Core Advantages and Ecological Status of Cosmos

Recently, an industry expert wrote an article about "the current core technologies and ecological projects of Cosmos", interpreting the core technological advantages of Cosmos, the innovative mechanisms on application chains, and several important projects currently on Cosmos.

The major challenge facing traditional blockchains today is the advancement of their widespread adoption and scalability. One of the difficulties is the lack of interoperability between different chains, which makes communication and data transfer complicated and inefficient. Furthermore, because the design focuses on security rather than scalability, scalability has always been a primary issue, leading to slower communication speeds, increased network congestion, and subsequently higher costs.

Cosmos proposes solutions to these challenges by introducing an interconnected blockchain paradigm. It utilizes inter-chain communication ( IBC ) protocol to achieve seamless communication and secure asset transfer between different chains. With a standardized framework for inter-chain interoperability, Cosmos facilitates efficient cross-chain interactions, expanding the possibilities and practicality of blockchain technology. Furthermore, Cosmos addresses scalability issues through its modular architecture and consensus algorithms. Developers can create application-specific blockchains, known as "zones," using the Cosmos SDK. Zones can adopt different consensus mechanisms, allowing for horizontal scaling and performance optimization. By supporting parallel processing across multiple zones, Cosmos significantly enhances the network's transaction capacity and scalability, while also leveraging the Comet consensus algorithm to provide fast block confirmation times, increased security, and the ability to resist malicious attacks.

Core: Cosmos SDK, IBC and Comet

The Cosmos SDK provides developers with the ability to create customized blockchains or zones that meet specific needs and objectives. Leveraging the interoperability features of Cosmos, these custom zones extend the boundaries of inter-chain interactions. The Comet consensus algorithm enhances this capability, ensuring that the Cosmos network operates securely and efficiently. Additionally, IBC supports seamless communication across different chains.

Highlights of Cosmos

Interoperability: The advantage of Cosmos lies in its guarantee of interoperability, allowing independent blockchains within the Cosmos network to connect easily. This interoperability promotes breakthroughs in cross-chain applications and collaboration, driving innovation and enhancing the practicality of decentralization.

Scalability and Performance: Cosmos addresses scalability issues by allowing the creation of independent blockchains or zones through delegation. These zones can customize their consensus mechanisms and scalability according to user needs, supporting horizontal scaling by merging additional zones to accommodate increased transaction volume. As a result, the Cosmos ecosystem boasts excellent performance and scalability.

Personal Sovereignty: The Cosmos ecosystem provides an ideal platform for creating chains focused on personal sovereignty. By leveraging the infrastructure provided by Cosmos, such as the Cosmos SDK, IBC, and the Comet BFT consensus algorithm, developers can flexibly customize any aspect of the technology stack to enhance performance, throughput, security, and other key factors of the chain. For example, EVM chains like Evmos are built using the existing technology stack. Additionally, dedicated application layers can be developed to support these specific virtual machines (VMs), thus constructing chains that run on different virtual machines, such as Move or SVM.

Developer-Friendly Environment: Cosmos provides a friendly environment for blockchain developers. The Cosmos SDK is a feature-rich platform for building dApps. By leveraging the modular framework of the SDK, developers can create their own unique blockchains outside of the SDK, thus simplifying the development process. This streamlined approach allows developers to create custom chains that extend from the Cosmos SDK, thereby increasing the adoption and growth of the blockchain ecosystem.

Cosmos application chain

Application chains are an indispensable part of the Cosmos innovative ecosystem, representing specialized and specific application blockchains that meet different use cases. Unlike traditional monolithic blockchains, the modular approach adopted through the Cosmos SDK enables developers to customize consensus, storage, and networking mechanisms according to the specific requirements of their dApps. This grants application chains a degree of autonomy, allowing developers to better control their applications and enhancing their ability to shape user experiences. Furthermore, the Cosmos application chain model provides attractive revenue opportunities, allowing dApp creators to explore unique monetization strategies and promoting sustainable growth within their respective chains.

In addition, the flexibility of Cosmos application chains extends to the handling of MEV. By providing developers with the tools to design MEV strategies that suit their needs, Cosmos incentivizes fair and transparent MEV extraction, promoting a more equitable and efficient ecosystem. Furthermore, the interoperability facilitated by the IBC protocol is a key advantage of the Cosmos application chain model. It supports seamless communication and asset transfer between different application chains, enabling the development of advanced cross-chain DeFi applications and expanding possibilities for developers and users alike. In summary, the application chains in the Cosmos ecosystem offer a promising avenue for dApp development, providing sovereignty, revenue opportunities, flexibility in MEV, and seamless interoperability, thus nurturing a vibrant and flourishing blockchain ecosystem.

Inter-chain Security

Inter-chain security is a groundbreaking approach aimed at enhancing the security of the new Cosmos chains and facilitating their smooth launch. It involves the concept of "renting" economic security from the already established security chain ( Cosmos Hub ) within the Cosmos ecosystem.

Main Advantages

Economic Security Leasing: In order to launch a new Cosmos chain, developers can utilize the security of the Cosmos Hub or other secure chains by locking a certain amount of the new chain's native token as collateral. This process helps to establish financial connections between the new chain and the secure chain.

Cross-Chain Security: Economic security is achieved through inter-chain security. The new Cosmos chain has stronger resistance against attacks, as it relies on a large number of different validators within the secure chain to protect its transactions and assets, reducing the risk of 51% attacks and other security threats.

Independent Blockchains: Each Cosmos chain operates independently, with its own governance, tokens, and use cases. However, through inter-chain communication protocols like IBC, they can securely exchange data and value, facilitating interoperability and synergy within the Cosmos ecosystem.

