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AiB: Reinforcing our commitment to the Cosmos Hub

The Cosmos Hub community has found itself facing some difficult choices lately. While AIB voted and recommended NWV on prop82, we recognize that some of the ideas in the ATOM 2.0 whitepaper deserve to be explored.
AiB: Reinforcing our commitment to the Cosmos Hub

The Cosmos Hub community has found itself facing some difficult choices lately. While AIB voted and recommended NWV on prop82, we recognize that some of the ideas in the ATOM 2.0 whitepaper deserve to be explored. As core founders of our ecosystem, we also know that Cosmonauts are looking to AIB to provide direction for the Hub. The best path forward is through collaboration and valuable contribution, and we’re committed to supporting the ATOM community in its effort to shape the future of the Cosmos Hub in the following ways.

Fostering Innovation while Maintaining Security

As the largest interoperable blockchain ecosystem, 51 sovereign Cosmos chains 3 already form the IBC economy, exchanging value while remaining independent. With the upcoming release of Interchain Security (ICS) in early 2023, this number will rapidly rise as new consumer chains harness the security of Cosmos Hub, speeding up their time to market while providing additional revenue for ATOM holders and Cosmos Hub validators.

In the long run, the primary source of revenue for stakers and validators or miners in blockchains is transaction fees. The Cosmos Hub is in a uniquely authoritative position to provide scaling of blockchain applications through ICS and collecting transactional revenue. This is why we prioritize minimalism in the Cosmos Hub design to ensure its economic security, stability, and dependability.

Recent events surrounding Terra/LUNA or FTX/Alameda have painfully shown that adding features unchecked, such as unrestricted Liquid Staking (LS) to the Hub, would pose a systemic risk to the entire Cosmos ecosystem. For example, LS tokens used in conjunction with leverage and shorting markets would incentivize self-sabotage.

Addressing the Issues with Liquid Staking (LS)

This is not to say that there is no place for innovation or that LS should be avoided completely. However, beyond the notable security concerns which must be sufficiently examined, LS, as presented in ATOM 2.0, presents additional risks, including a centralization risk with the validator set, which has yet to be adequately understood. We must ensure that trusted code is created and run to mitigate the risks of governance takeover by a remote zone, through staked interchain accounts. This could be in the form of taxes levied for Interchain Account Staking as proposed in ATOM ONE, or ICS-hosted security of well-proven and audited application logic, which the Cosmos Hub could incentivize.

Until these concerns are mitigated, as a short-term solution, AIB recommends a hard cap on the amount of LS tokens through interchain accounts at 20% of stake and then implementing a self-adjusting tax system to keep interchain accounts at 20% of stake. A self-regulatory framework should also be implemented that classifies tokens according to their qualities, such as LS tokens, which should not be shorted with leverage to prevent self-sabotage. Visit GitHub for more details on Liquid Staking here.

The Decentralists DAO and Sub-DAOs

Mission 0: Moving Operations On-Chain

AIB is committed to upholding core Cosmos values of transparency, accountability, and decentralization. We see an immediate need to form a DAO to move operations on-chain – from engineering to marketing and funding – that will be paid for by smart contract logic secured by ICS. Establishing adaptive frameworks for DAOs to exist and operate, implementing clear procedures, and defining critical operating frameworks (like the need for certain checks and balances) will enable us to:

We are committed to carrying out the necessary research and work to improve discourse, organization management, development, funding, and conflict resolution by supporting the creation of the Decentralists DAO. The Decentralists DAO will organize itself into a set of tightly aligned sub-DAOs dedicated to specific areas with the first being the Decentralists Engineering Team (DET). Creating very specific decentralized units will ensure the right people are involved in the right issues to help advance the Hub’s development openly and effectively and to move away from centralized coordination efforts.

Mission 1: Inter-branch Reconciliation

Part of the DET’s work will be to establish a transparent, collaborative, and inclusive information-sharing process by maintaining and updating a list of current and future Cosmos SDK and Tendermint forks, creating a taxonomy of alternative repos.

If you’re a project that has forked Tendermint Core (to be rebranded Tendermint++), Gaia, or Cosmos SDK, we want to hear from you; please fill out this Cosmos Developer Questionnaire.

