Cosmos ($ATOM)

Cosmos is often referred to as the internet of blockchains. Cosmos is a Layer 0 protocol meaning it itself is not a blockchain but rather a framework for building independent and sovereign blockchains. The Cosmos Network is a rapidly growing decentralized network of independent, scalable, and interoperable blockchains called zones.

There are currently more than 262 apps and services in the Cosmos network (As of Mar.1/22), including Binance Chain, Terra, Crypto.org, and Cosmos Hub, with over $149 billion of digital assets under management.

Before Cosmos, blockchains were siloed and unable to communicate with each other. They were extremely technical, hard to build and could only handle a small amount of TPS (transactions per second). Cosmos solves some of the most difficult problems in blockchain tech (scalability, and interoperability) with a new technical vision called IBC or Internet of Blockchains. IBC is a network of blockchains able to communicate with each other in a decentralized way.

With Cosmos and IBC, blockchains can maintain sovereignty, process transactions quickly and communicate with other blockchains in the ecosystem, making it optimal for a variety of use cases and attractive to developers.

Link to Map Of Zones showing all the different blockchains on Cosmos interacting - https://mapofzones.com/?testnet=false&period=24&tableOrderBy=totalIbcTxs&tableOrderSort=desc&fullscreen=true

Building a BLOCKCHAIN with Cosmos has many advantages. There are 3 main components of Cosmos blockchains - Tendermint Core, IBC (Inter=Blockchain Communication), and Cosmos SDK.

With these 3 components, developers can customize their blockchains due to the modular nature of the Cosmos SDK and Tendermint Core, while allowing each blockchain to communicate with each other through plug-and-play modules like IBC.

TENDERMINT CORE

There are 3 main layers of a blockchain. The Application layer, the Consensus layer, and the Networking layer.

Before Tendermint building a blockchain required building all three layers from the ground up. The goal of Tendermint is to provide the networking and consensus layers of a blockchain as a generic engine on which applications can be built. Tendermint allows developers to only worry about the application layer of their blockchain saving them countless hours of work and $$.

Tendermint Core is a consensus mechanism and is the leading BFT (Byzantine fault tolerance) engine for building blockchains. BFT essentially means that even 1/3 of the nodes on the system can fail arbitrarily or even maliciously and it can still reach consensus. Tendermint Core is language-agnostic meaning developers can write their app in any language. With Tendermint Core, a transaction is immediately finalized once it's included in a block. No need to wait for confirmations.

Tendermint Core passes transactions to the application layer through an interface called the ABCI (Application BlockChain Interface), which the application must implement.

Properties Of Tendermint Core That Makes It Alluring

Compatible with private and public blockchains

High performance. Has a block time of 1 second. Can handle the volume of 10,000 tps

It’s instant finality

It’s secure. Tendermint Core cannot be forked if less than two-thirds of the validators are malicious. Also, the Tendermint consensus is optimally Byzantine fault-tolerant.

It’s easy to use. The modular architecture allows for the application layer to be fully customizable.

Tendermint’s proof-of-stake (PoS) implementation protocol is far more scalable than the traditional proof-of-work (PoW) consensus algorithm. The major reason is that PoW-based systems cannot shard.

ARTICLES

https://docs.tendermint.com/v0.35/introduction/what-is-tendermint.html

https://tendermint.com/core/

https://blockgeeks.com/guides/tendermint/

https://github.com/tendermint/tendermint/tree/master/abci

VIDEOS

https://www.youtube.com/playlist?list=PLdQIb0qr3pnBbG5ZG-0gr3zM86_s8Rpqv

INTER-BLOCKCHAIN COMMUNICATION (IBC)

IBC is the Inter-Blockchain Communication protocol. This is the mechanism that enables communication, data and crypto-asset transfers across a network of blockchains in a decentralized way.

Think of it as the TCP/IP for blockchains.

IBC is a building block that blockchains designed on Cosmos can incorporate. This allows them to communicate with each other enabling them to do things like - Transfer tokens and other data frictionlessly and trustlessly between blockchains. This has never been possible before and opens up an immense amount of new possibilities.

Allowing blockchains on Cosmos to communicate with each other builds network effects as it opens up the door to true interoperability, not only for the user but also for developers looking for places to build.

ARTICLES

https://ibcprotocol.org/

https://medium.com/dokia/why-ibc-is-a-big-deal-and-why-you-should-know-about-it-8fe3f914b154

https://www.coinbase.com/cloud/discover/dev-foundations/ibc-protocol

https://johnniecosmos.medium.com/inter-blockchain-communication-protocol-ibc-the-tcp-ip-protocol-of-blockchains-bridges-trends-b38ed700c681

https://medium.com/chainapsis/why-interchain-accounts-change-everything-for-cosmos-interoperability-59c19032bf11

COSMOS SDK

The Cosmos SDK is a modular framework that simplifies the process of building secure blockchain applications. Cosmos SDK allows developers to build on top of the Tendermint consensus engine with plug-and-play modules like IBC.

