Overview of Cardano, Cosmos and PolkaDot
Abstract
The blockchain world is still consisted of isolated island and chain interconnection will no doubt be the future. There are projects like Cardano，Cosmos and PolkaDot trying to solve the problem besides Bitcoin and Ethereum. Cardano uses sidechains to connect other chains. Cosmos and PolkaDot try to provide interchain network platform, interconnecting by means of chain relay.
Cardano is driven by research and uses math proved blockchain to construct hierarchical ecosystem in order to solve scalability，interoperability and consistency. The project was initiated by previous Ethereum CEO Charles Hoskinson and consisted of three organizations : Cardano foundation，IOHK and Emugo, taking responsibility of commercialization，research and investment, respectively. Although the main net has been released, the project is slow and there are only 9 projects built on Cardano. The evaluation of its token ADA was about 9 Billion RMB based on the price of December 12th.
The goal of Cosmos is to make decentralized token exchange between different underlying protocols. It is a public chain project founded by Tendermint who comes from Silicon Valley and first researches BFT consensus engine. It improves scalability and provides upgradability by introducing concept of zone.Its main net was delayed and probably won’t be shipped until next year. However, there are 76 projects built on its ecosystem until February this year. The evaluation of its token ATOM is about 300 million RMB.
PolkaDot aims to build efficient chain net ecosystem which allows heterogeneous chains to exchange both data and asset. Furthermore, it supports heterogeneous chains sharing security. The project was lead by former Ethereum cofounder Gavin Wood who was also the author of Ethereum Yellow Paper (the technical specification of Ethereum). The main net is planed to be online on the third quarter of next year. There are fifteen projects in its system. Its token DOT was worth 600 million RMB totally and there will be another round of fundraising before the main net release.
This three promising projects have different focus. Cardano has big vision and needs large scale cooperation between communities, thus it has slow progress. Cosmos focuses on asset interconnection very early and already has relatively competitive ecosystem. PolkaDot launches afterwords though, it has clear vision which emphasizes interoperability and security sharing. Now it’s the end of bear market which means the evaluation of projects are reasonable enough. I believe Cosmos and PolkaDot will have good performance in terms of token price after they are listed. Nonetheless, long term value of these projects still need further verification according to technology maturity and market formation.
Introduction
The internet world is the same as the situation that Chinese masterpiece Romance of the Three Kingdoms describes: the world will be apart after it unites for a long time, together after breaks apart. The network resource was dominated by AT&T when circuit switching ,a technology that needed users to book circuit resources beforehand, was prevalent. Afterwards , circuit switching was replaced by packet switching after the invention of TCP/IP protocol. Thus, communication efficiency was tremendously improved, indicating the era of decentralized internet. Though, the underlying network communication was decentralized, there was no systematic framework to organize information. As a result, it was hard for people to find information online. Naturally, centralized companies, providing people with better internet experience, like Google and Baidu appeared. People lost control over their data.
In 2009, Bitcoin was invented and liberalistic crypto geek indulged in the possibility of a decentralized value internet era. In 2015, Ethereum initiator Vitalik Buterin, CEO Charles Hoskinson and CTO Gavin Wood introduced smart contract to blockchain world on shoulders of predecessors, which made blockchain out of financial category. Nevertheless, Ethereum had scalability problem and public chains could not communicate with each other. Afterwards, Charles Hoskinson founded Cardano in order to construct multi layers blockchain ecosystem.Jae Kwon who graduated from Cornell university resigned the position of technical director from Yelp and founded Cosmos whose vision was to become internet blockchain. Later, Gavin Wood inspired by Jae Kwon and the notion of Web 3.0 founded PolkaDot, aiming to build chain interconnection ecosystem.
Cardano
Cardano is the first blockchain platform that derives from natural philosophy, consisting of three organizations. The first is Cardano foundation located at Switzerland, mainly responsible for Cardano community construction. The second is IOHK ,the R&D center located at Hong Kong. The third is Emurgo at Japan, aiming to provide consultant service and financial support for startups that want to build products on Cardano. Cardano uses sidechain to realize interoperability.This project adopts unique Ouroboros consensus claimed as the first provable proof of stake algorithm , and IELE (EVM modified virtual machine).Furthermore, the Plutus platform is written in Haskell which claims to be the securest functional programming language, solving the problem of onchain and offchain language incoordination. It is also the first peer reviewed blockchain project. There are five important stages of Cardano.Byron stage realizes decentralized network processing of Cardano Settlement Layer. In Shelley stage, Cardano focuses on important functionality implementation like stake allocation and stake pool test net. They develop IELE virtual machine and make it general programming language in Goguen stage. In Basho stage, Cardano improves its performance, implements Ouroboros Praos and modifies network layer. The last Voltaire stage, they aim to realize sustainability of the project.
Though its main net has been released and the project is three years old, the first stage has not been finished so far due to its grand vision and high level developer entrance benchmark. Smart contract and other functions are not deployed on the main net except token transfer. Of course,developer ecosystem is not formed. When it allows developers to use traditional languages like Java,C and JavaScript to program surrounding applications, the situation may be better. We know from projects built on Cardano list that there are less than ten relative projects excluding official projects. Although there are regular audit, details of usage and plan of funds are not revealed and transparency of the foundation is also as issue(ADA addresses are not revealed).Internal management problems and conflicts are also disclosed in the development process, which leads to the resignation of foundation chairman Michael Parsons. The total token number is 45 billion which worth 9 billion RMB, 26 billion are in circulation. From the token distribution table, we can see there are four rounds of fundraising from October 2015 to January 2017. 400 million RMB is raised. However, investors from Japan take 95% of the total quota, which may cause token holder centralization.The price of ADA is 0.014 RMB during first round of fundraising, 0.018 RMB at last round. The price increases by 30%. Assuming reasonable growth rate of ADA price in 2017 is 60% and 120% in 2018, the price would be 0.007 RMB, one third of current price approximately.
