The "French Paradox" of the Hub: Moving from 'Cavalerie' to Real Economy / Le paradoxe français du Hub : Arrêtons la cavalerie
*(English version below / Version française ci-dessous)* Version Française Je suis un investisseur de long terme, et en tant que Français, je regarde actuellement un film catastrophe que je connais par cœur. Le Cosmos Hub se comporte exactement comme la France. Nous fonctionnons sur un système de ‘cavalerie’ (une boucle de dette) : nous imprimons de nouveaux ATOM (inflation) pour payer la sécurité et les validateurs, en espérant qu’une croissance future miraculeuse sauvera le système. C’est exactement le modèle social français : subventionner le présent en détruisant la valeur future de la monnaie. Le cœur du socialisme est beau dans son intention de partage, mais sans une économie pragmatique, le socialisme disparaîtra. Un réseau qui ne génère pas de profit réel ne peut pas subventionner indéfiniment ses acteurs. Si nous voulons que l’idéal de Cosmos survive, il doit d’abord être économiquement souverain et rentable. La générosité sans revenus, c’est de la charité ; la générosité avec des revenus, c’est un écosystème. Mon but n’est pas de ‘devenir riche’ rapidement , mais de voir émerger un modèle viable sur le long terme . L’ATOM est actuellement déclassé par…
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The diagnosis is right but the debate keeps stalling on a missing precondition: nobody knows what “real Hub revenue” actually looks like in numbers. You can’t vote to redistribute IBC fees if the data doesn’t exist in a queryable form.
The “cavalerie” loop you describe is partly a data problem. Inflation is visible and automatic. IBC fee revenue is invisible unless someone builds the tooling to surface it. As long as that asymmetry xists, governance will default to inflation because it’s the path of least resistance not because it’s better.
The Hub’s technological lead is real. But the author is right that it’s not eternal. What is harder to copy is the indexed history from genesis, the relayer relationships, the operational continuity.
The question is whether governance values that before competitors do.
C’est un excellent point, mais ne laissons pas la complexité technique masquer une équation comptable pourtant simple. Mathématiquement, le calcul est sans appel : Variation de la Supply - Inflation (Mint) = Burn. Même si le Mint est dynamique, il est connu par le protocole à chaque bloc. Si nous sommes capables de bâtir une infrastructure aussi sophistiquée que l’IBC, nous sommes forcément capables d’afficher cette soustraction en temps réel sur un tableau de bord. Le fond du problème que je soulève est là : tant que ce Burn (qui est le reflet direct de notre revenu réel) reste une donnée “fantôme”, la gouvernance choisira par défaut la solution de facilité : l’inflation. L’opacité actuelle n’est pas une fatalité technique, mais un frein à notre émancipation économique. On ne peut pas gérer une économie de marché sur des données invisibles. Ma question est donc la suivante : Qu’est-ce qui empêche aujourd’hui la mise en place d’un outil de mesure standardisé et public du Burn ? Est-ce un manque de ressources de développement, ou une réelle complexité liée à la structure modulaire de l’écosystème qui m’échapperait ? English Version That is an excellent point, but…
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Your accounting equation is correct, and I’ll answer your question directly: the barrier is not fundamental technical complexity. It’s a coordination and incentive problem, which, imo are harder to solve. Here’s what it looks like from someone building this infrastructure: The mint side is solvable. x/mint parameters are on-chain at every block. With an archive node you can reconstruct cumulative emission from genesis. We already capture this in our Cosmos Hub indexer. Not hard. The “burn” side is where the picture gets uncomfortable. On Ethereum, EIP-1559 created an explicit, formal burn event tied to fee revenue. On Cosmos Hub today, no such mechanism exists. Transaction fees are redistributed to validators and the community pool not destroyed. What actually gets burned currently? Slashed ATOM (small). Tokenfactory burns (trivial). IBC vouchers returned to source chains (not ATOM). Run your equation on Hub today and the result is roughly: burn ≈ 0. That’s not a measurement problem. That is the measurement. So a burn dashboard would not reveal hidden complexity it would reveal, in undeniable real-time, exactly what you’re arguing: the Hub is running on monetary expansion…
