Cosmos Hub Seeks Community Approval to Transfer 1 Million ATOM to Liquidity Protocol Hydro

The platform said on July 26 that Cosmos Hub’s (ATOM) proposal is live in the community forum.

Cosmos Hub has proposed transferring 1 million ATOM to liquidity protocol Hydro in a new governance proposal.

The proposal, announced by the platform on July 26, is now live in the Cosmos Hub community forum. If approved by the community, Cosmos Hub will transfer 1 million ATOM tokens from its community pool to the Hydro committee.

As part of the transfer, 500,000 ATOM will be used to seed an ATOM liquidity pool on the interchain auction protocol. The remaining 500,000 ATOM will be staked with liquid staking platform Stride to seed the stATOM liquidity bucket.

Stride is the Cosmos ecosystem’s leading liquid staking platform, boasting nearly 120,000 liquid staking users at the time of writing. The protocol’s assets under management stood at close to $100 million.

What is Hydro?Cosmos Hub describes Hydro as an interchain liquidity management platform that leverages Cosmos Hub for liquidity, governance, and community growth. The protocol generates value from bidders and through yield accrued by deploying liquidity into decentralized finance protocols.

Outlining how Hydro functions, Cosmos Hub says it is a set of smart contracts that projects can tap into to deploy protocol-owned liquidity. These deployments enable DeFi protocols to bid for liquidity, and the deployments are governed by the Cosmos Hub community. The value that accrues from these transactions benefits all ATOM holders.

Thyborg, a Cosmos Hub contributor and Informal Systems strategist, outlined the proposal as introducing a new liquidity injection ahead of the Hydro platform launch.

Hydro is currently in testnet.

Deployment of ATOM tokensATOM is currently the second-largest native token for liquidity on Osmosis, while it also accounts for a significant portion of the total value locked on Astroport, a Cosmos liquidity protocol.

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

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