Cosmos has emerged as the leading platform to build blockchains devoted to a single application. Cosmos chains provide more scalability, configurability, and sovereignty than deploying a contract on a smart contract platform such as Ethereum.

However, Cosmos chains have historically had a major challenge to overcome: they must be secured by a decentralized validator set, with a valuable staking token. This has been a hurdle for many projects who would otherwise benefit from running on a Cosmos chain. Putting together a validator set can be a distraction from building a community of engaged users, and building in a staking token can complicate a project’s tokenomics. Further, the chain’s security is directly tied to the market cap of the staking token, which may take time to increase in value, thereby subjecting the project to numerous security risks along the way to maturity.

Not any more. With Interchain Security, developers will be able to launch a chain running their EVM, CosmWasm, or Cosmos-SDK application. This chain will be secured by the validator set of the Cosmos Hub, and the full ~$6b market cap of the Atom. This is known as a “consumer chain” since it consumes security from the Hub. Deploying a consumer chain can be as seamless as deploying a smart contract on a platform such as Ethereum, or the chain can be customized at a very low level using Cosmos-SDK.

Overview of Interchain Security

• ~$6b of Security (and counting): At launch, consumer chains are secured by the full validator set and market cap of the Cosmos Hub.
• Full Cosmos Hub alignment: Consumer chains can be used to outsource core Cosmos Hub functionality. For example, Quicksilver will be doing this to build an integral part of the Cosmos Hub liquid staking system.
• Fast transactions and predictable gas fees: Transactions on consumer chains do not compete with any other applications. This means that there will be no unexpected congestion, and performance will generally be much better than on a shared smart contract platform such as Ethereum.
• Project keeps majority of gas fees: Unlike a smart contract platform, projects on consumer chains keep a majority of the gas fees that users spend to access them. Depending on configuration, these fees either go to the project’s community DAO, or can be used in the protocol in other ways.
• No validator search: Consumer chains do not have their own validator sets, and so do not need to find validators one by one. A governance vote will take place for a chain to get adopted by the Cosmos Hub validators which will encourage participation and signal strong buy-in into the project’s long-term success.
• Instant sovereignty: At any time in the future, a consumer chain can elect to become completely independent, with its own validator set.

There are two types of consumer chains: contract chains and custom chains.

The contract consumer chain

This is a way for developers to quickly deploy a smart contract application secured by the entire Cosmos Hub, Both EVM and CosmWasm smart contracts will be supported at launch, and Informal Systems will provide a CLI tool which turns a folder of smart contracts into a consumer chain. At launch, each contract chain will need to be approved by a governance proposal on the Hub. We are working towards permissionless deployment, so that smart contract applications will have the opportunity to freely run without complicating validator operations. Here are some of the attributes of this type of consumer chain:

• Standardized chain binary: The underlying binary that runs a contract consumer chain is always the same. Teams building on a contract consumer chain do not need to spend time working with low level blockchain code that is unrelated to their business logic.
• Majority of gas fees go to developer DAO: On this type of consumer chain, gas fees are paid in Atoms. For example, 25% of the gas fees are sent to the Cosmos Hub validators and delegators for securing the chain, and the remaining 75% go to a DAO supporting the development of the consumer chain. This mechanic supports truly sustainable development. This DAO is token-governed, and also has the authority to upgrade the contracts. As an analogy, consider the UNI token. It is a governance token for the Uniswap exchange on Ethereum. Users of Uniswap pay hundreds of millions of dollars in gas fees, but none of it goes to the UNI DAO. If Uniswap was built on a hub-secured contract chain, the UNI DAO would be getting 75% of those gas fees, thereby supporting long-term sustainable development.
• EVM and CosmWasm available at launch: We will support smart contracts written in CosmWasm or EVM compatible languages at launch, with support for other environments such as Substrate or GnoLang added if there is demand for them.

The custom consumer chain

In this configuration, instead of running all logic as smart contracts, the developers fully customize the consumer chain at the Cosmos-SDK level. This allows for more customization at a low level, and potentially even better performance. Hub validators and delegators will need to look more closely at these customized consumer chains, since their performance and security attributes can not be as easily guaranteed. For this reason, the developers may need to put more effort into rallying their governance vote, however, it will never be possible to launch this type of chain permissionlessly. Here are some of the attributes of this type of consumer chain:

• Fully custom chain binary: Customizing a consumer chain at the level of Cosmos-SDK allows projects to fully control how gas is metered and how transactions are assembled into blocks.
• Custom inflationary and fee token: This configuration allows developers to create their own token which can be used for fees, and can be created on the consumer chain in the form of inflationary rewards. These rewards can be used to incentivize user behavior, for example, LPing or staking. As above, some of the fees and rewards will be sent to the Hub, but the proportion is customizable by the developers and is subject to governance.
• Continuous airdrop: Cosmos Hub delegators (tens of thousands of blockchain early adopters) will be receiving a portion of a consumer chain’s fees, in the form of that consumer chain’s token. This provides the opportunity to give the Cosmos Hub delegators a direct stake in the project’s success, and build an active engaged community, the same way airdrops currently do.

Regardless of how projects decide to launch, Interchain Security will instantly align incentives between projects and the Cosmos Hub community. On a practical level, consumer chains will be tightly integrated with one another, and with Cosmos Hub functionality. At the same time, they will retain seamless connectivity with independent Cosmos chains over IBC. By launching as a consumer chain, projects will get access to the Hub’s user base and benefit from network effects over time.

The Cosmos Hub and its network of consumer chains will form a tight cluster at the center of the Cosmos galaxy.

If you are interested in building with Interchain Security, reach out at hello@informal.systems. We look forward to hearing from you!