Cosmos, one of the altcoin projects in which investors in Turkey also invest, made new announcements. The new token economy introduces an on-chain MEV marketplace, a system that facilitates economic coordination across the Cosmos Blockchain, and a new governance structure to the Cosmos Hub. Here are the details…
“ATOM 2.0” announced to the Cosmos ecosystem: New ATOM tokens
The highly anticipated whitepaper for ATOM 2.0 was released today following a series of talks on Cosmoverse by Cosmos co-founder Ethan Buchman, Osmosis co-founder Sunny Aggrawal, and Iqlusion co-founder Zaki Manian. The Cosmos-centric event kicked off this morning in Medellin, Colombia, and will run until September 28. Titled “The Cosmos Hub,” the 27-page document was penned by Buchman, Manian, and eight other prominent figures of the Cosmos community. New tokens for Cosmos Hub’s token ATOM have been outlined.
Cosmos is a decentralized independent Blockchain network. Not to be confused with the broader Cosmos ecosystem, Cosmos Hub is a private Blockchain designed to connect all other Blockchains in the network. In its current form, the main purpose of ATOM is to secure the Cosmos Hub through a staking mechanism. ATOM’s token economy has received criticism for its inflationary dynamics. ATOM issuance currently ranges between 20% at worst and 7% at best, depending on the percentage of total ATOM supply staked.
While the total ATOM supply was hovering at around 214 million in March 2019, data from CoinGecko shows that over 292.5 million ATOM tokens are currently in circulation. This indicates an increase of approximately 36.68%. The whitepaper proposes a new monetary policy for ATOM in two steps. Initially, a 36-month transitional phase would be initiated in which 10 million ATOMs per month would be mined initially. The issuance rate would then fall steadily until it reached 300,000 ATOM emissions per month, effectively reducing ATOM’s inflation rate to 0.1%. In the long run, it is thought that ATOM issuance will therefore become linear rather than exponential.
Inter Security will make Cosmos faster and cheaper
The primary reason behind ATOM’s current monetary policy is to subsidize Cosmos Hub validators to provide security services. Under the new model, validators will instead be rewarded with revenue generated by Interchain Security, a mechanism that allows Cosmos Hub to generate blocks for other Blockchains in the Cosmos ecosystem.
Interchain Security is expected to make a Cosmos Blockchain a faster, cheaper and easier process. It will also enable the creation of scaling solutions and increase overall IBC connectivity. A security mechanism would allow a phased reinstatement of the original ATOM issuance model should the revenue of Interchain Security prove to be an inadequate substitute for validators.
What will be the three new features of the altcoin project?
The whitepaper suggested adding three main features to Cosmos Hub as follows.
- Interchain Scheduler: The Interchain Scheduler will act as an MEV solution. MEV stands for “Maximum Extractable Value”, which refers to the profit that can be made by reordering transactions within a block as it is produced.
- Interchain Allocator: The purpose of the Interchain Allocator will be to facilitate economic coordination across the Cosmos network. By establishing multilateral agreements between IBC Blockchains and organizations, Allocator is expected to accelerate user and liquidity acquisition for Cosmos projects and secure ATOM’s position as the network’s reserve currency.
- Management Stack: Finally, the whitepaper advocated the creation of a governance superstructure for the entire Cosmos network, called the Governance Stack. Unlike Separator, Governance Stack’s mission will be to facilitate Cosmos-wide management by giving each Blockchain a common infrastructure and vocabulary.
Networking decisions will be up to altcoin holders
During their presentations on Cosmoverse, Buchman and Manian emphasized that the whitepaper should be a conversation starter. Ultimately, the development of Cosmos Hub will depend on altcoin ATOM holders who can vote for or against any change to the Blockchain. While the proposal has only been posted on the Cosmos Hub governance forum for a few hours, the response has so far been mostly positive.
Manian stated that the new features of the Cosmos Hub will “make EIP-1559 look like a joke,” referring to Ethereum’s burning mechanism. He made little effort to hide his rise on stage. ATOM is currently trading at $14.52. It has risen 2.8 percent in the last 24 hours.
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