UPDATE: now with PHOTON removed.
This document is a work in progress. This document assumes familiarity with the current workings of cosmoshub4 as of Oct 11th 2022. What is described here are modifications to what already is. This clause will be removed with future revisions, and the corresponding parts of the document updated with a full description of the constitution of the hub.
We the people of the Cosmos, in order to create a free world, enable voluntary and borderless transactions, facilitate permissionless innovation, ensure economic security, cater for economic and technological development, allow for the creation of sovereign zones, and maintain order among sovereign zones, do ordain and establish this Constitution for the Cosmos Hub.
Cosmos is the interchain network composed of many sovereign zones connected by IBC.
A zone is an independent chain (or an application hosted on a parent chain) with a well defined governing body or bodies that dictate the governance and economic rules internal to that zone. A zone by definition is sovereign or partially sovereign. A treasury DAO of the Cosmos Hub is partially sovereign.
IBC is short for Interchain Blockchain Communication, and includes all protocols that allow one chain to communicate state or messages with another chain by tracking the consensus state of the other.
The ATOM is the primary staking token of the Cosmos Hub.
ICS is short for Interchain Security, and includes all protocols that allow the consensus of one chain to be partially or wholly secured by mechanisms on another chain.
ICS1 also known as Simple Replicated Security, includes all protocols where the validator set is simply replicated across multiple blockchains and slash conditions are always submitted to a root chain.
ICS2 includes all protocols where slash conditions for complex failure scenarios of one validator set are handled by another validator set, where slashing affects tokens on the latter validator set.
ICS2A includes all protocols of ICS2 where stake is entirely managed by the Cosmos Hub (in the form of ATOMs or other derivatives).
ICS2B includes all protocols of ICS2 where stake is entirely managed by the logic of the other chain.
Auto-staking is staking across all current validators in proportion to their voting power. For example, if a validator that had 10% of the voting power were to get slashed 30% on the Cosmos Hub, and 50% of ATOMs were either staked onto the Cosmos Hub or free (not auto-staked), everyone who auto-staked ATOMs on the Cosmos Hub would get slashed 1.5%. Inflationary ATOMs are paid to auto-stakers such that they do not suffer from the inflation rate of ATOMs.
A two thirds supermajority is where more than 2/3rd of all participating staked ATOMs votes YES and the vote is above the current governance quorum value and the voting period has concluded. ABSTAIN votes do not count toward the 2/3.
This Constitution of the Cosmos Hub, hereinafter “the Constitution” hereby establishes the foundations of the governance model, economical model, and operating system of the Cosmos Hub.
All subsequent governance proposals must be in alignment with the provisions of the Constitution, and each proposal's proponents and all active governance voters are required to ensure consistency between such proposals and the Constitution.
The Cosmos interchain network is composed of many sovereign zones such as the Cosmos Hub.
The Cosmos Hub is composed of many chains including the root hub chain where staking and governance transactions are committed and executed, but also other chains secured by ICS that are subservient to the governance of the root hub chain, hereinafter "Hub Governance".
Other sovereign zones that are completely or partially secured by Cosmos Hub ICS by definition have their own governance mechanism, and the Cosmos Hub principally enables and follows the will of the governance of such sovereign zones with regards to the pegged tokens originating from said zones, except in well defined exceptional circumstances that involve bugs, theft, or harm to the Cosmonauts of the Cosmos ecosystem.
The mission of the Cosmos Hub is to create a new world allowing for permissionless yet secure interactions between the Cosmonauts of Cosmos in the Solar system.
The objective of the Cosmos Hub is to provide a classical BFT proof-of-stake multi-token payment and transfer system; and to scale the security of the platform to many applications hosted in other zones via Cosmos Hub ICS.
Every person has the right to become a Cosmonaut and can freely engage on the Cosmos Hub. As such, every Cosmonaut has the right to own at least one address on the Cosmos Hub.
Any Cosmonaut can also become a Citizen of the Cosmos Hub by using their address to stake ATOMs toward the Cosmos Hub and participate actively in governance. The status of citizenship is granted in an autonomous manner.
