Key Takeaways from the Annual Cosmos Gateway Conference
Prague just became the capital of “Cosmonauts” — blockchain/dApp developers, stakers and influencers fascinated by the Cosmos ecosystem — who gathered in Eastern Europe for the annual community conference. Despite the recent fall of Terra — the largest Cosmos chain, Cosmonauts proved to be strong and to be learning from the past experiences.
TLTR
- Lessens learnt from Terra/UST — Build for the worst
Economic factors must be considered when designing the new protocols. - The race for the new Cosmos stablecoin is on!
$CMST or $IST— crypto-backed coins— one of the pretenders - Liquid staking: eat a cake and have a cake
- Get value from NFT even in the bear market.
- From Degen to Regen — Regenerative Finance and Blockchain to fight climate change
Why Cosmos?
The Cosmos tech stack allows for easy development of new blockchains — L1 chains — and for easy exchange of tokens and information between those chains — blockchain interoperability.
Those are big topic, as development of own chains was historically complex process (look at Bitcoin forks): you needed to take care not only about your consensus mechanisms but also staking infrastructure. What is more, each blockchain was designed as an independent kingdom. Cosmos with its underlying tech — Cosmos SDK and Tendermint — addressed those challenges.
Smart contracts — set of automated rules executed by a machine might not be a new idea (think about parking meter or drink vending machines), but blockchain takes smart contracts to a new level: smart contracts run simultaneously on multiple independent computers, in different administrations and jurisdictions.
Consequently, smart contracts running on blockchain are distributed and permissionless applications — dApp — which allow to eliminate the middle man even in most complex financial transaction among others.
Blockchains optimize smart contract execution for various purposes — DeFi, NFT, gaming, metaverse, … and this is why we have/need so many blockchains and we are living in the Internet of blockchains
We are living in the Internet of blockchains. @dogemos, co-founder of @keplrwallet
Juno, smart-contract-based blockchain powered by the Cosmos, enables to find the product market-fit for your application, before developing application-specific blockchain with Cosmos SDK. Worth considering!
Agoric, come up with the idea to allow DeFi protocol development in most popular programming language in the world — javaScript.
Lessons learnt from Terra/UST
Cosmos SDK allows to easy build new blockchains and Terra, in Top10 largest blockchains, was until recently the jewel in the Cosmos crown. Though, the Cosmos community seems to rise back stronger with new experiences in the backpack:
- Correct execution of flawed algorithms
During the Terra/Luna crisis, over 8000 transactions were properly processes. Underlying tech — execution layer— worked mostly good: there was no bug. The problem was in the economic design of the stablecoin protocol of UST. - Build for the worst
Economic factors must be considered when designing the new protocols. There might be large attacks on tokens, validators, etc. You need to have solid architecture. Those economic attacks can happen on any part of the chain or protocol. - Watch out for oracles
There are still some issues with oracles and with the oracle economy, in general. There are various types of stablecoins, but all stablecoins depends heavily on Oracles. Cross chain protocols need to be surrounded by security features. - Call for Terra protocols
There are plenty of successful protocols on Terra that are now looking for the new home for — DAO, treasury and the smart contracts. Luckily, blockchains from (and outside) the Cosmos ecosystem are inviting. As Terra supported Rust as a programming language, my bets for the best chains are — Secret Network, Juno, or Terra 2.0 - Last, but not least, diversify your crypto portfolio
You can find a professional strategy/advise on Sommelier or Yanus from experienced degens.
The race for Cosmos stablecoin is on!
The race for the new stablecoin of Cosmos has begun, with many pretenders. It is critical for the large economy to have stablecoins.