Cosmos SDK Is Based On 2 Major Principles

Composability: The goal of the Cosmos-SDK is to create an ecosystem of modules that allow developers to use already-built modules in their blockchains. For example, the Tendermint team is building a set of basic modules that are needed for the Cosmos Hub, like staking, IBC, and governance. These modules can be used by any developer who wants to develop the application layer of a Tendermint blockchain.

Capabilities-based security: Capabilities constrain the security boundaries between modules, enabling developers to better reason about the composability of modules and limit the scope of malicious or unexpected interactions.

ARTICLES

https://docs.cosmos.network/

WHAT ARE ZONES AND HUBS?

In the Cosmos ecosystem, there are hubs and zones.

A hub is essentially a zone that has a lot of channels connected to it allowing it to facilitate IBC between the. The Cosmos Hub is the main hub and allows independent blockchains (zones) to communicate with each other via an Inter-Blockchain Communication (IBC) protocol.

Zones in the Cosmos Ecosystem are independent blockchains that can communicate with each other through a Hub that has an integration for IBC established. Also known as an app chain.

THE COSMOS HUB

The Cosmos Hub is the centerpiece of the Cosmos ecosystem. This allows tokens to be transferred from one zone to another securely and quickly without the need to exchange liquidity between zones. Instead, all inter-zone token transfers go through the Cosmos Hub.

The Cosmos Hub supports IBC, Gravity DEX, and Shared Staking, all of which it stands to earn fees.

INTERCHAIN SECURITY

Traditionally app chains or new blockchains have to bootstrap their validators on their own. This can be hard as with new app chains the token price is generally low. With interchain security, new apps have the ability to offload their resource-intensive security to the Cosmos Hub and its validators.

This is where shared security comes into play. It places $ATOM validators, from The Cosmos Hub, on the forefront where they are able to lease out security to multiple App-Chains that opt-in, for a price.

GRAVITY DEX

The Gravity Dex is the first cross-chain DeFi protocol on the Cosmos Hub. The Gravity DEX enables DeFi across multiple chains which have never been done before. Users can swap and pool digital assets between any connected blockchains.

The Gravity DEX uses using batched transactions to dramatically lower the fees – typically between $0.01-$0.10. Access and trade assets between 14 different chains.

LINK - https://emeris.com/

GRAVITY BRIDGE

Cosmos Gravity Bridge - is a Cosmos-SDK blockchain providing the entire SDK community with a neutral bridge to Ethereum and eventually all major EVM chains.

This will be a bridge that will bridge over ERC20 assets from Ethereum into the Cosmos ecosystem. This will start with ETH and then apply to other EVM chains such as Avalanche. This will allow massive amounts of liquidity to be bridged into the Cosmos ecosystem.

LINKS

Website - https://www.gravitybridge.net/

Breakdown of gravity bridge - https://www.gravitybridge.net/post/the-gravity-bridge-blockchain

TOKENOMICS

$ATOM is the native token of the Cosmos ecosystem and is used to secure the Cosmos interchain hub. Following is the token information of ATOM:

The $ATOM token has the following use-cases attached to it:

Staking and Securing Network: Atom holders can accrue value by staking tokens to contribute to the security of the cosmos hub.

Transactions: Atom is also used as transaction fees of the network. Additionally, a share of the transaction fees goes to the stakers.

Governance: The Atom token gives the community the ability to vote on proposals that decide the future of the ecosystem

Atom holders can accrue value by staking tokens to contribute to the security of the cosmos hub. Transactions: Atom is also used as transaction fees of the network. Additionally, a share of the transaction fees goes to the stakers.

See here for more info - https://messari.io/asset/cosmos/profile/token-usage

TEAM

Jae Kwon: The Founder and CEO of Tendermint, co-creator of Cosmos. Background in blockchain software architecture, computer science, and distributed systems.

Ethan Buchman - The co-founder of the Tendermint and Cosmos projects. He received a BSc in Physical Science and a MASc in Engineering Systems and Computing, both from the University of Guelph (Canada). He also runs CoinCulture CryptoConsulting, which offers in-depth courses on blockchain technology for both non-technical and technical audiences.

Kwon and Buchman later authored the Cosmos white paper and released its software in 2019.

Strategic partners

Binance Smart Chain.

Band Protocol.

Terra Protocol.