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Je m’exprime avec passion car je crois au potentiel immense du Hub, mais nous devons aujourd’hui affronter des vérités inconfortables. Merci pour cette honnêteté brutale : c’est l’aveu le plus important de ce débat. Le Burn ≈ 0 n’est pas un problème de données, c’est un problème de survie. Si le tableau de bord n’existe pas, c’est parce qu’il révélerait que le Hub ne capture actuellement aucune valeur réelle. Nous sommes dans un déni politique où l’opacité sert de bouclier à l’inefficacité. La transparence n’est pas un luxe, c’est le gage de confiance ultime. Or, sans confiance, il n’y a pas de réseau. Un investisseur ne peut pas confier son capital à un système qui cache son bilan derrière une planche à billets. Cette “cavalerie” a une autre conséquence dramatique : la centralisation. Aujourd’hui, seuls les mastodontes du staking survivent grâce à la rente automatique de l’inflation. Les petits validateurs, pourtant garants de notre décentralisation, sont asphyxiés par un modèle qui subventionne la masse plutôt que la valeur ajoutée. Et ne nous y trompons pas : les grands validateurs seraient les premiers gagnants de cette transition. Il vaut mieux détenir une part d’un…
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This is probably the most important structural point raised in this thread, and I want to build on it before it gets lost in the technical debate. The centralization argument is not a side effect, it is the logical output of the current model. Inflation-as-reward is a subsidy that scales with stake. It does not discriminate between a validator who built a governance tool, ran a relayer, maintained a public archive node for years, or simply custodied tokens at scale. The validator who contributes the most does not earn more. The validator who stakes the most does. What does that select for over time? Exactly what we are seeing. On the EIP-1559 parallel I think the direction is correct, but worth one honest caveat: Ethereum’s burn mechanism works in part because it operates on meaningful fee volume. At current Cosmos Hub fee levels, even a full burn produces a rounding error relative to issuance. The mechanism is necessary but not sufficient without simultaneously growing the Hub’s utility, fee-generating activity, IBC volume, on-chain services that people actually pay to use. There was some type of proposal to implement a similar mechanism, but i dont know what happened to…
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Nous sommes parfaitement alignés. Le fait que le burn des frais actuels ne soit qu’une “erreur de virgule” face à l’émission monétaire est précisément le signal d’alarme que je voulais déclencher. C’est là que réside le véritable changement de paradigme : tant que nous pourrons masquer l’absence de revenus réels par une inflation massive, personne n’aura l’urgence de construire des services à forte valeur ajoutée. Imposer un mécanisme de burn (même symbolique au début) et un tableau de bord transparent, c’est forcer le Hub à passer d’une économie de subvention à une économie de marché. Le dashboard n’est pas seulement un outil de mesure, c’est une boussole. Si le burn est proche de zéro, cela doit être affiché en grand pour que chaque proposition de gouvernance soit désormais jugée sur une seule question : “Est-ce que cela va enfin générer du revenu réel pour le réseau ?”. Cela soulève une question ultime : combien de temps un réseau peut-il maintenir cette déconnexion entre une inflation massive et un revenu réel quasi nul avant d’atteindre un point de rupture ? Si l’ATOM continue d’être utilisé uniquement pour payer une sécurité qui ne protège aucune valeur économique…
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@AtlasStaking hit the nail on the head regarding yield. Capital seeks returns, and lowering inflation from 15% to 4% risks turning ATOM into “just another coin” without a competitive edge. We need to keep investors incentivized to stay and lock their capital. However, the solution isn’t cutting rewards; it’s aggressive, utility-driven burning. Think about the economics: if we maintain a 15% yield to attract and retain investors like myself, but our utility engines burn the equivalent of 30% of the supply (as an aggressive target), we create massive, real scarcity. A rising price floor combined with a highly attractive 15% yield is the ultimate magnet for massive new capital and long-term staking. We shouldn’t fear inflation if we build a “Black Hole” for supply. In fact, we can take this a step further: If the burn rate is exceptionally high during certain periods, we could temporarily increase the yield percentage even more. This would act as a strategic marketing event to capture a massive new wave of investors. Even if some of them are just temporary yield-farmers, a good portion will inevitably stay once they experience the ecosystem and the consistent returns. To…
