Dear Cosmonauts, dear Lunatics,or whichever community you feel the closest ties to - We have likely just witnessed the most devastating week in crypto history.Within the matter of a few days, around $50 bn. worth of assets has evaporated in front of our eyes. To put that into perspective, let us look at a few past events: the 2016 DAO hack was $50mn. at time value, February´s Wormhole bridge hack $320mn., and Ronin around $600mn.Did $LUNA and $UST collapse out of the blue sky? Certainly not. Considering the strategic sophistication and timing of this economic attack, we can state with little doubt that what started unfolding was the result of a carefully coordinated effort to turn $LUNA into ashes. I will not dive deeper into how the attack unfolded in detail since there are good resources explaining the process already, e.g., by <a href="https://twitter.com/Cov_duk/status/1525698665838411776?s=20&amp;t=-2C37DBwiMEmbm6emcKt7A" target="_blank" rel="noopener noreferrer">Covduk</a> or <a href="https://twitter.com/Route2FI/status/1524775762074783746?s=20&amp;t=-2C37DBwiMEmbm6emcKt7A" target="_blank" rel="noopener noreferrer">Route2Fi</a>. However, I recommend you read those if you have not had a chance to get a good understanding of the collapse yet.Who is the culprit, then? There have been rumors of Citadel and BlackRock being involved - but both have publicly denied any allegations. Significant short positions from individual crypto traders [Gigantic Rebirth](https://twitter.com/GiganticRebirth) and funds like [Galois Capital](https://twitter.com/Galois_Capital) might also suggest direct or indirect involvement, but who are we to know as of now? Whoever is behind this, kudos to you. You managed to break one of the most passionate communities crypto has ever seen, an ecosystem that offered some of the most ingenious DeFi dApps, and the narrative that just until a few days ago was perceived by many as the “safe haven of crypto.”<h1>But Have We Lost Everything?</h1>The immediate effects of $LUNA´s and $UST´s collapse were devastating. Many fellow retail investooors had a significant portion of their portfolio in either of the two coins. Not a few even put their life savings into Anchor Protocol. <a href="https://www.thestreet.com/investing/cryptocurrency/luna-coin-collapse-fuels-social-media-stories-of-financial-ruin" target="_blank" rel="noopener noreferrer">The reactions on CT</a> and Reddit immediately following the incident exposed both the beauty and the beast of the crypto community. One could witness comments and statements filled with incredible compassion and a plethora of remarks branded with such an extent of cynicism and glee that is nothing short of disgusting. How about you toxic Bitcoin or Eth maxi spit your - in retrospect - such a clever comment like “We all knew it would fail. How could you be so dumb to put your life savings into this Ponzi” right into the face of the children crying for their lost father who just committed suicide after losing the family´s house? We are all in for a gud meme here and there; that is essentially what our crypto community is being nourished from, but think twice before kicking someone lying on the ground already.We need to put into perspective what $LUNA and the Terra ecosystem were fighting for. Yes, there have been behaviors so prone to ignorance and presumptuousness by the Lunatics and frequently Do Kwon himself that it might feel hard to forgive this community immediately. Yes, there have been approaches suggested and routes taken by Terra vastly different from what other ecosystems might have prioritized. And yes, we can only hope that all those burned by this terrable implosion learned their lessons and will reflect with intellectual honesty on what they can do better in the future. Nevertheless, we need to acknowledge that in the end, we are all - including the Lunatics, just as much as any other crypto community - fighting for a more decentralized world, a monetary system free of censorship, and a financial system with more transparency for all. We will only be able to move towards this goal in increments, not from zero to one hundred, and we will be bloody better served if we try to move in a little more unity and with a little less cult-like competition of one niche vs. the other. In some sense, yes, mfer, we were all the peg.I genuinely hope last week&#39;s developments will serve as an insightful case study from which the whole crypto community can learn, some members more in this direction, some more in the other. However, let´s take a look at the second-order effects of this.<h1>The Aftermath</h1>To also cover Do Kwon briefly, I would argue it is still up to debate what responsibility he should and will bear. Still, he certainly contributed his part in letting this once bastion of DeFi collapse. There is a plethora of remaining open questions, and it is fair to classify some of the procedures by the LFG as shady, to say the least, depending on which <a href="https://newmoneyreview.com/index.php/2022/05/16/terra-operators-bailed-out-crypto-whales/" target="_blank" rel="noopener noreferrer">allegations</a> turn out to be true. Just as on the side of those who actively attacked $LUNA, we also cannot make a final verdict on those who could have prevented the attack - or who could have at least soothed its fatal consequences. Regardless of what can ultimately be considered fair judgment, some people will now look for a <a href="https://watcher.guru/news/suspect-who-invaded-terra-founder-do-kwons-home-reveals-his-motive" target="_blank" rel="noopener noreferrer">target</a> to blame. It is reasonable to assume that some of those affected are not particularly the kind of people one wants to mess with. For now, it might be that Do Kwon´s liveliness is as pegged to the security of his estate as the financial lifework of some investors was pegged to the