Dear Comdex Community,
As we embark on the next phase of Comdex’s journey, our primary aim is to establish Comdex as the RWA aggregation and issuance chain secured by the Cosmos Hub, enabling users to access the best RWA yields across all possible avenues.
Our journey has led us to a moment where we can leverage our experience in building in DeFi and RWAs to create a solution that addresses the fragmentation in the RWA market. To achieve this, implementing an EVM module is necessary. This addition will enable us to integrate RWAs from different networks, expanding the range of opportunities we can offer. This will enhance our ability to aggregate and manage RWAs efficiently, positioning Comdex as a leading platform for accessing and managing RWAs seamlessly in the Cosmos ecosystem.
Our plan encompasses several key initiatives:
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Building an RWA aggregator platform for comparing RWA opportunities from various sources with a unified KYC system
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Implementing an EVM module to simplify RWA integration and aggregation
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Leveraging Partial Shared Security (PSS) and enhancing our economic security to onboard institutional clients
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Focusing on acquiring users and streamlining onboarding to be as seamless as Web2 interfaces.
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Continuing development of core products like ShipFi and Harbor.
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Working towards a long-term vision of becoming an L2.
This document outlines our comprehensive plan to establish Comdex as a central hub for RWAs and beyond secured by the Cosmos hub.
Reflecting on our Journey
As we reflect on the future of Comdex, it’s important to acknowledge our accomplishments and the lessons we’ve learned. From the outset, Comdex has prioritized the development of functional products. This focus is especially important in an industry where many projects struggle to deliver. We have gained invaluable experience and built a solid foundation. However, we recognize the need for a larger user base.
Throughout this journey, our dedicated validators and community have been instrumental, and we extend our gratitude for their ongoing support. This document charts our course for the future, outlining a comprehensive plan and the strategic measures and actions needed to achieve the said goal.
We saw the immense potential of the “appchain thesis,” where dedicated blockchains could cater to specific needs. This vision, however, required a foundation of robust infrastructure and the flexibility for customization.
We recognized early on that to build an effective CeFi to DeFi bridge, we would need our own infrastructure and customizability. Comdex is proud to be one of the first adopters of IBC and the Cosmos SDK. From the get-go, Comdex has been focused on Real World Assets (RWAs) and on-chain credit financing. When we launched our first MVP of the Enterprise Trade in 2019, we quickly realized that some crucial infrastructure elements were missing, essential pieces of the puzzle that we needed to put in place. Building in DeFi has helped contextualise our work.
On the fundamental level certain core primitives form the base of all finance. These basic, yet essential infrastructural components are integral to understanding how financial systems function. Comdex mirrors these financial primitives in its products.
The Security Imperative for RWA Products
As a Proof of Stake (PoS) chain, Comdex relies on the staking and delegation of tokens to maintain security. This system necessitates additional inflation to reward delegators and secure the chain.
A critical, yet often under-discussed, challenge in the particular design of DeFi focused appchains is achieving a sustainable balance between allocating resources towards paying for security (via inflation) while also incentivizing liquidity providers (LPs). However, this dual burden can have unintended consequences, potentially diluting the value of the native token holders. If not carefully balanced, it can lead to a reduction in the overall stake securing the chain, potentially compromising security as the token value decreases. When the value securing the chain decreases, the risk of vulnerabilities increases.
High-value RWA products require a heavily secured chain to prevent attacks from rogue actors who could accumulate a significant number of tokens, gain control, and compromise the chain. RWAs, such as tokenized real estate, supply chain finance, and trade finance instruments, involve high-volume and secure transactions, requiring a blockchain that can ensure liveness and resist consensus attacks
Therefore, maintaining a high level of security is not just desirable - it’s imperative.
In conclusion, the need for robust chain security is crucial for RWA products, and Comdex’s approach to leveraging the Cosmos ecosystem’s Interchain Security underscores its commitment to providing a secure, reliable, and trustworthy platform for its users.
Interchain Security as a Solution
Recognizing these challenges, we’ve identified ICS v2 as a promising solution. By leveraging Interchain Security, Comdex can “borrow” security from the Cosmos Hub.
Comdex aims to transition into an opt-in consumer chain and leverage the security of the Cosmos hub through Partial Shared Security (PSS). Over the past year, our team has studied various economic security measures, including Eigenlayer via ETHOS, Babylon, and ICS. We considered deploying our dApps on another chain, but that approach limited our growth potential to the ecosystem where we plan to deploy it. We see Interchain security as a true home.