Cosmos
Cosmos is incubated by InterChain Foundation. Team Tendermint, a team from Silicon Valley, launches this project in order to realize decentralized token exchange of heterogeneous chains. The framework ,Tendermint, packs consensus engine and underlying P2P network to consist Tendermint Core which interacts with logic application layer by ABCI protocol. The core product Cosmos SDK, upon which developers can realize blockchain fast development, is based on Go programming language. Common function includes multi-token account system, stake delegation, consensus of block production, on-chain government and so on. Developers just need to realize application logic of blockchain.
Basic function are already realized within SDK. Furthermore, extended function of SDK can be customized. Cosmos network is consisted of Cosmos Hub and several Zones. Hub acts as relay chain, sending messages to Zones by IBC protocol. Zones could be Bitcoin, Monero, Ethereum, decentralized exchange, private chain and league chain based on Tendermint. As to POW chains, Peg Zone is needed to connect them together. When blockchain needs to be upgraded to a new version , we can create a new Zone to Hub and migrate users. Cosmos improves scalability and provides upgradability by creating new Zones. The framework is illustrated in above graph.
The main net was planed to be online this February. It should be delayed to next year now and development of Ethermint, a project aiming to connect Cosmos to Ethereum, is in dead state. There are 76 projects intending to connect Cosmos until this February according to the uploaded list. Cosmos raised 240 million RMB and the final round was closed last April. The total number of its token ATOM is 200 million at evaluation of 300 million RMB. Strategic and early investors have 25% and 15% discount, respectively. Team members keep 10% and ICF keeps another 10%.
PolkaDot
PolkaDot is an early Web 3 Foundation incubated project, aiming to construct efficient chain net ecosystem, support heterogeneous chain asset and data communication and share security. High performance underlying chain framework Substrate, PolkaDot’s version of Cosmos SDK, is released this April. And PolkaDot chain acts as relay chain including all its para chains’ protocol. In addition, its para chain can also be sub relay chain. Chains like Bitcoin, Ethereum and Monero that have own consensus system can be connected to PolkaDot system through para chain bridge. Chains haven’t constructed consensus system can be linked to its system by Substrate transition. The framework is illustrated in above graph. PolkaDot adopts WebAssembly and Rust programming language. WebAssembly has gained big international companies’ support such as Google, Apple, Microsoft and so on, which means it has potential of wide adoption in following years. And Rust is struggling to be compiled into WebAssembly.
Parity (Ethereum’s multi signature wallet) developed by PolkaDot’s team members has two big bug accidents. Now PolkaDot is in second stage of PoC(Prove of Concept) , there are five projects developed on Substrate and fifteen projects in PolkaDot ecosystem. The main net is scheduled to be online next third quarter. Total number of its token (DOT) is 10 million. The first public fundraising closed last October. It raised 500 thousand ETHs at evaluation of 600 million RMB of the whole project based on the price of ETH on December 12th 2018. This fundraising adopted Dutch auction and tokens were locked for two years. Last but not the least, there will be another round of public fundraising before main net goes online ,releasing 1 million DOTs.
Conclusion
The vision of PolkaDot and Cardano is big, but they have different emphases. PolkaDot dedicates to resolving interoperability, scalability and the problem of security sharing. Cardano aims to solve scalability, interoperability and consistency. And Cosmos has more focused vision, mainly working on interoperability. Chains that want to share consensus algorithm connect to the hub of Cosmos and PolkaDot by means of chain relay, other chains that have independent consensus algorithm by para chain bridge. Cardano’s approach to connects chains by side chains needs further verification in terms of rich interaction including data and asset.
PolkaDot adopts ABFT algorithm（Asynchronous Byzantine Fault Tolerance) and invents GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) blockchain consensus and finality solution. Cosmos uses POS and BFT algorithm. PolkaDot will bring in Aurand algorithm in late period, which may cause recycling of block, though hybrid consensus speeds up formation of consensus. Cardano invents Ouroboros consensus algorithm which is peer reviewed and passes formal security verification. They all use POS algorithm. PolkaDot’s governance system is more sophisticated and subtle compare to Cosmos. And Cosmos has first mover advantage.
Cardano has slow progress considering the fact that it has founded for three years. And its movement needs large scale cooperation between different organizations. Now it’s the end of bear market, evaluation of ADA becomes reasonable though the price of ADA still has room to fall. As rumor says the OTC price of ATOM and DOT is ten times of their ICO, even 100 times in bull market, it’s worth paying attention to PolkaDot’s second round fundraising. Nevertheless, the development of blockchain and chain interconnection is at early age, there are still many technical difficulties. Other similar chain interconnection projects and blockchain 3.0 projects are booming. Formation of large scale net effect and maturity of business environment both need further market verification. Thus, long term value of these projects needs further observation.
Note: Price of listed tokens is on December 12th 2018.
