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Cosmos hub shared its whitepaper for the revamped Cosmos 2.0 on the 26th of September, to rapturous excitement from the Cosmos community.
The paper was revealed during the first day of the Cosmoverse conference in Medellin, Colombia. The slew of changes could see ATOM turn into Cosmos’ reserve currency.
A Slew Of Changes
The new Cosmos hub whitepaper proposes a slew of changes and a major expansion to the utility of the Cosmos Hub, the blockchain at the heart of the Cosmos ecosystem. The paper also outlines a new vision for the ecosystem’s native token, ATOM. At present, Cosmos Hub acts as a template, allowing blockchains to be built into the Cosmos Interchain, a web of individual blockchains for the seamless sharing of information and assets.
The new whitepaper proposes a host of changes to the Hub, allowing other chains to use it and secure their own network. ATOM will also see a change in its utility and issuance schedule. According to the paper’s authors, these changes will help the token better fulfill its role as an index of the broader Cosmos family of blockchains.
Cosmos co-founder and head of Cosmos research and development shop Informal Systems, Ethan Buchman, spoke about Cosmos’s new direction, stating,
“Cosmos Hub is taking its place within the interchain. The Hub is still not going to dominate the interchain or own the whole interchain or bring everyone under its umbrella. But it’s trying to offer services to the larger interchain that help enable it, help support it, [and] help it thrive and grow.”
Introduction Of New Features
The new whitepaper proposes features such as interchain security, which is an upcoming Cosmos feature, as a core element of the Hub’s value proposition. With the launch of interchain security on Cosmos Hub, other chains on Cosmos can borrow the Hub’s validators and secure their networks instead of utilizing their own. Cosmos Hub Product Lead at Interchain GmbH, Billy Rennekamp, talked about interchain security, stating,
“Interchain security is not only like a high market cap, for preventing attacks. “I think, actually, in the long run, the real value of interchain security is [being] legally, defensibly decentralized. I think the days are numbered for [layer one blockchains] to be launched and be legally classified as decentralized networks. And I think that the Cosmos Hub has a really great position through its integrity, history, and degrees of decentralization to provide decentralization as a service.”
And New Tokenomics
ATOM is the native token of the Cosmos Hub and the larger Cosmos ecosystem. In its current avatar, the ATOM token’s primary purpose is to secure the Cosmos Hub through a staking mechanism. The original tokenomics of ATOM have come under some criticism thanks to their inflationary dynamics. The issuance of ATOM currently varies between 7% and 20%, with the token supply around 214 million in March 2019. According to data from CoinGecko, the current circulation shows that around 292.5 million ATOM tokens are in circulation, an increase of over 36%.
The new whitepaper consists of a new monetary policy proposal for ATOM, which will be executed in two steps. First, a transitional period of 36 months would be introduced. The beginning of this period would see the issuance of 10 million ATOM per month. This would bump up the inflation rate in the short term. After this, the issuance rate would steadily decline until the inflation rate was brought down to 0.1%.
ATOM’s current monetary policy subsidizes Cosmos hub validators for securing the network. The new tokenomics model would see validators rewarded with revenue generated by interchain security. Interchain security would make spinning a Cosmos blockchain faster, easier, and cheaper.
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