It offers economic security while preserving the flexibility to customize our chain infrastructure. PSS has a familiar development environment that minimizes friction and accelerates the deployment process for the transition as compared to the other measures.Therefore, PSS is the ideal path forward, enabling us to retain our infrastructural control while deriving security from the Cosmos hub.
This approach offers several advantages:
- Enhanced Economic Security: By tapping into the Cosmos Hub’s security, we can achieve a level of economic security that would be challenging to maintain independently, especially in the early stages of our growth.
- Institutional Confidence: The added security layer provides greater assurance to institutional clients and larger volume traders, potentially accelerating adoption of our RWA products.
- Improved Operational Flexibility: Utilizing the Cosmos Hub’s security infrastructure provides us with greater flexibility in our resource management. This allows us to optimize our operational efficiency and focus on delivering value to our users.
- Focus on the core competencies: With base-layer security enhanced through ICS, we can focus more resources on developing and refining our RWA products and DeFi protocols. This enables us to innovate and improve our offerings.
For the past year, the team has been in ongoing discussions with the Informal team, eagerly anticipating the launch of ICS v2 to facilitate our transition. We believe the timing is perfect for this move.
Validators and Security Incentives
As part of our transition to Partial Shared Security (PSS), we are implementing a change in our tokenomics and security model. To align our security with the Cosmos Hub, we will be allocating 70% of CMDX inflation towards security provided by the hub. This substantial commitment underscores our dedication to maintaining a highly secure chain, which is crucial for our RWA products and future developments.
Validators participating and opting-in, in Comdex’s PSS will play a vital role in this new structure, contributing to the overall security of the network. It’s important to note that this allocation percentage will be evaluated every month on an ongoing basis and be adjustable in the near future, allowing us to optimize our security model as the ecosystem evolves.
Building Comdex as an RWA Aggregator Platform
Building specific platforms for RWAs comes with several challenges. As we’ve delved deeper into the RWAs, we’ve recognized the growing challenges posed by the proliferation of specialized platforms. While these platforms bring depth to individual markets, they’ve created a fragmented economy that complicates the investor experience. Users often struggle to discover and compare opportunities across multiple platforms, potentially missing out on optimal yields or diversification options. Moreover, the repetitive and burdensome onboarding processes, including KYC procedures, for each platform have become a significant barrier to entry and exploration of new opportunities.
In response to these challenges, we’re evolving Comdex into an RWA aggregator platform. This approach aims to simplify the user experience by providing a unified interface for discovering and comparing RWA opportunities from various sources. At the heart of this evolution is our innovative “once done and forget” KYC process. Once users complete their KYC on Comdex, they can access a wide range of RWA opportunities without repeating the process for each individual platform or asset.
This transformation not only simplifies access to diverse RWA opportunities and saves time, but also aids asset originators by increasing visibility for their offerings and providing access to a broader pool of potential investors. By reducing onboarding friction and complexity, we’re creating a more efficient, user-friendly environment for both investors and asset originators.
The aggregation app will be our immediate focus once PSS is live before the creation of debt assets via ShipFi. ShipFi will come later in our development timeline, allowing us to concentrate on building the aggregation platform first.
As we implement this strategy, we remain committed to maintaining the highest standards of security, compliance, and user experience. Our goal is to position Comdex as the go-to platform for accessing and managing RWAs.
Unlocking Potential: The EVM Module
As we continue to evolve Comdex into a comprehensive RWA platform, we recognize the critical importance of creating an ecosystem that is both user-friendly and developer-centric. This brings us to a key component of our strategy: the implementation of an EVM module.
The EVM module addresses a critical challenge we’ve encountered in our journey: simplifying onboarding the RWA products and lowering the barrier to entry for developers looking to build on Comdex. Despite numerous hackathons, finding developers who can quickly build and deploy using the current stack still remains challenging. We have engaged with many teams interested in deploying on Comdex, but the r/r of rewriting code in another language just isn’t there.
Solidity, the primary language for smart contracts, offers distinct advantages that we cannot ignore. Its prevalence and ease of use provides access to a large, experienced developer base. By incorporating the EVM, we can tap into this massive ecosystem, significantly expanding our potential. The decision to prioritize an EVM module is rooted in our primary goal: to build an environment that attracts both developers and users. We recognize that Solidity has proven its resilience and reliability over time. It has become, and likely will remain, a core language for smart contract developers.