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Merci pour cette contribution d’une immense valeur. La vision d’un “Trou Noir” économique — où l’utilité réelle brûle plus d’offre que l’inflation n’en crée — est conceptuellement parfaite. Si le Hub parvient à sur-monétiser ses services (Identity Registry, USDC Station, Venture Studio) pour surpasser l’émission, le TAEG de 15 % devient effectivement un aimant à capitaux irrésistible, et non un passif. Cependant, avant même de parler d’équilibre, la priorité absolue est de concevoir et d’activer ce “Trou Noir”. Nous devons mettre en place les fondations de cette capture de valeur dès aujourd’hui pour amorcer la trajectoire. Mais pour que cette vision devienne une stratégie et non un vœu pieux, nous devons confronter la taille du “Trou Noir” nécessaire à la réalité mathématique actuelle du Hub. Regardons les chiffres bruts de Mintscan aujourd’hui : Masse monétaire actuelle : ~508,69 millions d’ATOM. Inflation émise (Subvention de sécurité) : Fixée à 10,00 %, ce qui signifie que le protocole crée et distribue environ 4,23 millions de nouveaux ATOM chaque mois (soit plus de 141 000 ATOM par jour). Frais de transaction réels perçus (Revenu actuel) : Des miettes…
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@Alex_Hub The math you just laid out is exactly why I am pushing for this. You are 100% correct about the “optical illusion” of nominal yield. Institutional capital sees right through it; they calculate the real yield (Nominal Yield - Dilution), and right now, the math is brutal. To answer your closing question directly: Yes, absolutely. I completely agree. You cannot manage what you cannot measure. If we are going to build a “Black Hole” capable of engulfing 4.23 million ATOM per month just to break even, we need a speedometer. Building these revenue engines without a transparent Dashboard is like flying a Boeing 747 in a storm without instruments. The Dashboard is not just a measurement tool; it is the ultimate accountability mechanism for Governance. Every single spend proposal should be forced to look at that Dashboard first. Therefore, the logical next step isn’t just to talk about the Dashboard, but to fund it. Perhaps the immediate action item from this “French Paradox” awakening is to draft a Governance Proposal specifically to fund a team to build this exact Real-Time Revenue vs. Dilution Dashboard . If we establish the measurement, the fiscal discipline will…
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C’est un alignement parfait. L’image du Boeing 747 piloté sans instruments dans la tempête résume exactement le sentiment de beaucoup d’investisseurs aujourd’hui. Pour éviter tout amalgame, soyons bien clairs : nous ne nous plaçons pas ici en leader. Nous ne cherchons pas à diriger ce projet ni à nous approprier l’initiative, mais simplement à agir en tant que membres de la communauté désireux d’initier une dynamique collective et constructive. Puisque nous sommes d’accord sur le fait qu’on ne peut pas gérer ce qu’on ne peut pas mesurer, passons à l’action. Nous relevons le défi : l’étape suivante est effectivement de poser les bases d’une proposition de gouvernance claire pour financer et livrer ce Tableau de bord des revenus réels et de la dilution (Real-Time Revenue & Dilution Dashboard). Cependant, pour éviter que cette proposition ne devienne une énième usine à gaz ou un prétexte pour vider la trésorerie sans résultats, nous devons la structurer avec une discipline de fer. Avant de demander le moindre financement, nous devrions co-rédiger ici, sur ce forum, un cahier des charges minimal et non négociable. Pour commencer, ce dashboard devrait afficher trois…
