The evolution of the Cosmos eco-system, from ATOM, plus a few separate chains built using the Cosmos SDK toolkit, to a thriving eco-system now numbering 50 interconnected chains, with many more on their way has been a paradigm shift for the crypto space. Many chains have tried to become all things to all people. Cosmos took a different approach, with a focus on connected App specific chains. The success of this approach can be seen by a quick look at the activity levels as demonstrated on the Map of Zones
This success, has led to a paradox. The Cosmos eco-system is growing rapidly, even during a bear market, but what has been the primary asset - ATOM - has lost a fair bit of relevance. The open source nature of the eco-system has meant that other chains have utilized the core Cosmos code, and developed themselves into focal points for the interchain. Take OSMO and JUNO for example. OSMO was first to market with an IBC Dex, basically providing the "go-to-market" for IBC long before ATOM would have had their Dex ready. This first mover advantage left the HUB (ATOM) behind, and eventually it gave up on its ambitions of having a Dex on the ATOM chain. Similarly, chains like JUNO and EVMOS, to name just a couple, have captured significant economic activity and become focal points for the interchain eco-system.
This leaves ATOM with a bit of an issue...
A HUB without a focus.
The initial Cosmos whitepaper has been fulfilled. IBC has been delivered, the vision of a network of connected blockchains has been fulfilled. The "Internet of Blockchains" is a success. This actually presents two issues for the ATOM chain:
- Value capture missed. The interchain exploded so quick, that it seems that ATOM forgot to monetize it. The decentralized and open source nature meant that the HUB failed to pick up value for its token holders from this explosive growth. The only real way that ATOM stakers benefited from this growth was via airdrops. There was no fee's payed to ATOM holders, the HUB missed the mark with a couple of attempt to add value (Gravity Dex, and Gravity Bridge for example) and IBC transfers gained massive traction before the HUB could monetize and profit from them.
- Where to now? The initial Cosmos whitepaper has been fulfilled, completely, and with undeniable success. However, the focus of this was on delivering the interchain, through IBC, it was not a whitepaper specifically for the ATOM chain. Now it becomes a question of what comes next, and more specifically what comes next for ATOM.
This is where the ATOM 2.0 whitepaper comes in.
ATOM 2.0
A new whitepaper has been published, focusing on the future of ATOM, and building new use cases and focuses to maintain ATOM's pre-eminent role in the interchain economy.
Here is the link to read it for yourself
I don't feel qualified to give a detailed analysis of the paper, there have been many done, and there are some highly contentious parts to it that have stirred up debate and conflict amongst the community. The most contentious part is changes to the inflation supply. The paper proposes a period where inflation is increased significantly, with the extra token supply being channeled into a treasury fund. In the long run, the paper proposes a much lower ongoing inflation rate, but the dilution that existing stakers will experience from this temporary increase has proven to be contentious.
The new revenue models proposed are intriguing, being an "Interchain Scheduler" and an "Interchain allocator". These are new suggestions, and could provide a novel use case for the ATOM chain. The first is basically a marketplace to sell blockchain space, and the second is a way to co-ordinate economic activities between the Hub and other chains, as I understand it. These are complicated concepts, and I'm not really sure I fully understand them yet, despite reading the paper a couple of times.
Like I said, a full analysis of the paper is not really something I feel comfortable doing, a lot of it is above my understanding level. But it is important for anyone holding ATOM to take a look, and dive in to the various community perspectives circulating around this new approach.
To that end, here is a link to a letter that someone has written in response. It is pretty wild, and rambling, but interesting nonetheless as a counter view. There have been other criticisms and concerns raised, notably on Twitter that are worth looking at.
What do you think?
Have you looked over the ATOM 2.0 whitepaper?
Any thoughts, concerns or things you like about it?
I'd love to here your thoughts in the comment section below.
Thanks for reading,
JK.