Proposal #842
Passed on 16 Nov 2023 with 88.8% of the votes for yes.
Yes
88.8%
99.1% without abstain
Veto
0.3%
of votes cast
Ended
16 Nov 2023
88.75%
of votes cast
10.44%
of votes cast
0.47%
of votes cast
0.34%
of votes cast
Sam Hart (Head of Product & Strategy) and Maghnus Mareneck (Co-Founder) of Skip Protocol
The Cosmos Hub continues to grow as a central trust layer for the AEZ and wider Cosmos. With the expansion of ICS and the addition of Neutron and Stride, the Hub has increased responsibility and importance in the security and extensibility that it can offer to the interchain.
That said, some of the Hub's functionality is still based on dated Cosmos chain design formulated just as IBC was coming online. In particular, the Hub uses a first-come-first-serve, monolithic, and generalized mempool, and does not take advantage of any of the new Cosmos SDK advancements including ABCI++, vote extensions, or enhanced block-production capabilities that Skip has deployed widely across the interchain.
The Hub, like Bitcoin, currently has very-little-to-no MEV (we checked). This is because Hub transactions are mostly transfers, staking events, and light client updates. This is likely how it will stay, and so nothing in this proposal suggests introducing a MEV recapture or distribution mechanism. Rather, it focuses on improving the Hub revenue model by focusing on fee market improvements that have been developed and been battle-tested over the years since the Hub was first deployed.
As an aside, much of Skip's work has transitioned from MEV capture, and into core infrastructure work to improve the Cosmos ecosystem, as demonstrated by the [Hidden link] and the [Hidden link].
The next planned upgrade of the Cosmos Hub will have [Hidden link], which natively supports ABC++ functionality (but doesn't do anything with it). We propose putting it to work.
Our proposal: After the Cosmos Hub upgrades to Cosmos SDK 0.47 and has proven the software is stable, the subsequent upgrade should adopt the open-source Block SDK, the primary research and development focus of Skip Protocol built on ABCI++, and include the EIP-1559 fee market lane that Skip is building in collaboration with Osmosis Labs.
The current fee market on the Cosmos Hub, controlled by the [Hidden link], is very rudimentary and overdue for an upgrade. Transactions are charged a minimum fee irregardless of network load or demand, which is set by governance. Individual validators may choose to responsively increase fees by changing their local configuration. This causes several of problems:
That is to say, the Hub's fee market needs an update to scale and meet the needs its current security offering. Although the Hub has operated without incident to date, this could change quickly, and it will be too late once it does.
EIP-1559 is the adaptive fee market developed within the Ethereum community. Sam Hart worked on EIP-1559 at the earliest stages, helping to validate the design. Additionally, while at the ICF, Sam ran the fee market working group, which mapped out various fee market designs for Cosmos. This work led to changes in Tendermint that allowed for fee prioritization, and generated ideas that would eventually lead to Sommelier's multi-token auction model, as well as Osmosis and Notional's work on cross-chain fee abstraction.
Since deployment EIP-1559 has processed over billions USD-equivalent in fees, and proven itself as a robust and UX-friendly fee market design.
The TLDR of EIP-1559 is that it implements a base