Dollar. Hopefully, the prior will not face the same fate as the latter did a few days ago.Terra was by far the largest chain running on Cosmos. Given the sovereign and independent nature of IBC-enabled chains, other chains and the Hub itself remained unaffected by Terra´s collapse from a security standpoint. The failure of individual chains in the Cosmos ecosystem is not a bug but a feature. One can only imagine the risks if the hyperinflation of $LUNA had posed additional security risks to other IBC chains. I can recommend this <a href="https://twitter.com/buchmanster/status/1525150966139469825" target="_blank" rel="noopener noreferrer">thread by Ethan Buchman</a> to see his take on the effects of Terra´s collapse on Cosmos. However, $UST played a crucial role in Cosmos´ DeFi ecosystem. Many popular pools on Osmosis DEX were paired with $UST, and it was considered the defacto stablecoin across most Cosmos DeFi dApps. It will be an exciting competition to witness which stablecoin(s) will now rise to the top, given they are an essential component of every DeFi ecosystem. To name a few, Agoric, Axelar, Comdex, and Shade Protocol are currently all pursuing efforts or have launched stablecoin(s) (derivatives) already. <a href="https://twitter.com/ThyBorg_/status/1525148354321141760)" target="_blank" rel="noopener noreferrer">Thyborg wrote a thread</a> covering some of the stablecoin-related actors in the Cosmos eco.In the short- to mid-term, we might see declining interest in the Cosmos eco from other communities since many relate Terra very closely to other IBC chains. Still, I am not worried about any long-term negative impacts. In contrast, many of the buildooors behind the dApps on Terra are now looking for a new home, and some IBC chains might offer suitable shelter. Specifically, Juno and Secret Network come to mind. If CosmWasm should ever be implemented into the Hub, some dApps might even deploy there.Another aspect that one cannot ignore is the impact of $UST´s collapse on stablecoin regulation. We just saw $18 bn. market cap evaporate in front of our eyes during a time in which stablecoins become a more prevalent to-do on <a href="https://www.bloomberg.com/news/articles/2022-05-12/yellen-says-terra-meltdown-demonstrates-crypto-stablecoin-risks" target="_blank" rel="noopener noreferrer">regulators´</a> agenda day by day. It is yet too early to state how the recent events will shape regulators´ views precisely. However, for those pushing for stricter regulation and more government authority in the realms of DeFi and crypto, $LUNA´s and $UST´s collapse must have felt like a week-long Thanksgiving.$UST has been the only algorithmic stablecoin that ever achieved significant adoption across many chains and DeFi dApps. There might be algorithmic stablecoin models in different shapes and forms in the future, but this collapse has undoubtedly wreaked havoc on trust in such models. Following the downfall of $UST, we could also witness depegs swapping over to other algo stables like <a href="https://coinmarketcap.com/currencies/dei/" target="_blank" rel="noopener noreferrer">$DEI</a> from <a href="https://deus.finance/" target="_blank" rel="noopener noreferrer">Deus Finance</a>. In the short term, even (more or less) collateralized stables such as <a href="https://coinmarketcap.com/currencies/tether/" target="_blank" rel="noopener noreferrer">$USDT</a> experienced a temporary and slight depeg. During such times of uncertainty, the safest options are overcollateralized stables like $DAI and frequently audited USD-baked stables such as $USDC.Lastly, the question remains what the future of Terra, its dApps, and its community will look like. The chain was vibrant, most of the dApps were of high quality with a pleasant UX, and the community embodied passion and excitement for their beloved ecosystem as few others managed. Given that Terra is an IBC-enabled chain, future engagement with or on other IBC chains is likely. Teams may deploy some functionalities on the <a href="https://twitter.com/cosmos/status/1525220091629129729" target="undefined" rel="noopener noreferrer">Cosmos Hub</a> itself if CosmWasm is implemented in the future. Additionally, I would keep an eye on the roles which <a href="https://twitter.com/JunoNetwork/status/1525558743563395072" target="_blank" rel="noopener noreferrer">Juno</a> and <a href="https://twitter.com/ThyBorg_/status/1526291413003972608" target="_blank" rel="noopener noreferrer">Secret Network</a> will play concerning Terra dApps and the community. As they are both Layer-1 platforms, some Terra dApps might opt to deploy there if they view the infrastructure technology, the community, and the liquidity as suitable. For Terra itself, there have probably been as many recovery proposals released over the last days as <a href="https://decrypt.co/100791/terra-investor-mike-novogratz-breaks-silence-ust-luna-collapse" target="_blank" rel="noopener noreferrer">Mike Novogratz</a> having regretted getting a Luna tattoo. You can follow the proposals and their surrounding discussions on the <a href="https://agora.terra.money/t/terra-ecosystem-revival-plan-2-updated-and-final/18498" target="_blank" rel="noopener noreferrer">Terra Research Forum Agora</a>. Besides the proposal published by Do Kwon himself, you can also read many ideas originating from community members.<h1>The Takeaways</h1>To summarize, we can state that the collapse of $LUNA and $UST had a larger magnitude in terms of market cap destroyed as well as the number of users affected than any other prior major hack, exploit, or breakdown. We cannot yet predict the specific impact of this chain of events on various aspects, but it is reasonable to say that this fight is not over yet. From the perspective of retail investors, protocol teams, VCs, and regulators, there are many open questions and ways this situation was, is, and will be perceived.