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@Alex_Hub Apologies for the delay in my response, but I had other pressing matters that required my attention. Please understand that I am not just active here; I have my own work and business obligations to attend to. Thank you for your patience. The Boeing 747 is officially aligning with the runway. Regarding the institutional approach, I want to add a nuance: we shouldn’t act like inflexible bureaucrats setting “non-negotiable” rules written in stone. Instead, we should view this as drafting an Economic Constitution for the Hub. The parameters can certainly be modified in the future, but only if the changes are extremely well-argued and backed by the consensus of everyone. And of course, establishing this constitutional baseline before asking the Community Pool for a single dollar is exactly the right way to build trust. Your three initial pillars (Dilution Speed, Burn Speed, Real Yield Thermometer) are perfect. They form the core of this Constitution. To answer your question about other indispensable indicators, I propose a fourth pillar that feeds directly into the “Burn Speed” to give it context: 4. The Revenue Heatmap (The Source of the Burn): > While the Burn…
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image 552×634 21.2 KB @Alex_Hub , following our conversation, I’ve put together a visual prototype of how the 4th Pillar (Revenue Heatmap) integrates with our “flight instruments.” In this first capture, we can see the current reality: a -2.81M ATOM monthly deficit . While our utility engines (USDC, Registry, Tolls) are starting to provide lift, we are still only at 33.6% of the Break-Even Horizon . This is exactly why we need the Economic Constitution . We cannot continue to fly blind. This dashboard allows the community to visualize which “business units” are actually performing and which ones need to be audited or improved to close that gap. This is the only way to transition ATOM into a sustainable institutional asset. image 542×621 24.2 KB Capture 2: The Target State (Break-Even Horizon) The second image illustrates the goal of the Economic Constitution. By optimizing our utility engines—USDC routing, Registry fees, and Consumer Chain tolls—we can reach the 100.2% Break-Even Horizon . In this state, the deficit disappears, and the 0.01M surplus marks the transition of ATOM into a sustainable, data-backed asset. The logic is simple: we cannot manage what we…
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No worries at all about the delay; the pace is perfect, and the depth of this exchange shows we are moving in the right direction. In this rebuilding phase, our approach is completely open: any constructive idea or perspective that helps steer our path will be thoroughly studied and debated. Framing this as an Economic Constitution rather than rigid, bureaucratic rules is an excellent nuance. It provides the necessary flexibility for an evolving ecosystem while establishing the framework of trust required for the community and the Community Pool. Seeing these visual prototypes brought forward is a step. It perfectly materializes what we were just discussing. The fourth pillar — the Revenue Heatmap — adds significant value. As the captures show, measuring the burn volume is one thing, but precisely mapping its sources allows us to shift from passive observation to strategic steering (knowing where to double down and where to pivot). As for the bonus idea of the Break-Even Horizon progress bar , these mockups prove it is the perfect gamification tool. Watching that gauge fill up from the current 33.6% deficit up to the 121% net deflation state will be the ultimate…
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@Alex_Hub and the community, as we align on the concept of the Economic Constitution , we must recognize that a true Constitution is not written in a single day. It must be a living but rigid framework—born from the community, built on consensus, and ultimately ratified through a formal governance vote. To move from theory to action, we need to establish the Key Principles that will form the backbone of this Constitution before we put it to a vote. Based on our recent data (Gauntlet) and successes (USDC), I propose these foundational rules: 1. The Royalties Standard (Value Capture): The recent 50% revenue-share agreement with Injective USDC is our gold standard. If any project, service, or domain registry wants to use the “ATOM” brand or operate as a core Hub utility, it must have a clear Revenue-Share agreement. We cannot allow third parties to monetize our brand and extract liquidity while leaving the Hub with only negligible gas fees. If you build on the Hub’s prestige, you feed the Hub’s Black Hole. 2. Baseline Stability & Tactical Growth: Gauntlet’s data proves that emissions cause <1% of sell pressure. Therefore, the Constitution must protect our loyal compounding…
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A topic for the constitution exists, as I remember well.
