wait to see the AEZ grow and become economically sustainable.
ATOM is already DeFi and TradFi because Atom is also the market security provider like Bitcoin, ETH or a nation states military projection. Atom is the benchmark asset utilized to discharge debt in the interchain. The benchmark asset and security provider which allows the formation of a digital network states simply needs more avenues and locals for users to express its value. Aether is built to host an ecosystem of CoFi, TradFi and DeFi primitives around Atom and Aether. Thus, generating an ecosystem of Free Public Infrastructure and proper capital formation for stake holders without the heavy load of venture capital and opaque presale deals, whose cheaply priced supply exposes all secular stake holders to excessive downside. Applications and primitives built on Aether will enable Atom stake holders to use native and liquid staked ATOM to borrow, lend, express governance power, provide liquidity, and much more. These products will drive demand for the benchmark asset ATOM and help user driven consumption of ATOMs via the need for users to discharge interchain ecosystem debt and properly hedge user specific capital formations. The more robust builds and the more products that teams can choose from, the easier it is to sustain long term road maps and engage in active treasury management strategies.
ATOM is the benchmark asset that players use to discharge debt; it has thus won the battle for strongest asset across the interchain. There are pros and cons to becoming the benchmark asset of an ecosystem. One of the cons is that developer teams must seek allocation of this benchmark asset to secure dollar liquidity and thus hedge future development cost and risk: as the dollar is the global benchmark asset. The more teams that request ATOM for developer funding, the more future sell pressure exists for Atom stake holders. The project which received Atom to fund their expenses now must produce much more value to become a net positive endeavor for not just ATOM stake holders, but the native token they issue. We can call this AROAI or ATOM Returned On ATOM Invested. How much of the benchmark asset value is returned to ATOM stake holders nominal and real? Nominal values, just as in TradFi do not mean much in terms of real value after a long time series cycle. Too often, nominal values of AROAI are passed around as teams want to prove their worth to ATOM stake holders. The success story of ETH has nothing to do with bloated venture capital Erc20 ICO’s. It was the era and philosophy of FPI and values inherent in FOSS and cyberpunk culture which brought the most value to ETH stake holders. Projects built by ETH OGs, with little use of “other people’s money” such as venture capital, family offices, community pools, and grants. Limiting the initial use of external funding creates proper capital formation for stakeholders as well as adhering to the cultural pillars of crypto.
Consumer networks with appchains create additional hardware costs and devops costs for validators, as each validator must run a unique node for each additional consumer chain. This increases the CAPEX and OPEX for validator teams on the Hub, and thus increasing the liability side of the balance sheet, leading to more sell pressure. This is an obvious issue which is counter to the scale of economies. Smart contract systems are not an additional cost matrix for users and thus reduce increased risk exposure due to decreased cost. Permissionless access to smart contract utility as Free Public Infrastructure lets any creatives in the Interchain Ecosystem launch without creating additional bloat for the Cosmos Hub and her Stake Holders. Aether replicated security allows hundreds of projects to utilize the power of Solidity, without negative feedback loops imposed on the Cosmos Hub and participating validators, instead of having a separate chain for each project, now new teams can deploy on Aether’s EVM.
The Ethermint module was funded with ATOMs via the Cosmos Hub community pool, the codebase thus launched with an open-source license. Recently the license was changed. Because the Ethermint module was funded with ATOM community funds we think the license should remain open source and development of the open-source codebase should continue.
Aether will utilize the latest open-source version of it, and further iterate on the core codebase. The vision is to improve and maintain the chain thus keeping it as freely available public good. We think it is necessary for the Cosmos ecosystem to succeed.
We believe the future of any chain declaring itself as a general smart contract platform can exist only through open-source licensing. The adherence to FOSS is not just about security, but also dissolves legal moat, thus making it easy for developers to interact with the software without worrying about counter party claims. Anything opposite of this, is a Trojan horse vector to implement wide regulatory capture on chain. The anti-thesis of why we are all here.