Smooth User Onboarding and Acquiring a User Base
Building on our strategic developments, we now turn our attention to another aspect of Comdex’s future: user acquisition and onboarding. The Cosmos ecosystem has traditionally focused heavily on infrastructure development, and needs to prioritize user-friendly dApps to achieve greater adoption. A key challenge in the ecosystem has been the complexity of user onboarding. Our aim is to maximize account abstraction, eliminate the need for users to store seed phrases, and remove those pesky wallet pop-ups. Objective is to streamline the process to as simple as a single additional click compared to traditional web2 interfaces.
However, simplifying the onboarding process is only part of the equation. To truly drive adoption, we need to tap into existing large user bases. For instance, the fantasy sports sector in India alone boasts over 130 million players – a stark contrast to the Cosmos Hub’s 300-500k active users.
To bridge this gap, we’re exploring integrations with widely used applications like Telegram. Imagine onboarding to our chain being as simple as using your Telegram account to make a deposit. All the complex processes – account creation, seed phrase storage – would be handled seamlessly in the backend. Ensuring a mobile-first approach will be key to our strategy.
Existing Product Developments and updates
Building on our strategies for user acquisition and ecosystem growth, it’s crucial to provide an update on our existing product developments. The RWA aggregator app and ShipFi remains a key focus for our core team. We are diligently working towards its completion and are poised to launch once we transition to PSS . ShipFi aligns perfectly with our goal of establishing Comdex as an aggregation layer for RWAs. When building our DeFi protocols, we strategically opted for a modular code approach. This foresight now benefits developers on the Comdex chain, allowing them to easily create and deploy diverse financial primitives on-chain. By leveraging our pre-built modules, teams can accelerate development, from simple lending protocols to complex products like stablecoins. Simultaneously, we’re turning our attention to Harbor, with plans for its revitalization. A key component of this effort will be running debt auctions for the undercollateralized $CMST. This move is not just about addressing the current state of CMST but also about strengthening its position within our ecosystem. We have ambitious plans for CMST, including its close integration with the ShipFi and our upcoming RWA aggregation dApp.
These developments represent a holistic approach to our ecosystem. By enhancing ShipFi, revitalizing Harbor, and strengthening CMST, we’re creating a robust, interconnected suite of products.
The synergy between our various initiatives – from RWAs and DeFi to gaming – is designed to create a dynamic, self-reinforcing ecosystem. As more users and developers come to Comdex, they’ll naturally explore other parts of the Cosmos ecosystem, driving growth and innovation across the network.
Our ultimate goal is ambitious yet clear: to MAKE ATOM GREAT AGAIN.
The Modular Vision: Building Towards an L2 Future
The industry is rapidly advancing by modularizing the essential components required to build robust systems. This approach facilitates mass adoption by allowing these components to be combined for optimal solutions. For instance, data availability projects like Celestia reduce the costs of data and server infrastructure. Rollup SDKs such as Rollkit and Sovereign streamline system orchestration. Additionally, economic security can be offloaded using services like Ethos and Babylon, or by building an L2 on the Cosmos Hub, where settlement occurs on the hub, and sequencers provide soft commitments.
Comdex’s long-term vision is to transition to a L2 solution, ultimately streamlining development, lowering costs, and enhancing security, paving the way for broader adoption.
Security hinges significantly on decentralizing sequencers once the L2 is operational. Validators opting in and participating in Comdex’s Partial Set Security (PSS) adoption will automatically qualify to run sequencers on the L2.
Running an L2 is not only cost-effective but also ideal for scaling infrastructure. It provides the customizability of an appchain while avoiding the limitations and growth constraints of relying on external teams and ecosystems. By building an L2, we aim to achieve greater autonomy and control, enabling the development of a more flexible and scalable ecosystem. This approach offers a perfect balance and compelling middle ground, providing the best of both worlds for developers and users. It accelerates speed, reduces data costs, and enhances the performance and throughput of applications like gaming, making it a strategic choice for our future development.
Next Steps and Timeline
We are committed to a swift and efficient transition. Here’s our projected timeline for the upcoming changes:
- On-chain proposal: July 15, 2024
- Testnet launch: July 17, 2024
- Tentative spawn time: First week of August 2024
Please note that while we are working diligently to meet these dates, they are subject to change based on technical developments and community feedback. We will keep our community updated on any adjustments to this timeline.
A discussion thread will be opened on the Cosmos Hub forum for community feedback. We encourage all Comdex supporters and Cosmos ecosystem participants to share their thoughts and suggestions.