The Atom Finally Splits

The co-founder and general manager of Atom Accelerator DAO, a crypto cooperative that has distributed millions of dollars to support a Cosmos cryptocurrency, was ousted last week.

Atom Accelerator, a crypto cooperative that has distributed millions of dollars to support a Cosmos cryptocurrency, saw its co-founder and general manager ousted last week over a dispute surrounding the issuance of performance bonuses.

Employees of the Atom cooperative voted unanimously on September 25 to remove general manager Youssef Amrani from his post, with his final day with the organisation being September 30.

The drama is a big deal in Cosmos. Endowed with millions in crypto, the cooperative has a dual mandate: boosting the Cosmos Hub blockchain and the ATOM token, both of which were once meant to lie at the heart of Cosmos, the “internet of blockchains.”

The efforts have yet to pay off: Despite Atom Accelerator’s doling out crypto grants worth more than $6 million to more than 80 organisations, ATOM has fallen almost 60% since January 1, prompting soul-searching among the blockchain’s proponents.

A reckoning

Amrani’s ouster has prompted a reckoning at the cooperative.

Co-founder Ryan Orr declined to lead the organisation going forward, and suggested it either disband or find someone “who wants to lead a community renewal mandate process.”

Communications head Syed Choudhury said he would leave by year’s end. Controller Patricia Mizuki, who was the first to raise questions about the bonuses, announced she would do the same.

There’s more: The cooperative has received a “legal demand letter” from an unnamed “former contributor” demanding 12 months’ pay for dismissal without cause and defamation, according to Choudhury.

Additionally, the cooperative will review grants made during Amrani’s tenure to seek evidence of possible favouritism or nepotism, Choudhury said.

Amrani did not return DL News’ request for comment.

Cosmos Hub adrift

The ouster is the latest controversy to rock Cosmos, a network of interconnected blockchains that once held great promise as a means for scaling blockchain technology.

The Cosmos network was initially envisioned as having a hub-and-spoke model with Cosmos Hub at its centre. But its developers instead built software allowing its myriad blockchains to interact with one another directly.

After spending several years adrift, Cosmos Hub has taken tentative steps toward reinventing itself — an effort Atom Accelerator funded via grants to various developers, according to one member.

‘Why does the Hub exist?’

Nevertheless, its lack of a clear mission or purpose was “the reason for all our drama,” the insider said, asking that they not be named so they could speak candidly about the events that led to Amrani’s ouster. “Why does the Hub exist?”

Last month, the Interchain Foundation, a Swiss nonprofit backing Cosmos, faced a vote of no confidence over suspicion its leadership mismanaged funds meant to promote the network’s development.

Persistent advocacy

Behind both the ICF vote and Amrani’s ouster is crusading strategy consultant Grace Yu, who during several skirmishes with Cosmos leadership has earned respect for her persistent advocacy as well as frustration from those who see her style as unnecessarily adversarial and unyielding.

Atom Accelerator was founded by Amrani and Orr in 2023, with a small, mostly part-time staff funded by Cosmos Hub.

The hub’s validators voted in December 2023 to give Atom Accelerator almost 1 million additional ATOM tokens, worth more than $8 million at the time, to fund its efforts for 2024. Another 100,000 tokens were set aside for performance and retention bonuses.

‘The bonus pool should not be misused to ‘reward’ unexceptional performance.’

The text of the proposal included a link to a document titled “AADAO Performance and Retention Bonus Protocol.” According to that document, Atom Accelerator employees deemed to be meeting expectations would be eligible for a “middle tier performance bonus.”

Earlier this year, Yu was elected to a position on the cooperative’s oversight committee.

“The bonus pool should not be misused to ‘reward’ unexceptional performance that merely ‘meets expectations,’” she wrote in a September report detailing concerns with Youssef’s stewardship of the cooperative.

“Additionally, given the current price action of ATOM, the proposed methodology is all the more indefensible.”

While Cosmos Hub validators approved the bonus package, its details were tucked away in a hard-to-find online document that few had seen, Yu said.

A ‘dangerous negative spiral’

The oversight committee refused to approve the bonus payouts in August. In September, Yu detailed her misgivings on the Atom Accelerator forum.

The debate over Amrani’s bonus practice unspooled over hundreds of messages in which both sides accused the other of using anonymous accounts to create the impression they enjoyed broad support.

Amrani’s critics contended on the Atom Accelerator forum that he intended to use the bonus pool to reward work that wasn’t deserving of such recognition.

Amrani said Yu’s actions were “political”