EVM chains have become the go to solution for most DeFi projects. The Cosmos ecosystem will benefit with up to date EVM development, which is necessary to gain market share over other EVM focused ecosystems. The focus on only CosmWasm is a missed opportunity. While it is understood that CosmWasm was built with IBC in mind, it has thus failed to gain any significant developer adoption and failed to attract an Ethereum userbase. This is not the fault of CosmWasm, but simply the nature of developer demographics and languages in practice. The majority of the DeFi, projects are being developed on EVM chains. There is no reason to isolate the Cosmos Hub from such a vast ecosystem. There are only opportunities to gain by adopting a Native Hub EVM. CosmWasm development is far more complicated then EVM development and only a fraction of developers exists which have the capability of developing with a Rust/web assembly framework. Creating a significant CosmWasm developer pool will take a large amount of man hours and training time and it is not reasonable to assume it will happen in the short term. This is a multi-year endeavor. Launching an EVM on the Hub can boost CosmWasm adoption as new developers will come for the EVM and discover higher use cases with CosmWasm if their skills set is applicable.
Upon launch Aether will have a basic set of primitives, thus showing technical standard and decorum of commitment. The goal of these basic primitives is to demonstrate quick deployment of DeFi projects, the success of aether however doesn’t rely on any single primitive but on the adoption of the Aether EVM. Aether’s focus remains on sustaining an open source EVM that can act as Free Public Infrastructure for the AEZ and Interchain Ecosystem and to absorb any idle LSD supply.
Other EVM Cosmos Blockchains have failed to attract high value EVM Dapps. Part of the problem is the lack of security (and the highly inflationary tokenomics). ATOM with its enormous security budget will help Aether attract more attention and utility to the new Hub EVM. Aether will become the most secure EVM on Cosmos and the default option for deployment for all third-party solidity contracts.
Recently the liquid staking derivative module was launched on the Hub, unlocking a huge part of the supply. Liquidity is a double edged sword. What is not bonded or used capital is now floating. The pros of LSD is that it allows the velocity of money and credit to inspire a wave of DeFi, TradFi, and CoFi among the Interchain, including on Aether. This newly unlocked liquidity must find a home quickly or it may impact market liquidity negatively reducing upside potential because of lack of use cases, and current high rate macro market. Launching an EVM consumer chain concurrent to LSD becoming a standard is the best way to absorb the discharge of debt and turn all this liquidity into positive momentum for ATOM. In the absence of new use cases, liquidity sinks and DeFi protocols which allow the proper ability to hedge and discharge debt, the opposite can happen. An EVM chain is the optimal way to quickly put all LSDs to productive use. Launching an EVM consumer chain should be the immediate pressing concern of every ATOM stakeholder. The AEZ will not be able to grow without one. Network States will suffer the same issues as they mature without robust market mechanics to absorb risk from counter parties.
Aether’s goal is to launch all major DeFi primitives in the next 8-12 months and absorb the majority of LSD supply which in the present are without a home. Aether seeks to offer risk off opportunities and higher yield/ higher risk products and strategies. The first step into becoming a mature DeFi market is establishing a stATOM backed stablecoin. The most interesting opportunity lies in something like a multi collateral liquity v2 fork. In the meantime, Aether’s focus will evaluate solutions like CANTO/NOTE with a focus on ATOM LSD markets. It is time for LSDs to be used and for ATOM stakers to earn yield out of new DeFi primitives via Aether. ATOM DeFi is immature and/or fragmented across many chains. By launching all major DeFi primitives on Aether’s chain, composability is increased for ATOM. Users will be able to pool tokens and lend the LP tokens or use them to create stablecoins all in a single interface. We believe in the network state thesis, polished products and easy UX, and see these markets no different than trade finance guilds which existed prior to the monopoly of central banking. Ethereum has a variety of DEX models, some are focused on bootstrapping liquidity like solidly ve(3,3) model or Curve tokenomics which secures risk via layered topology of different bonded durations. There has been no proper flywheel mechanism tried in the Cosmos, but it is time to correct that. If you believe liquid staking derivatives must be put to use and fast then Aether is your greatest ally.