a discord group from french guys was also working on it since 2023
But nothing concret from there, the focus was elsewhere
Thank you for your constructive input, TRAVE, and thank you again for your commitment to this Hub. However, we must face the reality that without the active support of the entire community, achieving this will remain extremely complicated. Regarding the Gauntlet data you mentioned, I unfortunately do not have access to their sources or full report, but shouldn’t we be very careful with that “<1% of sell pressure” figure? Regarding the Constitution itself, yes, transparency must absolutely be the standard to establish true trust—and not just through technical instruments or dashboards. On the topic of systematic value capture, while it is a solution, shouldn’t we nuance it? Wouldn’t putting too much pressure on teams or chains simply scare them away? In reality, it feels like we have very few leverage points right now, except perhaps for IBC. Wouldn’t implementing small, painless taxes for users—not necessarily paid in ATOM, but capturing value directly from the IBC volume routed through the Hub—be a good starting point? Could we also eventually offer incentives for chains to work with the Cosmos Hub through subscription-based models (for extra speed, shared security,…
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@Guinch_Roze , the key difference between the 2023 attempts and this one is the focus. That is exactly why we are calling it an Economic Constitution : its sole purpose is to guide our finances, not strict politics. We are not trying to dictate a philosophy of life or get bogged down in deep systemic bureaucracy. We simply want economic stability. Past efforts failed because they were political; this is strictly a corporate business plan built to achieve monetary equilibrium. @Alex_Hub , these are exactly the nuances we need to refine the Constitution. 1. The Gauntlet Data: The <1% figure isn’t an assumption; it comes directly from the official “Hub Weekly Update #1 ” published by the Hub Unit on May 14th. They empirically estimated that actual sell pressure from emissions is only between 9,000 and 18,000 ATOM per day. We must base our monetary policy on this official hard data, not on market fear. 2. Value Capture & The 4-Year USDC Contract: I completely agree: the goal is not to extort builders, but to monetize the flow . Your idea of “painless taxes” on IBC routing is brilliant. We already have the perfect template: the 4-year Injective USDC contract that went live on May…
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I completely agree with this pragmatic and purely “business” approach. Grounding the debate in a strictly quantified business plan based on the recent data from the Hub Weekly Update #1 is exactly the path to follow to achieve monetary equilibrium and save the Hub. However, I strongly emphasize a crucial strategic point: we must submit these proposals to governance via multiple separate votes rather than launching a single, massive block. Too many ambitious proposals have failed in the past because a major validator voted “NO” over a single line of detail. By moving step by step, we secure each victory without risking everything all at once. Here is the structure of the three votes I propose: • Vote 1: Creation of a Burn Address and Measurement Tools. We need to deploy an official, transparent burn address directly connected to a real-time ROI measurement Dashboard. Before allocating any capital from the Community Pool for a native DEX or a partnership, these measurement tools must be active to audit the effectiveness of every single cent. • Vote 2: Dynamic Burn Mechanism via IBC Fees and the “Injective Standard.” The May 7th Injective agreement (50% revenue…
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@Alex_Hub , breaking this down into modular votes is a masterclass in governance strategy. You are absolutely right: monolithic proposals often fail over minor details. A step-by-step rollout secures the foundation without risking the entire vision. Vote 1 (Measurement) & Vote 2 (Dynamic Burn): These are flawless. I am 100% aligned. We build the instruments (Dashboard), and then we connect the revenue engine (IBC fees/Injective standard) to the exhaust (Burn address). Perfect sequence. Regarding Vote 3 (The Staking Paradox & Investor Psychology): We have a strategic divergence here. You correctly note that stakers are “strong hands” (only 9k-18k sold daily). However, cutting their yield based on this loyalty is a dangerous corporate move. Let me speak bluntly as an investor and a trader: If you reduce the inflation and cut the staking yield, what retains me from moving my capital? > Right now, investors hold because the high yield protects our investment while the price is down. If there is a market rally, compounding those high yields is far more profitable than selling. The high APR acts as our risk-insurance. If you cut the APR, you completely remove the incentive to…
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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…
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@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…
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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.
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 ?
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: • First establish…
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