In this CryptoCito interview, host CryptoCito is joined by Jack Zompolin, Founder of Strangelove and a core developer at the Cosmos network, to discuss the PHOTON token, ATOM as the core money of Cosmos, the various Interchain features, and more.
Read our notes below to learn more.
$PHOTON Token
A separate fee token for the Cosmos network proposed by Cosmos founder, Jae Kwon, in his ATOM 1 paper.
PHOTON directly “born” out of ATOM.
There’s auto-staking, which is an alternative to liquid staking.
Jack has never seen a 2 token model work well.
The ATOM Ecosystem
ATOM needs a core message which is what they’ve done with ATOM 2.
Growth flywheel; as IBC economy grows, ATOM economy can grow too.
The future will consist of thousands of tokens and automation is needed to deal with the complexity, and are building a feature for the relayer to solve it.
Just doing Interchain Security and nothing else is a poor choice.
ATOM 2.0 vision is a much cleaner path as it is flexible and has more features.
Core Money of Cosmos
The idea behind ATOM 2 paper is to defend ATOM as the core money of Cosmos
USDC will become the major FIAT on and off ramp.
Premature to say that Interchain Security will be the “end-all be-all” of ATOM value accrual.
v1 system that they’re shipping most likely tops out around 10-20 chains that are going to drive a lot of revenue.
IBC is a fundamentally better project than most of the current bridges and needs to figure out how to grab value on top of it.
Jack see a huge explosion of IBC-based chains coming to Cosmos.
Network needs a number of ways in which ATOM holders can derive value such as Shared security, Interchain Allocator, Interchain Scheduler, chain-naming service, etc.
These 4 features gives a chance for ATOM to accrue long-term value and continue to command the monetary premium within the ecosystem.
Interchain Allocator
Airdrops are not long-term aligned with the success of Cosmos.
Best way for long-term alignment is for ATOM holders via community pool/treasury to take positions in projects, which is what the Allocator does.
One criticism of ATOM 2.0 is the council’s power. On the contrary, it allows the council to bring people deeply invested in the ecosystem into governance.
Treasury differences between ATOM 1 and 2
ATOM 1 envisions filling it up through a community/treasury tax while ATOM 2 does it through newly minted ATOMs.
However, the treasury tax is also newly minted ATOMs.
Difference is the quickness and underlying mechanism.
ATOM 1 will not work in a liquid staking model.
Liquid staking is a feature that is going to happen and should not be fought or they will be left behind.
Validators/Nodes changes
Most Cosmos validators run on many chains already, and don't anticipate major problems.
Will be a need for additional tooling to deal with the complexity.
Spent the last few years cultivating the best validator set.
BNB Hack and Bug Bounty
All blockchains security relies on Merkle Tree cryptography.
Hackers use fake range proofs which Cosmos doesn’t use so it was unaffected.
Engineers started looking if a similar exploit could be done to Osmosis (popular appchain featuring a DEX) and found one which was patched within days.
Current security group is akin to a very competent volunteer fire department, need to shift to a professional one.
Attempting to put together a Builders foundation.
Other Projects
Most of the activity was spent on strangelove (strangelove is a company focusing on investing, building, and validating within Cosmos ecosystem).
Expanding IBC to non-cosmos ecosystems like NEAR, Polkadot, Algorand.
Re-enabling async composability (building a testing environment that allows interchain queries and accounts at the same time).
Working on USDC integration at strangelove.
Q&A
Q: Why would anyone be in charge, seems very “security like”? Is there an answer to how this proposed evolution of ATOM can mitigate regulatory scrutiny?
Not putting anyone in charge. Community pool and top-level Cosmos governance is still in charge.
Allows governance to delegate responsibility to smaller groups to accomplish bounded tasks.
Only proposed solution seen is a sort of liquid democracy type system that ends up looking like a council.
Doesn’t think regulatory scrutiny is a big concern.
Q: What’s Jack’s thoughts if the new issuance went straight to the community pool and vote through the community pool to allocate the treasury?
Supportive on changing the issue and structure from the paper.
Advocated for a smaller initial mint.
Issue with the current proposal is that every vote will become a fight.
Minting ATOM into the community pool will be positive/bullish for the community.
Q: ATOM 2.0 is the vision for the Cosmos Hub. But where do the ICF and its millions of Atoms fit into that, and all those private companies like Informal or Ignite?
Initial idea of ICF (Interchain Foundation) was to fund ecosystem development and AiB (Tendermint/Ignite) would fund the development of the Cosmos hub.
AiB(All in Bits Inc.) has decided to spend money on developing ignite chains instead.
ICF now builds the broader IBC ecosystem and continues to fund development of core software which is critical.
Private companies contract primarily with the ICF and do work with the ecosystem like systems testing, QA, etc.