This vision goals to align incentives between appchains and ATOM holders while increasing the likelihood that ATOM will generate a monetary premium. However, there are concerns about near-term dilution for token holders due to proposed changes in ATOM’s monetary policy.
The new issuance schedule would temporarily increase issuance (relative to historical levels) for the first 9 months before falling below current issuance rates and continuing to decline over subsequent years, eventually arriving at a steady-state issuance of ~300k ATOM per month. This equates to ~88M ATOM being issued over a three-year period, with ~55M directed towards the Cosmos Hub Treasury. The bulk of this new issuance (~65%) will occur in just the first 9 months of the proposal.
Certain community members have expressed concerns about near-term dilution and the manner in which the Cosmos Hub Treasury funds will be deployed. Without a reliable model for coordination and deployment of capital, ATOM holders will bear the bulk of the risk associated with deploying the Treasury capital at high rates of return.
Another proposed feature is the Interchain Scheduler, which facilitates an interchain MEV marketplace on-chain. Assuming cross-chain activity continues to grow, the opportunity for MEV across the Cosmos ecosystem will be significant. However, not all forms of MEV are created equal and oftentimes MEV is subject to off-chain cartelization, advantaging a small minority of market participants. The goal of the Interchain Scheduler is to create a rational, transparent, trust-minimized marketplace for MEV, allowing appchains to voluntarily sell blockspace in an auction format in an effort to incentivize the “efficient” forms of MEV and minimize the more malicious forms.
Another related proposal is the Interchain Allocator, which allows the Cosmos Hub Treasury to fund new Cosmos chains through on-chain agreements. In theory, the Interchain Allocator will function in tandem with the Interchain Scheduler to create a positive feedback loop wherein a portion of proceeds from the on-chain MEV marketplace are directed towards the Interchain Allocator. The funds will then be deployed by the Interchain Allocator to fund appchain development and grow the Cosmos ecosystem, which in turn should create incremental opportunities for MEV.