Cosmos vs Polkadot. It’s Time To Compare!
Polkadot and Cosmos are both protocols that allow distinct state machines to interact between themselves. They are based on the idea that in the future, various blockchains would need to interact with one another rather than operating in isolation. Being somewhat similar, these two projects are quite different.
Brief Information
Polkadot
Polkadot is an advanced blockchain protocol that connects many specialized blockchains into a single network. It was created as part of a larger vision for a Web3 that gives people back control over internet monopolies.
Kusama is referred to as a “canary network” for the Polkadot blockchain, which means that new code and features are constantly battle-tested on Kusama before being released on Polkadot. It is essential to clarify that it does not operate as a standard testnet since, unlike a testnet, the network has significant economic value.
Slot auctions are a mechanism for blockchains to use the potential of a certain parachain on Polkadot’s network. Since Polkadot has a limited amount of available chains, there must be a way to rank them. This is performed through a candle auction, which is frequently seen to be more equal than standard auctions.
Cosmos
Cosmos is a growing ecosystem of interoperable and autonomous blockchain apps and services designed for a decentralized future. Its native token is ATOM, which is being used as a type of cross-chain payment and as a staking coin to help safeguard the network.
Cosmos SDK is a tool for seamlessly connecting blockchains to the Cosmos Hub. Currently, most chains utilize proprietary code languages that make it extremely difficult to connect with other blockchains. Cosmos SDK hopes to remedy this by making the development process more user-friendly and intuitive.
Gravity DEX is a decentralized exchange that runs on the Cosmos blockchain. It allows you to trade and exchange tokens (like Uniswap or SushiSwap, for instance). Every token on the network is exchangeable for ATOM. The tradable tokens, however, are those on the Cosmos chain.
Cosmos aims to address many of the same concerns as Polkadot by creating an “internet of blockchains” so that chains may establish connections fast and effectively.
Core Model
Polkadot employs a sharded approach in which each protocol shard contains an abstract state transition function (STF). Polkadot’s “meta-protocol” is WebAssembly (Wasm). The STF of a shard can be abstract as long as Polkadot validators can execute it in a Wasm context.
These Polkadot shards are known as “parachains.” When a parachain wishes to change its state, it sends a block (batch of state transitions) along with a state proof that Polkadot validators could independently authenticate. These blocks are accomplished when Polkadot’s Relay Chain, the primary chain of the system, performs their finalization. As a result, all parachains share state with the whole network, which means that reorganizing a single parachain would need reorganizing the Relay Chain, as well as all other parachains.
Cosmos joins Tendermint chains via a bridge-hub mechanism. The system can have numerous hubs (the major being the “Cosmos Hub”), but each hub links a number of outside chains known as “zones.” Each zone is in charge of protecting the chain by deploying a suitably staked and decentralized validator set. Zones communicate with one another via the hub using the Inter-Blockchain Communication protocol (IBC). Because zones do not share state, reorganizing one zone does not reorganize other ones, which means that each message is trust-bound by the recipient’s assumption of the sender’s security.
According to recently suggested enhancements, Cosmos will become a more interoperable, decentralized, and secure ecosystem. One of the adjustments discussed is the reinvention of the Cosmos Hub as the “Interchain” web, which would allow other Cosmos blockchains to borrow the Hub’s validator pool to secure its network rather than requiring to establish their own. This opens up the possibility of hosting a new category of applications with complementary capabilities.
A new issuance model for ATOM is also included in the updates, with the goal of reaching a better balance between ecosystem development and interchain adoption while retaining the security given by the initial mechanism. Cosmos is planning to provide a leveraged liquid staking feature, which can hopefully increase the value of its token.
Governance
There is multicameral governance in the Polkadot ecosystem. Before becoming a regulation, any proposal must pass through various stages.
Cosmos, in contrast, has less permit procedures and relies on coin-voting to approve referendums. Any blockchain may become a Cosmos hub. Furthermore, there is no centralized governance framework, and each hub is regulated by its own set of laws.
Scalability
Parachains on Polkadot are full-fledged blockchains of their own, running in parallel with the main chain. For consensus, parachains rely on the Polkadot main chain. They can communicate among themselves via cross-chain message passing (XCMP).
Cosmos enables developers to create their own blockchain from the ground up. It also includes a consensus mechanism, network infrastructure, and application layers that may be combined to build a blockchain. This is performed through the use of SDK, which allows developers to launch their own network in tandem with the main network, fixing the congestion issue while also making the entire Cosmos network safe.
Use Case Examples
While both initiatives strive to deliver a more scalable and efficient future for crypto, their applications are not the same. Polkadot is more concerned with security, whereas Cosmos is more interested in adoption.
Polkadot is often used in the loan sector. An example is the Centrifuge project. It aims to increase loan accessibility using the Polkadot network and promises to revolutionize the lending market by allowing users to utilize unconventional types of collateral. Its team is working to allow the use of invoices and cryptocurrency as loan collateral. This has the potential to have a significant influence on the loan sector as a whole.
IRIS Network is a project that seeks to integrate commercial activity into the Cosmos network. Its purpose is to create a business platform that will help to interact with customers and enhance overall efficiency, optimizing financial activities through the use of a unified service paradigm. The network was built with the Cosmos SDK.
Composable Finance, as a project actively working with both the Polkadot and Cosmos ecosystems, expects that integrating the two will result in a seamless and trustworthy Web3 experience. The cross-chain virtual machine (XCVM), a top-level orchestration layer for launching and executing cross-chain operations, is the result of the team’s active work. It will enable the deployment of natively cross-chain, trustless applications, powered by Compasable’s underlying infrastructure and Inter-Blockchain Communication.
Market Capitalization
Polkadot has a market cap of around $8 billion, being presently the tenth most popular cryptocurrency. It peaked at over $53 per coin in November 2021 and fell to roughly $6 in July 2022.
Cosmos has a market capitalization of over $4 billion and is currently trading at roughly $14 per coin. It has fallen from a high of $44.70 in late September 2021.
Conclusion
Polkadot and Cosmos appear to be similar, but in fact they have few technical similarities. Although Cosmos allows developers to design their own blockchains, Polkadot parachains are more versatile in terms of deployment. Parachain auctions are prompting investors to make speculative DOT price forecasts, comparing today’s Polkadot to Ethereum in 2017.
The Cosmos blockchain enables many hubs for connectivity, but that does not significantly affect its scalability potential. Because the Cosmos centralized hub is required to exchange messages and tokens across the chains, the concept is that every party must trust this hub. We cannot call this approach scalable since it divides security.
Polkadot, in turn, was built on the idea that scalability and interoperability necessitate shared validation logic in order to establish a trust-free environment. As additional blockchains are created, their security will be collaborative rather than competitive. Polkadot provides common validation logic and security procedures across chains, allowing them to communicate while knowing that their interlocutors are operating under the same security model.
Developers on Polkadot are able to build a bridge between an external blockchain and the Polkadot relay chain, providing interoperability. A bridge, according to the Polkadot concept, is a form of “virtual parachain.”
While Cosmos promises to offer a rapid, cost-effective and useful alternative to Ethereum, the world’s leading smart contract blockchain, Polkadot aims to be a platform on which alternatives to Ethereum can appear. Both have rich ecosystems of decentralized protocols and services that are constructing the Web3 environment. Furthermore, by employing PoS consensus rather than the energy-intensive PoW consensus, they will help to lessen the carbon footprint of the blockchain industry. We all know how important it is.
