Cosmos has historically been an ecosystem that has promoted horizontal scalability, as opposed to vertical scalability. The Cosmos ecosystem has been able to scale horizontally more efficiently than any other ecosystem as a result of having the most mature interoperability protocol and software development kit in cryptocurrency, known as the Inter-Blockchain Communication Protocol (IBC) and Cosmos Software Development Kit (Cosmos SDK). Simply put, IBC is a set of standards that facilitates communication between blockchains in the Cosmos and the Cosmos SDK is an open-source framework for building permissionless Proof-of-Stake (PoS) blockchains. IBC and Cosmos SDK enable teams to spin-up application-specific PoS blockchains with ease, which connects to all other PoS blockchains built with Cosmos SDK and IBC. As of time of writing, there are 46 zones (Cosmos SDK blockchains) that are connected to IBC. The power of having the flexibility and optionality to create your own blockchain in the Cosmos allows the ecosystem to scale ‘horizontally’. Any time blockspace reaches capacity on a single blockchain, another blockchain can be conceived that connects to the existing blockchain. This is in stark contrast to other ecosystems such as Ethereum, whereby an application suffers if blockspace on Ethereum is at capacity because bandwidth becomes much more expensive. Now, for the first time in Cosmos history, there are multiple vertical scaling solutions being built in the Cosmos ecosystem that complement existing horizontal scaling solutions that already exist within the ecosystem. This article focuses on four vertical scaling solutions being worked on in the Cosmos, which include (Cosmos Hub) Interchain Security, Dymension, Celestia and Saga. The Cosmos ecosystem is unique in that each vertical scaling solution being worked on intrinsically scales horizontally as well, thanks to the flexibility facilitated by the modularisation of Cosmos.
When bandwidth becomes expensive on networks such as Ethereum, users suffer from high transaction fees. Networks such as Ethereum have attempted to solve issues with scalability by creating scaling solutions that work ‘vertically’, as opposed to ‘horizontally’. Vertical scaling entails another layer being built on top of Ethereum network, which leverages the underlying security of Ethereum (known as the Layer 1) yet handles transaction execution off-chain (known as the Layer 2). This is an important step to take transaction execution off-chain because as of right now, transaction execution on Ethereum is responsible for the majority of bandwidth woes. Another word for a Layer 2 is an execution layer because transactions are executed off-chain. After transactions are executed on a Layer 2 (execution) layer, a proof is sent to the underlying Layer 1 (e.g. Ethereum) of the state changes that have occurred off-chain. There is then either a period of time whereby other actors in the network can prove fraud if execution off-chain is different to what has been written on-chain (via fraud proofs) or a verifying contract on-chain has to verify the validity of a zero-knowledge proof coming from an actor such as a sequencer that must also ensure all transactions are available so any full node can recover all transactions in order to also verify that execution being written on-chain is correct. Without diving too deep into the technical details, simply speaking Layer 2s can save users gas due to superior encoding, which is well-explained by Vitalik Buterin here.
Using a Layer 2, or vertical scaling is an alternative way for users and applications to execute transactions off-chain and write data to the Layer 1 to save blockspace by using compressed data and calldata (as opposed to writing directly to storage of a Layer 1, which is more expensive bytes-wise) and hence results in lower transaction fees.
In the past, Cosmos and Ethereum have taken a completely different approach, with Ethereum focusing on vertical scaling and Cosmos focusing on horizontal scaling. Now, the two ecosystems seem to be converging as both are making progress towards incorporating elements of the opposite approach to scaling in order to compliment its existing work on either vertical or horizontal scaling. This article will focus on vertical scaling solutions that are in the works in the Cosmos ecosystem that aim to complement the existing horizontal scaling solutions that are already available in the Cosmos. In particular, this article will cover 4 vertical scaling solutions in no particular order that are being worked on in the Cosmos, including: Interchain Security, Dymension, Celestia and Saga.
