Cosmos Is ‘Forging a New ATOM’ Starting With Interchain Security
Cosmos community plans to revamp the way ecosystem blockchain work together with the Cosmos Hub.
The Cosmos community has published its latest whitepaper for the Cosmos hub, which aims to radically revamp the tokenomics of the native atom token (ATOM)
The new feature is known as interchain security, while multiple forms of liquid staking of atoms will provide new functionality in the Cosmos ecosystem.
The Cosmos hub doesn't generate any protocol revenue in its current phase, despite having a high market cap does it accrue value to ATOM said Zaki Manian a Cosmos contributor and co-Founder of Sommelier Finance.
That's set to change dramatically expanding the potential of liquid staking and turning on interchain security will allow ATOM holders to benefit from the growth of the Cosmos ecosystem
“No one has ever attempted this level of economic rebuild of a large-scale cryptocurrency, and there’s a little bit of showmanship that’s required to make that all happen,” he said.
Cosmos sovereign chains use staking to provide for their security with delegators bonding tokens to validators to reclaim their tokens, delegators typically endure a 21-day unbounding time.
According to Manian.
“We’re trying to accelerate the growth of all the liquid staking protocols so they have a seamless [user experience] for onboarding users,” Manian said.
Umee CEO and co-Founder brent xu said:
“Staking derivatives are the basis for how we can utilize proof-of-stake as a benchmark or reference rate for building out the term structure of interest rates for crypto,”
“Proof-of-stake rates are also a good hedge against economic inflation as you have a yield bearing asset as the basis for the protocol. This same logic applies to Ethereum,”
Umee plans to take the benefit of liquid staking to more easily offer liquid short-term loans, a feature that would have been harder to make work without the update.
Uses cases like this should lead to higher staking rates for ATOM across Cosmos chains.
“If we’re able to then use the success of the liquid staking protocols to get the number of staked atoms to 80% to 90%, we’ll be in a good position to change inflation and new atom creation which will be allocated to the security budget,”
Furthermore, the Cosmos ecosystem will be the launch and development of interchain security. Until now, the Cosmos hub can be seen as a model home inside a new housing development, Billy Rennekamp, Cosmos hub lead at interchain. io expressed in this metaphor, the neighborhood around the Hub began to grow based on the model.
But the Hub’s position at the center is valuable and “can be transformed into an asset to the community,”
Interchain security normally allows the Cosmos hub to run many blockchains in parallel, all with the same security attributes Jehan Tremback, Sommelier core developer and co-Founder of Althea explains in Medellin.