The Cosmos ecosystem has fallen on hard times recently. However, comments coming out of the project strike a defiant tone, with promises to reclaim lost ground, radical redesigns of its $ATOM token, and the scrapping of certain plans. One of the most controversial issues the Cosmos Hub is facing is the mass exodus of projects and developers. A number of these projects were considered high-profile, and those that did not pivot or migrate to other chains have scaled back or completely shut down. A Cryptopolitan analysis highlighted Cosmos’ struggles, with projects opting for the Ethereum Virtual Machine (EVM) to plug into liquidity-rich venues. The Cosmos ecosystem has had to deal with a mass exodus of projects One of the most recent projects to dump Cosmos is the Noble protocol, a major stablecoin-oriented project that had processed billions in volume before it announced its departure from Cosmos to launch an EVM-based L1. Noble initially positioned itself as a consumer chain. However, it reportedly never delivered on that promise, and according to Tony, the Cybernetics and Nolus community lead, the best it did for the ecosystem was issue USDC for Cosmos DeFi. Its exit from the Cosmos Hub has generated FUD, but Tony claims this FUD is misplaced as the Hub was not benefiting from the project, even while it issued USDC on behalf of Circle. Aside from Noble, other projects that are no longer active on the Hub or have scaled down include the privacy-focused Penumbra, which shut down entirely; Comdex, Kujira, and Evmos, all of which have halted certain developments; and the likes of Omniflix, Elys, and Jackal, which have been migrated to other chains by their respective teams. The ATOM token is also not doing well The exodus of so many projects is concerning enough. There is also the sharp criticism the ATOM token has been facing, which makes the situation even more dire. The token has underperformed dramatically, especially when compared to other major L1s. It is down nearly 90% from its all-time high and is currently trading around $2.3 as it lags behind in the current cycle. Critics have opinions on why the token has underperformed, and they range from flawed tokenomics and governance issues to leadership fractures, as well as a failure to evolve its security and economic models effectively. The issues facing the token and the recent exodus of projects had caused some to tag the ecosystem “pretty much dead,” or on the “path to slow death.” However, Tony, the Cybernetics and Nolus community lead, is convinced the exodus is one of the best things to happen for the Hub. From his perspective, most of them were not contributing in any significant way to the Hub. Tony defends the Cosmos amid heavy criticism Tony believes Noble leaving the Cosmos ecosystem is a net positive and not a negative. “Noble never generated meaningful value for ATOM holders. Literally zero. And the funniest part? The same people who spent YEARS saying ‘consumer chains don’t accrue value to the Hub’ are now panic-posting about how Noble leaving is some catastrophic event,” he wrote in an article he posted on X recently. The way he sees it, Noble leaving clears the path for something better to happen. He claims that the Cosmos Hub is now in direct talks with Circle to issue native USDC on the Hub itself. “Let me tell you something. USDC belongs to Circle, not Noble. And if Circle wants USDC to be natively issued in Cosmos, it won’t rely on Noble or any third-party chain they partnered with for this,” he wrote. As for the projects that left or died, he urges the community to take it all in stride, pointing out that projects that fall in those categories were mostly consumer-facing, retail-focused apps that the Hub is actively pivoting away from. “Their exits don’t contradict the thesis. They confirm it,” he says. He went further by suggesting that Noble’s stablecoin issuance for institutions was actually competition to the Hub, since the Hub wants to do that exact thing for institutions as well. He believes this sets the stage for the Hub to transition into an environment where institutions and financial infrastructure can be built, rather than a trial ground for just any DEX or NFT marketplace. “The Hub’s positioning is narrow and deliberate: become the most interoperable, neutral, secure rail AND infrastructure for institutional-grade applications,” he wrote. How the Hub is fighting back amid all the criticisms Some have written the Cosmos ecosystem off, but optimists can still find signs to be bullish about. According to Tony’s article, there are already a number of things planned to help the Hub stay relevant. One involves the Cosmos Labs and related teams pursuing radical redesigns of ATOM’s tokenomics, seeking to overhaul the present model after acknowledging the security-based approach has not done so well. There are also efforts to improve value accrual, reduce inflation bands, and introduce incentives while focusing more on business development. Some plans have also been scrapped to prioritize more viable paths, even if controversial. From here on out, more emphasis will be laid on the Hub’s core strengths, which include interoperability, appchain flexibility, and resilience. However, whether this will be enough to reverse the current trajectory remains to be seen. Tony seems to think so, but even he has agreed that this may have no effect on short-term price action. After all, institutional adoption is slow, CBDC pilots take years, and native USDC can’t make the ATOM token “moon tomorrow.” He claims anybody who truly believes in Cosmos will have to be patient and avoid looking for success in metrics that other L1s are actively pursuing because Cosmos has set its sights higher. Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free .
