Atom Economic Zone (AEZ)

The ATOM Economic Zone refers to a growing ecosystem of blockchains, projects, and decentralized applications (dApps) built around the Cosmos Hub and powered by the ATOM token. It is designed to create an interconnected network of blockchains that not only communicate with each other through Inter-Blockchain Communication (IBC) but also share security, governance, and economic resources centered on ATOM.

Key Components of the ATOM Economic Zone:

Cosmos Hub as the Core

The Cosmos Hub acts as the central hub for this ecosystem, connecting various blockchains (called "zones") and securing them through shared security models. It is where ATOM plays its most significant role. Blockchains that join the Cosmos network can interact seamlessly via IBC, enabling efficient transfer of tokens and data across the ecosystem.

Interchain Security (ICS)

One of the core mechanisms driving the ATOM Economic Zone is Interchain Security (ICS). Through ICS, smaller chains can borrow security from the larger Cosmos Hub. This means blockchains can leverage the existing validator set of the Cosmos Hub, secured by ATOM staking, without needing to set up their own validators. This shared security strengthens the overall network while increasing demand for ATOM, as staking is necessary to participate in validation. Aa a COSMOS HUB validotar GATA HUB aim to run all possible ICS chains to support the cause.

Example: A new blockchain in the ATOM Economic Zone might focus on decentralized finance (DeFi) applications, and instead of having its own validators, it can use the security infrastructure of the Cosmos Hub by paying validators in ATOM. This reduces the operational burden for new chains while benefiting from Cosmos’ security.

Liquidity and Token Transfers

The Cosmos ecosystem's defining feature is its ability to facilitate token and data transfers between different blockchains, thanks to IBC. This allows users to move assets across various dApps and chains, similar to how Ethereum uses tokens in decentralized finance (DeFi) apps. In the ATOM Economic Zone, the Cosmos Hub serves as the main connector, enabling fast and secure transfers across multiple blockchains.

Governance and Decision-Making

ATOM holders play a critical role in governance, not only for the Cosmos Hub but for projects within the ATOM Economic Zone. They vote on proposals related to software upgrades, inflation adjustments, security parameters, and the inclusion of new chains in the ecosystem. This decentralized governance model is essential to keep the Cosmos ecosystem community-driven.

DeFi and Liquid Staking

As part of the ATOM Economic Zone, liquid staking has recently become an important innovation. With the introduction of liquid staking modules, users can stake ATOM without locking it away for extended periods (previously 21 days). They can now use their staked ATOM in DeFi applications while still earning staking rewards. This flexibility makes ATOM an even more valuable asset in the Cosmos economy.

Example: Users who stake ATOM can receive liquid staking derivatives (LSDs) which represent their staked position. These can then be used in decentralized finance applications like lending or yield farming, allowing them to participate in DeFi without sacrificing staking rewards.

Economic Impact of ATOM in AEZ

The ATOM token is at the center of this economic zone, where its utility goes beyond simple transactions. It fuels governance, secures multiple blockchains, facilitates liquidity, and powers decentralized finance applications within the Cosmos ecosystem. Over time, the ATOM Economic Zone is expected to grow, integrating more chains and dApps, and making ATOM an even more integral asset for Cosmos participants.

In summary, the ATOM Economic Zone creates a cohesive, interconnected blockchain ecosystem where ATOM is used for governance, staking, security, and DeFi, all connected by the Cosmos Hub. As the ecosystem expands, ATOM's role will continue to evolve, driving value both within and beyond the Cosmos network. Currently following Chains has joined AEZ - Stride - Neutron

Folling chains are actively working to join AEZ - Elys - Nobel - Evmos