In an effort to boost DeFi activity within the Cosmos ecosystem, Cosmos has dedicated funds and received a significant token windfall in return. The proposal, introduced last year, aimed to introduce liquid staking and interchain DeFi to the Cosmos Hub, the main point of contact for various blockchains within the ecosystem. The proposal requested 150,000 ATOM tokens, equivalent to approximately $950,000, to be invested in projects that would bring liquid staking and DeFi activity to the interchain through replicated security. One of the projects, Neutron, a CosmWasm blockchain enabling smart contracts deployment across multiple blockchains, received 50,000 ATOM tokens. The remaining 25,000 ATOM tokens are currently being voted on for reallocation to Neutron. Furthermore, with the launch of Neutron, an estimated $12 million in an airdrop will be returned to the Cosmos Hub, surpassing the original Prop 72 allocation by 28 times.
Cosmos Devotes Funds to Boost DeFi Activity
Overview
Cosmos, the popular blockchain platform, has recently made a significant move to boost decentralized finance (DeFi) activity. This move comes in the form of Proposal 78, which aims to introduce liquid staking and interchain DeFi into the Cosmos ecosystem. The proposal has received widespread support and is set to have a positive impact on the development of DeFi within the network.
Introduction to Proposal 78
Proposal 78 was first introduced in May last year as a means to enhance the capabilities of the Cosmos ecosystem. The proposal focuses on the implementation of liquid staking and interchain DeFi, which are seen as crucial components for the growth and success of the network. By introducing these features, Cosmos aims to attract more users and developers to its platform and further solidify its position as a leading player in the blockchain industry.
Purpose of Proposal 78
The main purpose of Proposal 78 is to allocate funds to projects that can bring liquid staking and DeFi activity to the Cosmos ecosystem. The proposal requested a total of 150,000 ATOM tokens, which are currently valued at approximately $950,000. These tokens would be used to invest in projects that can leverage the Cosmos technology to enable liquid staking and interchain DeFi.
Allocation of ATOM Tokens
As part of Proposal 78, 50,000 ATOM tokens were allocated to P2P, a proof-of-stake validator and remote procedure call (RPC) node provider, to build Neutron. Neutron is a layer-1 CosmWasm blockchain that allows for the deployment of smart contracts across multiple blockchains. This allocation represents a significant investment in the development of Neutron and its potential to bring interchain DeFi to the Cosmos ecosystem.
Investment in Neutron
The investment in Neutron through the allocation of 50,000 ATOM tokens demonstrates Cosmos’ commitment to promoting the growth of DeFi within its network. By supporting projects like Neutron, Cosmos aims to foster innovation and expand the range of possibilities for users and developers in the decentralized finance space.
Reallocation Proposal for Neutron
Currently, only 25,000 of the initially allocated 50,000 ATOM tokens have been received by the Neutron team. As a result, a proposal is underway to reallocate the remaining 25,000 ATOM tokens from P2P to Neutron. This reallocation will ensure that Neutron has the necessary resources to continue its development and bring the benefits of interchain DeFi to the Cosmos ecosystem.
Voting Results for Neutron
At the time of writing, nearly 97% of voters are in favor of Neutron receiving the additional 25,000 ATOM tokens. However, the proposal has not yet reached quorum, and voters have until August 24 to cast their votes. The overwhelming support for Neutron’s reallocation proposal is a testament to the community’s belief in the project’s potential and its ability to drive DeFi activity within the Cosmos ecosystem.
Allocation Returns to Cosmos Hub
In addition to the reallocation proposal, the launch of Neutron on the replicated security (RS) platform will result in significant allocation returns to the Cosmos Hub. An estimated $12 million will be sent back to the Hub as part of an airdrop, representing an expected initial return of 28x the original allocation from Proposal 72. This substantial return further reinforces Cosmos’ commitment to promoting the growth of DeFi within its ecosystem.
Airdrop to Cosmos Hub
As part of the agreement between Neutron and the Cosmos Hub, 25% of all transaction fees and 25% of all miner extractable value (MEV) revenue will be allocated to the Hub. This ensures a continuous source of revenue for the development and maintenance of the Cosmos ecosystem. The airdrop of tokens from Neutron to the Cosmos Hub further strengthens this arrangement and demonstrates the positive impact of collaboration within the blockchain industry.
Neutron’s Proposal for Airdropped Tokens
In light of the airdrop to the Cosmos Hub, Neutron plans to submit a proposal to enable the use of airdropped tokens for Neutron governance. This proposal aims to empower the Neutron community by giving them a say in the decision-making process and ensuring that their interests are represented in the development of the project. By involving the community in governance, Neutron aims to create a more robust and inclusive ecosystem for interchain DeFi within the Cosmos network.
In conclusion, Cosmos’ decision to devote funds to boost DeFi activity through Proposal 78 is a significant step towards the growth and development of Decentralized finance within the Cosmos ecosystem. The allocation of ATOM tokens to projects like Neutron and the subsequent reallocation proposal demonstrate Cosmos’ commitment to promoting innovation and expanding the possibilities for users and developers in the DeFi space. With the support of the community and the allocation returns to the Cosmos Hub, the future looks bright for Cosmos and its endeavors in the world of decentralized finance.
