Cosmos Hub proposes transfer of 1m ATOM to liquidity protocol Hydro

Cosmos Hub has submitted a governance proposal seeking community approval to transfer 1 million ATOM to liquidity protocol Hydro.

The platform said on July 26 that the Cosmos Hub (ATOM) proposal is live on its community forum. If the community approves the plan, Cosmos Hub will transfer 1 million ATOM tokens from the community pool to the Hydro committee.

Accordingly, 500,000 ATOM will be used to launch an ATOM liquidity pool in the cross-chain auction protocol. Meanwhile, the other 500,000 ATOM will be staked with liquid staking platform Stride to launch the stATOM liquidity bucket.

Stride is the top liquid staking platform in the Cosmos ecosystem and currently has around 120,000 liquid staking users. At the time of writing, the protocol’s assets were close to $100 million.

What is Hydro?

Hydro is a cross-chain liquidity management platform that uses Cosmos Hub for liquidity, governance, and community growth. The protocol generates value from bidders and yields by distributing liquidity across decentralized finance protocols.

As for how Hydro works, Cosmos Hub says it’s a set of smart contracts that projects can leverage to distribute liquidity for the protocol. These distributions allow DeFi protocols to bid for liquidity and are governed by the Cosmos Hub community. The value generated from these transactions benefits all ATOM holders.

Cosmos Hub participant Informal Systems strategist Thyborg noted that the proposal is to introduce a new liquidity injection before the launch of the Hydro platform.

Hydro is currently in the testnet phase.

Distribution of ATOM tokens

ATOM is currently the second largest native token in terms of liquidity on Osmosis, while accounting for a significant portion of the total value locked in Astroport, a liquidity protocol within Cosmos.

According to DefiLlama, Astroport’s TVL currently sits at around $28.89 million, while its year-to-date volume is over $1.3 billion.

The ATOM token is also distributed across 15 dApps in the Cosmos ecosystem, including Canto, Injective, Archway, Dymension, and Kava.