The first vertical scaling solution to mention going live in the Cosmos is Interchain Security on Cosmos Hub. In short, Interchain Security allows networks to lease security from the Cosmos Hub. In practice, this means that networks do not have to spend time ‘bootstrapping’ validators for its network, which can be a drawback of horizontal scaling. To explain further, each network that goes live in the Cosmos has security equal to the amount of value it has staked, meaning there is an argument that networks could be seemingly less secure in the Cosmos if the amount of assets backing a network (staked) is not high enough. For example, due to the nature of Tendermint consensus, if a validator (or group of validators) controls more than 34% of stake on a network, it is able to halt finality in a Cosmos network and essentially censor a network. Therefore, it can be appealing for a Cosmos team to instead opt for using the security of Cosmos Hub, which currently has ~$1.5bn worth of stake (ATOM) securing it. Not only would a team not have to worry about increasing the value of its network to ensure the security of it but it can also ‘lease’ validators that already exist on Cosmos Hub and therefore not have to do business development work to obtain validators and work on its security budget for its own validator set. In return, a ‘consumer chain’ (a chain that borrows security from Cosmos Hub) pays a leasing fee to the Hub itself and those who secure it, which is x% of a consumer chain’s emissions schedule being redirected to Cosmos Hub delegators. The fee paid to Cosmos Hub delegators for each consumer chain will be specified in a Cosmos Hub governance post. A governance post that pitches a team’s vision / product is required from teams looking to rent security from Cosmos Hub because consumer chains are ‘permissioned’, meaning consumer chains can only borrow security from the Hub if enough ATOM holders vote YES on it in a governance vote. One nice feature of interchain security is that it gives team the choice of either creating their own ‘custom consumer chain’ or ‘contract consumer chain’. The main difference between the two comes down to the binary that validators run. In contract consumer chains this is standard, whilst in customer consumer chains teams have the flexibility of customising the binary to experiment with different transaction fees and transaction assembly. A good overview of Cosmos Hub interchain security versus other solutions is presented here:
Figure 1 — The advantages Interchain Security offers versus existing deployment options (source: Informal Systems)
Whilst the promise of leasing security from Cosmos Hub sounds enticing, there is a trade-off to be had here on decentralisation of Cosmos Hub. This is because validators that operate nodes on Cosmos Hub will also be required to run nodes for consumer chains simultaneously to the Hub (at least in version 1). This extra requirement on validators will likely result in validators needing ‘beefier’ hardware in order to keep up with the workload as consumer chains vertically scale whilst borrowing security from Cosmos Hub (similarly to shards borrow security from Ethereum in that ecosystem). To put it simply, validators suffer at the hands of making it easier for teams wanting to get a headstart with security and a validator set. However, it is important to note that consumer chains always have the option to create it’s own network (i.e. a team can use vertical scaling via interchain security to start and then transition to horizontal scaling outside of the Cosmos Hub with its own blockchain at a later point). To date, there is two projects that are a certainty to use interchain security, which is Quicksilver and Neutron. Quicksilver for example, has opted to use interchain security over building out its own network because it is focused on liquid staking, which directly impacts security of all Cosmos networks, therefore security of its own chain is paramount in order to keep the entire Cosmos ecosystem secure.
Another vertical scaling solution being worked on in the Cosmos is Dymension. Dymension is taking a very similar approach to Ethereum’s current vertical scaling roadmap. The main difference that Dymension is taking compared to Ethereum is the level of customisation and flexibility on offer versus what is available in Ethereum. Dymension is working on creating a Rollup Development Kit (RDK). The RDK takes inspiration from the Cosmos SDK and can be tweaked effortlessly by any team, depending on their needs. Dymension is working on ‘enshrined rollups’, which communicate and transact with the settlement layer via native protocols and modules and thus increase the overall security over traditional rollups. Another element Dymension has thanks to interoperability properties materialising from the Cosmos is that of native interoperability between Dymension rollups, which are connected to the Dymension settlement layer. Another unique property Dymension is leveraging that is not available in the Ethereum ecosystem is PoS for sybil resistance / to solve the keeper’s dilemma. Dymension has come up with a unique way to solve the keeper’s dilemma that rollups currently face in Ethereum.
Dymension is in its very early stages, so not much can be given away about the protocol design at this stage. The best way to think of Dymension is like Ethereum’s current settlement and execution layer design (e.g. ORUs executing tx off-chain and then writing state to the ‘settlement’ layer), only Dymension inherits many properties that makes Cosmos networks so dynamic, such as native interoperability, PoS and a developer framework to easily spin-up rollup chains.