The Liberty and Property of all Cosmonauts engaging in the Cosmos Hub is hereby guaranteed. Any restriction to the Liberty and Property of Citizens on the Cosmos Hub can be done only through the Cosmos Hub's governance.
Every Cosmonaut has the right to receive benefits from their engagement in the Cosmos Hub, including rights derived from held or staked ATOMS in line with the provisions of this Constitution.
Every Citizen allows the Governance of the Cosmos Hub to restrict their staked ATOM property by partial or full slashing according to their voting activity.
The root hub chain of the Cosmos Hub is uniquely identified by chainid "cosmoshub". This chain commits and executes transactions that serve the following functions:
- governance voting
- intra-hub token transfers
- IBC token transfers
- ICS1 and ICS2 management
The working language of Cosmos Hub governance is English.
The quorum necessary for a proposal to be valid shall depend only on number of bonded ATOMs.
The governance process must extend the voting deadline to ensure at least 2 weeks of voting after the minimum quorum has been met.
UX interfaces that present the results of voting on governance proposals should also display the content of the memo field of each voting transaction such that the reason for the vote can be seen.
TODO: fill in rules of cosmoshub4 governance.
Every Cosmonaut allows any other Cosmonaut to create full or partial airdrops of new tokens to any chain using the distribution of any token on the Cosmos Hub at any time.
Every Citizen allows any Cosmonaut to modify their pro-rata of their airdrop portion by partial or full slashing based on their cryptographic voting activity according to well defined principles at any time.
The Cosmos Hub governance may establish one or more transparent and accountable Treasury DAOs by simple majority vote.
The operations of the Treasury DAO must operate on an ICS secured zone outside of the hub. As an exception, the tokens of the Treasury DAO may reside on the the Cosmos Hub as a m-of-n multisig account where n is at least 3 and m is at least 1/2 of n, where each signatory is an authorized member of the Treasury DAO and Citizen of the Cosmos Hub.
The Treasury DAO shall be composed of Cosmonauts, and at the top Executive Board level be composed of one or more Citizens. All Cosmonauts and Citizens of Treasury DAOs including their Oversight Committee must have public and known real personal identities.
To enable the well-functioning of Treasury DAOs and the separation of powers in the utmost interest of the Cosmos Hub, each member can hold just one type of role within each Treasury DAO.
The members of the DAO must perform efficiently in their role in line with their job description. They are accountable to each DAO’s Oversight Committee and the Hub Governance. They can be dismissed from their functions by a two-thirds majority vote by the DAO’s Oversight Committee or the Governance Hub.
The role and functions of the Executive Board shall be further developed through governance proposals within each DAO, unless the DAO chooses to defer to Cosmos Hub governance by Citizens.
Each Treasury DAO shall have an Oversight Committee composed of any number of Cosmonauts. The Oversight Committee must have at least the right to freeze all transfers of tokens from the Treasury or its designated m-of-n multisig account on the Cosmos Hub.
The one and only economic incentive model of the Cosmos Hub is the collection of market-based transaction fees from a large number of transactions across all the chains secured by the staking of ATOMs on the Cosmos Hub including ICS1 hosted blockchains.
The ATOM functions as voting shares, economic incentive shares, and security bond for the Cosmos Hub.
To preserve the security and identity of the acting governance and validator set, the inflation rate of the ATOM is made to vary over time to target 2/3 of all ATOMs. The maximum inflation rate is 20% non-compounded per year. There is no minimum inflation rate, and it can even be negative (deflationary).
Inflated ATOMs are paid to bonded ATOM holders in proportion to each delegator's staking amount.
Staked ATOMs are converted to Bonded Share Units.
The Atom Unbonding Period shall be 3 weeks.
Redelegation is allowed twice per Atom Unbonding Period for any delegation.
Double signing at any height/round/step results in slashing penalty that is proportional to the total amount of double signing by all validators for that height/round/step, with evidence collected during the Atom Unbonding Period; the penalty shall range from +0% to 100% of the Upper Slashing Limit in linear proportion, the latter when 1/3 of voting power double-signs.
Complex signing failures (those that require +1/3 to coordinate) shall result in slashing the Upper Slashing Limit.
