[SIGNALING PROPOSAL] [DEPOSIT PERIOD] Integrating Token Factory into the Cosmos Hub

Hub Proposals Signaling/Text
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Change log

  • 2025-08-13 Created initial post

Summary

Highlight the need to integrate the Token Factory module into the Cosmos Hub, leveraging the activation of permissionless CosmWasm deployment via Proposal 1007 (recently adopted).

Details

Background

Proposal 1007 was recently adopted, authorizing permissionless deployment of CosmWasm contracts on the Hub.

The Token Factory module provides native capabilities for creating IBC-ready tokens.

Main Goals

  • Provide developers with a complete environment on the Hub (dApp + token + callbacks) without relying on other chains.

  • Facilitate the creation of natively IBC-ready tokens, promoting their integration into the Cosmos ecosystem via IBC.

  • Capture more economic value on the Hub (more transactions, more fees, more outbound IBC).

  • Leverage mature and battle-tested code, already audited and successfully used on other chains.

  • Create an attractive environment for innovative projects (governance tokens, stablecoins, RWAs, LSD, etc.).

  • Enable complex interchain workflows thanks to callbacks feature (e.g., atomic swaps, transfer-triggered responses, etc.).

Advantages

  • Decentralized token creation & management: CosmWasm contracts can generate tokens without manual intervention or third-party modules.

  • Native IBC interoperability: tokens are directly usable across the Cosmos ecosystem.

  • Proven security: technology already in production on Osmosis, Neutron (audits available).

  • Synergy with permissionless CosmWasm: combining these modules creates a complete, programmable platform on the Hub.

  • Economic value retention: prevents migration of activities to Osmosis or Neutron.

  • Standardization of Cosmos assets: facilitates integration by DEXs, dApps, and wallets.

  • Advanced interchain experiences: callbacks enable powerful interoperable workflows.

Risks and Proposed Mitigations

  • Spam and useless token inflation

Concern that enabling Token Factory on the Hub may lead to a proliferation of worthless tokens, harming the Hub’s readability and reputation.

Already observed on other chains (many denoms created, very few actually used).

Several stakeholders (e.g., Govmos) stress the need for a significant fee on denom creation to limit this effect.

  • Increased governance complexity

With Token Factory, the community may need to manage more settings, abuse cases, or conflicts around created tokens.

This could place additional burden on Hub governance, requiring arbitration on more technical and economic issues.

  • Distraction from the Hub’s primary role

Some fear the Hub could dilute into a token issuance platform, while its main mandate is security and interoperability (via ICS and IBC).

@Govmos stresses the importance of staying aligned with the blockchain trilemma (security, decentralization, scalability) rather than drifting into secondary use cases.

  • Technical compatibility and interchain consistency

@kromsten highlights compatibility issues between Token Factory implementations (Osmosis vs Neutron).

For example, Neutron has its own CosmWasm bindings (neutron-std), which may complicate contract portability.

This raises the question of which module version should be adopted on the Hub, and the risk of fragmentation.

Conclusion

This proposal seeks to make Cosmos Hub a fully programmable, interoperable, and economically active platform. By coupling Token Factory and callbacks (already live on the hub) with permissionless CosmWasm (thanks to Proposal 1007), the Hub becomes a true one-stop shop for dApps with tokens, interchain workflows, and enriched logic.

The identified risks (spam, governance, security) can be managed via proven mechanisms (fees, disabling risky features, regular audits).

The Hub will thus be better positioned to attract developers, retain value, and reinforce its leadership within the Cosmos ecosystem.

Forum post link

Governance votes

The following items summarize the voting options and what it means for this proposal:

YES - A YES vote signals that you support asking Cosmos Labs or another dedicated team to scope, develop, and implement the Token Factory module for the Cosmos Hub. This proposal does not activate the module directly but expresses the community’s intent to prioritize this work.

