Cosmos drops Hub-native EVM in sudden pivot

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Interchain Labs (ICL) has charted a new course for Cosmos.

The core team, which has been behind the ecosystem’s strategy and development since the start of the year, announced that it’s shelving plans to make the Cosmos Hub a smart contract platform hosting an EVM layer. Instead, it will double down on the Cosmos Stack’s role as an infrastructure toolkit for sovereign L1s, targeting businesses, institutions and developers looking to launch their own chains.

The decision wasn’t easy. ICL leadership admitted in a candid townhall that the push to add its EVM directly onto the Hub was pulling resources in too many directions, according to ICL co-CEO Barry Plunkett.

In recent weeks, “we got a lot of confidence that we were going over a cliff,” Plunkett said on a livestream.

Despite early enthusiasm, ICL found the pitch simply wasn’t landing with new developers and investors outside of Cosmos’ existing base. Meanwhile, rising costs and a rapidly fragmenting market for blockspace made competing as yet another general-purpose contract platform increasingly untenable.

Instead, ICL says it wants to focus on what Cosmos does best: helping others launch customizable, sovereign chains connected by IBC. It’s betting big on institutional demand — from banks to stablecoin issuers — who want dedicated L1s with selective interoperability and full control over their infrastructure. The Cosmos Hub is seen as a service marketplace to route assets and provide bridging via products like IBC Eureka.

“We’re not trying to be someone else,” said ICL co-CEO Magmar. “We’re going to be Cosmos — except we’re going to do it on overdrive.”

But that vision raises difficult questions. How exactly will the Cosmos Hub’s role as a service marketplace drive concrete demand for ATOM? The team insists ATOM remains the “monetization layer” for Cosmos, but specifics remain vague. They point to transaction fees, routing services and potential institutional payments that could buy and burn ATOM, or use it as collateral. Yet ATOM holders have heard variations of that promise before.

There’s also the question of the builders who invested months preparing Hub-native deployments. How will ICL support those teams left in the lurch?

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Leadership says in some cases it will help them migrate to other Cosmos chains (like Neutron) and continue any prior funding commitments. But after this flipflop, will developers trust the next promise?

Strategic consistency has been a presumed advantage to the ICF acquihire of the Skip team. Cosmos has long been infamous for its ideological malleability and governance drama. ICL will need to work to contain damage to builder and investor confidence. Its answer is apparently to narrow scope, prioritize institutional customers and stop trying to serve everyone at once.

“There’s already a conglomerate of Japanese banks using Cosmos and IBC to transfer data and assets, collaborating with SWIFT to offer a seamless SWIFT-to-IBC bridge,” Plunkett said. “That happened without our involvement, which is a very good sign.”

The challenge will be to balance the role as an open infrastructure provider with accountability to the ATOM community. Cosmos is arguably more than just its stack; it’s a social contract with the people and capital that have faithfully bet on ATOM’s centrality.

ICL says it’s entering “startup mode” — iterating fast, testing customer needs and refining the long-term strategy. For Cosmos, this could be the beginning of a sharper, more sustainable vision. Or it might be one pivot too many.

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