Cosmos Quarterly #2 Q3-26 - Hardening, Interop, and the Hub & Tokenomics Roadmap

image 1920×768 644 KB Hey folks! This is the second Cosmos Quarterly , and the first one in the format every edition will use from now on: the quarter’s news, pillar by pillar, and what each team is working on next. If you want the story of how Cosmos Labs is structured and why, that lives in Quarterly #1 and we won’t retell it here. The Thursday Hub Weekly continues as it is. The short version of the quarter: The tokenomics phase 2 is finished, the Hub roadmap passed validation, and both are preparing for a review process in governance, ATOM went live on Paxos, an institutional staking API is coming through InfStones, the USDC migration is past halfway, post-quantum keys shipped, the IBC release for EVM and Besu networks is weeks away, and the enterprise team took the tokenization suite to banks and to SWIFT’s ledger. It was also a security-hardening quarter . Two vulnerabilities in shared code and one governance attack on an ecosystem chain hit between August and September. The Hub responded to all three quickly and lost no funds. Since then, the team has published new security policies and expanded the security operations team, so the ecosystem is better covered for…

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• How’s the tokenomics Phase 2 and road map finished when the community is not seeing a single bit of it? If Gauntlet produced the report long ago already, why wait for another month to post it?
• Why does it take forever for a roadmap? The roadmap was due the beginning of THIS year. You delayed it for no reason in the beginning of this year, delayed it for the paid trip to Korea, delayed it for the security incidents, and now you are delaying it even more because holidays are coming up. Is this a joke?
• The ICF call addressed none of the community questions and instead gave a useless education on bureaucracy and legality. The community is clearly unsatisfied at the content. Why are you turning a blind eye and calling that done?
• The whole quarterly report reeks of AI. Why is ATOM never a priority? Other projects get things done at crypto speed while you are doing things more slowly than the slowest traditional bureaucracy. ATOM price continues to hit ATL and liquidity is shrinking day by day as you sit back and drag your feet along not yet proposing a “multi-year roadmap”. Are you serious? Are you intentionally killing ATOM?

Hey @ATOM-Renaissance ! Hope all is well. I understand where you come from. Mostly, from a long-term perspective. However, I will respond to the commitments we made as team in the last months We are in a very exciting place. A couple of months later after forming the Ecosystem team, we have gone through the phases for both tokenomics/roadmap and managed to go through a lot more with a newly formed team (USDC, security upgrades, ATOM integrations, etc.). A few months ago we committed to a process with the community for how we’d build this, and you’re free to disagree with it. We’ve since gone through ideation and problem exploration, and talked through on the validator and community calls which angles resonated most. Now we’re reaching the end of it. That’s thanks to folks who engaged, reached out, and chatted with us, throwing in the hat. Getting to the stage we are at, my main ask for folks is: Look at the proposals and ideas, and dive into the weeds with us. You can batter your head against the process, or you can help, as many have. It’s going to be a unique shot to participate in these reviews, and we can’t wait to finally get to these props up. Godspeed to…

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We appreciate the reply but do you agree the process is extremely slow? We heard the exact same words about tokenomics revamp, “not another 2.0” exactly one year ago, with the promise of getting it done through governance by the end of Q1 this year per Magmar and Robo. With how slowly things are progressing we are not even sure anything will be done by the end of Q1 next year. You might have forgotten about all the promises but we ATOM holders have memory. We are certainly not the only ones feeling the same way, and words like “the timeline is what it is” feel extremely arrogant and do not help at all.

As ATOM continue to hit ATL, get delisted from many places, and liquidity visibly shrinking day by day. By the time the process is done there is a real risk of ATOM literally going to 0. By the time the proposals come online there will not be much of a community left.

Is there no sense of urgency at the ICF / CL at all, seeing the treasury vaporize as you work like a sloth?

ATOM-Renaissance: We heard the exact same words about tokenomics revamp, “not another 2.0” exactly one year ago, with the promise of getting it done through governance by the end of Q1 this year per Magmar and Robo For my part in trying to commit to timelines on tokenomics, obviously the timeline didn’t work out the way that I hoped it would. I was wrong. There’s not much I can do about that, and there’s not a whole lot that continuing to dwell on it can do for any of us either. We do our best to give accurate timelines so people aren’t kept in the dark as to what we’re working on, but sometimes things outside of our control mean that those timelines don’t work out. When we first learned that the timeline would likely slip, we always made sure to keep people updated. Getting the ecosystem to a place of relative stability has taken a lot of time and effort that delayed tokenomics and a lot of other things. Bear in mind, while most crypto projects can ship quickly because all they have to manage are a few sets of smart contracts, Cosmos contributors have to maintain multiple entire open-source SDK libraries and, by extension, nearly all of the chains that rely on them.…