NO - A NO vote signals that you do not support requesting Cosmos Labs or another dedicated team to work on the Token Factory module at this time. The Hub would continue without a native Token Factory, and projects would still rely on other chains to create tokens.

NO WITH VETO - A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed 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.

4 Likes
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Ophir DAO is a redemptive treasury operating on the Cosmos Hub. We manage our operations through DAODAO infrastructure and are strong supporters of adding the Token Factory module to the Hub.

As a migrated project, we are now preparing to issue a new token to finalize our transition. While we have evaluated many Cosmos-based chains, the Hub has always felt most aligned with our vision. With permissionless CosmWasm live—and the potential addition of Token Factory—we believe issuing our governance token directly on the Hub through a DAODAO token-based DAO would deepen that alignment and further strengthen the Hub’s role as the center of the Cosmos ecosystem.

Our members are a diverse group of committed power users from across the Cosmos. We see this proposal as a meaningful opportunity to unlock new capabilities, foster innovation, and create stronger ties between DAOs and the Hub.

At the same time, we recognize the concerns raised in the signaling post: versioning questions, the risk of spam, and the importance of not distracting from the Hub’s core role. These are valid considerations, and we respect the importance of governance weighing them carefully.

Overall, Ophir DAO is supportive of this proposal. We believe it offers a path to expand the Hub’s relevance while staying true to its mission. Ultimately, we trust the community’s decision and look forward to building in alignment with whatever direction the voters choose.

6 Likes
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100% Yes VOTE Cosmos Hub Needs new energy.. this needs to happen ASAP…

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Even considering the risks, making the Hub useful sounds like a decent bet :smiley:
All for !

2 Likes
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I like this idea, everything to bring more users, more volume and more usecase to ATOM/Cosmoshub is welcome to me only then we have a chance at competing with the likes of Solana & SUI

Support from me!

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Context

Following the discussions on the initial post, it has become clear that the IBC Hooks functionality is not essential for the Cosmos Hub. In fact, the callback functionality is already enabled on the Hub, which addresses much of the original need.

Updated Proposal

Given this, the signaling proposal should be refocused. Instead of requesting the activation of IBC Hooks on the Cosmos Hub, the emphasis should now be placed on implementing a Token Factory. This is the most relevant and impactful feature to strengthen the Hub’s role and interchain interactions.

Why a Token Factory Makes Sense

  1. Complementarity with Existing Features

    • The existing callback functionality already covers the key use cases that were driving the need for IBC Hooks.

    • The Token Factory would therefore complement the Hub’s current toolkit without creating overlap.

  2. Native Token Creation and Management

    • Enables projects and communities to create and manage tokens directly on the Hub, without relying on external solutions or smart contracts.

    • Improves security, transparency, and governance of newly created assets.

  3. Strengthening the Cosmos Hub’s Attractiveness

    • A native Token Factory makes the Hub more competitive and central within the Cosmos ecosystem.

    • Encourages projects to use the Hub as a primary anchor for their interchain tokens.

  4. Interoperability and Simplification

    • Combined with the existing callback functionality, a Token Factory would streamline automation and interchain asset flows.

    • Reduces infrastructure complexity and costs for developers and operators alike.

Conclusion

By focusing solely on the Token Factory, the proposal becomes sharper, more pragmatic, and fully complementary to what is already in place. It addresses actual ecosystem needs while avoiding duplication and maximizing impact on the Cosmos Hub’s development.

1 Like
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(post deleted by author)

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Integration of Token Factory on Cosmos Hub appears to be a powerful strategic move: it turns the hub into a complete center for creating and managing tokens, gradually increases its attractiveness for developers, helps retain economic activity and value, and also supports the standardization of Cosmos assets.

The main risks are the threat of spam, increased governance workload, and the need to maintain a high level of security, but these issues can be addressed through governance mechanisms and technical expertise.

Our team supports this proposal.

2 Likes
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This prop does not request adding IBC Hook. The hub has already a similar solution : callback.

2 Likes