Eclipse Gone South - A Luna Post Mortem Analysis?

Celestia: A Disruption In How We Do Blockchain?

<h2>What is Yield Me If You Can?</h2>Gm Frens, and welcome to another new format for our exclusive Frens Newsletter! In Yield Me If You Can, we will uncover the latest and greatest DeFi opportunities in and around the Cosmos. We will ensure we catch the juicy yields before they are gone and known to the masses! We will find them all from medium-risk lending to full-on degen leveraged yield farming! The best thing is that we will not only tell you where to find gud APRs and APYs but also show you step by step how you can use the respective protocol. If you would like us to cover a project or dApp that caught your interest, always feel free to hit us up on our <a href="https://twitter.com/frensvalidator" target="undefined" rel="noopener noreferrer">Twitter</a> or <a href="https://t.me/+8pdHY6nvy8Q2N2Qy" target="undefined" rel="noopener noreferrer">Telegram</a>! Our first edition will cover three yield opportunities in the Evmos ecosystem. Evmos is a Cosmos SDK proof-of-stake blockchain that is interoperable with Ethereum. This architecture enables devs to quickly deploy EVM dApps on Evmos, which in turn is interoperable with other IBC chains, e.g., Osmosis. <h2>850% APR With Staking?!</h2>Yes, you heard that correctly! You can currently earn around 850% APR just by staking $EVMOS. You probably did not think this staggeringly high yield would be our first DeFi opportunity, right?<h3>How Are These High Staking Rewards Possible?</h3>However, before you ape in, let us first understand where this crazy yield comes from. At genesis, 200mn. $EVMOS have been issued. <img src="https://images.prismic.io/frens/24fbd8ca-fe27-491e-8d13-4765c3ced8be_Screenshot+2022-06-15+181520.png?auto=compress,format" alt="null" /><a href="https://medium.com/evmos/the-evmos-token-model-edc07014978b" target="_blank" rel="noopener noreferrer">https://medium.com/evmos/the-evmos-token-model-edc07014978b</a>The illustration shows that 50% of the 200mn. $EVMOS, i.e., 100mn. were airdropped to the community; however, of these 100mn. $EVMOS only 23% have been claimed so far. While we can technically count the 100mn. as well as the 80mn. in the strategic reserve and the 20mn. in the DAO treasury towards the circulating supply, the latter are not liquid on the markets, nor are they being staked. If you don´t know whether you are eligible for the $EVMOS airdrop, check out <a href="https://app.evmos.org/mission-control" target="undefined" rel="noopener noreferrer">https://app.evmos.org/mission-control</a> and connect your Keplr wallet there. <a href="https://medium.com/evmos/claiming-your-evmos-rektdrop-with-keplr-cf4ad1114a84" target="undefined" rel="noopener noreferrer">This Medium article</a> from Tharsis Labs shows you how to claim your airdrop in case you encounter any difficulties.<img src="https://images.prismic.io/frens/993e1c80-274d-47c7-b22f-5c82fbc16e92_Screenshot+2022-06-15+181940.png?auto=compress,format" alt="null" />The current inflation rate of $EVMOS is around 140%, which will decrease yearly. Check out <a href="https://medium.com/evmos/the-evmos-token-model-edc07014978b" target="undefined" rel="noopener noreferrer">this Medium post</a> by Tharsis Labs and <a href="https://www.youtube.com/watch?v=IhzBZO6atUQ" target="undefined" rel="noopener noreferrer">our recent YouTube video</a> to get an A+ understanding of the $EVMOS tokenomics. Considering the time since the $EVMOS launch, our<a href="https://app.evmos.org/mission-control" target="undefined" rel="noopener noreferrer"> current circulating supply</a> is 217mn. $EVMOS. However, of these 217mn. only 117mn. are liquid since the 80 mn. in the strategic reserve and 20mn. in the community DAO is locked up (see the token distribution diagram above). <img src="https://images.prismic.io/frens/26026531-860b-4bc2-b940-9efe1b2fe95f_Screenshot+2022-06-15+182141.png?auto=compress,format" alt="null" />Of these 117mn., 19.1 mn. $EVMOS are bonded, i.e., staked according to <a href="https://www.mintscan.io/evmos" target="undefined" rel="noopener noreferrer">Mintscan</a>.