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I appreciate all the excuses but those actually prove THE point the community has been reiterating - ATOM utility, tokenomics and value seem very low on the list of priorities, and even with the Mintscan team acquisition we are not seeing things moving nearly as fast as we want. It still seems very much like everything else takes priority before focusing on ATOM, and the supposed tokenomics revamp has been dragged on as if it were just a delay tactic. If ATOM truly was a priority you would not have been able to come up with such a long list of excuses. When the community welcomed CL it was all about making ATOM great again, and we’ve yet to see anything substantial to that commitment. Not to discredit the work but the deliverables simply aren’t there yet. And the proposed timeline in this quarterly is still unreasonably long. Seriously? Holdiay season usually sees crypto doing well and somehow it becomes an excuse to slack off and postpone the work further? While leadership from other projects constantly and proudly promote their own token, where is any of that from Barry or Magmar now? Where’s any of that from the ICF? Don’t bring up legality as it’s just lame at this point…

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Everything on the list of things i shared above, without exception, is needed for ATOM to succeed. To give just one example, one of the security incidents that you don’t feel should’ve been a priority would have allowed an attacker to mint unlimited ATOM and sell it to zero on exchanges. Is it your view that ATOM could have been successful without addressing that?

What you’re proposing would be like building a house on a wooden foundation that also happens to be on fire

We’ve had to spend time to put the fire out, and now we’re building the house. If you truly care about helping ATOM succeed, please feel free to pick up a hammer and help us build by providing some constructive solutions rather than unproductive problem statements.

Thanks as always for your comment

It was our understanding that the entirety of 2025 was about putting out the fire throughout Cosmos already, or more accurately shrinking the Cosmos ecosystem so much that the team doesn’t have so much stuff to worry about besides the Hub itself. With not much of an ecosystem left in 2026 we are surprised that the team has still not focused on the Hub as much as we want.

The infinite mint incident would not have happened if the team looked into the bug reports a little closer. Also we didn’t say the responses to the security incidents weren’t adequate. We are talking about a delay of almost an entire year and that certainly cannot be excused by the security incidents alone.

We very much like to rebuild the house and we are actually doing it actively with vATOM and other upcoming products. For this particular issue on ATOM tokenomics revamp and roadmap, we’d like to pick up the hammer way sooner than the proposed Nov 20, December, next year etc. timeline. Will the Hub team move faster to give us a chance?

I understand the frustration from ATOM holders in this thread, and I share most of it. The work in this report is real, but a lot of it benefits the Cosmos stack in general, not the Hub or ATOM. Here is what the Hub community keeps asking for, as plainly as I can put it: 1. IBC to L2s and Solana, from the Hub. IBC between EVM networks “with no Cosmos chain in the middle” is great for IBC as a standard, but it routes value around the Hub. Solana is waiting for a use case: the Hub is that use case. Make the Hub the default route. 2. DeFi on the Hub needs building blocks first. We want DeFi apps on the Hub, but key primitives are still missing (a native price oracle, for example). Builders won’t come until those exist. 3. Decentralization is a meme right now. Just look at the Nakamoto coefficient. Staking incentives are being redesigned anyway in the tokenomics work, so this is the moment to add mechanisms that push it up, like the Nakamoto bonus I’ve argued for. 4. Osmosis. The Osmosis initiative should never have been frozen. If it had flaws, the team should have reworked it and brought it back properly instead of shelving it. 5. A real Hub showcase. Something…

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I think The Guinch summed up very well what the community is expecting.

Hey Guinch! Thank you so much for these constructive suggestions. I’m glad to see someone making suggestions that give us an actual starting point for constructive debate. IBC to Solana, pricing oracles, Dexes, etc are all things we’ve discussed in the past and are things that could be good additions to the Hub. Some of them (e.g., IBC routing and oracles) will end up being important for the roadmap products so I can almost guarantee they will come to the Hub, but as far as prioritizing these and building them now instead of later, i’d love to hear your answer to this question: What do you believe all of these things are for? What’s your goal in building them now? How does the Hub benefit from building these things right now? If the answer is “to bring builders to the Hub,” that’s not an adequate plan on its own. Let me tell you a little story about permissionless Cosmwasm: Over a year ago the Hub passed the proposal to bring permissionless CosmWasm to the Hub, with the same stated goal: “enable the primitives, builders will come” They didn’t. Over a year later only 2 apps have seen any meaningful adoption on the Hub: Stargaze (which required a governance proposal…