Related to Dymension but also with its own unique design that is a vertical scaling solution going live in the Cosmos is Celestia. In a nutshell, Celestia is a ‘data availability network’. Breaking this down, Celestia validators guarantee that state (data) is available for verifiers to verify themselves that execution has been done properly off-chain in order to mitigate any need for a challenge period on the ‘settlement layer’. Celestia network itself does not execute any transactions. It is merely a network that has the latest state of an L2 that can be leveraged by verifiers to determine whether or not data is available (and therefore can reconstruct the previous state to check if execution has been done appropriately in different intermediate states). A nice design choice of Celestia is the way in which it uses 2d Reed-Solomon erasure coding to involve non-consensus nodes in determining whether or not data is indeed available. This is a scaling decision in itself, as light nodes in the past had no role in consensus. In Celestia, light nodes can probabilistically determine that all transactions are available because a block producer would have to withhold >50% of a block’s data in order for censorship to occur. Due to the technology of 2d reed-solomon erasure coding, it becomes a trivial task for light nodes to find out whether even just 1 transaction (which could be 1 in potentially thousands) is being censored by a block producer sequencing to a settlement layer. In data availability design without this, it is burdensome for light clients to sample transactions because if only 1 transaction was withheld (which could be critical), the more transactions that were being batched to a settlement layer, the harder it would be for a light client to find, the less security a roll-up would have.
In the Ethereum ecosystem, a rollup (such as Optimistic Rollup) could post calldata to Ethereum but it is still (relatively) expensive versus posting the same data to Celestia to ensure data is available (and therefore recoverable to challenge what is sequenced to the settlement layer). There is a chance that rollups that exist in Ethereum now might only use Ethereum in the future to challenge the off-chain execution if it was incorrect (and slash on Ethereum) and use Celestia as the data availability layer to verify that data is available in order to submit the challenge.
Celestia is also working on creating a framework that allows zones (outside of rollups) to also write transaction data to Celestia, whereby Celestia ensures it is available. In Celestia’s own words:
Optimint is the software that allows a chain to deploy directly on Celestia, as a rollup. It spins up its own p2p network, collects transactions into blocks and posts them onto Celestia for consensus and data availability.
Optimint is essentially a framework for developers to use that does not require them to undergo business development to find their own validators or create its own security budget as Celestia handles the work for them. Optimint is the consensus layer of Celestia, which provides a framework for transaction ordering that can be used in the data availability layer as well as settlement layer (if required). It is likely that Optimint could rival interchain security because the value proposition is the same for both of them. It is unknown how consensus will differ in Optimint vs Tendermint as it exists in Cosmos Hub today.
In any case, Celestia is a completely unique and elegant design that tailors to all execution layers’ needs. Celestia is blockchain-agnostic and provides consensus over data availability within an execution layer. This is a powerful concept and Celestia’s importance could transpire across both Cosmos and Ethereum in the near future.
Finally, another vertical scaling solution being built in the Cosmos is Saga. Saga is a network that is purpose-built to give each application that launches on its network its own execution environment. This means there could potentially be hundreds / thousands of ‘chainlets’ running on Saga. A core value proposition of Saga is that execution environments are customisable, an application has the flexibility to choose its own execution environment depending on its needs. The power of each individual application having its own execution environment is that resources can be managed in a more efficient way. Whenever one application runs out of blockspace, it can easily spin-up another execution environment that is focused on a particular subset of the activity from the original application via deploying another instance of the same smart contract in order to handle the load. Saga suffers a relatively similar fate to interchain security in that there is a lot of burden placed on validators in order to allow applications and application-specific chains to run smoothly. It is Saga’s intention to have chainlets provisioned by validators in a fully-automated way but this is a complex challenge to solve. If Saga is able to solve provisioning automation in an efficient way, it will be a force to be reckoned with within the Cosmos.
Figure 2 — An overview of the design choices made by Interchain Security, Dymension, Celestia and Saga
To conclude, traditionally Cosmos was fully-focused on scaling the ecosystem horizontally. Horizontal scaling is in stark contrast to the approach Ethereum has taken, which has focused on scaling the network vertically. In 2022, there has been a trend for teams to start working on experimenting with vertical scaling solutions in the Cosmos to complement the already existing horizontal scaling solutions that exist. The four major vertical scaling solutions that are being worked on in the Cosmos are Cosmos Hub Interchain Security, Dymension, Celestia and Saga.
Each vertical scaling solution comes with its own design choices and trade-offs. However one theme holds true amongst all vertical solutions being worked on in the Cosmos — flexibility. All vertical scaling solutions in the Cosmos are completely customisable and offer a tremendous amount of freedom for developers to experiment with. The original value proposition of the Cosmos — IBC, Cosmos SDK and Tendermint is being leveraged in different ways by new vertical solutions in the Cosmos. What is unique to scaling in the Cosmos is that it is intrinsically horizontal. All vertical scaling solutions being built still scale horizontally. This is in large part due to the seamless experience, standards and software development kits that are prevalent in the Cosmos. Even if a vertical scaling solution is built that leverages the security of an underlying validator set, it scales horizontally in an easier manner than what can be found in other networks because of the modularity of the Cosmos. For the first time in Cosmos history, vertical scaling will accompany existing horizontal scaling to pioneer what could be the most scalable blockchain ecosystem in existence.