<img src="https://images.prismic.io/frens/840fd386-b6d4-4c32-b79c-ec99c070f62c_Screenshot+2022-06-15+200703.png?auto=compress,format" alt="null" />Now, let us try to reason how this crazy staking APR comes to be. Usually, you start by calculating the bonded ratio: The current bonded ratio is 19.1 mn. bonded tokens / 117 mn. circulating supply = 16.3%  Now, let´s divide the inflation rate by the bonded ratio: 143% / 0.163 = 877% With this formula, you can approximate staking rewards for most protocols. In short, if more people bond (stake) their tokens, the bonded ratio goes up, and staking rewards go down. As inflation is assumed constant, the same amount of tokens now has to be paid out to more people. In turn, if fewer people stake their tokens, you earn a higher share of the inflation, i.e., staking rewards go up. Remember that a low bonded ratio is not necessarily good since you want to see many users stake their tokens to contribute to securing the network. High rewards should incentivize more people to stake. If a chain fails to achieve that long term, try to look for possible reasons and assess whether this poses any significant risk. However, for Evmos, the formula below determines the precise staking APR. Nevertheless, for a quick and easy approximation, the former is sufficient.APR =  (1 - 5%commission)((365 * EpochProvision * StakingRewards factor) / Bonded tokens) * 100%<h3>How Can I Get These Yields?</h3>To stake your $EVMOS, just head to <a href="https://app.evmos.org/staking" target="undefined" rel="noopener noreferrer">https://app.evmos.org/staking</a> and choose the validator you want to stake with. After that, lean back and enjoy claiming your daily rewards. You can either compound them via re-staking or sell them on any Evmos DEX or Osmosis. <img src="https://images.prismic.io/frens/baefd067-f6ae-4565-8fbe-9871b5c5be7b_Screenshot+2022-06-15+201638.png?auto=compress,format" alt="null" />When staking, you do not have to worry much about the possibility of rugpulls and exploits compared to other DeFi strategies. However, keep in mind that under the current market conditions combined with the high inflation rate of $EVMOS, there is high selling pressure on the token. <h2>More than 500% APR on Cronus Finance</h2><a href="https://app.cronusfinance.xyz/#/swap" target="undefined" rel="noopener noreferrer">Cronus Finance</a> is an automated market maker (AMM) decentralized exchange (DEX) on Evmos where you can swap and yield farm various Cosmos and bridged Eth-assets. By additionally staking their native token $CRN, you can earn higher yields than just the swap fees. On the “<a href="https://app.cronusfinance.xyz/#/farms" target="undefined" rel="noopener noreferrer">Farms</a>”-tab, you can check which pools are eligible for boosted yields. <img src="https://images.prismic.io/frens/8ee6c53d-d693-4f0c-8675-0482cb7c4606_Screenshot+2022-06-15+202119.png?auto=compress,format" alt="null" />The yield you receive will depend on the <a href="https://app.cronusfinance.xyz/#/farm/e-1" target="undefined" rel="noopener noreferrer">lockup period</a> you choose. Depending on the saturation of the pools, the difference in yields between the lockup period options may differ from pool to pool. <img src="https://images.prismic.io/frens/1f3b7b05-5906-48b6-9a2b-a545be69aa71_Screenshot+2022-06-15+202224.png?auto=compress,format" alt="null" />Let´s assume you want to provide liquidity to the $USDC-$WEVMOS pool. On the “Swap”-tab, you can exchange any of the assets available for the two tokens you need: $USDC and $WEVMOS. <img src="https://images.prismic.io/frens/609c5981-3061-4b2c-9437-a7ec1470da55_Screenshot+2022-06-15+203121.png?auto=compress,format" alt="null" />Then, head to the “<a href="https://app.cronusfinance.xyz/#/add/0xD4949664cD82660AaE99bEdc034a0deA8A0bd517/0x51e44FfaD5C2B122C8b635671FCC8139dc636E82" target="undefined" rel="noopener noreferrer">Liquidity</a>”-tab and select the assets and amount you want to provide. Approve the transaction and click “supply,” then “confirm supply” at the bottom when it appears.  <img src="https://images.prismic.io/frens/c73ff479-6fce-46bf-8412-90988f79631f_Screenshot+2022-06-15+203233.png?auto=compress,format" alt="null" />When the transaction went through, you should see your position displayed below.<img src="https://images.prismic.io/frens/dd3fd25a-89d2-401d-916a-0e75ae5837b4_Screenshot+2022-06-15+203358.png?auto=compress,format" alt="null" />Now, head to the pool on the “Farms”-tab and choose the lockup period. Depending on your position size, you must provide a corresponding amount of Cronus´ native $CRN token. If you do not hold any $CRN tokens yet, you can exchange other assets for them on the Cronus DEX.