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From a capital allocation and risk management perspective, the economic framework outlined in Cosmos Quarterly #2 asks stakers to absorb maximum downside risk under the guise of “sustainability.” Before this roadmap translates into an on-chain parameter change, the Hub Unit and Gauntlet must address these core issues: 1. A guaranteed 50% cash-flow slash in exchange for pure economic speculation Cutting gross staking APR from ~19.8% to under 10% halves daily token generation overnight. Blockchain code can strictly enforce a 50% yield reduction at a target block height, but code cannot force the open market to double the price of ATOM . Asking delegators to accept an irreversible 50% pay cut based on theoretical models of future price appreciation is an unacceptable risk asymmetry. 2. Remember Proposal 82 (ATOM 2.0): The community has used “No with Veto” before Proponents should not forget the precedent set in late 2022. When core teams attempted to push through the ATOM 2.0 whitepaper—forcing a top-down overhaul of tokenomics, treasury issuance, and staking mechanics—the community mobilized to cast over 37.3% NoWithVeto , rejecting the proposal and burning the deposit.…

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Hey Robo, happy to answer your questions. RoboMcGobo: What do you believe all of these things are for? What’s your goal in building them now? How does the Hub benefit from building these things right now? I’m in favor of building the foundations first, so that potential demand can land on the Hub properly and find everything it needs, while of course weighing the financial and human costs. I understand Cosmos Labs has chosen the opposite approach: wait for demand, then build if needed. But since Skip joined the ICF as Cosmos Labs, the Hub has been presented to us as a router and a provider of interchain services. That’s exactly where these primitives make sense. Today, instead of being the interchain provider, the Hub sources almost everything from elsewhere. That’s the opposite of the vision we’ve been sold for months, close to years now. CosmWasm was an essential building block for a permissionless Hub where builders could build without limits. But on its own it wasn’t enough: TokenFactory was needed too. I asked for it, and we all voted for it. Without these two building blocks, the Stargaze and Hydro migrations would have been harder, even though…

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Do you not find it ironic that community / ICF spent millions of dollars, yet developers still don’t have the basic building blocks to get an ecosystem started? It makes us wonder where did all the spending go? Where’s the official testnet ATOM faucet? Why isn’t CL’s very own Skip:Connect running on the Hub? Of course third-party teams could bring them to the Hub but how do you expect anyone to be motivated if the “official” team is not even interested? In our very own case of vATOM we’d very much benefit from Skip:Connect but it just isn’t there on the Hub.

And if Vitalik looked at cost and risk like you are doing, Ethereum should have stopped running right after the DAO hack. For you it’s CosmWasm to blame now, but if community wanted EVM you’d blame EVM. If community wanted Go you’d blame Go, right?

Using your house analogy, the community simply wants a basic foundation to get things going, and it seems that you are unwilling to even prioritize building that foundation.

Hi Trave!

I’m not sure where these statements and numbers are coming from. We haven’t said anywhere that raw inflation reductions are what we’ll be proposing, and we certainly haven’t published any numbers like proposing to cut staking APY to 10%, forcing 365 day lockups on people, etc etc.

Remember that up to this point, we’ve just been sharing Gauntlet’s findings. We haven’t made any qualitative statements about those findings or what they should mean for the Hub and ATOM. I’d ask that you and others reserve judgment until the phase 2 outcomes have been posted. Much of what you seem to think is going to happen simply isn’t going to happen.

We think there’s room for a tokenomic model for the Hub that is reflexive to revenue, such that if there’s no revenue, the inflation numbers that governance voted for don’t change, and a model that rewards stakers for being long-term aligned without forcing anyone to lock tokens (which we’d never do).

The claims you’re making about cutting the yield to 10% are simply untrue.

Not quite sure what you mean but our point is that Ethereum never stopped developing features just because this and that may be buggy or risky. Cosmos Labs putting the blame on permissionless CosmWasm is like throwing the baby out with the bathwater. In fact there has been countless cancellations but very minimal production launches coming from Cosmos Labs. This is a pattern that really gets the community frustrated. Why can’t we get anything shipped?

Hi @RoboMcGobo , Before breaking down the arithmetic, I must address your opening remark: publicly dismissing a delegator’s calculated figures as “simply untrue” is an unwarranted personal attack. Labelling legitimate community analysis as falsehoods in a public space is not only disrespectful, but it also borders on calling investors liars. As a long-term capital allocator, I do not throw random numbers around. I verify my financial models meticulously; in fact, I cross-validated the Cosmos SDK formulas and parameters across three independent AI analytical models, all of which confirmed with mathematical precision the exact figures I presented. If you believe a community member’s calculations contain an error, the professional approach is to say: “Please justify the data behind your figures” , and engage in a constructive, fact-based debate. As investors, we are always open to counter-arguments and corrections. What is unacceptable is resorting to public disrespect—especially when this is not the first time community members have experienced this dismissive attitude when raising tough questions. A public retraction of that accusation is in order. Furthermore, dropping…

