Atom Accelerator DAO (AADAO) has yet again proven its commitment to safeguarding the Cosmos Hub and Atom Economic Zone (AEZ) by accelerating a comprehensive security audit of the Liquid Staking Module (LSM).
This grant spotlights the importance and results of this audit, conducted by the blockchain security experts at Zellic, and why it was necessary to take immediate action.
About Zellic
Zellic is a renowned vulnerability research firm specializing in blockchain security. Their expertise spans multiple ecosystems, including EVM, Move (Aptos and Sui), Solana, ZK, and Cosmos, making them uniquely qualified to tackle complex vulnerabilities.
Over the past several months, Zellic has become a trusted partner of the Cosmos Hub, conducting critical audits for features like the Inactive Validator Set and Permissionless ICS. Their deep technical knowledge and proven track record of delivering actionable security insights made them an ideal partner for AADAO’s grant of $51,000 dedicated to thoroughly auditing the Liquid Staking Module.
The Liquid Staking Module (LSM)
For those unaware, LSM is a forked module of the Cosmos SDK that extends core functionalities, including staking, distribution, and slashing. Its innovative design allows users to tokenize their delegations, enabling them to redeem tokens for the underlying staked assets.
However, recent revelations raised concerns about the module’s origins—specifically, the possibility that DPRK-linked workers may have contributed to its early development. Although the LSM codebase has undergone significant updates during its integration into the Cosmos Hub, these findings necessitated swift action to address any potential risks. Any vulnerabilities in this module could expose staked assets to risk and undermine confidence in the Cosmos Hub.
While the recent norm has been to use Community Pool Funding proposals for audits, the urgency of this situation led AADAO contributors to fund this audit directly to avoid delays, given that LSM is already in production. Literally accelerating ATOM, providing the funds needed to perform this necessary audit.
A Look Into the LSM Audit
Zellic’s assessment focused on critical goals, including ensuring users cannot receive more tokens or shares than they are entitled to, preventing manipulation of deposits or withdrawals, and verifying that no role has the ability to lock user funds unfairly.
The audit revealed two findings: one of high impact and one of low impact. Importantly, no critical vulnerabilities were identified, affirming the robustness of the module’s core functionality. Zellic’s detailed observations and recommendations have been shared with The Hub team at Informal Systems for ongoing improvements.
This rigorous assessment assures the community that both the funds and the code are safe, reinforcing trust in the LSM’s security and reliability. Read into Zellic’s full LSM audit report here.

Looking Forward
With Zellic’s audit complete, the Liquid Staking Module has been fortified to protect staked ATOM and maintain trust among users and the market. AADAO’s swift action and targeted funding have once again proven the value of an agile approach to critical issues.
While LSM may be removed in the future, proactively addressing potential vulnerabilities was still extremely important; not only to protect the Cosmos Hub but all projects built with the LSM.
About the Atom Accelerator DAO
Atom Accelerator DAO (AADAO) is a governance-mandated DAO of the Cosmos Hub. We have been formed and mandated to drive value for the Cosmos Hub and ATOM, supporting initiatives that either directly create economic impact or produce value that can drive its growth. From this, our current primary mandates are public grants and venture grants.
*Note: Starting January 1st 2025, AADAO has been sunset and is in maintenance mode, no longer accepting new grant applications.
In 2023, we deployed $3.8 million in grants to 39 recipients – resulting in, among other things – a $22m USD airdrop to the Community Pool, an AEZ Accelerator program to expand the AEZ, a successful hackathon with 42 project submissions bringing innovations to the AEZ – and many other key initiatives. Read about them in our 2023 Impact Report.