<img src="https://images.prismic.io/frens/db2627da-e773-4a6c-8688-073416fde1c8_Screenshot+2022-06-15+203551.png?auto=compress,format" alt="null" />Once you have approved your LP position, click on “Deposit” when it shows up. <img src="https://images.prismic.io/frens/b8b8ba5e-9a28-4855-8eb8-4cf8551a9421_Screenshot+2022-06-15+203820.png?auto=compress,format" alt="null" />If you deposited your liquidity successfully, you would now see until when it is bonded. <img src="https://images.prismic.io/frens/63c203cf-e318-4ceb-b15f-568fc59f965d_Screenshot+2022-06-15+204020.png?auto=compress,format" alt="null" />The yields on Cronus Finance are attractive without a doubt. However, they come at the cost of having exposure to the price of the $CRN token and being locked up for the respective time frame you choose. Also, your <a href="https://cronus-finance.gitbook.io/docs/cronus-finance/yield-farms" target="undefined" rel="noopener noreferrer">boosted rewards</a> are paid out in the $CRN token. Keep these factors in mind before aping in, my fren :)<h2>Farm Triple-Digit APRs with Diffusion Finance</h2>Last but not least, we want to introduce you to <a href="https://diffusion.gitbook.io/docs/GXx8KsOHCFNEcZgOpj0b/" target="undefined" rel="noopener noreferrer">Diffusion Finance</a>. Like Cronus, Diffusion is an AMM DEX where you can swap various Cosmos and bridged Ethereum assets.We start by providing liquidity to our pool of choice. If you lack any of the assets required, use <a href="https://app.diffusion.fi/#/swap" target="undefined" rel="noopener noreferrer">Diffusion´s DEX</a> to swap. <img src="https://images.prismic.io/frens/382489bc-877c-4cc9-aac4-20bfc75961ae_Screenshot+2022-06-15+204223.png?auto=compress,format" alt="null" /><img src="https://images.prismic.io/frens/269f7874-4100-4905-bf98-bacf38fc5f2f_Screenshot+2022-06-16+003450.png?auto=compress,format" alt="null" />Having acquired both assets, let´s become a providooor! On the “<a href="https://app.diffusion.fi/#/farm" target="undefined" rel="noopener noreferrer">Farm</a>”-tab, choose your pool of interest. <img src="https://images.prismic.io/frens/e59b5f3d-107b-4f8f-a038-96bb0873794f_Screenshot+2022-06-16+003717.png?auto=compress,format" alt="null" />For our tutorial, we will use the $DIFF-$USDC pool. Remember that this pool inherently exposes you to the price action of the $DIFF token. The “Add liquidity” button will take you to the “Pool”-tab. <img src="https://images.prismic.io/frens/06bc9f67-e5cd-4421-aa4e-f361a236f3d1_Screenshot+2022-06-16+003825.png?auto=compress,format" alt="null" />Input the amount you want to provide and click “approve” and “supply.”Now, head back to the “Farm”-tab, select your pool, and “approve” and “deposit.”<img src="https://images.prismic.io/frens/8f5755a2-fc51-44eb-9b71-724cfc1424f6_Screenshot+2022-06-16+003939.png?auto=compress,format" alt="null" />After a successful deposit, you will see your position displayed as shown below. <img src="https://images.prismic.io/frens/ff59b7a8-78b0-4180-badd-9c73841d6378_Screenshot+2022-06-16+004058.png?auto=compress,format" alt="null" />Sit back and regularly claim your $DIFF rewards to turn your &gt;400% APR into a &gt;3,000% APY if you want to compound. Alternatively, you can sell your rewards or <a href="https://app.diffusion.fi/#/stake" target="undefined" rel="noopener noreferrer">stake</a> some $DIFF tokens to earn a 500% APR. <img src="https://images.prismic.io/frens/770b71ca-2568-45aa-bfd4-62d136790678_Screenshot+2022-06-16+004210.png?auto=compress,format" alt="null" />Please remember that $DIFF (like $CRN) is a farm token and will likely experience selling pressure under these market conditions when deciding if you want to enter any of the farms. To gain a more in-depth understanding of the tokenomics of <a href="https://docs.diffusion.fi/docs/diffusion-tokenomics/tokenomics" target="undefined" rel="noopener noreferrer">Diffusion</a> and <a href="https://cronus-finance.gitbook.io/docs/cronus-finance/yield-farms" target="undefined" rel="noopener noreferrer">Cronus</a>, I can recommend you to read the respective documentations.We hope this first edition of Yield Me If You Can provided you with valuable insights on how to earn high yields despite the downturns of the last weeks. If you have any questions or want us to cover a specific dApp or protocol in the future, please hit us up on our <a href="https://twitter.com/frensvalidator" target="undefined" rel="noopener noreferrer">Twitter</a> or <a href="https://t.me/+8pdHY6nvy8Q2N2Qy" target="undefined" rel="noopener noreferrer">Telegram</a>!None of the protocols mentioned sponsored this report. All information provided does not constitute financial advice but solely reflects the personal opinions of Frens Validator team members.

