Back in June Duality submitted a proposal on the Cosmos Hub forum to become the third consumer chain secured by interchain security. We had a brief alpha feed post here: https://members.delphidigital.io/feed/duality-posts-ics-proposal-aims-to-go-live-in-august?&utm_source=link&utm_medium=portal
Today, they’re proposing a bit of a pivot, instead launching on Neutron (the first ICS chain) instead. Why the switch? Running consumer chains is expensive and having two of them competing in the same vertical (DeFi) is suboptimal for the AEZ (Atom economic zone). Duality never planned for their own token anyways so this switch allows them to seamlessly tap into Neutron’s liquidity for spot assets and saves validators a combined $500k-$1m/yr. With this proposal, Duality’s DEX module will be included directly in Neutron’s binary (i.e. at the infra layer instead of a smart contract).
What does this say about interchain security or appchains? For ICS, I think we’ll see most DeFi projects aim to launch on Neutron instead of independent chains, and new ICS chains for the Hub will need to be something unique in a new vertical. Cosmos has a liquidity problem, and high fees due to competing DeFi applications is not an issue; fragmenting them at this stage creates a tougher onboarding environment for new users.
As of now the Hub has consumer chains in two verticals: DeFi (Neutron) and Liquid Staking (Stride). One I would keep my eye on is Stargaze and their NFT ecosystem, as that would be a natural third vertical to adopt (at a minimum, I expect easy routing to buy Stargaze NFTs with ATOM instead of STARS, something Skip has been working on recently).