The Atom Economic Zone (AEZ) is a revolutionary ecosystem within the Cosmos network, comprising a collection of blockchains that are partially sovereign. These blockchains, while maintaining their independence, are intricately tied to and dependent on the Cosmos Hub and the $ATOM token. The AEZ’s primary objective is to foster collaboration and synergy among its member chains while ensuring that they benefit from the robust security infrastructure of the Cosmos Hub.
Mechanism and Architecture
Interchain Security is a groundbreaking mechanism that allows validators of a provider chain, such as the Cosmos Hub, to simultaneously participate in the consensus of a Consumer Chain using their stake on the provider chain. This architecture divides chains into two categories:
- Provider Chain: A blockchain that allows its validators to secure another blockchain using their stake.
- Consumer Chain: A blockchain that permits validators from another blockchain to participate in its consensus.
The essence of Interchain Security is to offer a meticulously designed security framework to protect both new and existing sovereign app-specific blockchains. It is this technology that underpins the AEZ. The Atom Economic Zone is a collection of chains that all use the Cosmos Hub as their provider chain (in addition to a number of other methods of economic alignment.)
Benefits for ATOM Stakers and Consumer Chains
The baseline benefit of joining the AEZ that all consumer chains enjoy is the enhanced security they receive. Given that the Cosmos Hub’s security is directly correlated with its market cap and has consistently been among the top 50 blockchains, consumer chains in the AEZ can leverage the security equivalent to that of a much larger chain. In return for this security, ATOM stakers receive a portion the consumer chain’s native token as a reward, usually in the form of ongoing block emissions, in addition to their standard ATOM rewards. This symbiotic relationship forms the foundational trade-off of the AEZ: chains compensate with their native token, and the Hub reciprocates with unparalleled security.
However, the benefits extend beyond just security. Each chain negotiates unique value propositions with the Hub that benefit both chains. For instance, when Stride joined the AEZ, the Cosmos Hub utilized a significant amount of ATOM from the community pool to enhance the liquidity pool between ATOM and stATOM, a liquid staked derivative of ATOM provided by Stride. Such collaborations are tailored to the specific needs and offerings of each chain, ensuring mutual growth and development.
The process of joining the AEZ is decentralized, meaning technically there is no formal or standardized procedure. The ultimate decision rests with on-chain governance. Both the Cosmos Hub and the aspiring consumer chain must approve the required code updates through on-chain governance, where all stakers vote. Once a ConsumerAdditionProposal passes, validators prepare to run the consumer chain binaries and set up validator nodes on the approved consumer chains. The startup sequence involves initializing the consumer chain, generating genesis, submitting proposals, updating the genesis file, and starting the chain. Validators are essential in this process, ensuring the seamless integration of the consumer chain into the AEZ.
In order to become a consumer chain, new chains must go through a few steps:
- Build their chain, test and audit it. See Cosmos Developer Tutorials Here.
- Introduce themselves, with a Draft Proposal, on the Cosmos Forum. At this stage, they will detail their offer to ATOM delegators for feedback and negotiation.
- Once the Draft Proposal is finalized, they will then create a “Consumer Addition Proposal” on-chain to formally onboard their chain to Cosmos Hub’s Interchain Security. When this vote is approved, the two chains will establish a connection between themselves. Note: Some chains may do a “Signalling Proposal” first – to get confirmation that Atom Delegators definitely want the chain to be onboarded before the actual “Consumer Addition Proposal.”
- Go Live! Once the Consumer Chain starts producing blocks, every block should produce rewards for Cosmos Hub stakers.