Yield Me If You Can #1 - Evmos Edition

Hey Frens 💛 🤝As the Cosmos community, we are aligned that the Cosmos Hub should be the center of our beloved multichain ecosystem. From an investor perspective, we all welcome further value drivers for the $ATOM token and would like to see it valued at the top of all Cosmos assets as the native currency of the Cosmos Hub. Given these goals, what are suitable characteristics the Hub should be optimized for, which factors make it a deserving center of the multichain future, and how does Proposal #69 play into all of this?<h1>What is Prop #69?</h1>Cosmos Hub Proposal #69 aims to broaden the spectrum of use cases of the Cosmos Hub by implementing a smart contract platform called “CosmWasm,” which allows developers to program smart contracts in Rust.CosmWasm can be easily implemented into any Cosmos SDK blockchain. For example, Terra uses it as their primary way of deploying smart contracts. Even Osmosis has a governance gated version attached.CosmWasm turns any application-specific Cosmos chain into a general-purpose smart contract platform. If the Cosmos Hub were to implement CosmWasm, it would be a permissioned version — meaning that all smart contracts would need to go through a governance process determining whether they will be deployed. This is contrary to permissionless smart contract platforms like Juno, on which users may deploy any (technically feasible) smart contract. The permissioned nature of smart contracts on Cosmos aims at providing a higher degree of security for the Hub.Prop #69 started a discussion on whether or not to implement CosmWasm into the Cosmos Hub. Right now, the majority of community members seem to reject the proposal. But there’s more to the story.<img src="https://images.prismic.io/frens/e068af07-ac15-43e1-8500-b1304766ebc3_vote.png?auto=compress,format" alt="null" /><h1>What is the value proposition of implementing CosmWasm into the Cosmos Hub?</h1>Various key thought leaders in the Cosmos Ecosystem have expressed their support for Proposal #69 since it was first published. These include but are not limited to <a href="https://twitter.com/zmanian" target="_blank" rel="noopener noreferrer">Zaki Manian</a>, <a href="https://twitter.com/jack_zampolin" target="_blank" rel="noopener noreferrer">Jack Zampolin</a>, and <a href="https://twitter.com/billyrennekamp/status/1521205891151933440?s=20&amp;t=sJcFcv0dQl1qiA4mvOJ1Og" target="_blank" rel="noopener noreferrer">Billy Rennekamp.</a> But what are the key arguments why one would favor the implementation of CosmWasm?The core argument around CosmWasm on the Hub is that it will ease the deployment of new features on the Cosmos Hub. This lowers the barriers to making further contributions to the Hub. With the implementation of CosmWasm, it is no longer necessary to run an entire upgrade of the Hub to enable deployment. Instead, smart contract functionalities can be deployed when they pass through chain governance. Examples of functionality expansion are the deployment of token standards, synthetic assets, and DAOs. Via the permissioned nature of CosmWasm on the Cosmos Hub, proponents want to ensure that only very secure and deserving smart contracts will be deployed.It will also lower the burden for validators and maintainers since the omission of chain upgrades for new implementations eliminates significant coordination hurdles between the Cosmos core contributor organizations, validators, and node runners. The ability to iterate new features faster without upgrading the chain can further benefit security aspects.Simultaneously, one can argue that CosmWasm does not pose a significant security risk if tested rigorously and maintained adequately. Multi-billion chain ecosystems like Terra and Juno have been running on CosmWasm for years reasonably reliably. With Confio, funded by the Interchain Foundation, and the team at Interchain responsible for the Cosmos Hub, it is a reasonable statement to make that there is sufficient technical competency to include and maintain CosmWasm if implemented with the Rho Upgrade.Lastly, we need to think about the role we envision for the Cosmos Hub to play in the future and the implications of possible routes. Besides all technical aspects of the discussions around Proposal #69, there are economic and philosophical considerations we need to evaluate as well. Those supporting the proposal argue that it will lose relevance over time if the Hub does not foster innovation and new use cases. Ultimately, why should the Hub be regarded as the center of the Cosmos ecosystem if few things are happening on it and attention strays away to other zones? Proponents of Proposal #69 argue that it is not worth forgoing this innovation for the sake of preserving a small and hardly quantifiable amount of security while missing out on a significant driver of usage of the Cosmos Hub and potential value accrual of the $ATOM token.Having outlined that CosmWasm is a pretty cool tech and the potential benefits that can come along for the Cosmos Hub if implemented, let us see why other thought leaders and community voices are opposing the proposal.