Cosmos (ATOM), launched in March 2019, is a decentralised network of parallel blockchains, each with its own Byzantine Fault-Tolerance (BFT) consensus powered by Tendermint.
Cosmos has a TVL of $6,611,374 and 262 apps and services in its ecosystem as of January 29, 2022. It distinguishes itself from other blockchains by emphasising two main features: interoperability and customization.
Cosmos Hub is the company's primary chain, and it serves as a central ledger for Zones (interoperable blockchains). Each Zone has a lot of flexibility. They communicate through the Hub by using Internet Blockchain Communication (IBC). This allows developers to create their own currencies with features like custom block validation settings. For instance, it allows public and private blockchains to send tokens to one other. No other blockchain framework currently supports this degree of interoperability.
Before the introduction of Cosmos, blockchains were isolated and unable to transact with one another. They were hard to develop and could only process a limited number of transactions per second. Then came along Cosmos, and yes, there are various interoperable options, but Cosmos is very popular among developers. The main reason is its open-source development tools like Cosmos SDK, IBC, and Tendermint consensus mechanism.
Cosmos's main objective is to create an ecosystem of networks that can communicate data and tokens programmatically without a central hub. Osmosis, Cronos, and Terra are among the over 20 blockchains built on the Cosmos SDK with IBC enabled, and the number is expanding. The developers call it the Internet of blockchains.
Let's take a closer look at the pros and cons of Cosmos blockchain.
- Cosmos is capable of processing over 1,000 transactions per second (TPS). It takes just 7 seconds for a transaction to be confirmed. As more developers build on Cosmos, the network's activity will expand. The innovative token, ATOM, would be the principal benefactor of increased network activity.
- Cosmos Platform is fully open-source, with its development public on Github. As a result, we have a slew of flawlessly connected blockchains that can communicate with one another with ease. One of the main advantages is that it makes no difference whether the chains are Tendermint-based blockchains developed using Cosmos-SDK or not. Developer activity has also remained quite steady, as shown in the graph.
- Cosmos blockchain has credible use cases. THORchain, Terra, Kava, and Binance Chain are just a few of the blockchains that have used the Cosmos Network. Terra has benefited from Cosmos' software solutions. For example, the advantage of utilising Cosmos SDK to create chains is that they are extremely scalable. All of Terra's protocols form their own chain like the Anchor protocol has its own chain, and the Mirror protocol has its own chain, all of which are connected by IBC. As a result, they are able to create scalable but linked chains. Several crypto initiatives can take advantage of the success of the aforementioned cryptocurrency-inspired protocols by adopting Cosmos.
- The Cosmos SDK is a modular framework that makes it simple and safe for developers to build blockchain apps on top of Tendermint, making it exceedingly easy to join the Cosmos network.
- Plans to enhance the security (with two expected upgrades, Rho and Lambda) among network zones will provide projects and developers wishing to construct their own blockchains with even more flexibility, freedom, and incentives to join Cosmos.
- Cosmos is up against very stiff competition from a variety of directions. Polkadot is a direct rival with strong brand recognition. Ethereum is by far the most advanced ecosystem, which might lessen the need for interoperability efforts. Finally, while not direct rivals, bridge projects like Badger and Ren and side chains like Polygon present alternatives that potentially grab market share from Cosmos.
- Cosmos has problems with staking. When you stake an ATOM on Cosmos, it takes three weeks to get your stake back. As thousands of users do not have the time to go through the staking procedure, staking is usually delegated to a regular network member. If your delegator misbehaves and their tokens are slashed, not only will they lose their tokens, but your tokens may also be lost along the way. If more individuals experience this difficulty on the Cosmos Network, it may deter them from participating in the network.
Projects on Cosmos
Cosmos has no trouble gathering contributors to its ecosystem. Many projects are already in the works built on top of the Cosmos platform and are part of its ecosystem.
One of the most significant Cosmos SDK-based projects is Terra, a blockchain for algorithmic stablecoins. The Terra ecosystem contains the Mirror Protocol and the Anchor Protocol, among other projects. Terra launched IBC in October 2021, which allows Terra developers and users to build and trade with other IBC-equipped blockchains. Terra's IBC integration allows Terra-based assets, assets bridged onto Terra, and wallets like Terra Station to communicate with Cosmos' wide and quickly developing network of blockchain apps.
Osmosis is another network, or zones, connected with the Cosmos Hub. The zone is IBC-compatible, which means it can communicate with the rest of the network's zones. It is a decentralised peer-to-peer blockchain that allows cryptocurrency holders to establish liquidity and trade tokens that support IBC. It makes use of a PoS mechanism that includes most of the same professional staking services as the Cosmos chain.
Akash Network is another project that runs on Cosmos blockchains. Akash's primary goal is to assist Web3 developers in delivering various decentralised apps (dApps) with configuration, minimal setup, and server maintenance. The project, dubbed "Airbnb for Cloud Compute," is the first decentralised open-source cloud, allowing developers to construct dApps using permissionless cloud computing resources.
Cosmos is attempting (along with many other blockchains) to outperform the Ethereum network. Still, it appears that it is the only one attempting to do it in a novel method - as a decentralised network of several parallel blockchains. There's little doubt that Cosmos is in for some exciting times, and we'll be here to see it develop.
Roadmap for the Future
It's critical to grasp the project's roadmap, like it is with other blockchains, to determine how they plan to expand in the future. Here's what Cosmos has in store for the year 2022.
First up is an upgrade to Theta (expected Q1 2022). In this upgrade, Cosmos' SDK will receive an upgrade to v0.45. Key features include the Groups module. It will enable higher-level multisig permissioned accounts like weight-based voting policies. Another feature includes Meta-Transactions. It allows transactions from different accounts that receive tips.
The second is Rho Upgrade (expected Q2 2022). It will feature Interchain Security v1. The Cosmos shared security solution relays validator set composition from a Provider Chain (Cosmos Hub) to a Consumer Chain via IBC Cross Chain Validation (CCV). This validator set generates blocks on both networks utilising distinct nodes. Consumer Chain misbehaviour leads to a reduction of Provider Chain staking tokens (ATOM). Independent modules, such as Gravity DEX or Bridge, will exist on distinct chains with their own development cycles.
Next is the Lambda Upgrade (expected Q3 2022). Cosmos will strengthen Interchain Security to v2 in the Lambda Upgrade, allowing Provider Chain validators to opt-in to prevent production for different Consumer Chains. We'll also witness the debut of Token Issuance, which will enable developers and users to create tokens directly on the Hub, allowing for ERC20 functionality.
Finally, the Epsilon upgrade (expected Q4 2022). Because the Epsilon Upgrade is still months away, there isn't much to say about it. Still, the roadmap did include a third Interchain Security upgrade to v3.
Cosmos has a long list of Future Upgrades planned, including non-IBC cross-chain bridges, Atomic Exchange, Decentralised IDs (DID), and smart contract languages. All will bode well for the network.
Cosmos and Tendermint are two of the most intriguing concepts currently under development. They give blockchains a whole new degree of scalability and interoperability, which they need right now. Only time can tell how it will compete with rivals like Cardano, ICON, and others in the interoperability area.
Nonetheless, the blockchain appears to be intriguing, and the company appears to be led by a passionate and motivated team. In order to accelerate market acceptability, scalability and interoperability challenges must be solved by the creators. Maybe Cosmos Blockchain will help pave the path.