Xavier Meegan is Research and Ventures Lead at Chorus One.
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Chorus One is one of the largest staking providers globally. We provide node infrastructure and closely work with over 30 Proof-of-Stake networks.
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The bull cycle of 2021/2022 was largely defined by decentralized application platforms that provide an alternative to Ethereum experiencing adoption and growth within their ecosystems. All these platforms have one thing in common: they need operators commonly called validators actually running the underlying infrastructure to enable the applications built on them to be usable.
Most importantly, there should be enough independent operators for such a network to be considered sufficiently (politically) decentralized, to avoid a subset of parties being able to shut down applications, censor transactions, or in other ways impede the credible neutrality of the platform.
A core belief within Chorus One is that the increasing adoption of decentralized applications will lead to further networks springing up; a directional trend that can be observed looking at the growth of application-specific chains, e.g. in Cosmos, the pioneering and leading ecosystem of this approach (via the Cosmos SDK and IBC), which is also being pursued by similar initiatives in other ecosystems (e.g. Avalanche subnets, Polygon supernets, Substrate chains on Polkadot). Notably, in recent months, some of the most used applications including decentralized derivatives trading platform dYdX confirmed and NFT juggernaut Yuga Labs hinted at plans to launch their own application-specific blockchain.
Given these forces on the network supply side, the demand and competition for professional operators are growing and protocol designers need to think about how to incentivize validators to join their ecosystems — as opposed to a “build it and they will come” mentality.
The following post aims to provide an insight into existing strategies and criteria for network foundations to foster decentralization and create a healthy validator set via stake delegation programs.
As mentioned, a key tool in the toolbox of network foundations, who generally are endowed with a decent portion of the underlying protocol’s staking token and the mandate to grow the ecosystem, is the ability to distribute the stake to independent validators. Crucially, here we are not talking about giving tokens directly to validators through e.g. validator-specific investment rounds or incentivized testnets, which are other viable strategies to create alignment. Rather, we talk about delegating foundation tokens to validators based on some sort of evaluation. This mechanism can be used to continuously reward operators that add value enabling them to build a stake in the network via commission rewards. This cannot be underestimated as both a bootstrapping mechanism for validators to join your network and as a mechanism to reward valuable contributions, as well as continued participation and performance.
In the following table, we aim to highlight some of the different criteria choices providing examples of existing foundation delegation strategies that can be taken into consideration. We also look at two exemplary liquid staking protocols, another interesting party with similar goals to a protocol foundation that has been innovating on establishing methods of how stake is distributed among their validator sets.
Furthermore, most programs also institute a maximum fee that validators are allowed to charge. Notably, it can be observed that some liquid staking protocols actively try to minimize validator fees as their main product is the APY of their liquid staking token.
Finally, it is also interesting to note which programs are carried out in an automated fashion on-chain, which is spearheaded e.g. by Solana stake pools and Polkadot’s 1,000 validator program (see links below).
Once aligned on the desired criteria, you’ll need to decide on the frequency and how to communicate the criteria, how people can take part, and how decisions will be communicated. We recommend using a mailing list for upgrade communication and Discord or Telegram for active discussion. We have collected some critical resources from other delegation programs at the end of this post for inspiration.
An alternative to delegation programs that some networks opt for is to run foundation nodes themselves, a practice that we would largely discourage or at least try to limit for early phases of the network in which some additional control of the foundation might be necessary or in some minor fashion to ensure the network’s validator software and surrounding process are useable. At scale, this practice takes away the chance for validators to truly become a part of the network and will ultimately result in a centralized, and thus pointless, network.
Well-designed stake delegation strategies are a powerful bootstrapping mechanism to get independent operators interested in your decentralized network. In addition, they can serve as a mechanism to continuously reward valuable contributions such as community engagement and open-source tooling.
In this post, we touched upon why delegation programs are needed, the underlying goals, and what criteria can be used to conduct them. There is a lot of work to be done evaluating the effectiveness and improving and innovating on delegation strategies we have introduced here.