Multiple EVMs have launched in the Cosmos. The most successful product being CANTO. CANTO has decided to pivot to a roll up model on Matic, thus ending the isolation of the digital money market and offering such primitives to a wider ecosystem. Their transition to Matic shows their lack of commitment to the Cosmos, thus creating a favorable opportunity for Atom Stake holders. The observation of other products like Kava, Bera, and Evmos have also taught many lessons to Atom Stake holders. Network States with emerging money markets are not always going to have a perfect launch, nor short term stability; like any new revolutions which seek to organize human incentives correctly (such as states, municipalities, DAOs, etc) there are many that fail and many that grow. Short term volatility is huge, but long term there is stabilization of organizational corpus. Network State crafting is far from over, and the future is bright. These emerging Digital Network State money markets go through periods of robust springtime blooms and then welt into crypto winters. These cycles of market reflexivity have thus made it easy to identify key points that we look to do right with the launch of Aether.
The EVM chain needs to launch with core primitives, rather than wait for third parties to build them; otherwise, the EVM misses the entire point of its M.O. which is the ability to lift free public infrastructure. Products only have to offer better property rights, access to protection of purchasing power, etc than most local markets can offer their citizens. Someone in a capital control market can protect themselves better from purchasing power debasement risk with relative ease now.
The token needs to have utility from day zero, creating a positive flywheel is critical path.
High inflation and soft money policy destroys any positive momentum via dilution of key stake holders. Many Cosmos chains had the misfortune of launching during a bear market or right on the cusp of it, with extremely high chain inflation to incentivize users.
Others opted for lower inflation and has overall more protocol growth and adoption from users. Aether tokenomics seek to align stake holders with more predictable and lower issuance policy.
Concentrating on improving tech and the base layer protocol (only infrastructure lift) before having use-cases and a growing ecosystem of is a quick recipe for failure.
You can only launch once, it is better to get things right the first time. Rework and pivoting after failure rarely leads to recovery and adoption. Genesis is everything.
Aether’s goal is to bring EVM capabilities and core DeFi primitives to Cosmos. The main user-base that is being targeted in the beginning is ATOM owners. The chain will focus on the Cosmos side UX, making it as easy as possible for Cosmos ecosystem users to interact with it. Keplr’s smooth UX flow will be one of our biggest priorities. For this reason we decided to use the default Cosmos fee system (and keep up to date in the fee tech stack improvements being discussed in the last weeks) instead of the default ethermint fee system. Coin type 118 will be used instead of the default eth coin-type allowing us to make IBC UX depositing and withdrawing seamless like Osmosis without any manual interaction or address copy-pasting.
Airdrop recipients tend to quickly sell their tokens not giving the project time to grow. Aether airdrop mechanism will enforce a lock time in accordance with capital formation strategy formed over hundreds of years. This will help ensure the project has enough time to prove its worth to ATOM stakers and the AEZ as a whole.
ATOM Prop #44 gave Evmos an ATOM subsidy from the community pool. Aether looks to airdrop to ATOM holders without being the beneficiary of 100,000 ATOMs to bootstrap the project.
Aether also did not raise in funding, not receiving VC money will keep Aether nimble and focus the team on creating as many value capture mechanisms for Aether and the Cosmos Hub.
Token reputation is impossible to regain once lost. The market desires risk managers, not risk takers on the long tail.
Open-source drives value creation, closed source is a terrible long-term strategy, as open source always receives more adoption long term, and it is more secure as more people have an incentive to contribute. The public owns the codebase. That is why Linux won for enterprise adoption and is one of the most widely used OS today in which nation states, transnational firms and such entities are reliant on. FOSS also creates a contribution culture based on metaphysical idealism, an important pillar to have in the temple when times of dearth exist.
Culture is key to a flourishing crypto project and NFTs are key to culture, but the culture cannot exist in the long term without economic sovereignty as the key modus operandi of the Network States culture, a prime abstract value most EVM projects missed.
