Why Was Cosmos Hub’s ATOM 2.0 Proposal Rejected?

The ATOM 2.0 proposal has rejected by the Cosmos Hub neighborhood in a hotly contested vote; the proposal failed regardless of gaining help from nearly all of voters.

ATOM 2.0 Fails to Cross

After weeks of debate and a tense two-week voting interval, the Cosmos Hub neighborhood determined earlier this morning to reject Proposal #82, “ATOM 2.0: A brand new imaginative and prescient for Cosmos Hub.” 

Based mostly on a whitepaper penned by Cosmos co-founder Ethan Buchman and eleven others, the proposal was marketed as the subsequent step in Cosmos Hub’s evolution. Amongst different issues, the whitepaper steered drastically altering ATOM’s tokenomics and constructing two new instruments, the Interchain Allocator and the Interchain Scheduler, which they argued would assist cement Cosmos Hub as one of the vital essential appchains within the broader Cosmos ecosystem.

The proposal, now thought-about by some in the neighborhood as probably the most controversial within the historical past of Cosmos, noticed an unusually excessive turnout of 73.41% of all ATOM tokens, with the vote remaining tight till the very finish. Finally, 47.51% of cash had been pledged in favor, 37.39% voted “NoWithVeto,” 13.27% abstained, and 1.82% merely voted no. 

Whereas most tokens had been certainly pledged in favor, Cosmos Hub’s governance mechanics make sure that a proposal can not move if greater than 33.4% of voters go for “NoWithVeto”—a system that forestalls the Hub from falling prey to 51% assaults. “NoWithVeto” is, due to this fact, a powerful sign neighborhood members use to speak their perception {that a} proposal is actively dangerous to Cosmos Hub’s pursuits.

Buchman acknowledged the robust response towards the proposal in a tweet storm: “To people who voted NoWithVeto, I respect your resolution and listen to you loud and clear: the proposal in its present type is untenable. Even when it handed, amendments could be essential!”

Why Was It Rejected?

ATOM 2.0 was an bold and thrilling proposal, and that will have been a part of its drawback.

The 26-page whitepaper didn’t restrict itself to modifying one or two points of the ATOM token, because the neighborhood initially anticipated, however got down to essentially remodel the best way the Cosmos Hub functioned by introducing three new main instruments along with revamping tokenomics. The Interchain Scheduler, for instance, goals to be an on-chain MEV market, whereas the Interchain Allocator’s function could be to allow mutual stakeholding throughout totally different IBC chains; these are two very totally different, very advanced subjects, and ATOM stakers might have ended up voting towards the proposal due to one of many instruments regardless of liking the opposite one.

One other vivid concern within the ATOM 2.0 proposal needed to do with the revamped tokenomics. The whitepaper argued in favor of significantly rising the issuance of ATOM tokens for a short time to be able to subsidize the Hub, after which reducing emissions over a interval of 36 months. Critics argued that the change in financial coverage was unwarranted and that particulars had been missing with regard to how the Hub would use the gathered ATOM. Others had been unconvinced that ATOM emissions could possibly be efficiently changed by different sources of income by the point emissions waned. 

Almost definitely, the assorted elements of the ATOM 2.0 whitepaper will find yourself being resubmitted to the neighborhood for voting as their very own particular person initiatives, similar to how an in depth proposal for Interchain Safety—one other bold initiative to place Cosmos Hub as a central part of the Cosmos ecosystem—was handed in March. 

Disclaimer: On the time of writing, the writer of this piece owned ATOM, BTC, ETH, and a number of other different cryptocurrencies.