The Upper Slashing Limit shall be 50%. This parameter may be increased by a two thirds majority of the Cosmos Hub. In cases where there is sufficient evidence of malice and intent, this parameter may be overruled by a simple majority of the Cosmos Hub on a per-case basis up to 100%.
Liquid staking may only be supported through interchain accounts (aka non-native liquid staking).
To limit the amount of liquid staked tokens so as to reduce systemic risk from liquid staking, there shall be imposed a 5% tax (the "Liquid Staking Tax") on all rewards paid out to staked interchain accounts at time of reward withdrawal. This Liquid Staking Tax parameter may be adjusted by a two thirds supermajority vote of the Cosmos Hub.
If the amount of ATOMs staked using interchain accounts exceeds 20% (the "Liquid Staking Factor") of the total staked ATOMs, the Liquid Staking Tax shall automatically increase by 1% per month. The Liquid Staking Factor parameter may be adjusted by a two thirds supermajority vote of the Cosmos Hub.
TODO: simplify the above two rules.
(note: formerly an article on the PHOTON token)
Any inflation of ATOMs to the Community Pool or a designated Treasury DAO beyond the default inflation rate described in the Constitution shall require a two thirds supermajority vote of a special inflation governance proposal type.
The special inflation proposal can include a description of the purpose of the inflation, but cannot include any other modifications to the Cosmos Hub or its Constitution, nor the adoption of any new Treasury DAOs.
The Common Pool tax proceeds shall apply to transaction fees and inflationary ATOMs, and shall be sent to the Community Pool.
The Common Pool Tax rate shall initially be 2%, but can be increased up to 50% by two thirds supermajority of the Cosmos Hub governance.
New updates to the Cosmos Hub should be broken down into independent components and discussed/proposed separately with adequate time between, regardless of any omnibus whitepaper.
The Cosmos Hub shall not have any VM functionality, but shall be plainly implemented in a single garbage collected language as reference (namely Go); and other clients may implement all or portions of the stack in another language like Rust.
The only cryptographic assumptions allowed to be used by the Cosmos Hub including its consensus protocol shall be Ed25519 and Secp256k1 elliptic curves, and RIPEMD160 and SHA256 hash functions.
No zero-knowledge proof systems may be adopted on the Cosmos Hub even if they are composed of the approved primitives.
The rules of this article may only be changed by two thirds supermajority vote of the Cosmos Hub.
For the sake of decentralization, accessibility, accountability, and security, the Cosmos Hub and each ICS zone shall be restricted such that each can run on a commodity computer.
This constitution may be modified or additional parts and rules appended by two thirds supermajority of Cosmos Hub governance.
This is not part of the Constitution
The notion that ATOM is a "memecoin" ignores the obvious and original business model for the hub -- token transfer fees. Bitcoin and Ethereum gas transaction fees are in the 10s/100s of millions, and we haven't even gotten to VISA scale yet. ATOM is not money, it's VISA shares, IBM shares, and FED shares (but where ATOM stakers are general partners rather than limited partners).
It's an alternative to the status quo that Bitcoin originally wanted to be, but more. Well, imagine what kind of social manipulation we must be under, to be pursuing such a dream.
The best part is we've done most of the work already. With minimal ICS the simple-transfer-zones are already more or less done. We're 90% done with massive scale MVP, and after that scaling will be relatively easy. AND this ATOM1 hub is a minimal hub that zones will want to use. The product market fit is already there. It's simple, and we are already positioned for it. It is neutral to application zones that provide more functionality than token transfers.
As IBM's CEO once said, the secret cash cow of IBM is transaction processing.
IBM Mainframe=FT, Tendermint=BFT
Cosmos is the VISA network built upon this decentralized BFT mainframe system. Always was, and should remain.
New functionality can always be permissionlessly added on top of this base ATOM1 framework. The gno.land prop69 #exitdrop is a demonstration of value-add to the Cosmos Hub, as it will provide Gnolang smart contracts while IBC pegging to the Cosmos Hub for tokens.
