Interchain Labs Redefines Cosmos Strategy

Interchain Labs (ICL) is shifting its focus from making the Cosmos Hub a smart contract platform with an EVM layer to prioritizing the Cosmos Stack as an infrastructure toolkit for sovereign Layer 1s. This change targets businesses and institutions aiming to launch their own chains.

During a recent town hall, ICL leadership, including co-CEO Barry Plunkett, expressed that the initial push to integrate EVM was diluting resources. Despite the enthusiasm, the concept failed to attract new developers and investors beyond the existing Cosmos base. Rising costs and increased competition in the blockspace market rendered becoming another general-purpose contract platform impractical.

ICL now aims to emphasize customizable, sovereign chains linked by IBC, banking on institutional demand from banks and stablecoin issuers requiring dedicated L1s with controlled interoperability. The Cosmos Hub is envisioned as a service marketplace for asset routing and bridging through products like IBC Eureka.

However, significant questions arise regarding the Cosmos Hub’s ability to generate demand for ATOM, as details on its role as a monetization layer remain unclear. While ICL highlights transaction fees, routing services, and potential institutional payments that could utilize ATOM, skepticism persists among ATOM holders.

Addressing concerns for developers who prepared for Hub-native deployments, ICL plans to assist them in migrating to other Cosmos chains and honoring prior funding commitments. Nevertheless, questions about trust and strategic consistency linger as ICL attempts to boost confidence among builders and investors while narrowing its focus toward institutional clients.

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