The announcements are becoming difficult to ignore.
Noble replaced its Cosmos SDK blockchain with an EVM Layer 1. Sei progressively removed CosmWasm, native Cosmos transactions and IBC to become EVM-only. Elys shut down its appchain before rebuilding its product on Base. Nillion moved its token and economic coordination to Ethereum. Evmos simply stopped its blockchain. (Noble) (Sei) (Elys) (Nillion) (Stakeflow)
The movement is real. It now affects major infrastructure projects and can no longer be dismissed as the failure of a few minor chains.
But before concluding that the Cosmos Hub is being emptied out, a more precise question needs to be asked:
What did these projects actually contribute to the Hub and to ATOM?
The answer is less flattering than the usual “Internet of Blockchains” narrative.
For most of them, very little directly.
Cosmos Is Not the Cosmos Hub
The Cosmos Stack includes the Cosmos SDK, CometBFT and IBC. These technologies allow teams to build independent blockchains with their own governance, token and security model.
The Cosmos Hub is only one of the chains using those tools. ATOM is primarily used to secure and govern that specific blockchain. (Cosmos Hub documentation)
This distinction matters.
dYdX, Sei, Evmos and Nillion were not applications hosted on the Cosmos Hub. Their transactions were not executed by the Hub, and their validator sets were not automatically secured by ATOM.
They used technology developed within the broader Cosmos ecosystem, while operating their own blockchains.
When they migrate, they are therefore mainly leaving the Cosmos Stack or the Cosmos economic environment, not a service directly provided by the Hub.
Were They Using the Hub for Free?
Not exactly.
Saying that these projects used the Hub for free implies that the Hub provided them with security, execution or infrastructure without receiving compensation.
In most cases, that service was never provided.
These chains funded their own validators, RPC endpoints, explorers, upgrades and tooling. They carried the cost of their own infrastructure.
What they could use freely was the Cosmos SDK, which is open source, and IBC, which contains no built-in mechanism directing revenue toward the Cosmos Hub or ATOM holders. Any costs are linked to transactions and relayers, not to a mandatory payment to the Hub. (IBC Protocol)
The economic result for ATOM was still the same: activity on those chains did not automatically generate revenue for the Hub.
But the reason is different.
These projects were not receiving a free service from the Hub. They were using tools intentionally designed to remain open and independent from it.
Noble: Important Infrastructure, but Not a Hub Consumer Chain
Noble illustrates this separation particularly well.
The chain used the Cosmos SDK and IBC, but operated under its own Proof-of-Authority model. Its validator set included selected operators, some of whom were also Cosmos Hub validators, but Noble did not rely on ATOM’s economic security. (Noble documentation)
Noble had considered joining Interchain Security. The integration was postponed because the fees generated by the chain would not have covered the additional costs imposed on Hub validators. The team was concerned that joining too early would turn Noble into a structurally unprofitable consumer chain. (Cosmos Forum)
Noble still created considerable value for the wider ecosystem. It issued native USDC, supported stablecoin circulation and connected numerous chains through IBC.
That value was, however, indirect.
Noble’s volumes did not automatically generate revenue for ATOM stakers. Using USDC issued on Noble did not require holding ATOM either.
Its departure is therefore a major loss for the Cosmos ecosystem, its liquidity and its image. But it does not remove a significant revenue stream that had previously flowed to the Hub.
That revenue stream had never truly been created.
Elys: The Important Exception
Elys was in a different position.
The project selected the opt-in Partial Set Security model. A group of Cosmos Hub validators could choose to secure Elys using the economic power associated with their ATOM delegations. (Cosmos Forum)
In return, the proposed economic model included:
- 25% of Elys staking rewards for participating validators and their delegators;
- 15% of protocol-retained revenue distributed in USDC;
- an additional airdrop bonus for the validators and stakers involved.
For the first year, two million ELYS were expected to be allocated to opt-in validators and their delegators. (Cosmos Forum)
Elys was therefore not receiving Hub security for free.
The project had established a direct mechanism intended to compensate participating operators and ATOM stakers.
That does not mean the contribution was sufficient to create long-term demand for ATOM or cover every infrastructure cost. But unlike most of the other projects discussed here, Elys had created an explicit economic link with the Hub.
Its departure therefore represents the loss of a consumer chain and of a potential reward source for participating ATOM stakers.
The Problem Is Not Free Use, but the Lack of Value Capture
This is where the structural problem appears.
Cosmos was designed to allow independent blockchains to build and communicate without requiring permission from a central platform. That architecture helped the Cosmos SDK and IBC achieve broad adoption.
It never guaranteed that this adoption would benefit ATOM.
A chain can:
- use the Cosmos SDK;
- adopt CometBFT;
- open IBC channels;
- attract users;
- process billions of dollars;
without buying ATOM, paying the Cosmos Hub or using its security.
This is neither a bug nor an abuse of the system. It is a direct consequence of the model that was chosen.
The Cosmos Stack was built as open infrastructure. The Hub never succeeded in becoming the mandatory — or sufficiently attractive — layer through which that infrastructure could be monetised.
Not All Departures Have the Same Impact
A project can weaken Cosmos without directly reducing Hub revenue.
Noble takes with it part of the Interchain’s stablecoin activity and credibility. Sei reduces the presence of CosmWasm and IBC on a major chain. The repeated moves toward EVM environments also reinforce the perception that developers, users and liquidity are concentrated elsewhere.
These are real losses.
But they primarily affect:
- the reach of the Cosmos Stack;
- IBC activity;
- liquidity circulating between chains;
- the general attractiveness of the ecosystem;
- its image among developers and investors.
Their direct impact on ATOM is harder to quantify precisely because the economic relationship with the Hub was already weak or non-existent.
The Hub therefore suffers the reputational consequences of projects leaving the Cosmos ecosystem, without necessarily having benefited from their previous activity.
dYdX Shows That the Appchain Model Still Has a Purpose
dYdX prevents us from concluding that every major chain will eventually move to an EVM environment.
The protocol continues to use a Layer 1 built with the Cosmos SDK and CometBFT. Its architecture still relies on its own Proof-of-Stake network and validator set. (dYdX)
In this case, the appchain serves a clearly identifiable technical purpose: controlling the order book, consensus, transaction processing and trading parameters.
dYdX is not staying because Cosmos automatically brings it more users or liquidity.
It is staying because its blockchain is an integral part of the product.
That is probably the most important dividing line.
When an application genuinely requires specialised execution, the appchain model retains a clear purpose.
When the main objective is simply to find users, liquidity or existing tooling, maintaining a sovereign blockchain becomes much harder to justify.
The Hub Was Not Robbed — It Never Built the Cash Register
The projects discussed here did not all benefit from free Cosmos Hub services before leaving.
Most of them did not use the Hub’s security and therefore did not owe it direct compensation. Elys was the main exception, with a model designed to reward participating validators and ATOM stakers.
The problem is more structural.
Cosmos succeeded in creating technologies used far beyond the Hub, but ATOM was never placed at the centre of their economic activity.
Noble’s departure and Sei’s change of direction remain worrying because they reduce the influence of the wider ecosystem. But they mainly expose a weakness that already existed before those projects moved: their success did not automatically create value for ATOM.
The Hub is not dead because these projects are changing direction.
But it cannot continue presenting itself as the economic centre of a system that was specifically designed to operate without it.
The question is no longer only how to retain projects.
It is how to build services — security, liquidity, execution or coordination — valuable enough for projects to choose the Hub and willingly pay for what it provides.
Without that, Cosmos may continue producing excellent technology.
And ATOM may continue watching its value flow elsewhere.
