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Cosmos’ Shared Security Model Gets Vote Of Confidence

The first proposal to allow a blockchain to derive its security from the Cosmos Hub, a major blockchain worth more than $3 billion, was met with near-unanimous support. Neutron, the blockchain that wants to outsource its security to the Cosmos Hub, bills itself as a DeFi-focused smart contract platform. The Cosmos Hub will receive 25% of the Neutron chain’s transaction fees and miner extractable value (MEV), as well as 7% of the supply of its NTRN tokens. 

If the proposal is approved next week, Neutron will be the first chain to use the shared security feature known as Replicated Security. Cosmos’ ATOM token has remained relatively stable over the last month. According to Cosmos co-founder Ethan Buchman, this is a significant milestone. Buchman also serves as the CEO of Informal Systems, which released the first version of Replicated Security. “For the first time, really,” he told The Defiant, “it opens up a development ecosystem around Cosmos Hub.” 

Stride, a liquid staking protocol similar to Lido Finance and Rocket Pool, is also voting on whether to adopt the shared security model in real time.  Replicated Security provides a potential solution to the chicken-or-the-egg problem of launching a new blockchain — the security of a blockchain is typically provided by validators who must hold a project’s native token in order to secure the network. If that token is inexpensive, as it often is when a project begins, a malicious actor may be able to gain control of the new blockchain at a low cost. The problem of easy corruption is theoretically eliminated if a project is secured by the Cosmos Hub, which is valued at $3.3 billion. 

With the potential use of the model by Neutron and Stride, the Cosmos ecosystem may be entering a new era in which businesses can safely spin up “consumer chains” with relative ease.  While Cosmos has always advocated for app-specific chains, there has been an increase in activity across crypto to provide tooling for smaller projects to launch blockchains specific to them. Arbitrum, a leading layer 2 network built on Ethereum, has launched a product called Orbit that allows projects to quickly spin up custom blockchains.

Optimism, another major scaling solution, is working on its own Superchain model, which involves an ecosystem of chains, similar to the Cosmos model. Buchman does not believe that the convergence poses a threat to Cosmos. “I think it’s all complementary,” he explained. “It’s encouraging to see the ETH community coming to terms with the Cosmos vision and approach.”


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