The "French Paradox" of the Hub: Moving from 'Cavalerie' to Real Economy / Le paradoxe français du Hub : Arrêtons la cavalerie

[Alex_Hub]

I truly appreciate the blunt honesty in your response. This is exactly the kind of transparent debate the Hub needs, and I’m glad we are 100% aligned on Votes 1 and 2.

​However, your argument regarding Vote 3 actually highlights the core tension we need to resolve that has been holding ATOM back for years.

​You are looking at high APR as “risk-insurance.” But in corporate finance and macroeconomics, unbacked high yield is not insurance—it is the source of the risk. When a token prints supply to pay a high APR while its market cap stagnates, it creates an illusion of safety. You feel protected because your token count increases, but the market reacts by devaluing the asset to absorb that dilution. This is why institutional capital calls ATOM an “uninvestable asset.” Serious funds do not want “30-day boosted promos”; they want sustainable, predictable monetary policy. They flee the “cavalerie” printing press.

​You ask: If we cut the APR, what retains you from moving your capital to swing-trade more volatile altcoins?

​My answer is simple: A rising token price. Right now, you stay because high APR compensates for a bleeding price. I want you to stay because the token price is finally expanding. By fixing the denominator (Supply) via a yield adjustment and connecting the revenue engine (Burn), we create organic upward price pressure.

​If we keep the APR high just to artificially lock capital, we are running a textbook yield-farm model, not a major Layer 0 infrastructure. We cannot out-burn an unsustainable emission rate if the market cap keeps dropping due to lack of investor trust.

​Let’s look for a compromise. I understand your fear of a liquidity drain. But instead of defending a broken baseline, what if Vote 3 focuses on a gradual, multi-step reduction paired with market cap milestones, rather than a brutal cut?

​I’ve laid out the direction. You understand the trader psychology better than anyone — so what would a responsible, gradual reduction look like to you, one that protects holders without perpetuating the cavalerie model?

[TRAVE]

@Alex_Hub, sorry for not replying earlier, I’ve been very, very busy and couldn’t get back to you sooner. I genuinely appreciate this debate. This is a personal opinion based on my experience. I don’t want to change anything about your proposal. I just want to share my perspective, and we can stick to the 4 points we discussed, if you’d like. Having said that:

I speak strictly from the perspective of money—making a profit is exactly what large investors, CEXs, and whales care about. They don’t want anything else, and they have no emotional attachment to one coin over another. If a coin is at risk of sinking or the yield drops, they will simply pack up their capital and move on to the next opportunity. They couldn’t care less about the ecosystem as long as there is profit to be made elsewhere.

Let’s look at how this capital actually behaves in the market today:

1. The 21-Day Lockup & The Ultimatum: Capital is fluid. Let me be perfectly blunt: if you touch the APR to stabilize or boost ATOM, investors and CEXs will simply take their money and leave. We will come back later when the coin is stable and there is no risk, but right now, absolutely nothing else retains us. Let’s look at Toncoin (TON / Telegram) as an example. They recently ran promos offering over 20% APR for 30 to 45 days, and their unbonding period is a mere 11 to 48 hours. The price doubled during those days—it was an absolute bargain to buy, stake, and sell fast. In the crypto world, having your money locked for 21 days is more than an eternity; it means thousands and thousands of dollars in lost opportunity costs. The current 15% APR on ATOM is what “compensates” us for that massive risk. If you cut it, capital will simply migrate to more agile chains.

2. Modern Market Dynamics vs. Textbooks: Traditional economic books are foundational, but the rules here evolve brutally fast. Things change in a fraction of days. Look at BTC: the traditional 4-year cycle is gone. It is now heavily manipulated by institutional whales and sovereign governments buying and selling at will. The balance of fear and media manipulation dictates the market now. In this environment, a high guaranteed yield is one of the few tangible anchors that retain liquidity.

3. Devaluation is Net, Not Nominal: You argue that high APR devalues the token. But devaluation comes from net supply (Emissions minus Burn). If we implement Vote 1 and Vote 2, and we manage to burn more ATOM than we emit, we are deflationary. If we burn 20% while paying a 15% APR, why on earth would we cut the yield? If the machine works, you don’t break it.

4. The CEX & Governance Reality: Major CEXs and large validators control the governance. Why would they vote to cut their own revenue when Gauntlet officially states that emissions are not the primary cause of price suppression? Touching the investors’ money before exhausting other options is the fastest way to trigger a capital flight.

