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. 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.
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 serves as a stopgap solution to cover the transaction fees for IBC relayers.
AADAO’s grant will be used to market-buy approximately 8,000 ATOMs to replenish the fee grant wallet. This action will prevent the cessation of IBC activities on the Hub, which would otherwise severely impact its operational capabilities. The working group acknowledges that this is a temporary solution and emphasizes the need for a long-term fix where users cover their relay costs. Should a permanent solution be found, any unused funds from this grant will be returned to the ATOM Accelerator DAO.