Launching a new token for Aether (and sending unclaimed tokens to ATOM community pool) will assure maximum alignment as there will be overlap between Aether airdrop recipients and ATOM stakers. No other solution will create as much value for ATOM stakers and validators.
Usecases, DeFi primitives, an optimal flywheel mechanism and good tokenomics are necessary and not optional.
EVMs are not valuable without use-cases, and use-cases are not abstract, or opaque. The story of crypto is simple even if venture capital re-framing attempted to steal the story. The story for real players in the arena is the ability to transition culture into a more open money market system with permissionless bearer use cases, allodial private property, and self-custodian responsibility and security as a market good to enshrine the above. These are the most valuable abstract goods produced in human history.
The cosmos ecosystem and more importantly ATOM has always been perceived as largely disconnected from the rest of crypto, thus it didn’t participate in the previous cycle DEFI wave, we think the largest contributor to this is the lack of an EVM tied to the hub and a lack of focus on EVM narratives from ATOM stakeholders.
As of now there is not many ways to utilize ATOMs beyond simple staking or LPing, Aether goal is to adapt all the most popular ETH products to ATOM, creating the hedging and yield market ATOM always deserved but never got.
We think that launching an EVM consumer chain is the most productive use of interchain security and will quickly become the most profitable chain in the AEZ.
An EVM consumer chain will eventually have to happen on the Cosmos Hub if adoption is the goal. The faster it happens the more likely ATOM increases product market fit within the Cosmos Ecosystem. An EVM on the Hub should be tailored for it and not a pivot. Delaying such launch by months is not something the ATOM community should consider. We think the time to deploy the EVM consumer chain was yesterday, and we are surprised it was not deployed already. For this reason, development started right after ICS was launched.
Code is complete, testnet is ready to deploy as soon as needed, binaries will be released shortly.
Aether will need help for the testnet launch. If you are a validator or a Cosmos community member interested in supporting us in the early days please join our communities.
- UX and gas fee payment improvements, effortless userflow
- DEX: Aether’s dex will focus on creating the ideal conditions for ATOM focused trading pairs
- Lending with focus on ATOM and ATOM LSD
- Liquid ATOM backed stable coin
- Perpetual platform/Futures contracts and products with ATOM collateral
- NFT platform with ATOM pricing
- In general, the most popular EVM primitives will be ported
- Integration with p2p DeFi/CoFi lending markets, automated yield producing vaults
- EVM specific MEV extraction tools (and integration with existing ones)
- After all core primitives are established Aether will focus on creating new DeFi primitives which leverage the unique capabilities of the cosmos SDK and ABCI++
- 40% airdrop
- 20% LP rewards
- 10% community pool
- 1.50% validator incentives
- 15% long term development (locked for 32 months)
- 5% mid term development boost (locked for 24 months)
- 7% founders (locked for 32 months)
- 1.50% liquid tokens for early expenses
To make sure alignment with the Cosmos Hub stakes remains long term, all airdrop tokens will be auto staked upon claim in one of the four long term staking options. Higher tiers will get bonus tokens and during the first 8 months only staking rewards (and lp rewards) will be liquid, no airdropped tokens or team tokens(team tokens will be locked in the long term staking options same as airdrop tokens, staking rewards will be liquid and used for development).
This will ensure Aether becomes a long-term project and will show the multi-year commitment, with both the AEZ and the Cosmos Stakers.
- Private Aether test net is currently running
- Proposal is posted on the forum
- Multiple weeks of time for community feedback.
- During this community feedback time binaries will be published and a public test net for Aether is launched (either a new test net or using already running Cosmos Hub test net depending on community feedback).
- A signaling proposal is launched on the Cosmos Hub.
- After the signaling proposal (hopefully) passes all the code will be published on Github with open source licensing.
- After the public test net is deemed stable a deployment proposal on the Hub will be posted.
- Approximate “ready to launch” timeline 2 months since the forum proposal is posted.