Overview of analysis:

In this investigation, the holders of the $ATOM token have been determined. After that, the behavior of the Whales on Comsos on governance has been investigated. This analysis has been divided into the following parts:

• The $ATOM holders and distribution of wallets by their held $ATOM have been underestimated
• Top 20 holders and their behavior
• The Identification of Whales and comparing the actions of these Whales with ordinary users as:
  • Governance of Cosmos
  • Voting behavior
  • Vote change ratio
  • Popular proposals
• Reveals the reasons of Whales participation based on most popular proposals

Cosmos network:

Cosmos is a collection of parallel and independent blockchains that can communicate with each other. Cosmos was launched with the aim of increasing scalability and the ability to establish communication between different networks. Currently, the Cosmos ecosystem is a collection of 53 different blockchains that can communicate with each other using the communication protocol developed by this collection. In the considered architecture of Cosmos, there are independent and parallel networks that are managed by Tendermint BFT resilient consensus algorithm. Each of these networks is called a zone. On the other hand, there are a number of connection points or hubs that can enable communication between these networks through a communication protocol called IBC. Also, blockchain technical development is easily possible through the innovative framework of this collection called Cosmos-SDK. The IBC Inter-Blockchain Communication Protocol is an open source protocol that allows networks to communicate and transfer messages and assets in a trustless manner.

Governance of Cosmos:

There is an on-chain module for managing proposals. Each proposal initially has an opportunity called the deposit period; During this period, which will last up to 14 days, the proposer or other supporting people must prepare and deposit a total of 64 atoms. If this amount is deposited before 14 days, this period will be completed; Otherwise, if this amount is still not provided after 14 days, the provided amounts will be burned.

Then we enter the voting period, which is already defined as 14 days. Participants can choose four options: Abstain (meaning that the voter is indifferent to the provisions of the proposal), Yes (meaning agreeing with the proposal), No (meaning opposing), and NoWithVeto (meaning stronger opposition to the proposal).

Methodology:

The data provided by Flipside has been used to handle this analysis.

• Step 1: Find out the held $ATOM token by wallets
  • Table→ cosmsos.core.fact_transfers where currency = ’uatom’
  • Method→ Difference of total received and sent $ATOM tokens
• Step 2: Distribution of $ATOM tokens among wallets
• Step 3: Whales are wallets with over 10,000 $ATOM
• Step 4: Action done by Whales and compare them with ordinary users→
  • Voting patterns of different voter types
  • The vote change ratio
  • Most popular proposals
  • Vote change pattern
• Step 5: Investigate on top 3 proposals on Comsos
  • Find out the reasons for vote change
• Step 6: Draw a conclusion based on the aggeration of previous parts

Importance of Whales:

$ATOM whales are individuals and entities that hold millions of digital currencies. Digital currency whales have a lot of influence in the market and are very rich because they play an important role in driving up and down the prices of bull and bear markets. Being aware of the activity of digital currency whales is a positive point in your investment strategy and research that you should keep in mind.

Part 1: Stats related to $ATOM holders and Whales

Useful links:

• Cosmos
• Whales on Crypto
• Proposals on Cosmos

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani

Proposal #82

Explanation: ATOM 2.0: A new vision for Cosmos Hub

• Proposer

cosmos1et60e8cmehzcdhyluk0lnkzzye5jj7zj3a00cn

• Initial Deposit 1.000000ATOM
• Total Deposit 64.000000ATOM
• Voting Start 2022-10-31 15:03:04
• Voting End 2022-11-14 15:03:04
• Final status: Rejected

The activity of Whale voters:

The whale changed their Votes from YES to NoWithVeto and this voting change caused the rejection.

A ‘NoWithVeto’ vote indicates a proposal either (1) is deemed to be spam, i.e., irrelevant to Cosmos Hub, (2) disproportionately infringes on minority interests, or (3) violates or encourages violation of the rules of engagement as currently set out by Cosmos Hub governance.

Part 3: Investigation on most popular proposals among Whales

Key Findings:

• The highest count of captured votes and unique Whale voters occurred on November 2022 with 345 votes by 114 unique wallets.
• Also, on November 2022 and February 2023, Whales participated in 8 governance proposals of Cosmos.
• The top Whale voter on Comsos governance has been voted for 63 times.
• The most popular proposals among Whales are proposals #82 and #69 with the highest count of participation.

