The Atom Accelerator DAO (AADAO) is dedicated to funding key initiatives that drive Cosmos Hub forward, whether that’s with on-chain activity, new use cases, and even network participation.
In the blog below, we’re proud to spotlight one of our most impactful grants yet, supporting the IBC Relayers Working Group (WG) and their critical efforts in ensuring efficient IBC operations for the future of the Cosmos Hub.
About IBC Relayers WG
The IBC Relayers WG was established through governance Proposal #862 to address the core issue of a lack of in-protocol incentives for IBC relayers. Currently, they face a critical issue: the FeeGrants wallet is low, and they don’t have enough time to go through the governance voting process to secure more funding before running out.
Recognizing the urgency, the IBC Relayers WG requested AADAO’s support. In response, AADAO stepped in to accelerate the process, providing an expedited grant of $56,000.
This grant was used to market-buy 8,000 ATOM to replenish the wallet and cover the transaction fees for IBC relayers on the Hub for the next six months (until 12/2024), ensuring that relaying can continue without the burden of costs falling on the relayers themselves.
The Relayer Dilemma
Relayers serve as the backbone to IBC, transporting transactions between chains. To do so, they operate nodes on the chains they relay on, which incur high infrastructure costs and gas fees for the relayed data. Back in November 2023, Hub relayers were already handling over 400,000 IBC messages per month, costing more than 1,800 ATOM.
So far, there is no incentivization in place for relayers, which means they have to take on the costs themselves to keep IBC and their respective chains running. Which means, if relayers halt, so would the Hub.
Proposal 862, passed in December 2023, not only brought together the IBC Relayers WG, but also the FeeGrants. This is a dedicated wallet that covers ATOM gas fees for IBC relaying to and from the Cosmos Hub, with the first amount set to cover a three month period. The funding enabled twenty-four relayer teams to offset their native ATOM fees during this period. However, the three months are now over and the wallet is close to empty.
This year, the Hub also introduced Fee Middleware, a feature in Gaia v16 aimed at enhancing the IBC relayer and user experience. While it does implement transparent fee information and permissionless operations, it still does not solve the lack of incentivization for our relayers.
Which is why this AADAO grant is so important for the continuity of the Hub and its ecosystem while it’s working on an official and scalable solution.
Hope for Hub Relayers
As happy as AADAO is to support such key players in the ecosystem, this grant is just a temporary solution in order to cover fee costs for the relayer teams until the proper solution comes into play.
Luckily, a fully permissionless IBC relayer fee infrastructure (ICS-29 with upgraded major channels) is expected to go live on the Hub in the coming six months, which aims to support relayer fees and solve this conundrum they are in. It’s agreed that any unused funding will be returned to the AADAO.
Are you driving value to the Cosmos Hub?
Funded by the AADAO, the IBC Relayer WG is bringing forward critical efforts to the Hub and IBC as a whole.
Are you building a project that could help drive value for the Hub? If so, be sure to check out our Funding Themes and apply for a grant today.
About the Atom Accelerator DAO
Atom Accelerator DAO (AADAO) is a governance-mandated DAO of the Cosmos Hub. We have been formed and mandated to drive value for the Cosmos Hub & ATOM, supporting initiatives that either directly create economic impact or produce value that can drive its growth. From this, our current primary mandates are public grants and venture grants.
Atom Accelerator’s venture arm, strategically invests in promising early stage web3 founders and startups both within and outside of the Cosmos Hub’s ecosystem. Offering expertise, guidance, and support as experts within the Cosmos ecosystem while driving value towards Atom.
In 2023, we deployed $3.8 million in grants to 39 recipients – resulting in, among other things – a $22m USD airdrop to the Community Pool, an AEZ Accelerator program to expand the AEZ, a successful hackathon with 42 project submissions bringing innovations to the AEZ – and many other key initiatives. Read about them in our 2023 Impact Report.