Chorus One is an experienced staking provider active on over 30 networks actively investing in the ecosystem and helping networks from conception to launch and beyond. We have also written about other tools, including incentivized testnets. We encourage builders launching their application-specific blockchains and researchers interested in this space to get in touch with us through ventures(at)chorus.one
Solana Foundation
Interchain Foundation
Web3 Foundation
Tendermint Team
Lido
Marinade
Terraform Labs
Celo Foundation
Socean
e-Money
Avalanche is an open-source platform for deploying decentralised applications in a highly scalable environment. Avalanche takes a ‘network of networks’ approach to scaling and contains from the get-go a smart contracts platform designed for global finance, with near-instant finality. The network infrastructure allows applications to maintain sovereignty on their own “subnet”, while tapping into the Avalanche mainnet for interoperability with other subnets. Ethereum developers can easily build atop Avalanche via the EVM-compatible C-Chain. Through its novel Avalanche Consensus Protocol, Avalanche is able to scale capabilities to a processing capacity of 1,500 TPS (transactions per second) in the C-chain and upwards of 4500 TPS in the X-chain. In summary, Avalanche presents a revolutionary technology both in consensus and horizontal scaling design via subnets.
The main novelty of Avalanche is its approach to scaling, which involves the concept of subnets. A subnet is a set of Avalanche validators and the assignment of one or more blockchains for these validators to validate. There is a mainnet, or Primary Network, which consists of all Avalanche validators and that are assigned the P-chain, X-chain and C-chain to validate. As mentioned before, the C-chain is the smart contracts chain that is EVM-equivalent. The X-chain is an UTXO DAG-based chain specially tailored for high-speed asset transfers. The P-chain is perhaps arguably the most important one as its job is to maintain the coordination of validators and delegators on all subnets.
Other subnets are therefore subsets of the mainet validators that are assigned additional blockchains to validate. The reasoning behind this design decision is brilliant: Instead of having one chain accomplish everything in the Avalanche ecosystem, each “sub” blockchain can specialize for a certain use case.
In the meantime, the platform is expanding and enabling developers to launch their own customizable blockchains. Distributing activity over several chains keeps the Avalanche platform dynamic and flexible, enabling it to meet the blockchain’s trinity of decentralisation, security, and scalability.
Avalanche delivers even more in terms of technology by regularly releasing open-source code in the form of VMs ready to be picked up by projects looking to jump in in the subnet movement. @DeFiKingdoms is an example of a live subnet.
Other projects in Avalanche may soon start to shift to the subnet environment. For instance, liquid staking via BenQi (sAVAX) with three more solutions coming up: Lido on Avalanche, LAVA, and Eden Network + YieldYak. There is also a competitive DeFi landscape which may do the same, with TraderJoe (DEX), Platypus (stable swap), Aave (lending) and many others.
Becoming a validator in Avalanche requires expertise and a bonded stake. It would be troublesome if being a validator on the Avalanche network was free since a bad actor might start a large number of nodes that would be queried often. A node must bond (stake) something valuable in order to become a validator (AVAX). The more AVAX bonds a node has, the more often that node is requested by other nodes. A node’s sampling of the network is not uniformly random. It is rather weighted by stake quantity. Nodes are encouraged to be validators because they get a reward if they are sufficiently accurate and responsive when validating. Chorus One behaves in this way, helping to secure Avalanche. Users can delegate to Chorus One to and share the rewards.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Token distribution and inflation of 9.2%.
Reward Rate: Rewards are paid out at expiracy of the validation contract provided the validator uptime as seen by the network is above 80%.
Chorus One Commission: 2%
Staking Limits: The maximum weight of a validator (their own stake + stake delegated to them) is the maximum of 3 million AVAX and 5 times the amount the validator staked. For example, if you staked 2,000 AVAX to become a validator, only 8000 AVAX can be delegated to your node total (not per delegator)
Slashing: No slashing. A validator will receive a staking reward if they are online and respond for more than 80% of their validation period, as measured by a majority of validators, weighted by stake. You should aim for your validator be online and responsive 100% of the time.
Re-Staking: You need to withdraw rewards and re-stake them with some frequency if you want to make use of compounding returns hence, additional delegation is needed for compounding.
Staking Guide: To read a step-by-step guide on how to stake AVAX, click here
Covalent is a protocol that collects data from various blockchain networks. Covalent attempts to gather granular information stored inside smart contracts that isn’t available with current technologies by completely indexing whole blockchains and accessing their data via a single API. In this way, Covalent wants to help developers have a better grasp of the whole blockchain ecosystem. Users will even be able to incorporate private business data after all blockchain data is indexed.