Alongside AIB and future collaborators, the NewTendermint spin-out entity will support the creation of the DET (managed by the Decentralists DAO) and suggest PRs between Tendermint Core, Tendermint2, the Cosmos SDK, and their branches.

NewTendermint will develop and release Tendermint2, a more minimal version of the original Tendermint++. Tendermint2 is designed to endure by focusing on simplicity of design, minimal code, minimal dependencies, modular dependencies, and completeness. This team will suggest changes upstream based on their work and port necessary fixes from Tendermint++ to Tendermint2.

The DET will be a separate team but intersect with the existing diverse development teams. To encourage collaboration and decentralization, we propose joint funding of this initiative between AIB, NewTendermint, and the ICF. We’re looking for passionate contributors and partners to participate in this effort, so if you’re excited about joining the DET, or other future sub-DAOs, make sure you contact us. You can read more about our initial thoughts on the constitution of the Decentralists DAO here.

Mission 2: Alternative Implementation of ICS

The base economic model for the ATOM token is earning transaction fees. With the rollout of ICS the value capture for this model becomes even greater as the Cosmos Hub lends security to an increasing number of chains in exchange for transaction revenue. Given the importance of solving ICS for the business model of the Cosmos Hub, NewTendermint and AIB will commit resources to either vet the existing ICS work or create an alternative implementation of ICS hosting by the DET.

Enabling the Transition to Decentralized Funding

Web3 is still defining how projects should adapt and function following a decentralized approach, and new needs are always emerging. One such need is the decentralization of funding for a specific project or proposal. We’ve seen more and more projects moving away from a centralized funding approach like direct funding from foundations, treasuries, or entities controlled by a subset of people to more decentralized on-chain mechanisms like DAOs.

Current initiatives like the discussions of using the Cosmos Hub Community Pool as the only community treasury and increasing the tax rate to fund future developments are precisely the type of funding operations that should be organized through a DAO. Establishing these procedures early on will ensure an appropriate environment to safely allocate funds from the Community Pool.

Encouraging Open Dialogue - Decentralists Discord

To achieve all these goals, more specific coordination is needed, and we propose the creation of alternative communication channels, starting with the Decentralists Discord. These channels will be more transparent, productive, efficiently moderated, and topic-specific; the most effective way of brainstorming and holding detailed discussions. Anyone who wants to positively and actively contribute to the development of the Hub can share thoughts and feedback, concerns and ideas, and suggestions to improve any of the components laid out in recent proposals.

We should create separate channels for each idea so that community members can focus on specific topics depending on their interests. This will ensure that the right people are involved in each component. We can also create specific focus groups on distinct issues, including:

Cosmos Hub Constitution

Channel moderation is vital to prevent trolling, spamming, and other unproductive behavior. AIB recommends enlisting the support of a community-chosen coach to monitor adherence to rules of engagement and create discussion reports that dive deeply into the potential benefits or disadvantages of each proposal. Let’s make this a community-driven endeavor where we select several facilitators to moderate engagement in a neutral manner. We can then decide collectively whether to experiment with any components before creating proposals and placing them to vote on-chain.

To advance these discussions, AIB commits to initiating and facilitating interactions between the teams and contributors who want to participate. We will also allocate the necessary resources to moderate the community’s discussions for this collective contribution.

Establishing a Cosmos Hub Constitutional Convention

Finally, AIB reinforces our belief that the Cosmos Hub needs a Constitution that reflects and upholds our core values. Transparency, accountability, security, simplicity, sovereignty, and decentralization have been fundamental to Cosmos so far. When committed to a Constitution that acts as our guiding vision, we can ensure that all new development proposals are aligned.

With all the major revisions proposed to the Cosmos Hub, a Constitution that we can rally around and hold as a universal source of truth and reference point to illuminate our path is vital. You can read more about our ideas for a Constitution on GitHub here and leave your feedback and suggestions. There are also suggestions for improving Cosmos Hub governance here. PRs and discussions are welcome.

These recent weeks have been divisive within our community but they have also propelled us into action. Now it’s time to work together to reconcile our ideas and shape a sustainable future for Cosmos Hub. Let’s embrace and foster innovation to ensure the ecosystem continues to thrive. AIB is committed to being a core contributor to this effort.