Modernizing Proof of Stake on the Cosmos Hub
The goal of the ATOM2021 concept is to modernize 2016 era ideas about Proof of Stake, taking into account the realities of Exchange Staking and nascent Decentralized Finance (DeFi) protocols. The UniFi DAO site provides information and updates on new proposals for developing features in the Cosmos DeFi ecosystem. Discussions take place on the UniFi DAO Telegram.
In 2021, derivatives of staked ATOMs must be issued by the Hub smart contract and be available to DeFi projects\ Derivatives of staked ATOMs do not exist today. We strongly believe that creating a mechanism for such derivatives is valuable to the participants of the Cosmos Hub ecosystem. Presently, all ATOM stakers get compensated with more ATOMs for helping to secure the underlying network. However, ATOMs that earn rewards remain bonded and cannot participate in the DeFi ecosystem. ATOM2021 goal is to make DeFi projects available to ATOM stakers through ATOM Futures Token. That enables participants to take long or short positions on the unearned portion of block rewards over some period of time in the future. Since Futures Tokens are not bonded, they can be traded and are available to all DeFi projects that have Inter-Blockchain Communication (IBC) support. @zmanian and @b-harvest have converged on a design for staking liquidity that could be implemented as a native module.
In 2021, staked ATOM holders must earn yield on custodial assets via Peggy\ Presently ATOM holders are not able to earn rewards on custodial assets of any external chain. ATOM2021 vision is to change that. Peggy creates that opportunity between Cosmos blockchains and Ethereum. It allows Cosmos Validators to run a smart contract on Ethereum platform to earn yield on Ether that is stored on Cosmos Peggy account. In exchange, Peggy issues Ether Vouchers to Cosmos users. These Vouchers are backed by the underlying Ether and can be used in all projects that have IBC support.\ -- 30,000 ATOMs have been raised by a community funding campaign to support this effort.\ -- The development of Peggy is led by Iqlusion and Althea teams. -- We now have a long running ERC 20 bridge testnet running
In 2021, the Cosmos Hub must support an Automated Market Maker allowing seamless exchange of tokens, including staking derivatives and IBC tokens\ In order to support active trading of staked ATOM derivatives and other IBC tokens, we would like to have a decentralized trading platform available on the main Cosmos Hub. An Automated Market Maker (AMM) provides necessary liquidity and allows ATOM stakers to earn fees as Liquidity Providers. That gives ATOM holders more incentive to stake with non-exchange Validators and better access to innovative DeFi products that exchanges are not able to offer.\ -- The development of AMM is led by B-Harvest and All in Bits, Inc (AiB), who is also funding the work.\ -- Project specs, milestones and timeline can be found here.