This article summarizes the key points of the new Cosmos white paper

Highlights from Cosmos’ new 27-page white paper:

- Safe economic expansion

-ATOM as a reserve currency

- New economic engine

Atom 2.0 White Paper

Introduction

• Cosmos realizes its 2016 vision: secure software stack for Lisk ecosystem; dynamic inter-blockchain communication economy
• The Cosmos Network is an association of autonomous communities connected through the Cosmos Hub
• Hub was originally developed to facilitate the Internet of Blockchains - developed Cosmos SDK, IBC, Tendermint
• The Hub's new role is to develop a resilient interchain economy: to secure and capitalize critical applications in the ecosystem; to serve as an entry point into the universe; and to be the coordinating center for interchain infrastructure and governance
• Renewal is a target for infrastructure service providers whose utility will scale with interchain growth.

architecture

• The Cosmos Stack: Social Coordination Technologies - Tendermint, Cosmos SDK, IBC
• Safe economic expansion: inter-chain security upgrades to make it more useful, effective, and collaborative; liquid pledge, providing a secure infrastructure for liquid pledge assets
• Hub specific features:

Interchain Scheduler - IBC economy is many asynchronous markets, many MEV opportunities; markets can be more efficient and secure, and Cosmos brings profits; interchains need a secure block space market to optimize usage

Interchain Allocator - New approaches are needed to enable on-chain economic coordination between chains; designed for delegators to facilitate and coordinate Atom-based marketplaces, facilitating multi-chain trust and coordination

flywheel

• The Scheduler monetizes IBC economic activities, and the income goes to the Allocator
• Allocator supports new Cosmos chain, expands market for Scheduler
• ATOM becomes the preferred collateral in the ecosystem, and Hub becomes the long-term holder of ecosystem assets
• Encourage more participants to join the network and interact

Extending Cosmos Safely

• Interchain security enables reuse of the same validator set and collateral
• Liquid staking enables ATOM holders to earn staking rewards and use ATOMs for other opportunities
• Allow third parties to use Cosmos infrastructure to build their own applications, such as: Rollup settlement, IBC routing, chain name service (CNS)
• Liquid pledged assets can be output through IBC and accumulate rewards, expanding the utility of ATOM between chains
• The cross-chain liquidity market will be the catalyst for ATOM deployment

ATOM: Interchain Reserve Currency

issued

• Liquidity staking increases ATOM's capital efficiency
• Solve the original monetary policy problem, so issuance can change
• Two-stage monetary policy: Transition - within 36 months of the change, increase issuance for 9 months to guide liquidity; Steady State: Significant reduction in issuance
• The transition period begins with the issuance of 10 million ATOMs per month and decreases to a steady state of 300,000 ATOMs per month
• Remaining circulation sent to Hub Treasury to support growth and adoption

cost

• Part of the transaction fees and issuance from the Consumer Chain is sent to the Cosmos Hub to ensure the security of all chains
• Whitelisted tokens can be used to pay transaction fees
• Governance shall set a single ATOM floor fee. while the base fee is algorithmically determined based on demand
• A trust-minimizing oracle to update the price of whitelisted tokens

Cosmos Economic Engine

Interchain Scheduler and Interchain Allocator Combine to Drive Cosmos Growth

Interchain Scheduler:

• Create a market for tokenized cross-chain blockchain space
• MEV relay network provides off-chain marketplace for private transaction submissions
• Scheduler solves MEV problems by bringing markets on-chain
• Tendermint Upgrade Allows Ordering of Transactions in Future Blocks for Tokenization, Exchange, Transfer

Interchain Allocator:

• Provide a more efficient way to acquire users and liquidity for new Cosmos projects
• Two basic tools: Covenant - a multilateral agreement system of designated chains and IBC-based entities; Rebalancer - a system for automatically managing asset portfolios with public liquidity
• The Cosmos Hub will actively seek to fund an incentivized aligned community that will help achieve the goals of the Allocator
• Responsibilities of the Allocator: increase the speed at which new Cosmos projects are created; accelerate project growth and sustainability; expand the cross-chain space economy; align incentives between new projects and the Cosmos Hub; make ATOM the most popular and widely deployed reserve assets
• Covenant system creates a single tool for inter-protocol transactions
• Rebalancer is a third-party capital allocation strategy tool: takes current and target portfolios and trading policies as input
• Periodically calculate trades of assets flowing into the target portfolio
• The combination of Scheduler and Allocator enables the Hub to benefit from providing liquidity, reduces the overall risk of the Hub, and enables the Hub to provide more capital

Cosmos Governance

• The Cosmos governance stack provides a common format for DAOs to self describe their structure, relationships
• Governance format vocabulary shared with on-chain and off-chain layers
• Cosmos Hub Assembly is a decentralized organization
• Combined with domain-specific committees to form a governance supply chain
• Aims to make governance more accountable and open to more participants
• This multi-stage design provides a higher level of organization for the next phase of development of Cosmos.

summary

• The Cosmos Hub spawns the Internet of Blockchains, interchain security and liquid staking is the final piece of a secure interchain economy
• Allocator capitalizes the new chain and incentivizes it to trade
• Scheduler creates a market for interchain block space
• Flywheel Drives Cosmos Expansion
• The success of the Cosmos Hub is linked to the wider IBC economy