<h1>What is the criticism about implementing CosmWasm into the Cosmos Hub?</h1>As of now, the majority of voting power has opted for voting “no” or “no with veto,” but what are the arguments for opposing proposal #69?Shortly after the release of proposal #69 by the Interchain Foundation, the co-founder of Cosmos, Jae Kwon — stated that the Cosmos Hub should continue optimizing for a minimalistic approach. He argues that CosmWasm brings more significant security risks than potential benefits. Considering the attack vector that CosmWasm on the Hub would open does not make its implementation worthwhile.<img src="https://images.prismic.io/frens/ae73d6eb-517d-4139-adb1-8b86b612f275_jaekwon.png?auto=compress,format" alt="null" />While proponents of the proposal argue that implementing CosmWasm into the Hub adds a long-awaited value driver to Cosmos and the $ATOM token, Jae instead claims that $ATOM derives its value particularly because of its minimalism and specific scope of functionality. Cosmos should primarily serve to secure other chains within the Cosmos ecosystem via Interchain Security- not a general-purpose blockchain. Instead of continuing to implement various innovative features, the Cosmos ecosystem is better served if the Hub prioritizes uptime and security.Critics argue that the relevance of the Hub does not depend on implementing other use cases but is satiated already. The vast majority of the Cosmos community acknowledges the Hub’s current role and value proposition. By serving as the de-facto FIAT on and off-ramp for the Cosmos ecosystem, nearly every user who withdrew $ATOM from a CEX or sent it to one has interacted with the Hub. Planning on scooping up some exciting Cosmos assets on Osmosis DEX? Well, first, you will need to exchange your FIAT for $ATOM on a CEX, then withdraw it to the Hub, send it to Osmosis via IBC, and then the fun part begins…Supporters of Proposal #69 argue that the permissioned deployment of CosmWasm via smart contracts´ preceding governance approval, the track record of CosmWasm on other chains, and its maintenance by a technically competent team are entirely sufficient measures to ensure minimal risk and complexity. However, skeptics state that aside from the additional complexity of CosmWasm itself, permissioned deployment does not equal bullet-proof contracts. In line with that, the tendency of chain governance proposals to be disproportionately accommodating toward new features amplifies both coordination and security challenges. If Proposal #69 sets a precedent for favoring innovation over security, who can prevent this pendulum from swinging too far in one direction.<img src="https://images.prismic.io/frens/0ceecd1d-3d3b-4569-88f5-a59c19d86ad5_adriana-kalpa.png?auto=compress,format" alt="null" />Lighter critics such as <a href="https://twitter.com/gregory_landua/status/1522286822910566402?s=20&amp;t=9nmUBkbvQ39H2udp-iTLDg" target="_blank" rel="noopener noreferrer">Gregory Landua</a> or <a href="https://twitter.com/adriana_kalpa/status/1521950210515218432?s=20&amp;t=9nmUBkbvQ39H2udp-iTLDg" target="_blank" rel="noopener noreferrer">Adriana from Kalpa Tech</a> call for intensive code testing and audits a priori to CosmWasm implementation. Thus, not all no-voters are fierce defenders of Jae Kwon´s view on Hub minimalism and are open to new utilities of the Hub but do not yet view the measures taken to ensure a safe implementation (of the very lack thereof) as rigorous enough.Lastly, IBC makes it possible to offload features that would otherwise be made available on the Hub onto other zones. Thus, there is no justification in terms of technical needs to deploy CosmWasm on the Hub. Instead, here again, we close the circle back to the philosophical question about the appropriate role of the Hub.<h1>What adds further controversy to the proposal?