By adopting inter-chain security and collaborating within the Cosmos ecosystem, new chains can significantly lower entry barriers and gain robust, proven security infrastructure. This promotes innovation, accelerates the development pace of blockchain, and ushers in a new era of secure and interconnected dApps.

Cosmos SDK

The Cosmos SDK supports modularity, creating an ecosystem that includes a large number of interchangeable modules. This approach frees developers from the previous task of "building complex functions from scratch." Instead, developers can seamlessly integrate pre-built modules into their applications, simplifying the creation of application-specific blockchains. The Cosmos SDK offers a high degree of flexibility in module customization, allowing developers to precisely tailor these modules according to their application needs, opening up a possible avenue for fine-tuning chain applications. As the Cosmos Network evolves, the ecosystem of SDK modules will also develop, providing developers with scalable options and functionalities. In this dynamic environment, complex and highly specialized blockchain applications can be nurtured, fostering innovation and driving the growth of the Cosmos ecosystem.

The Cosmos SDK also prioritizes security through its capability-based security concept. These features serve as "guardians," clearly defining boundaries between modules and mitigating the risks posed by malicious or unforeseen interactions. By protecting creation, the Cosmos SDK focuses on security measures.

Inter-Blockchain Communication Protocol IBC

IBC is a protocol in the Cosmos ecosystem designed to facilitate secure and decentralized communication across blockchains. It serves as a bridge, enabling data transmission throughout the Cosmos network. By utilizing cryptographic proofs and consensus algorithms, IBC promotes the integrity and trustworthiness of inter-chain transactions, maintaining data confidentiality and preventing tampering or unauthorized access. The protocol not only enhances the interoperability of chains but also fosters collaboration and innovation by allowing project-based systems to operate on the network. With IBC, Cosmos has the potential to usher in a new era of blockchain interconnection, offering new possibilities for dApps, cross-chain asset transfers, and the creation of interconnected blockchain networks.

Tracking: Chain B continuously receives the data headers sent from Chain A, and vice versa. This allows each chain to track the validator set of the other chain, essentially meaning that each chain runs a light client of the other chain.

Binding: When the IBC transfer is initiated, the token is bound.

Relay Proof: Then, 10 tokens are bound as proof relayed from chain A to chain B.

Verification: Verify the certificate against the data header on Chain B for Chain A. If the certificate is valid, create 10 certificates on Chain B.

Cosmos Environment

The current Cosmos ecosystem is quite good, attracting a variety of projects and establishing influential partnerships. By leveraging Cosmos's powerful infrastructure, these projects have entered a highly interoperable blockchain space, with the potential to unleash strong network effects. This seamless collaboration and integration greatly enhances the overall ecosystem, fosters innovation, and drives the adoption of Cosmos as a popular blockchain solution.

Cosmos-based project

Osmosis

Osmosis is an innovative cryptocurrency project built on the Cosmos ecosystem, providing a DEX platform that facilitates liquidity provisioning. With the support of the IBC protocol, Osmosis enables seamless token swaps between different chains within the Cosmos network. This unique feature allows users to access a variety of assets and pools, promoting an efficient and secure trading experience. By leveraging Cosmos's interoperability and scalability, Osmosis has created an inclusive and interconnected ecosystem that enhances liquidity and enables cross-chain collaboration. With its focus on user-centricity and optimized liquidity management, Osmosis opens new opportunities for DeFi participants to explore broader asset domains and realize their trading potential.

dYdX

dYdX is a DEX platform that has gained popularity due to its user-centric approach to crypto trading. By allowing users to have complete control over their private keys and assets, dYdX eliminates reliance on centralized institutions, promoting a safer and more transparent trading experience. dYdX operates on the Cosmos chain, utilizing the Cosmos SDK to facilitate fast and efficient trading, as well as seamless interoperability with other Cosmos-based applications. In addition to basic crypto trading, dYdX also offers margin trading and lending services, catering to traders looking to leverage their positions and lending users who wish to earn interest on idle assets. With its robust security, Cosmos presents a promising future for dYdX, fundamentally changing the way traders participate in cryptocurrencies while fostering the growth of the DeFi ecosystem.

Akash Network

Akash Network provides a decentralized cloud computing marketplace. By leveraging the security of Cosmos, Akash Network offers a secure platform where users can send data to each other and develop applications. The network operates on a PoS consensus mechanism, enhancing the security of transactions. The native token of Akash Network is AKT, serving as the utility token of the ecosystem. Through integration with Cosmos, Akash Network benefits from the interoperability and scalability of a larger network, enabling seamless communication with other blockchain platforms. Thus, Akash Network allows developers and organizations to access affordable decentralized cloud computing resources.

Sei Network

Sei Network is a high-performance blockchain platform that operates as an L1 on the Cosmos SDK blockchain platform, providing financial services to users and facilitating the deployment of the DeFi ecosystem. The network was founded by individuals who recognized the need for a decentralized financial system that prioritizes transaction speed and security while offering innovative financial tools to users. Sei utilizes its proprietary PoS consensus algorithm to provide secure transaction confirmations through staking and ownership verification. The platform's three-layer architecture includes a client layer, service layer, and chain platform layer, supporting high throughput with the capability to process up to 20,000 transactions per second. With built-in support for smart contracts in Rust and Solidity programming languages, developers can easily build customized projects and DeFi applications on Sei. The network's native token SEI serves as an internal asset for rewards, staking, and project management, fostering a sustainable and prosperous ecosystem. Additionally, Sei's integration with Cosmos grants it interoperability and scalability, allowing for seamless communication with other blockchain platforms and supporting broader adoption and easier access to DeFi services. Ultimately, Sei Network aims to become a cost-effective and powerful blockchain platform that drives financial inclusion and supports the development of cutting-edge applications across various blockchain domains.

Neutron

Neutron is a DeFi project in the Cosmos ecosystem.