Covalent is gradually decentralizing and that will allow the Covalent Network to be owned and controlled by its users with the use of the CQT token:
Covalent is already demonstrating a wide range of applications. From taxation, where a trader can immediately obtain a CSV file of their transaction data, to NFTs, where NFT applications like ChainGuardians and Ethermon are now employing the Covalent API to not only enable innovative features unique to each project but also to enhance user experience.
To provide broader access to blockchain data, multiple roles such as validators, block-specimen producers, indexers, storage request responders, and others are required for data retrieval, storage, and query procedures. Learn more about them here. Covalent brings a great value to web3 developers and users and we’re excited to contribute as Block Specimen Producers, ensuring the accuracy of the distributed data.
About Staking on Covalent:
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Inflation and Distribution ($1Bn CQT):
- Seed: 10 %
- Ecosystem: 20%
- Private sale: 20.4%
- Private sale II: 2.9%
- Public sale: 3.4%
- Team: 14.4%
- Advisors: 2%
- Reserve: 18.9%
- Staking: 8%
- There will be a 2% inflation per year for 4 years.
Reward Rate: The amount of CQT that is rewarded per epoch (24 h). Learn more about staking CQT here.
Chorus Commission: 7.5%
Withdrawal Delay: 28 days for delegators and 6 months for operators.
Staking Limits: There is a ratio (currently 6:1, it will be upgraded to 10:1 in the short term, then up to governance) determining how much delegation an operator can receive on their own stake, ensuring operators have skin in the game. In addition, there are max. stake limitations in place to avoid centralization and to ensure the network grows in conjunction with its maturity.
Slashing: Currently, there is no slashing on the Covalent Network. Until slashing is live, network operators who produce Block Specimens with invalid proofs won’t receive rewards.
Re-Staking: Delegating is non-custodial. While CQT is held in the staking contract, it is only the owner of the respective staked CQT that can interact with it.
Evmos is aligning developer and user incentives to bring Ethereum-based apps and assets to the interoperable networks of the Cosmos ecosystem.
Evmos is an EVM-compatible Cosmos SDK blockchain allowing developers to have all of Ethereum’s desired features while also benefiting from Tendermint fast finality and other benefits that a custom Cosmos SDK blockchain brings. Evmos is connecting the Ethereum and Cosmos ecosystems via a bridge to Ethereum and by utilizing the Inter Blockchain Communication Protocol (IBC).
Evmos is built on Tendermint Core, which depends on validators like Chorus One to commit blockchain blocks. These validators participate in the consensus mechanism by broadcasting cryptographically signed votes. Validator candidates can stake their own tokens and have others “delegate” them. The EVMOS is Evmos’ native token. You can stake with us to share our rewards. Evmos launches with 150 validators. The top 150 applicants with the largest stake become Evmos validators.
Executing the Tendermint consensus protocol will yield validators and delegators Evmos as block provisions and tokens as transaction fees. Initially, transaction fees will be paid in EVMOS, however, in the future, any Cosmos token can be used if whitelisted by governance. Validators establish a commission on delegate fees as an incentive. Token holders are responsible for steering and governing the network, including e.g. determining applications that should be incentivized with EVMOS tokens.
As previously stated, the dApps that will be available on Evmos can include everything currently on Ethereum and beyond. For example, AAVE is expected to be launched on Evmos. The introduction of Aave on Evmos will allow for an increase in user activity while also filling the demand for a dependable lending protocol on Cosmos. The core team also stated that they are currently working with Chainlink to implement Aave V3 functionality before the mainnet launch later this month. Other examples of applications on Evmos include NFTs and decentralized exchanges — such as Diffusion or Exswap.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Inflation and Distribution: Over the first four years the newly minted tokens will be distributed, at each block, in the following way:
There will be no limit on token minting. Over 300M EVMOS will be coined in the first year and 1 billion in the first four meaning inflation after network launch is high.
Reward Rate: 7 seconds block production distributes the rewards. Variable APY (at the time of writing above 500%, check the official dashboard for current values)
Chorus One Commission: 5%
Target staking rate: 50%
Withdrawal Delay: 2 weeks, no rewards are earned during this time
Slashing: A validator missing more than 95% of the preceding 10,000 blocks will result in a slashing of 0.01%
Re-Staking: Manual, must be withdrawn from accrual pool
Additional details: Coinbase guide
Stargaze needs little introduction, it is setting the pace for NFT marketplaces in the Cosmos ecosystem. Stargaze is a network that has built an NFT marketplace from the ground up, including designing a new NFT standard (via a module) for the Cosmos SDK ecosystem that will eventually be interoperable across IBC. What’s unique about Stargaze versus other NFT marketplaces is the fact that the same currency (STARS) will be used to bid and sell as well as to secure the underlying network, which creates entirely novel economics that have not previously been seen before.
