Applicable use case
Large number of applications in the ecosystem
Lower ranks are better
Interoperable fast and scalable blockchain solution
Has an ecosystem of applications and other blockchain solutions
Novel technology and a consensus mechanism
High transaction throughput of over 1000 TX/s
Out of the box SDK for building decentralized applications
Sound token economics
Applicable use case
Large number of applications in the ecosystem
High competition in this sector in which Cosmos operates
High total supply
ATOM token lacks further use case
Cosmos Network is the continuation of the blockchain evolution from Bitcoin being unprogrammable to Ethereum, which allows programmability but still has time scaling. Its isolated network is focused on building a solution that fixes these issues. Instead of being another separate blockchain, it is rather an ecosystem of blockchains, with the Cosmos Hub being the main point of connection between its other parallel chains.
In order to solve the current main problems with blockchains like usability, interoperability, and scalability, it implements an entirely new structural design, Proof-of-Stake consensus mechanisms, communication protocol. It provides various tools as an SDK in order to increase the ease of development.
The cryptocurrency associated with the network is Cosmos Hub’s ATOM and is the native token of this blockchain, the central point in the network of independent parallel blockchains that are each powered by classical BFT consensus algorithms like Tendermint. These parallel blockchains are referred to as zones and are connected with the Hub through the Inter-Blockchain Communication protocol (IBC).
Cosmos Network's technology is novel in nature but stands upon some of the existing concepts like the Proof-of-Stake consensus mechanism. The novelty comes from having an original implementation. The key focus is on proving an ecosystem of blockchains that have to stay connected with each other, unlike traditional ones that are isolated.
The platform consists of key components such as the Cosmos Hub, the primary blockchain referred to as the Hub, parallel blockchains (sidechains) referred to as zones, Tendermint consensus mechanism, and Inter-blockchain Communication protocol (IBC). In addition, there is a Cosmos Software development kit for building " out of the box" blockchains on the network.
This is a Byzantine fault-tolerant Proof-of-Stake consensus mechanism that powers the Cosmos Network. It is both an engine and an interface used for building applications. Unlike traditional BFTs, where each node has the same voting power, the Tendermint PoS distinguishes the nodes with voting power. These nodes that have voting power are called Validators, and they participate in the consensus protocol by broadcasting cryptographic signatures, or votes, to agree upon the next block.
Their voting power is set at the genesis block for side chains and can later be changed by the blockchain upgrade or can depend on the amount of token staked which is the case in the Cosmos Hub.
The consensus is achieved by a fixed set of validators identified by their public key that vote on one block at a time in rounds. The votes are cast on the block proposed by the round leader who is selected randomly, but the odds of being Selected is proportional to ones stake in the network.. The voting process is accepted as valid if ⅔ validators come to a consensus.
Tendermint consensus can achieve high transaction throughput speeds of 1000-10,000 TX/s per blockchain. In benchmarks of 64 nodes distributed across 7 data centers on 5 continents.
The Cosmos Hub is the first of potentially thousands of interconnected blockchains - zones that will eventually comprise the Cosmos Network ecosystem.
As you can see per the graph above, the Cosmos Hub is the first blockchain in the ecosystem and is the focal point between its sidechains, referred to as a zone. They are connected and are communicating through a novel inter-blockchain communication protocol (IBC). The protocol communicates the token types and transfers within the ecosystem as well as transactions and the number of tokens in each zone. This is why the token transfers can be seamless without the need for liquid exchange because all inter-zone coin transfers go through the Cosmos Hub. Since the zones can be derived from existing blockchains, any blockchain system can be plugged into the Cosmos Hub, thus achieving true interoperability. Also worth mentioning is that every zone can also become a Hub through an acyclic graph.
Thus, the Cosmos Hub is a central ledger for the whole system and is a multi-asset blockchain through which these tokens are moved across the network. They are transferred in a special IBC packet called a “coin packet.” The hub is responsible for preserving the global invariance of the total amount of each token across the zones. IBC coin packet transactions must be committed by the sender, hub, and receiver blockchains.
This is the protocol by which data is transferred inside the Hub and the Zones network, and it does so in data packets. To move the packet from one chain to another, a proof is posted on the receiving chain that states the sending chain published the packet into the designated destination. Then the receiving chain checks this proof through the senders’ block header.
The IBC protocol has two types of transactions: an IBCBlockCommitTx transaction, which allows a blockchain to prove to any observer of its most recent block-hash, and an IBCPacketTx transaction, which allows a blockchain to prove to any observer that the given packet was indeed published by the sender’s application, via a Merkle-proof to the recent block-hash.
Lastly, the Cosmos ecosystem's key component is its Software development kit, which enables “out of the box” blockchain development. It provides a set of tools for developers to easily and quickly build and design new blockchains and decentralized applications.
This tool kit allows them to quickly write custom blockchains with their own logic, launch their product and connect to other blockchains in the ecosystem.
Cosmos Network is an ecosystem architecture that aims to build decentralized applications and interoperable blockchains to provide a base layer for powering the decentralized future.
This is why its primary target audience is blockchain projects that are in need of scalable, interoperable, fast, and usable blockchain platforms that can easily communicate and connect with other blockchain projects. Put simply, those would be the projects that have to stay seamlessly connected with other platforms and projects and require componential collaboration for their solution to work.
Those can be enterprises but also developers that now have a simplified means of building decentralized applications through the Cosmos SDK framework for building interoperable, application-specific blockchains.
The Cosmos Network can proudly say that it already has a vast ecosystem of dApps that have built on top of the provided infrastructure. Those that are specifically designed for further developing and building on top of Cosmos enable easier smart-contract integration to marketplaces, games, social networks, and financial applications.
