No Power Vacuum in Cosmos: What Founder’s Departure Entails

News and Analysis
13.02.2020

Cosmos, the big one among blockchain interoperability projects, has its founder Jae Kwon leaving to work on another project. Soon after the news about Kwon’s decision hit the news, criticism followed.

According to social media and the news, Jae Kwon is being accused of neglecting the Cosmos project, walking away from his responsibilities, abusing colleagues, and even pulling off an exit scam. 

We’ve looked into this situation to figure out what happened between Cosmos’ developers, what’s that new project of Kwon’s, and what it may mean for the Cosmos project.  

Cosmos in a Nutshell

First, a brief reminder about the Cosmos project itself. 

Cosmos is a blockchain framework developed by Tendermint Labs, whose legal name is All In Bits Inc. The company provides a software development kit to build public blockchains. Cosmos Network is meant to be “a decentralized network of independent parallel blockchains, each powered by BFT consensus algorithms like Tendermint consensus.” According to the Tendermint website, at least $6 billion are managed by blockchains built with the kit.

The network is an ecosystem of blockchains that follow certain common rules and can communicate with each other. A counterexample would be a bunch of blockchain networks like Bitcoin and Ethereum that, for the sake of argument, are entirely independent systems that do not interact directly.

Cosmos Hub is the first blockchain built in the Cosmos ecosystem. The Cosmos Hub system has its own ATOM token used for staking and governance needs. There are multiple other blockchains in Cosmos.

There also is the Interchain Foundation, a Switzerland-based non-profit focused on promoting and supporting projects like the Cosmos Network and Tendermint. 

Jae Kwon happens to be the CEO and founder of Tendermint Labs, the main architect of Cosmos, and the president of Interchain Foundation. The man is, or at least was, the ideological leader of the entire Cosmos endeavor.

Kwon’s Troubled Resignation

On January 29th, Daily DeFi reported that Jae Kwon is leaving Cosmos, which meant resigning as Tendermint CEO, to focus on some other project known as Virgo. 

Jae Kwon promptly responded saying that he’s not leaving until everything is ready for his resignation and he is not exactly leaving the project, which doesn’t require him to function anyway.

Kwon also noted that he won’t cut ties to Cosmos and will remain an Interchain Foundation council member. 

The same day, Jae posted an explainer on GitHub, calling the news about his alleged resignation “probably intentional misrepresentation” or “a mistake in translation.” He went further to point out that what happens is the elimination of the CEO role for Tendermint, rather than a resignation.

Finally, on February 3rd, Tendermint director Zaki Manian called Jae Kwon out for negligence towards the Cosmos project. 

In a series of tweets, Mr. Manian pointed out Kwon’s obsession with Virgo and the resulting bias in resource distribution, which hurt the IBC Protocol, the key element of Cosmos’ blockchains interoperability.

“Over the last 6 months, Jae has obsessively focused on Virgo while neglecting and under-resourcing IBC. He threw a painstakingly planned hiring and resource improvement proposal out the window to become @BitcoinJaesus. His behavior has become an untenable distraction,” Manian tweeted.

Manian also claimed that Jae Kwon made himself a single point of failure in Tendermint, referred to by its legal name All In Bits:

“For the past month, Jae has subjected every internal communication channel to religious discrimination, loyalty tests, and abusive rants. At the end of the day, for all his skills at building fault-tolerant systems, Jae built All In Bits with himself as a single point of failure.”

Zaki Manian also voiced his plans for the project after Kwon, stressing that IBC will be launched.

“I’m going to work tirelessly on shipping IBC even if Jae fires me,” reads one of Zaki’s tweets.

Notably, Mr. Manian wasn’t the only one to comment on Jae Kwon’s decisions and behavior. Tendermint’s Director of Security Jessy Irwin tweeted that the core engineers on the team “have faced repeated episodes of retaliation, harassment, bullying, and discriminatory behavior.” 

The Interchain Foundation posted a response to the situation, noting that its operations won’t be affected by Kwon’s move.

“The Cosmos Network belongs to everyone now; it is not owned, controlled, or operated by any single party. The Interchain Foundation will continue to support this decentralized and resilient community according to its mandate,” the post reads.

The ICF’s response ends with an optimistic outlook on Cosmos’ future and expectations that the controversy will be nothing more than a “short term distraction.”

What’s Up With Virgo?

Without much attention to it, Jae Kwon was apparently busy building a project called Virgo. It is about 6 months in the making, as mentioned in Zakin Manian’s tweet. By now, it has a website and a GitHub page, presenting the project’s main ideas and concept.

According to the manifesto, Virgo is “an open association of individuals and organizations working together to create better open tools for coordination at all scales.” The project is claimed to represent the idea of “decentralized, transparent, accountable Human Coordination,” and compared to OpenLibra as an idea of “decentralized, transparent, accountable Finance.”

Kwon’s explainer describes Virgo as a complementary product to Cosmos and a part of an experimental project “bootstrapped by the ICF, headed by Jae Kwon, and executed with the support of AIB.” Jae also noted that Virgo will bring more users to Cosmos:

“Virgo’s mission is to decentralize our financial, social, and org-tech systems from open software to open hardware. Cosmos fulfills a significant portion of Virgo’s mission, and Virgo, in turn, can help Cosmos stay true to its mission to provide the world with the best viable alternative open financial infrastructure while bringing new users to the Cosmos ecosystem.”

What Does It Mean for Cosmos?

As anticlimactic as it may sound, in terms of Kwon’s resignation the Cosmos initiative will probably move on without much of a hiccup. The one particular serious thing that happens now is the disappearance of the CEO role in Tendermint, which looks more like a reasonable step to take in terms of decentralization of authority.

Importantly though, the incident with accusations on Twitter did bring up unpleasant details about Tendermint’s internal affairs. Firstly, it appears that Virgo was cannibalizing the resources meant to be allocated for Tendermint’s main products. As pointed out by Zaki Manian, Mr. Kwon was, basically, an obstacle to the development of the IBC protocol and Tendermint’s Cosmos SDK. Moreover, if Jae really was the kind of an abusive boss described by Jessy Irwin, his departure appears to be rather beneficial for Tendermint. 

On the other hand, if Jae Kwon is indeed going to build another strong product to empower Cosmos and users worldwide, it will add more value to the infrastructure and the $6 billion already handled by the ecosystem. This is good news for Cosmos in its own right.

Although, now there may be a grudge between Jae Kwon, who is still heading the Interchain Foundation, and his soon-to-be-former colleagues at Tendermint. It is hard to say if it would have any negative effect on the ICF’s further decisions regarding Cosmos and other projects involved.

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