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 Cosmos's core technological advantages, innovative mechanisms on application chains, and several important projects currently on Cosmos.

The major challenge faced by traditional blockchains today is the advancement of their widespread adoption and scalability. One of the dilemmas is the lack of interoperability between different chains, which leads to complex and inefficient communication and data transfer. Additionally, because the design focuses on security rather than scalability, scalability has always been a primary issue, which has also resulted in slower communication speeds and increased network congestion, thereby raising costs.

By introducing an interconnected blockchain paradigm, Cosmos offers a solution to these challenges by utilizing the Inter-Blockchain Communication (IBC) protocol, enabling seamless communication and secure asset transfers 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. Additionally, Cosmos addresses scalability issues through its modular architecture and consensus algorithms. Developers can use the Cosmos SDK to create application-specific blockchains known as "zones." Zones (independent blockchains, also referred to as regions) 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 leveraging the Comet consensus algorithm to provide fast block confirmation times, increased security, and resilience against malicious attacks. This type of consensus algorithm serves as a reliable foundation for an interconnected blockchain network, combining efficiency, finality, and robustness.

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 goals. Leveraging the interoperability features of Cosmos, these custom zones expand 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.

Cosmos Highlights

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, which can customize their consensus mechanisms and scalability according to user needs. This approach supports horizontal scaling by merging additional zones to accommodate increased transaction volumes. Therefore, 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 offered 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, certain EVM chains are built using existing technology stacks. Additionally, dedicated application layers can be developed to support these specific virtual machines (VMs), allowing for the construction of 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 SDK's modular framework, developers can create their own unique blockchains outside of the SDK, simplifying the development process. This simplified 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 enhance their ability to shape user experiences. Furthermore, the Cosmos application chain model offers enticing revenue opportunities, allowing dApp creators to explore unique monetization strategies and foster sustainable growth within their respective chains.

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

Inter-chain Security

Inter-chain security is a groundbreaking approach designed to enhance the security of new Cosmos chains and facilitate their smooth launch. It involves the concept of "renting" economic security from already established secure chains within the Cosmos ecosystem (Cosmos Hub).

Main Advantages

Economic Security Leasing: To launch a new Cosmos chain, developers can leverage the security of the Cosmos Hub or other secure chains by locking a certain amount of the new chain's native tokens as collateral. This process helps establish a financial connection between the new chain and the secure chain.

Cross-chain Security: Economic security is achieved through inter-chain safety. The new Cosmos chain has a stronger resistance to attacks, as it can rely on a large number of different validators in the secure chain to protect its transactions and assets, thereby 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, the new chain can significantly lower the entry barrier and gain a robust and proven security infrastructure. This promotes innovation, accelerates the development pace of blockchain, and brings about 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 features from scratch." Instead, developers can seamlessly integrate pre-built modules into their applications, simplifying the creation of application-specific blockchains. The Cosmos SDK offers great flexibility in module customization, allowing developers to precisely tailor these modules based on their application needs, opening up a possible realm 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 act as "guardians," clearly defining the 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 within the Cosmos ecosystem designed to facilitate secure and decentralized communication across blockchains. It acts as a bridge that enables data transfer throughout the Cosmos network. By utilizing cryptographic proofs and consensus algorithms, IBC enhances the integrity and credibility of cross-chain transactions, maintaining data confidentiality and preventing tampering or unauthorized access. This protocol not only improves chain interoperability but also fosters collaboration and innovation by allowing project-based systems to leverage the network. With IBC, Cosmos has the potential to usher in a new era of blockchain interconnectivity, providing new possibilities for dApps, cross-chain asset transfers, and the creation of interconnected blockchain networks.

Tracking: Chain B continuously receives header data 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 operates a light client of the other chain.

Binding: Tokens are bound when the IBC transfer is initiated.

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

Verification: Verify the certificate against the data header on chain B with the data on 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 the powerful infrastructure of Cosmos, these projects have entered a highly interoperable blockchain space, with the potential to unleash strong network effects. This seamless collaboration and integration greatly enhance the overall ecosystem, promote innovation, and drive the adoption of Cosmos as a popular blockchain solution.

Cosmos-based Projects

Osmosis

Osmosis is an innovative crypto project built on the Cosmos ecosystem, providing a DEX platform that facilitates liquidity supply. Supported by the IBC protocol, Osmosis enables seamless token swaps across 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 creates an inclusive and interconnected ecosystem that enhances liquidity and enables cross-chain collaboration. With its focus on user-centric design and optimized liquidity management, Osmosis opens up new opportunities for DeFi participants to explore a broader range of assets and realize their trading potential.

dYdX

dYdX is a DEX platform that has gained popularity for its user-centric approach to crypto trading. By allowing users to have complete control over their private keys and assets, dYdX eliminates the 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 seeking leverage and lending users looking to earn interest on idle assets. With its robust security, Cosmos has a bright future on dYdX, fundamentally changing the way traders participate in cryptocurrency 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 through a PoS consensus mechanism, enhancing the security of transactions. The native token of Akash Network is AKT, serving as a utility token for 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. As a result, 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 L1 on the Cosmos SDK blockchain platform, providing financial services to users and facilitating the deployment of the DeFi ecosystem. The network was founded with the realization of the need for a decentralized financial system that prioritizes transaction speed and security while providing users with innovative financial tools. 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 ability 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 custom projects and DeFi applications on Sei.