Some of the notable ones include Band Protocol, Binance Smart Chain, Coinex DEX, Crypto.com, CyberMiles, Data, Ethermint, Kava, Lambda, Matic from the range of over 200 projects and applications that currently run on the Cosmos Network.
But when it comes to product and feature that are specific to the Cosmos Network, they can be divided into two segments:
Cosmos Essential Software and Services
Cosmos Auxiliary Software and Services
Fluidity Smart Contract Framework
Hub (IBC, PoS/Delegation, Governance)
Community Events and Support
Bitcoin and Ethereum bridges
Since the Cosmos Network is focused and built around interoperability in mind, it is perfect for every use case that needs seamless exchange of value and data. This is why it is perfect for Decentralized Financial Applications (DeFi) and all of its variances: Decentralized Exchanges, Lending, and Borrowing platforms Staking and so on.
This would be different than the currently most known process of how DEXs work via an AMM or even with an order book. The closest thing to what Cosmos Tendermint can offer is an atomic swap. Still, unlike in the case of atomic swap where users have to be online to perform a transaction, the Tendermint protocol can ensure that zones in Cosmos can finalize transactions fast – for both exchange order transactions as well as IBC token transfers to and from other zones.
A second use case can enhance the scalability of the existing blockchains such as Ethereum by offering a bridge transaction. This bridge is similar to the way Cosmos Hub communicates with its parallel blockchains - zones. So the traditional blockchain can be bridged inside the Cosmos ecosystem and utilize its network to increase the transaction throughput. A "bridge-zone" on the Cosmos network keeps up with the Hub and the other cryptocurrencies. The indirection through the bridge-zone allows Hub's logic to remain agnostic and straightforward to other blockchain consensus strategies such as Bitcoin's proof-of-work.
While these are some use cases that utilize Cosmos Network’s main distinguishing features, some of the more standard ones would be building a wide range of decentralized applications for Gaming, Healthcare, Prediction markets, cross-border payments, and many more.
Cosmos Network has been initiated by Jae Kwon, Zarko Milosevic, and Ethan Buchman, who were the co-founders of Tendermint Inc., a software development company formed to construct the new consensus mechanism, which is the cornerstone of the Cosmos blockchain. Kwon stepped down as CEO in 2020 and was replaced by Peng Zhong.
The Cosmos Network team is vast and depends on the company in which they have a role and the department they are in. There are three entities in charge of the Cosmos ecosystem development:
Cosmos roadmap 2021.
While the Cosmos Network is a multi-asset platform, ATOM is the native cryptocurrency of the Cosmos ecosystem. It is used similarly to Ether on the Ethereum Blockchain to pay for transaction fees and prevent network spamming. But considering that the Cosmos Network uses a PoS consensus mechanism, ATOM is also used for staking, secure and validate transactions, and participate in network governance.
The initial token allocation has been divided into 75% for the public sale, 5% for lead donors, making a total of 80% distributed to the public. Out of the other 20%, 10% was withheld by the Cosmos Network Foundation, and the other 10% was allocated to ALL IN BITS Inc., for-profit Delaware C-Corp behind Tendermint.
The token sale was conducted on the 5th of April 2017 at the price of $0.1 per ATOM. A total of 173,000,000 ATOM tokens was allocated to the sale out of the total initial supply of 236,000,000, which the hard cap of $17,300,000 successfully reached. As from Genesis onward, 1/3 of the total amount of atoms are to be rewarded to bonded validators and delegators every year. This means that the supply increases at the rate of 9-10% annually and is now at approximately 272,000,000, ATOMs.
The ALL IN BITS vesting period was for 2 years, while Founders didn’t have a vesting period. After the public sale, the ATOM tokens were staked and formed 100 validators, and this number of validators increases at a rate of 13% for 10 years and settles at 300 validators.
Cosmos Network has a huge market potential as it offers to provide the base layer for powering a new decentralized economy. It currently has a large ecosystem of applications and projects that have already built significantly useful products that range across many fields from finance to social to gaming, marketplaces, and other blockchain infrastructures.
In addition, it can connect the existing traditional blockchains offering further use case and connectivity in the space, which can even position itself as the blockchain oracle for many other existing cryptocurrencies.
Currently, it is sitting at 22nd place according to market capitalization (while writing this). With the increase of the total market and further expansion, it could take a significant chunk from the existing smart-contract platforms that haven’t shown any promising developments, such as EOS.
There is a lot of competition in this sector, but the Cosmos Network has the highest potential and strong ecosystem around it, which would be expected to increase in time. The meer network effect may cause further hype that can lead to increasing adoption.
Cosmos Network has a large social media presence, particularly compared to some of the other cryptocurrencies close to its market cap and size. The highest number of followers is on Twitter where the project mostly communicates announcements and recent developments but is also active in connecting with its partner projects and supporters.
Next is the Telegram channel with an engaging community of members and project investors who are highly active in communicating with each other. This applies for the Discord serves as well, but the sub-Reddit holds second place according to the number of members.
NO INVESTMENT ADVICE
The content is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by Upblock or any third party service provider to buy or sell any cryptocurrencies (also called digital or virtual currencies, crypto assets, altcoins and so on).
DO YOUR OWN RESEARCH
Our content is intended to be used and must be used for informational purposes only. It is essential to do your own analysis before making any investment based on your circumstances. You should take independent financial advice from a professional in connection with or independently research and verify any information that you find on our website and wish to rely upon, whether to make an investment decision or otherwise.