It is critical for the large economy to have stablecoins — Zaki Manian
Ethereum has DAI among others, Near — USN (algorithmic coin), Binance — bUSD, Polkadot aUSD — crypto-backed and over-collateralized stablecoin on Acala (EVM-compatible chain of Polkadot). The major pretender for the stablecoin of Cosmos are crypto-backed and over-collateralized
There are various types of stable-coins, depending on how they keep peg to the target value: fiat-backed stablecoins (Theter), crypto-baced (DAI), algorithmic (UST). To learn more, check my previous blogs posts on stablecoins: Ultimate stablecoin classification, How DAI, aUSD and lUSD compare?
Interestingly both $IST and $CMST are crypto-backed and over-collateralized. Are algorithmic stablecoins gone?
Defi goes mainstream
IBC is already live and the community is already used to trade various assets cross chain. Cosmos DeFi benefits from shared features such as shared accounts. Even Composable.Finance — built on the Polkadot substrate — has incorporated primitives of Cosmos.
Cosmos will have product market fit when it creates more products that can not exist on other places. At the same time, we do not know yet, how such cross chain DeFi application will function. It is important to remember that not everything needs to be on blockchain, quite often smart contract is enough.
What is the role of privacy in DeFi? The ability to control which information to disclose. Blockchains Secret Network and Penumbra are here to help.
Liquid staking
Staking is a huge market with over $100B assets already locked in staking.
Typically staking comes for the cost of freezing your tokens for a given period of time. Now with liquid staking you can eat a cake and have cake:
- stake
- get a liquid token confirming that you stake,
- accumulate reward
- … and go for more DeFi or staking.
Persistence and QuickSilver make liquid staking possible
NFTs and Metaverse
StarGaze is decentralized marketplace with zero gas fees. Its biggest competitor — OpenSea on Ethereum — is a centralized company, without any governance token. Gravity bridge will enable soon to transfer NFTs from Ethereum to Cosmos, which sparkles the NFT revolution!
StarGaze is calling for Terra NFT projects to join and underlying the role of NFT in the bear market.
Even in the bear market you still get value from your NFTs, says Shane @shan3v co-founder Stargaze Protocol
Role of Community
Building a crypto community is challenging task, as stated by @jurimaibaum. You can’t do that with 9 to 5 mindset neither force anybody to join your DAO. Instead, you need to take your community seriously, as it is your greatest ambassador. Mission and Vision matters, e.g. Frens is a validator that wants to be your friend. Mission and Vision matters even more in the times of difficulties.
Your “how” goes on no matter what the market conditions are. @jurimaibaum, DEFI Time co-founder
How to bootstrap your community from zero?
- Go step by step — set up Discord, post meme with handshake, or with Friends from 90s
- Twitter, telegram are pretty strong. Real life event works when you have existing communities
- Regulatory “circumstances” comes. Compliance saves founders from going to jail.
- Community needs to be first. Give it big stake in your project. You can do token distribution only once. Do it right. Don’t reward speculator. Make staking attractive. Airdrops can be exploited. Solution — targeted distribution
- Network usage is a king
DAOs created mew marketplaces with human capital. You want to have good community that will advertise you
Closing Thoughts
The good think for all crypto start-ups is that VCs investments into blockchain are booming. Crypto investors seem to be focused on the long-term DLT impact and not worried about the market rollercoaster.
We want to be become the largest blockchain investor in Europe, says Viktor Fischer, Managing Partner Rockaway
It is a common misconception that blockchains are environmental unfriendly because of the energy consumption. What might be an issue for the PoW chains like Bitcoin or (still) Ethereum, definitively does not apply for PoS chains in the Cosmos ecosystem. What is more, with DAO governance and the community approach, the crypto projects are more resilient that traditional one to green-painting and deliver real impact on the environment. Regenerative Finance (reFi) is a good example.
Simply put, regenerative finance uses money as a tool to solve systemic problems and regenerate communities and natural environments. Its goal is to heal and create shared value. Profits are not the end, but rather a means to further progress. Source: Impact Entrepreneur
Many thanks — @againstutopia of Cerulean Ventures — for bringing those less technical, but positive and important aspects up!
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