Theoretical approach for building a risk-free atom delegation token

Introduction Hello everyone, this is Meher, co-founder of Chorus One. In this post, I consider the question of whether a risk-free interest rate exists for the Cosmos Hub. I got interested in this question because Hyung from BHarvest wants to create a validator independent delegation token. Such a token would allow its holders to make some amount of validator-independent risk free interest from the delegation economy. Here is my proposal to make such a risk-free interest-delivering token for the users of the Cosmos Hub. This proposal is in addition to a separate design, based on delegation tranching, being worked on concurrently by BHarvest. Naively, the expectation would be one cannot make any amount of risk-free interest in atoms. The impression is that the choice is between holding liquid atoms at zero interest or delegating to a validator and making ~10% interest. Delegations incur risk, therefore the interest made via delegations to a validator are not risk-free. The next section summarizes all of the parameters used in the example to follow. The section thereafter demonstrates a particular delegation portfolio, christened “The Ideal Delegator’s portfolio”, that…

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