Key Findings:

• About 56% of Whale voters have changed the first voting option on the governance of Cosmos.
• The vote change ratio by proposals of Cosmos governance demonstrated that proposals #82, #83, and #69 have the highest vote change ratio among proposals of governance.
• The most popular vote change path by Whale voters is the “YES→ NO with Veto” path and this path reveals that Whales wanted to reject the proposal with their votes.
• The responsible proposals for each vote change path have been identified. Based on the outcomes of this content, proposals #69 and #82 have the highest count of changing votes by “YES→ NO with Veto”.

Key Findings:

This detailed analysis related to the participation of various voter types (Whales or ordinary users) has been demonstrated in this section:

• According to the results, Whales have consistent participation in governance voting compared to ordinary users. The average vote per voter for Whales is more than ordinary users.
• The general view related to the description of votes for various voter types shows that ordinary users have voted on the “Yes” option more than Whales.
• The share of Whales participated on more than 30 proposals is more than share of ordinary user.
• The distribution of voters by count of captured votes for various voter types reveals that Whales were more active than ordinary users on governance of Cosmos.

Part 2: Activity of Whales on Cosmos governance

Key Findings:

This detailed analysis related to the proposals of wrapped assets and related liquidity pool has been represented in this part:

• The average $ATOM token held by wallets is about 301 tokens.
• The current number of Whales according to the definition is about 645 unique wallets. These wallets held over 86% of the total held $ATOM on Comsos and the domination of Whales on Cosmos network is considerably high.
• The average amount held $ATOM by Whales is about 220k $ATOM tokens. The difference between these numbers and with the average held amount by ordinary users is very large.
• The distribution of the $ATOM tokens shows that most of the $ATOM holders held under 10 tokens.
• Now let’s exclude the largest group (Below 10 $ATOM) and find out the distribution of wallets.
• About 72% of users held between 10-100 tokens and it’s the higher group of wallets for balance (Over 10 $ATOM).
• The top 20 holders of $ATOM have been identified and revealed in the bar chart.

Proposal #69

Explanation: Include CosmWasm in Rho Upgrade

• Proposer

  cosmos1hxv7mpztvln45eghez6evw2ypcw4vjmsmr8cdx

• Initial Deposit 0.050000ATOM

• Total Deposit 64.050000ATOM

• Voting Start 2022-04-29 19:30:20

• Voting End 2022-05-13 19:30:20

• Final status: Rejected

The activity of Whale voters:

The whale changed their Votes from YES to NoWithVeto and NO to NoWithVeto this voting change caused the rejection.

A ‘NoWithVeto’ vote indicates that Whales are strongly opposed to this change and will exit the network if passed.

Proposal #72

Explanation: Bringing Liquid Staking and DeFi to the Cosmos Hub with Interchain Security

• Proposer

  cosmos1czryt9wefedpqc43k2pnvqyl5txzhqdkxxdfcz

• Initial Deposit 0.000001ATOM

• Total Deposit 64.010201ATOM

• Voting Start 2022-06-27 03:56:05

• Voting End 2022-07-11 03:56:05

• Final status: Passed

  
  
  The activity of Whale voters:

  The whale changed their Votes from NoWithVeto to YES and NO to YES this voting change caused the acceptance.

This proposal is requesting 150 000 ATOMs from the Cosmos Hub community pool to fund smart contract applications that are looking to leverage Interchain Security and the liquid staking feature and to fund P2P’s mission to launch a DeFi Hub consumer chain, set to host the Lido liquid staking protocol.

Part 4: Summary and references

Conclusion:

• In general, the value of digital currencies is determined by supply and demand. This means that if a large portion of the supply of a particular digital currency goes out of circulation, the price of the remaining digital currencies in circulation will increase. Similarly, if a large number of cryptocurrencies are suddenly liquidated, their value will decrease. For this reason, cryptocurrency whales are particularly capable of manipulating the cryptocurrency market and can change it to their advantage.
• Also, the behavior of whales and their participation in Cosmos governance is used to find out the decisions of Whales on the future of the Cosmos network. As it is clear from the results, the whales were against major and extensive changes in the network, but when they seek to increase capital in order to expand the Cosmos network, they vote in favor.