Cosmos ecosystem yet again came to the crypto market spotlight when the most battle-tested crypto derivative exchange decided to launch their v4 version as a sovereign chain utilizing Cosmos SDK. The attention was all over the Cosmos ecosystem for a spare moment, tokens pumped as expected and then everybody moved back to the old, yet still good Ethereum Merge narrative. But, why a core Ethereum Protocol would leave its native ecosystem? and will others follow Dydx?
I’d say there’s a small chance that the other “DinoDefi” protocols move their production to the Cosmos. The teams are ideologically and personally affiliated with Ethereum. Also, Cosmos doesn’t provide nearly as big liquidity and community base required for developed-stage Defi giants at this stage. For me, Cosmos stands a much bigger chance of acquiring new builders coming to the industry.
Why?
Building on Ethereum means that one agrees to exchange a significant portion of its “business” revenue in exchange for the security and vibrant ecosystem Ethereum blockchain provides. Lego analogy, you can play with Ethereum Defi legos and add your brick, only if you contribute to LEGO’s business model by buying a toy set.
On the other hand, Cosmos is a Santa that leaves all the existing LEGO bricks under a Christmas tree with a bunch of different kit instructions that you can but don’t have to use. The instructions are the Cosmos SDK toolkit, which allows anybody to set up a completely functional chain without much developer effort. On top of that builders can customize the chain in whatever way they like by leveraging various programming languages with Cosmos not enforcing a specific one on anybody. This way developers can add highly-customized bricks to Cosmos interoperable Defi setup.
Cosmos veto on Fat Protocol Thesis ensures maximum value is internalised to the appchain itself.
Choosing appchain model brings a variety of revenue options for the platform. The simplest and most common are transaction fees. Defi built on top of Ethereum leaks the value created by the application to the hosting platform. That’s why most Defi protocols tokenomics are considered money grabs and there is an urge to figure out an even more complex version of veTokenomics yet and yet again. The tokens could have a simple, yet so effective value accrual and finally reward protocols believers. With the full customisation that Cosmos stack brings, the world is an oyster for new appchain tokens’ utilities.
Sure, you can’t deploy stuff as fast as on an EVM-compatible chain(actually, Evmos got you covered). But, is the end goal to have 367x fork of Uniswap or play the L1 rotation chess all over again? or build a better, more transparent settlement hub for real-world problems?
Cosmos is secured by much less $ than Ethereum, its main token $ATOM is kind of boring(for now 👀), and the liquidity, especially stablecoins, well.. isn’t there. However, it is the only organization that presents a valid alternative to Ethereum modular vision. The end goal of both entities is the same. Provide net positive value to society thru blockchain technology, without the need of even knowing what a blockchain is. Cosmos has been built for years and for some time now people start to notice how big a revolution it could bring.
Stay up with the news with a filtered, no-bullshit Cosmos ecosystem Twitter list: https://twitter.com/i/lists/1514494607811297281
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