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We are investors,not dreamers. For years, we’ve been hearing about interoperability, new blockchains and technological developments. But what does all of this actually bring to atom holders? Having great technology is not enough if it creates no value for its token. Another major problem is dilution caused by inflation, new atom tokens are constantly being created to reward staking, but if demand doesn’t keep up with the growing suplly, the price remains under constant pressure. Earning staking rewards doesn’t mean making money if the token’s price drops faster than the rewards accumulate.We must not forget those who bought atom at much higher prices and have watched a large part of their investement disappear. For some, simply recovering their initial investment now seems like a huge challenge. We are not here to fund a technological dream or applaud every announcement about interoperability. We invest our own money and expect an economic return. Where is the revenue generated for atom? What value actually flows back to its holders? It’s time to control dilution and implement a real value-creation strategy. We need to stop confusing the technological sucess of cosmos with the…

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Embarrassing, maybe you should just focus on ATOM

The point is they are not even using Gauntlet’s result. They will likely propose minimal change and say “inflation is fine” because they have 0 revenue to this date.

We think a formal apology to the community and a post-mortem are warranted for the extreme level of delay to make sure it doesn’t happen in the future. This would not have been acceptable in any legitimate company or project. Especially during the first half of this year where the security incidents did not hit, what exactly caused the Q1 tokenomics deadline to be missed without any apparent reason? We do remember “ICF review” taking forever. Was that the thing “out of your control”? If so why does the ICF have to be hindering any progress? Why such bureaucratic bullshit in a fast-moving industry, and why are we still not moving fast?

For god sake Magmar said “I was wrong” last year and now you are saying “I was wrong”. Who’s next, Nico? How do you expect the community to still have any confidence after all of this ridiculousness?

A correction and some ideas to keep the ATOM discussion going Hi @RoboMcGobo and everyone, I want to start by correcting something I said in my previous comments. While reviewing several documents and proposals from the forum, I mixed up information and attributed figures to Gauntlet that don’t appear in its official Phase 1 report. That was my mistake, and I’m sorry. The 2%–6% inflation range, which includes a 4% example, comes from a community proposal, not an official Gauntlet recommendation or a Cosmos Labs decision. I also mixed that discussion up with other proposals, such as The Interchain Real-Yield Alliance , which suggests a different range. So I withdraw my previous claim that Gauntlet or Cosmos Labs had formally proposed reducing staking yields below 10%. The original 2%–6% proposal can be found here: Tokenomics idea n°1 . The calculations I made at the time were hypothetical scenarios based on certain assumptions about total supply and the amount of ATOM staked. They weren’t validated predictions of what would actually happen. The fee revenue estimates I mentioned weren’t sufficiently verified either, so they shouldn’t have been used to support a firm…

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The network is absolutely not secure with ATOM at $1.4 and still dropping. Fix that first.

Hi Trave! Thank you very much for correcting the record. As you say, I definitely wasn’t intending my message to be a personal attack against you, and I apologize if it came across as such! I was only pointing out that we haven’t made any claims about what an ideal inflation adjustment mechanic should be our whether an inflation cut is even an appropriate thing to do. We always want to ensure that whatever decision is made is informed by research and thoroughly discussed and agreed upon by the community. TRAVE: 1. Linking issuance to revenue, without requiring an automatic 1:1 replacement I think it makes sense for real revenue to gradually become a source of rewards for participants. But I don’t believe every reduction in issuance must automatically be matched, point for point, by new revenue. If a proposal says delegators’ returns will be maintained, then it should explain what additional, recurring, net revenue would support that. If rewards are going to be reduced without fully replacing them, then it should explain why the remaining security budget is considered sufficient and what risks the change could create for delegators and validators. This…

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Thanks @TRAVE; the input is good, and we do want to hear what the hard lines are for folks. As Robo said, we are coming from the same perspective, and we have these points in mind; we believe sustainability has to work for all network participants. We will take your phase 2 inputs in

An Old Idea About ATOM: Combining Price, Staking, and Real Revenue to Reduce Token Issuance Hi @RoboMcGobo and @qxnico , First of all, thank you both for taking the time to reply and listen to the ideas we share on this forum. A few years ago, when ATOM was offering a staking APR of around 16%, I started wondering how we could reduce the creation of new tokens without forcing those of us who stake ATOM to give up a significant part of the economic value of our rewards. Eventually, I put the idea aside because I lacked the data and technical knowledge to develop it further. When Cosmos Labs announced its work with Gauntlet, I thought it might be worth revisiting. In short, I am not proposing a simple APR cut. I would like to explore a combination of four elements: the existing staking mechanism, an issuance adjustment linked to sustained increases in ATOM’s price, real revenue that can replace newly issued tokens, and incentives for long-term staking. These four elements would serve different purposes, but I believe their real potential lies in how they work together. I have developed two possible models for the price adjustment, although I do not know which would…

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