Interchain Governance

A mechanism where a governance proposal passed on one blockchain can trigger an executable action on another. This relies on verifiable proofs (like Merkle proofs or light client verification) to authenticate the proposal's passage on the source chain. Key implementations include:

• IBC-enabled governance: Proposals passed on a Cosmos Hub can instruct actions on connected chains via Inter-Blockchain Communication packets.
• Bridge relayers: Proposals from an L1 (like Ethereum) are relayed to an L2 or sidechain to execute upgrades or parameter changes.

A security model where governance authority is distributed among a set of trusted entities or validator sets from multiple chains. This creates a threshold signature scheme for interchain decisions. Examples include:

• Cosmos Interchain Security: The Cosmos Hub validator set provides security (and thus voting power) for consumer chains.
• Polkadot's Relay Chain: The Polkadot Relay Chain collator set effectively governs parachain slot auctions and runtime upgrades.
• Ethereum L2 Multisigs: Many L2s use a multisig controlled by entities from Ethereum's ecosystem for upgrade keys.

Smart contracts or modules that maintain the canonical ruleset for interchain interactions, updatable via governance. These act as a source of truth for:

• Allowed connections: Which blockchain bridges or IBC connections are permitted.
• Fee parameters: Costs for cross-chain message passing.
• Asset listings: Which foreign assets are recognized and can be moved via the bridge.
• Security models: Defining the light clients or oracles trusted for verifying foreign state.

The process of synchronizing protocol upgrades or hard forks across multiple, interdependent chains to maintain compatibility. This is critical for:

• IBC protocol upgrades: All chains using IBC must coordinate upgrades to the core IBC protocol to avoid network partitions.
• Bridge vulnerability patches: If a vulnerability is found in a shared bridge contract, all connected chains must govern and deploy fixes in a coordinated manner.
• CosmWasm module updates: Updating a commonly used CosmWasm contract across an interchain ecosystem.

The spectrum defining where final governance authority resides in an interchain system.

• Sovereign Chains: Each chain has its own validator set and governance. Coordination is voluntary and achieved via treaties or standards (e.g., Cosmos chains with IBC).
• Shared Security: A primary chain (provider) leases its validator set's economic security and voting power to secondary chains (consumers). The provider's governance often has sway over consumer chain parameters (e.g., Polkadot parachains, Cosmos Interchain Security).

Using an interchain account—an account on a remote chain controlled by a smart contract or module on the home chain—to execute governance votes or administrative actions. This allows:

• A DAO on Chain A to vote directly on proposals on Chain B using its native tokens, without manual bridging.
• Chain-level automation: A governance module can automatically rebalance treasury assets across chains or provide liquidity based on passed proposals.
• This is a native feature of the IBC protocol and is being adopted in ecosystems like Cosmos and Ethereum via cross-chain smart contract calls.

A critical risk where insufficient voter turnout can lead to governance capture by a small, motivated group. This is exacerbated in interchain contexts where participation requires holding and staking tokens across multiple chains, increasing complexity and cost.

• Consequence: Low quorum thresholds can allow malicious proposals to pass.
• Example: A proposal affecting a cross-chain bridge could be approved by a tiny fraction of the total staked value, risking billions in locked assets.

The ability to submit governance proposals from one chain to another creates new attack vectors for spam and spoofing.

• Spam Attacks: Malicious actors can flood a target chain's governance with low-quality or malicious proposals, exhausting community attention and causing voter fatigue.
• Spoofing Risks: Verifying the authentic origin and intent of a cross-chain message is critical. Without robust cryptographic proofs, a proposal could be falsely attributed to a reputable DAO or protocol.

Interchain governance can create conflicts between the sovereign rules of individual chains and the decisions of a cross-chain governing body.

• Hard Fork Risk: If a chain's validators reject an interchain governance outcome, it can lead to a chain split or hard fork, fragmenting the network and its assets.
• Execution Finality: A governance decision executed via an Inter-Blockchain Communication (IBC) packet may be finalized on the destination chain but reverted on the source chain, creating inconsistent states.

Synchronizing protocol upgrades or parameter changes across multiple, independently operated blockchains is a major operational security risk.

• Implementation Lag: A security patch approved by governance may be deployed on Chain A immediately but take weeks on Chain B, leaving a critical vulnerability open on one chain that could be exploited to attack the interconnected system.
• Validation Complexity: Each chain's validator set must independently upgrade their node software, requiring flawless coordination to maintain consensus and prevent forks.

The economic design of interchain governance tokens introduces novel attack surfaces beyond technical exploits.

• Cross-Chain Liquidity Attacks: An attacker could borrow or manipulate the price of a governance token on one chain (e.g., a DeFi lending market) to gain disproportionate voting power on another chain.
• Vote-Buying & Bribery: Markets for delegated voting power can emerge across chains, making it economically rational for token holders to sell their voting rights, potentially to a malicious entity seeking control.

Most interchain governance systems rely on relayers or bridges to transmit votes and execute decisions. These components become critical centralized points of failure.

• Censorship: A centralized relayer operator could censor governance packets, preventing a vote from being recorded or a decision from being executed.
• Trust Assumption: If the system depends on a multisig bridge or a small set of relayers, compromising these entities allows an attacker to forge governance outcomes or steal funds earmarked for cross-chain execution.

These are formal suggestions for protocol changes or treasury allocations that require approval from stakeholders across multiple blockchains. They are a primary mechanism for executing interchain governance.

• Mechanism: A proposal is submitted on a hub chain (like the Cosmos Hub) and voted on by the staked tokens of connected consumer chains.
• Example: A proposal to adjust the shared security fee or to fund a cross-chain development grant from a communal treasury.

A model where a provider chain (like Cosmos Hub) leases its validator set and economic security to a new consumer chain. This is a key governance arrangement in interchain systems.

• How it Works: Validators from the provider chain produce blocks for the consumer chain, which inherits the provider's security.
• Governance Aspect: The provider chain's governance must approve new consumer chains and set parameters like fees and slashing conditions.

The group of nodes responsible for achieving consensus, producing blocks, and enforcing network rules. In interchain governance, the composition and behavior of validator sets are a primary concern.

• Interchain Relevance: Validators often operate across multiple chains in an ecosystem (e.g., a Cosmos validator may secure 10+ chains).
• Governance Power: Validators typically have significant voting power in on-chain proposals, influencing the direction of the entire interchain network.

A specific implementation of consumer chain security within the Cosmos ecosystem, where the Cosmos Hub's validator set is replicated to provide security to other chains. It represents a formalized interchain governance relationship.

• Process: Consumer chains opt-in via a governance proposal on the Hub. The Hub's validators then run nodes for the consumer chain.
• Economic Alignment: Consumer chains pay fees to the Hub's stakers, creating a shared economic model governed by cross-chain proposals.