</h1>Looking at the positioning of significant Cosmos ecosystem thought leaders, we seem to have a balanced distribution. Cosmos co-founder Jae Kwon, Peng Zhong from Ignite (formerly Tendermint), and Jacob Gadikian from Notional DAO express opposition, while Billy Rennekamp, Zaki Manian, and Jack Zampolin express their support. One could now assume that this creates an excellent pool to set up constructive debates presenting both sides of the argument. However, there is an additional influence on the decision of many that we cannot ignore.Jae Kwon decided to exclude yes-voters from a future airdrop for the in-progress project of his called Gno.land. Therefore, we now have a direct economic consequence depending on how holders voted. People are incentivized to vote “no with veto” &gt; “no” &gt; “abstain” &gt; not vote at all &gt; “yes” if taking potential gains from a $GNOT airdrop into account. You can check out his GitHub article if you wish to dive deeper into Jae´s positioning and project Gno.land.We do not attempt to make a final verdict on whether it is ethically acceptable to bribe governance proposal votes as Jae Kwon did. Still, there is no doubt that this procedure added another layer of controversy around the fairness of the voting process. It is a reasonable assumption to make that a significant portion of holders was influenced by the airdrop incentives when voting and did not vote based on the pros and cons of CosmWasm in isolation.<h1>Some considerations before you vote?</h1>Similar to the series of heatedly discussed proposals on Juno Network a couple of weeks ago, many of you might feel overwhelmed to make a clear and easy voting decision on this one. Admittedly, this, again, is not an easy verdict to make. Nevertheless, we will try to provide you with some questions to help you make a more educated decision.Ask yourself if you have the technical expertise to adequately assess the proclaimed risks coming along with CosmWasm on the Hub. If not, do not blindly follow the voices stating “it is too risky” or “there is no risk at all,” but shift your attention to those who undertake the effort to actually explain why CosmWasm might pose risks to the security of the Hub or why it will not. We all have witnessed the consequences of when “safety” is being abused as the primary fuel for creating coercive narratives over the last two years. Fear is a powerful emotion, so make sure it is not used against you.Additionally, think about the economic and philosophical role you envision the Hub to pursue in the future. Are you okay with other zones drawing away potential attention and traction from the Hub if they implement features missed out if CosmWasm does not make it onto Cosmos? Or do you believe that the Hub, in general, should intensely focus on a very selected few use cases and derives its value, particularly from that characteristic?Finally, consider your own economic interest. Are you willing to sell your vote for the sake of receiving a higher allocation in the $GNOT airdrop, or is this instrument Jae Kwon opted for beyond your ethical tolerance for skewing polls to one side? How do you think the value accrual of the $ATOM token will be influenced depending on the outcome of the vote.<h2>References</h2>The following is a selection of articles, threads, and other resources which can help you dive deeper into specific aspects of Proposal #69 and explore other people´s views.<ul><li>Billy Rennekamp: <a href="https://forum.cosmos.network/t/proposal-69-vote-on-chain-include-cosmwasm-in-rho-upgrade/6243/2" target="_blank" rel="noopener noreferrer">https://forum.cosmos.network/t/proposal-69-vote-on-chain-include-cosmwasm-in-rho-upgrade/6243/2</a></li><li>Jae Kwon: <a href="https://github.com/gnolang/gno/blob/master/gnoland/docs/peace.md" target="undefined" rel="noopener noreferrer">https://github.com/gnolang/gno/blob/master/gnoland/docs/peace.md</a></li><li>Polkachu (validator): <a href="https://polkachu.com/blogs/ibc-will-not-make-cosmos-a-hub-thats-great-news" target="_blank" rel="noopener noreferrer">https://polkachu.com/blogs/ibc-will-not-make-cosmos-a-hub-thats-great-news</a></li><li>Adriana from Kalpa Tech: <a href="https://twitter.com/adriana_kalpa/status/1521950210515218432" target="_blank" rel="noopener noreferrer">https://twitter.com/adriana_kalpa/status/1521950210515218432</a></li><li>Gregory Landua from Regen Network: <a href="https://twitter.com/gregory_landua/status/1522286822910566402" target="_blank" rel="noopener noreferrer">https://twitter.com/gregory_landua/status/1522286822910566402</a></li><li>Thyborg: <a href="https://twitter.com/ThyBorg\status/1522169257219420160" target="_blank" rel="noopener noreferrer">https://twitter.com/ThyBorg/status/1522169257219420160</a></li><li>Medium Article on Proposal #69 by Silver Raven: <a href="https://medium.com/@RealSilverRaven/cosmos-atom-prop-69-nice-explained-3f9326b665ab" target="_blank" rel="noopener noreferrer">https://medium.com/@RealSilverRaven/cosmos-atom-prop-69-nice-explained-3f9326b665ab</a></li></ul>

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