It is unlikely Stargaze will host NFTs that mimic other ecosystems such as Ethereum. Users can expect totally new collections to drop on Stargaze that combine elements that might be too computationally expensive to use in other networks. In fact, Stargaze solves many existing problems in NFT marketplaces that exist today. We have previously released a whole article on the different types of problems that Stargaze solves, such as centralised curation, bad security, difficult workflows, limited flexibility, high fees, scams, intransparency of contracts & royalty restrictions, which can be read here. In general, what makes Stargaze a powerful proposition is its unparalleled security, decentralisation, transparency and flexibility. Users, creators and curators will be able to maneuver NFTs like never before in Stargaze as it brings in a new level of fairness and fun to the Cosmos NFT ecosystem.
Stargaze launched Mainnet Phase 0 on October 30th 2021, launching the network with 0% initial inflation. Stargaze Mainnet Phase 1 occurred between December 16 — December 18 2021 to offer early adopters the chance to purchase STARS in Osmosis via a Liquidity Bootstrapping Pool (LBP). Our Research Analyst, Xavier Meegan, described the economics of LBPs to educate those in the Cosmos ecosystem about the benefits of LBPs, which can also be consumed for Cosmos LBP events in the future. The construction of the STARS / OSMO LBP was a first-of-its-kind, as Stargaze proposed to borrow OSMO to kickstart the initial STARS / OSMO pool weights. The borrowed OSMO was returned at the end of the LBP when STARS / OSMO weights hit 50/50 and STARS achieved price discovery. Stargaze Phase 2 was completed on Jan 1 2022 when it successfully started minting new STARS after the passing of governance proposal #2 to activate inflation for the network. As a part of Stargaze’s Mainnet Phase 3, Stargaze announced 25% of their token supply will be ‘fairdropped’ to ATOM and OSMO stakers + to Stargaze validator delegators on Cosmos, Osmosis & Regen as a part of their Mainnet Phase 3. By the conclusion of Stargaze Mainnet Phase 3, the fairdrop would have been completed and the Stargaze NFT marketplace fully-live ready for anyone to trade on.
We’re excited to be able to contribute to securing Stargaze to propel a new era for NFTs in the Cosmos ecosystem. Stargaze is unleashing unmatched economic freedom for creators, stellar incentives for curators and superior security for NFT traders and we look forward to contributing to its future success.
Stargaze is built using Cosmos SDK. Users can delegate their STARS to Chorus One using a wallet, such as Keplr.
Validating Rights: The weight of validators is determined by the amount of staking tokens (STARS) bonded and/or delegated as collateral.
STARS Inflation: 35% in year 1, issuance is reduced by 1/3rd every year after that
Reward Rate: Rewards from staking STARS will vary depending on the inflation and total amount of tokens that are staked at a given time. As of time of writing, the APR is ~120%. Learn more about the details of staking reward rates for chains built using Cosmos SDK here.
Chorus Commission: 5%
Withdrawal Delay: After withdrawing, your staked funds will only become accessible after the unbonding period (usually 21 days) has passed.
Slashing: You can get slashed (loss funds) in case the validator you are delegated to commits an offense. Make sure to do due diligence to minimize this risk.
Re-Staking: You need to withdraw rewards and re-stake them with some frequency if you want to make use of compounding returns.
2021 was an incredible year for Proof-of-Stake. As a major staking provider, we are keen to explore new ways to give back to our delegator community that enables us to pursue our mission to advance the staking ecosystem. For this reason, we decided to initiate the first NFT airdrop to our Solana delegators (see also the official announcement post covering the basics and our reasoning for the ‘Reaction’ drop). In this post, we want to expand on our collaboration with CoherenceNFT going deeper into the background of this initiative and on how our snapshot of on-chain data is impacting the generated art.
After Uniswap’s initial $UNI airdrop, there have been many further iterations to reward initial users and to bootstrap a community of dedicated users. While some airdrops currently try to form a community based on on-chain activity without much of a product (see $SOS and $GAS), others are trying to bring valuable users into their communities; this can especially be seen in the Cosmos ecosystem. Here, Osmosis led the way by airdropping a large portion of tokens to valuable Cosmos community members, an example many others are following, a recent ambitious example being the Evmos Rektdrop. As a validator, we found ourselves in a slightly different situation. We already have a sizable community of delegators earning rewards on their staked assets with us and we wanted to give them something unique to thank them for their support while working towards a larger goal.