I studied ATOM carefully before committing my capital. I am here for the long term, but I am driven by data and money.

My Proposal: Let’s maintain your step-by-step approach. We execute Vote 1 (Dashboard) and Vote 2 (Burn Engine). We let them run. If, and only if, the Dashboard shows over a sustained period that our burn cannot keep up with emissions, then we open the data-driven discussion about APR.

Let’s secure the burn mechanism first before we penalize the stakers.

[Alex_Hub]

The proposals are on the table — argued, structured, and backed by numbers.

The inclusion of this topic in the Hub Weekly Update confirms the centrality of the problem. And TRAVE’s honest response has the merit of lifting the veil on the reality of our governance: when a participant openly states that large investors and CEXs ‘couldn’t care less about the ecosystem’ and asks ‘why would they vote to cut their own revenue?’, the ‘Cavalerie’ diagnosis is officially validated — not by its critics, but by its beneficiaries.

This dynamic, if it exists at scale, would represent a structural value extraction: dumping tokens for stablecoins, using them as collateral to short ATOM, and repaying the debt at a lower cost through validation rewards fueled by hyper-inflation — all disguised as ‘yield protection’.

Proposing to wait for a hypothetical burn that would mask a very real nominal inflation is, at best, a delay tactic to protect short-term rent.

I will hedge accordingly, and let the market settle what governance admits it does not want to decide.

See you in 60 days.

[Sansego]

Merci beaucoup pour cette analyse qui permet enfin de mettre des bases solides et évidente à n’importe quel système qui souhaite réellement évoluer et honnêtement. Tout système qui se veut fiable, performant, rentable se doit d’avoir à minima cette mesure. Sans transparence sur ces bases, il me semble compliqué de rester confiant, et sans confiance, cela est la porte grande ouverte à la méfiance, le jugement, la peur,.. de la pure perte d’énergie et de temps. Je ne pense pas que l’énergie et créativité qui a permis à ce projet de clore, est été de ce genre.

Je suis d’avis, comme vous, à ce que l’ on se donne les meilleurs énergies qui permettent d’avoir les bons outils au meilleurs moments afin que COSMOS explose réellement. Cette technologie le mérite vraiment

Je ne suis qu’un investisseur qui croit au changement donc, Merci beaucoup pour tous ces echanges que je viens de lire et je voterai favorablement pour les propositions 1 et 2

Bien à vous

PS: est-ce que les mesures sont uniquement journalières ? Est-ce que l’on ne pourrait pas avoir une mesure hebdomadaire, mensuel, annuelle , afin de voir l’évolution ?

[Josmar]

I think this discussion is one of the most valuable and intellectually honest debates the Hub has had in a long time.

Both sides are touching different parts of the same structural problem.

@TRAVE is absolutely correct about how capital behaves in modern crypto markets. Liquidity today is mercenary, not ideological. Large capital flows move where risk-adjusted yield is highest, and the 21-day unbonding period already creates a significant opportunity cost for ATOM stakers. Ignoring this reality would be a mistake.

At the same time, @Alex_Hub is also correct in pointing out that an economy cannot rely indefinitely on inflationary rewards as its primary value proposition. If emissions become the main engine sustaining the system, instead of real economic activity, then long-term structural pressure on the asset becomes unavoidable.

For me, the strongest point raised in this entire discussion is this:

We cannot penalize stakers before proving that real economic value capture exists — but we also cannot use stakers forever as justification for maintaining structural inflation.

That is why I believe the most rational path is the phased approach:

1. First establish transparent economic dashboards and public metrics.
2. Then implement and measure real burn/value-capture mechanisms.
3. Only after sufficient data exists should APR adjustments be discussed.

Because without transparent data, governance becomes ideological.
Without revenue, burn becomes symbolic.
And without sustainable tokenomics, APR alone eventually becomes fragile.

The key objective should not be “high APR” or “low inflation” in isolation.

The real objective should be building a self-sustaining economic engine where:

• emissions,
• burn,
• staking incentives,
• validator security,
• and real ecosystem activity

are finally balanced by measurable data instead of assumptions.

This debate is important precisely because both sides are identifying real risks:

• one side fears capital flight,
• the other fears long-term value extraction.

Ignoring either risk would be dangerous for the Hub.

Personally, I support Proposal 1 and Proposal 2 first, because transparency and measurable economics must come before any major monetary adjustment.