A little bit of chit-chat
The dYdX Chain underwent an extensive three-phase security audit by Informal Systems. These phases scrutinized various custom modules and changes in forked CometBFT and Cosmos SDK versions. Upon completion, the audit revealed no current critical issues within dYdX Chain's source code. Specific findings included 1 critical (since resolved), 4 medium, 17 low, and 19 informational issues. Of these, 34 were accepted, while 5 were deemed to function as designed. To further their commitment to safety, dYdX is hosting a bug bounty with potential payouts up to $5,000,000, subject to terms and conditions.
Cosmoverse TL, DR.
As with all other Cosmos conferences, here’s our TL,DR edition about the most important topics discussed during Cosmoverse 2023 in Istanbul.
An account hub
Sunny introduced a new concept for accounts on the Osmosis platform. Dubbed as "smart accounts", these are not just traditional key-based accounts; instead, they are customizable and have adaptable properties. Unlike legacy accounts that are statically linked to a private key, smart accounts allow users to add, modify, or delete authenticators, enabling functionalities such as key rotation and incorporation of different cryptographic types. They can also utilize the power of CosmWasm to create custom authenticators, enabling a wide range of use cases, from limiting transactions to enabling multiple keys for added security. With the goal of making user interaction seamless, Osmosis intends to make its smart accounts interoperable with other chains and apps, allowing for an astral projection-like functionality where actions on one chain can be reflected on another. This innovation is aimed at making Osmosis not only a liquidity hub but also an account hub for the interchain ecosystem.
Make inflation predictable… for the first time
Effort Capital, a researcher at Blockworks, proposed a series of enhancements for ATOM. They emphasized reevaluating ATOM's tokenomics to align its growth with the wider interchain economy and introduced a revised, more predictable inflation schedule. The proposal also highlighted potential over-expenditure on network security, advocating for a shift in staking costs to the broader interchain realm. Acknowledging the rise of liquid staking, they suggested a dynamic tax mechanism to regulate its growth, which could fund community projects or be burned to potentially limit ATOM's supply. They underscored the unique strength of the Cosmos Hub's on-chain governance, promoting its use for strategic alignment between the Hub and its interconnected chains and recommended bundling shared security with protocol and liquidity to create a differentiated market offering.
IBC for all
Jack Zampolin from Stragelove commented that they are in the process of refining an extensive interchain test, presently in beta, which seeks to create a virtual multi-chain environment and is geared towards expanding compatibility to languages like TypeScript and Rust. Aiming to expand IBC's outreach, Strangelove is working on decoupling IBC from its deep ties with the Cosmos SDK, aspiring for integrations with platforms like the Optimism stack and Avalanche.
Staked BTC in Cosmos
Babylon aims to integrate Bitcoin (BTC) as a trustless staking asset within the Cosmos ecosystem. Utilizing advanced cryptography and BTC scripting, they've devised a mechanism where Bitcoin holders can stake their BTC without transferring it, ensuring trustlessness. This staking model supports fractional slashing as a deterrent against malicious actions, allows delegation to existing Cosmos validators, and provides on-demand unbounding for flexibility. This initiative seeks to marry Bitcoin's unparalleled security and value with Cosmos's decentralized ecosystem.
The future of the AEZ
The Atom Economic Zone (AEZ) is actively defining its trajectory within the Cosmos ecosystem. The prevailing sentiment emphasizes deeper alignment with partner chains, cultivating a coalition inspired by mutual success rather than a solely transactional relationship. As it grapples with its identity and role, there's a distinct push towards expanding its boundaries, potentially including projects like Osmosis and addressing challenges related to interchain UX. There's a collective call for increased coordination, focused objectives, and a dedication to collaborative growth. The vision for AEZ's future hinges on evolving from just a hub to a central entity that not only secures but also champions and supports its partner chains, creating an interconnected space of shared prosperity.
A new door to the Interchain
Jelena from Noble and Circle’s team members announced the CCTP (Cross-Chain Transfer Protocol) launch on Noble's testnet, with a mainnet release expected soon. CCTP, described as a generalized message-passing service, currently operates on platforms like Ethereum, Avalanche, Optimism, and Arbitrum. The service facilitates cross-chain asset transfers using smart contracts and attestation services. A demo showcased the simplicity of transferring assets between Avalanche and Noble using the protocol. The presentation concluded with news of Circle's expansion plans for CCTP to include other chains like Solana, Polygon, and Base.
The future of IBC
During a panel, various IBC contributors draw some conclusions regarding the future of the Cosmos’ jewel. The future of the Inter-Blockchain Communication Protocol (IBC) underscores the imperative of privacy and its real-world applicability. As discussions around blockchain privacy intensify, there was a consensus on the need for chains to incorporate privacy features to gain traction among large institutions and governments. This emphasis on privacy, however, is balanced by the belief that while chains should offer privacy, the communication flows between them should remain transparent for security. Addressing the economic aspects, especially concerning relayer incentives and the monetization of certain processes, stands as a challenge to be tackled. Lastly, with the rising interest from enterprises, features that cater to regulatory compliance and white-listing/black-listing will likely spearhead IBC's enterprise adoption.
A cosmic fusion
Vishal Talasani, co-founder of Stride Labs, suggested a merger between Stride's liquid staking zone and the Cosmos Hub, envisioning a conversion of the STRD governance token to Cosmos' native ATOM. Although the proposal is still nascent and details remain scarce, the intent is to mitigate concerns related to centralization, inspired by concerns surrounding Lido's control over Ethereum's staked ether. Stride, with a total value locked (TVL) of $36.94 million and being the predominant liquid staking protocol in the Cosmos ecosystem, sees nearly 80% of this TVL as staked ATOM. The merger would render ATOM as Stride's exclusive governance token and would reallocate Stride's annual rewards to ATOM stakers. Both Stride and the Cosmos Hub anticipate increased decentralization and confidence post-merger, while some in the community, like Neutron founder Avril Dutheil, remain cautiously optimistic about its long-term implications.
Wrap Up
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