We realised that NFTs could serve as a gateway for our ambitions to form an engaged community enabling us to reward our most valued supporters in a crypto-native way. Ultimately, we aim to weave NFTs — including the Reaction drop — into our products and services in creative ways. Stay tuned and hold onto your Reaction NFTs to get access to unique benefits as we explore the possibilities enabled by them!
We decided to begin in the Solana ecosystem, to which we attribute a lot of our success and which has a flourishing NFT ecosystem and low fees; uniquely enabling our initial concept: a large-scale NFT airdrop that is using on-chain data to create art with differing rarities based on our delegators’ profiles. We took a snapshot of the stake accounts delegated to the Chorus One public validator on Dec 8th, set a threshold for delegations of above 0.1 SOL, and aggregated addresses with multiple stake accounts. This resulted in 3,600 unique NFTs which we — in collaboration with CoherenceNFT — decided to further break down into 9 rarities. The NFTs differ in qualities depending on their rarity. This applies to the colours used, which range from new stakers which are coloured in Chorus One greens, to medium duration stakers that are coloured in Solana’s brand colours, to long-term stakers that receive a mix of both. In a similar fashion, the thickness of the lines used in the artworks depends on the amount of stake going from thin for lower amounts of stake to thick for large stakers. The chosen parameters resulted in the distribution illustrated in the image below.
Conclusion
We are thrilled to have started our foray into NFTs and are looking forward to expanding this effort and engaging with various other web3 tools complementing our services. Stay in the loop by jumping onto our Discord, Telegram or showing us your NFTs on Twitter. And while you do that, why not consider staking with us too? Who knows, you could lay your hands on another surprise NFT in the future!
We want to thank CoherenceNFT for this collaboration and are looking forward to engaging with other artists and projects in the NFT space in the future!
I’m excited to work with Chorus One to grow the Solana NFT community by creating an asset to expand the benefits offered to Chorus One stakers. More companies entering the NFT space are making NFT utility and adoption a reality. I’m hoping a broader and more diverse set of businesses and creators are inspired by this to make use of blockchains as a way to fulfil their visions. From a creative point of view, it was really challenging and inspiring to use a new creative mode, where I had to design in advance to reward different ranges of users according to the desired characteristics of the Chorus One team
CoherenceNFT
Today, we are excited to announce that we are airdropping 3600 NFTs to all of our Solana delegators that stake more than 0.1 SOL with us. We have teamed up with CoherenceNFT to work on Chorus One’s first-ever venture into NFTs. Solana addresses that are eligible for the airdrop can be found here. We took a snapshot of all delegators that stake more than 0.1 SOL with us on 08-Dec-2021 at 10:58:37 AM UTC.
To the best of our knowledge, ‘Reaction’ is the first-ever large-scale validator NFT drop. We thought surprising our Solana delegators with a gift in the form of NFTs would be the perfect start to the new year.
We decided to drop Chorus One NFTs to reward different clusters of delegators that have chosen to stake with us since the inception of Solana Mainnet-Beta. These NFTs will be used to give their holders an on-chain identity. In 2022, we will use these identities to personalise our validator services via a variety of reward tiers. We will be giving our delegator community exclusive utility related to Chorus One’s services and beyond. In future, we will have another post outlining how NFT rarities were determined and the impact rarities have on utility.
For those who are reading this and wondering why we’re only rewarding our Solana delegators - don’t worry as our NFT strategy will be multi-chain! We have decided to reward our delegator community on Solana first because it is our most important network that also happens to be the home of a vibrant NFT community. However, we have active plans to reward delegators on other networks with NFTs in the near future as we want to ensure as many of our delegators as possible are rewarded for choosing to stake their assets with us. It is also not too late to stake SOL with us on Solana, as it’s likely that we will continue future NFT drops for our Solana delegators — we want to reward newcomers too!
The drop of ‘Reaction’ is just the beginning of our web3 strategy. We are looking forward to experimenting with web3 and NFTs by making use of on-chain data in ways never done before by a staking provider. For example, we have just announced a collaboration with Portals, a metaverse in the Solana ecosystem. Initiatives like this will play an integral part in supporting our mission to advance the Proof-of-Stake ecosystem by helping to get people interested in securing decentralized networks such as Solana.