Using ICS, it should be possible to run new Gnolang VM powered zones secured by the Cosmos Hub, but also IBC connected to the gno.land chain for importing logic hosted on the gno.land "github" (and paying gas fees & license fees to each).
Say there are 10,000 zones. Say a zone fails and it requires manual intervention. With 10,000 IBC connections you require 10,000 zones to all agree on recovery procedure; will never happen. But a zone connected to a more secure hub will be protected when it needs intervention.
Another need for hubs; uniformity of guarantees. You need a hub to coordinate shard zones where governance/policy and staking gets applied to all shards. Otherwise, you don’t have one system of guarantees, you have many independent chains. Need to scale sendtx, might as well ICS.
UPDATE: My thinking on this section has evolved since PHOTON can be implemented as auto-staking on top of ICS1.
The staking ratio today on Ethereum PoS is 12%. With massive adoption, unless we have complete laymen involved in staking, and with ETH becoming money, the stake ratio should fall even lower, perhaps even to <1%. At that point it becomes easy to coordinate a fund to take over the consensus process of the chain. PoW networks have two “tokens” the mining infrastructure (which can be bought or sold, and also is “inflationary”) and the coins themselves. This separation allows Bitcoin to become widely adopted without worrying about security vulnerabilties, because even the largest of whales cannot simply buy 1/2 of mining infrastructure. It isn’t a superfluid market, which makes it more secure.
(In biology, it’s the difference between Eukaryotic (cell nucleus) and Procaryotic (no nucleus) cells. Evolution has proven that multicellular (inter-cellular) systems like us are generally Eukaryotic. They both exist, but complexity demands more intracellular security.)
Imagine how easy it would be to create a fund and simply buy VISA… well not even buy, but simply bond the capital of the market cap of VISA, of $391B. That’s a lot of money, but if bonding that capital means one can take control over the financial system, people would lend their money in a heartbeat. But thankfully VISA shares are not money, and there are probably plenty of shareholders who don’t want to sell.
Once there are ATOMs and PHOTONs, and the hub finds good ways to incentive PHOTON usage, we will end up promoting PHOTON more than ATOMs, and the market cap of PHOTON should theoretically eclipse that of the market cap of ATOM. There’s much more money in circulation than the market cap of VISA/IBM/FED combined.
Finally, with the rollout of ICS1 and ICS2, simple-transfer zones and other application zones, the inflation rate of the ATOM may even become negative to maintain the target of 2/3 bonding.
Liquid staking somewhat usurps the point of bonded staking, and thus by nature its utility is limited. It is already supported through the usage of interchain accounts, so that is all that needs to be done to support it. Rather we should limit liquid staking and other systemic risks by limiting how much can be bonded through interchain accounts.
Global governance consensus driven investments will fair worse than local competition driven investments, like central planning fails. - where-ever possible we should ensure that intelligence is preserved or amplified in decisions. The way to ensure that good decisions are rewarded and bad decisions punished, is to require individual decision makers to put skin in the game. This is why innovation happens in the private sector, and why governance funding is seen as a corruption of private sector innovation, and why central government planning historically has led to failure. It turns the incentive model of individual merit, into a game of politics. This is true even when decision making is weighted by relative capital.
We can see this clearly in the private sector investment world. The best performing funds do not have their decisions made by weighted voting of LPs. Rather, the LPs are free to join and leave, while the investment thesis of each fund is maintained by select GPs. The ATOM2.0 tokenomics model is akin to taxing all investment funds and putting the proceeds into a giant super-fund controlled by LPs. If this were to happen in the real world, the super-fund would create such a large distortion of incentives as to destroy innovation in general. It would turn into a game of media/mind/political control, and actual innovators would fail to get the funding they need, and even if they did get funding, the entire private sector would become swamped with the resulting dumb money, making it harder for innovators to compete with incumbent politicians. The world would not accept such a policy toward central planning, and we should not accept it either, as it will lead to sure failure not only of the Cosmos Hub, but of the entire ecosystem.
This Constitution defines Treasury DAOs that have local decision making authority, where Treasury DAOs compete with each other.
