What is Cosmos?

Token Takeaways ✍

✨ Cosmos is a network hub focused on enabling cross-chain interoperability between individual blockchains.

✨ Many promising projects have emerged as its ecosystem has expanded.

✨ The Cosmos Ecosystem Collection features a number of key related projects.

The token ecosystem has seen huge expansion over the past few years. While the token space started with Bitcoin, today the ecosystem is home to several active blockchain networks. Many of them host their own native applications and projects, taking a variety of different approaches. One of the most promising networks in the ecosystem today is Cosmos, whose vision for creating a vast cross-chain hub has differentiated it from most other projects. As the project has grown into one of the token ecosystem’s most vital networks, we curated a Collection dedicated to The Cosmos Ecosystem. You can learn more about how it works, why it has potential, and our Collection in this feature. 

What is Cosmos? ⚛

Cosmos is a blockchain network that brands itself as “the Internet of Blockchains.”

Launched by Jae Kwon and Ethan Buchman in 2015, it’s one of the oldest blockchain projects in the ecosystem today. The two developers wanted to allow for the free flow of data between individual blockchains within one ecosystem. 

The broader ecosystem currently has a market capitalization of $73.5 billion, making it one of the token ecosystem’s largest. At the core is Cosmos Hub, a multi-token network that allows individual blockchains to interact with one another through one zone. Cosmos Hub adopts a mechanism called Tendermint Core to achieve consensus on transactions and has a native token called ATOM. The token is used to secure the network, pay for transaction fees, and vote in governance decisions. 

Another key development is the Cosmos Software Development Kit (SDK), which allows blockchain developers to launch their own blockchains for different applications. BNB Chain, THORChain, and many other prominent token projects were built using the Cosmos SDK. 

Cosmos aims to be “the Internet of Blockchains.” (Source: Cosmos)

In March 2021, Cosmos launched an update called Inter-Blockchain Communication (IBC) with the goal of achieving cross-chain communication. IBC lets connected blockchains interact with one another, bringing the token ecosystem closer to solving the cross-chain interoperability problem. As many individual blockchain networks have launched over recent years, the demand for solutions that allow for moving assets and tokens across networks has increased. While separate blockchains have difficulty in communicating with one another as they adopt different frameworks, Cosmos’ IBC attempts to solve this by providing one hub for cross-chain communication. 

Shared Security ⛓

A unique characteristic of the network is its pioneering “shared security” model. Unlike most other blockchain networks, Cosmos Hub secures the various blockchains that connect to the network. That makes it easier for new blockchains to join the network without fear of an attack from bad actors looking to overtake the network. 

Thanks to its pioneering vision for creating “the Internet of Blockchains,” Cosmos differs from almost every other network in the token ecosystem. Bitcoin acts as a blockchain that focuses on securing the BTC token, while the likes of Ethereum and Solana use smart contracts to host decentralised applications. Cosmos, meanwhile, has created a hub for new blockchains to join and communicate with each other. 

The Internet of Blockchains and its ecosystem 🌌

As Cosmos has matured, its ecosystem has expanded. 

Today, the network is home to over 200 applications catering to different use cases. 

Similar to other networks like Ethereum, Cosmos is home to a number of projects focusing on decentralised finance, NFTs, and other use cases. Osmosis, for example, allows for decentralised token trading on Cosmos. Another Cosmos-native application, Juno, supports activities like token lending and borrowing. 

According to data from DeFi Llama, the ecosystem currently holds around $900 million in total value locked—a key metric for evaluating the level of adoption of a network. 

Cronos, Osmosis, Canto, Kava, and THORChain account for roughly 85% of the total value locked on the network today. 

As the token universe expands, it’s likely that many more applications will flock to the ecosystem. 

Cronos, Osmosis, Canto, Kava, and THORChain are among the leading projects in the ecosystem (Source: Defi Llama)

While the network took a hit in market value and total value locked terms during the ongoing crypto winter, the project has ambitious plans for the future. In 2022, the team behind Cosmos unveiled a new whitepaper to revamp the ATOM token as ATOM 2.0. However, the proposal was rejected by the project’s community in a hotly contested vote. 

Cosmos received less attention than many of the most prominent “Layer 1” blockchain projects during the 2021 market cycle and remains lesser known than the leading projects in the ecosystem. However, its ambitious vision for creating a cross-chain hub for networks to interact with one another makes it one of the most innovative projects in the token universe today. If demand for cross-chain interoperability continues to grow, the project could see the benefit in the future. 

The Cosmos Ecosystem Collection 💫

The Cosmos Ecosystem shines a light on Cosmos and its affiliated projects. 

The Collection features ATOM, the network’s native token. As the token used for securing the network, paying transaction fees, and voting in governance decisions, ATOM is key to the project’s ecosystem. 

The Collection also features Osmosis and Injective, two projects that leverage the network’s pioneering Inter-Blockchain Communication feature. Osmosis plays a particularly crucial role in Cosmos as the ecosystem’s leading decentralised exchange. 

It also includes some of the top projects developed using the Cosmos SDK. Cronos, Fetch, Kava, Kadena, and THORChain were all built using the crucial framework. As such, they have a place in our Collection. 

dYdX is a popular decentralised exchange for trading perpetual futures contracts on tokens on Ethereum’s Layer 2. However, the project recently announced its plans to launch a blockchain network on the Cosmos Hub. dYdX also features in our Collection. 

Finally, The Cosmos Ecosystem features The Graph, the Web3 query layer project for searching blockchain data. As The Graph has expanded, it’s integrated with a number of the token ecosystem’s leading projects, including Cosmos. 

Our curated Collection will expand as the project progresses—keep an eye on token.com for further developments on the horizon. 

Discover more 👀

Now that you’ve read our guide, you have everything you need to know to explore The Cosmos Ecosystem. To learn more, head to our Collection via the token.com app today.

Learn more about token.com here

Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.