Cosmos — the internet of blockchain — is evolving
The cosmos vision was to create a common blockchain core. An internet of blockchains, a protocol on which projects can plug and play.
This vision has been achieved. The team behind Cosmos is now looking forward to develop the rest of what’s needed to consolidate this vision and make Cosmos stable over the years to come.
The base
As a quick reminder, we’ll go through the foundation of what makes Cosmos a blockchain of choice for some top tier projects like Nym, Juno, Osmosis or Umee (NFA.)
The base layer is the “Social Collaboration Technology”, composed of Tendermint, SDK Cosmos and the IBC.
Tendermint: the core of the core.
The language agnostic BFT engine makes up the most fundamental aspect of the cosmos ecosystem: the consensus protocol and the network dynamics. It’s basically offering to public blockchains what Hyperledger offers to permissioned ones: all the basic blockchain rules.
SDK Cosmos: the application layer
The Cosmos’s Software Development Kit makes building your application a lot easier. Use it to define your application specific rules about transactions, governance, rewarding, authentication, epochs, minting etc.
The IBC: Inter blockchain
A standardised set of primitives, used to enable interactions between independent blockchains in the Cosmos ecosystem.
What’s next
In their recently published whitepaper about Cosmos 2.0, the team behind Cosmos says that they consider the objective of creating the internet of blockchains as accomplished.
The Cosmos 2.0 focus is to build the economical dynamics to manage the infrastructure composed by Tendermint, Cosmos SDK and the IBC.
The main goals are to increase scalability, security and collaboration.
The two main economical lubricants are:
Liquid staking : essential to every PoS protocol, staking suffers from its rigidity. Not everyone can lock value for long periods of time. Liquid staking could make participating in protocols a lot more accessible and thus strengthen the cosmos ecosystem by attracting new validators.
Interchain security : The security interests of the Cosmos Hub itself and the other projects — or zones — become strongly intertwined. Meaning that every actor of the ecosystem share the same interest at heart.
To make liquid staking and interchain security possible, Cosmos counts on two economical tools :
The Interchain Scheduler : a marketplace for the most important resource of a blockchain: block space. The objective is to offer scalability options within the ecosystem. Protocols that have room to spare in their blocks can sell them on an open market to protocols that need more of it.
The revenues generated by the trading of block space or Maximum Extractable Values (MEV) flows back to the second economical tool:
The Interchain Allocator : A system to allocate ATOM liquidity where its most needed. Offering a solution to the opportunity cost of staking native $ATOM vs other application specific tokens. The Interchain allocator helps projects acquire more users and incentivises long-term interests alignment by intertwining the faith of the native blockchain and the zones.
Closing thoughts
After offering a multi blockchain ecosystem, Cosmos is building the economical tissue to ensure a stable and robust ecosystem for the years to come. The Interchain Security is built to enable services like under-collateralised financing by securing loans with alternative collaterals from the whole ecosystem.
The resulting economy is destined to support a strong DAO culture. Composed of chain specific councils, who then elect representatives that join the Cosmos Hub Assembly to vote on projects and development. This way, the interests of every zone (application specific blockchain) is represented in the deciding organs of the whole Cosmos ecosystem.
Blockchain has showed how a decentralised system can work, if you keep in mind that every actor will act in his own best interests. Thus, the solution resided in building a system where the interests of all the actors are complementary. Cosmos 2.0 is the concretisation of this philosophy.
But Cosmos isn’t the only one. Other protocols, like Avalanche and their channels or Polkadot and the parachains, have explored the ability of creating application specific blockchain on top of a robust layer 1.
There is no doubt, the future relies on communicative blockchains. The real question is which solutions will the market adopt ?
As always, time will tell.
Like everything on the internet, this shouldn’t be considered as financial advice. It’s a good starting point for your DYOR though ;)