The powers of the world as represented by the WEF is intent on implementing the mark of the beast. As per the Book of Revelation,
- The nations of the world were deceived by pharmakia/medicine (Revelation 18 23)
- The mark (in original Koine greek, a needle prick) is required to buy or sell (Revelation 13:17)
- The mark gives you sores (Revelation 16:2) // NOTE: have no fear about it even if you got the shot.
How could it be that a two millenia old document can predict what is happening today? Well, most people don't read the bible at all, and anyone can see the light and turn into a white-hat. It appears to me that the white-hats have shepherded the black-hats into following a script that ends up exposes them when it is too late. And now the "true Christians" have indeed exposed the NWO agenda, and this awareness is growing exponentially.
This control grid was leaked by whistleblower Senator Larry McDonald in the 70's, whose plane was soon after shot down. (ODY)(TWT). The "monolithic and ruthless conspiracy that relies on covert means" was leaked before by JFK who was assassinated in 1963. (ODY)(YT). Now we have experienced the NWO control grid by the WEF, and its young global leaders, such as Fauci, Gates, Gavin Newsom, Trudeau; and even experiencing the war between Zelenski and Putin. The WEF, whose leader Schwab boasted about having infiltrated government cabinets, also wants us to "own nothing and be happy". If it isn't clear enough, their logo even includes a subtle 666.
The fact of the matter is, we probably do want some regulatory system to deal with large scale theft of coins resulting from bugs or human error/malice. Even if such a regulatory system is not imposed upon any zones, zones may want to voluntarily adopt some kind of regulatory policy. And zones probably want to enforce these policies across zones that choose to adopt the same policies.
It follows, that in a minimal system, zones should be allowed to choose their own set of regulatory policies, and the Hub can help enforce these policies when it comes to IBC transfers across zones, or from hub to zone. From the perspective of the Hub, this is still a permissionless, voluntary system.
When it comes to transactions on the hub, and transactions from zones to the hub, we should adopt the most minimal regulatory system. We could arguably do nothing--until it is too late, and we learn our lesson that we need something in the case of large scale theft from malice or bugs. The minimal nonzero policy we can adopt, is to enable one or more bonded DAOs to designate one or more addresses as being affected, with full justification, to temporarily freeze those coins, where the coins will unfreeze automatically until the hub's governance votes to act upon the frozen coins or to freeze the coins for longer to determine the facts. Something along these lines is a minimal regulatory system. Also, it is probably sensible for the hub to implement a kind of delayed transfer system, so that accounts with large token amounts can be protected by this regulatory system in the case of theft. Perhaps accounts can opt out of this transfer-delay protection.
The above minimal regulatory system still begs for a full system of checks and balances. That's another rabbit hole for another issue/document. The ATOM1 constitution hints at a system of checks and balances, but IMO it isn't complete yet, at least not in its current written form.
The challenge is to (a) further refine and minimize the aforementioned hub internal regulatory policy, and (b) to define the inter-zone permissionless regulatory framework. With these implemented, the hub can ensure the rights to property, protect property in the case of theft, and allow zones to permissionlessly set their own policies. This is a critical architecture/constitutional/regulatory problem we should be discussing today. Until it is implemented, IMO crypto will not be ready for the general population.
The problem is, getting this wrong is significantly worse than not implementing it. When done wrong, either it will become destructive (tokens being frozen/stolen by the regulatory system), or it will become abusive (think 1984 global dictatorship as per the NWO agenda, followed by global human depopulation). It follows that the Cosmos Hub should not implement a regulatory framework such that it can allow the permission innovation and proofing of regulatory frameworks over time. This best increases the chances of success in designing the right regulatory framework.
A Rule should be added to the constitution to succinctly represent the above paragraph.
For more discussion, see https://forum.cosmos.network/t/atom-one-constitution-proposal/7514 and cosmoshub@googlegroups.com
Also see https://github.com/jaekwon/cosmos_roadmap/tree/master/shape_of_cosmos for more a previous essay on interchain staking and other related topics.
- Jae Kwon - main author
- Paul Susman - structure and various contributions
- Manfred Touron - increase in redelegation
- Thank you Cosmonauts for much feedback