Cosmos

Note: Data in this section last updated August 26th, 2022

Cosmos was conceived in 2014 and launched in 2019 by founders Jae Kwon and Ethan Buchman.

Like Polkadot, the project is aspiring to be a “Layer 0” protocol that can connect multiple, independent smart contract platforms. In fact, while some call Polkadot the “blockchain of blockchains”, Cosmos is often referred to as an “Internet of blockchains”.

From a technical level, both projects use a “hub and spoke” model that connects several Layer 1 smart contract platforms (spokes) to a central chain (hub) that is responsible for security and validation.

Cosmos Uses a “Hub and Spoke” Model to Connect Multiple Blockchains

Source: Seq via Medium

That said, there are a few key differences between the Cosmos and Polkadot:

• Faster Finality: Cosmos created its own spin on Proof-of-Stake validation through its Tendermint BFT (Byzantine Fault Tolerance) mechanism. This innovation allows the protocol to reach consensus – and therefore execute transactions – faster. Tendermint is also used by several other Layer 1 blockchains including BSC.

• Multiple Hubs: As discussed both Polkadot and Cosmos employ a “hub and spoke” model. The key difference between the two, however, is that Polkadot only has one hub, while Cosmos will have multiple hubs that can all communicate with each other through a protocol known as the Inter-Blockchain Communication Protocol (IBC).

• Strong Developer Tools: Cosmos has created a proprietary software development kit (SDK) that allows developers to create highly customizable blockchains. One of the most attractive features of the SDK is that it can translate several popular programming languages, such as Java and C++, into a format that is readable by the Cosmos network.

These three innovations should combine to give Cosmos as high TPS (it is estimated to approach 10,000 transactions per second), fast time to finality, low fees and – most importantly – high interoperability.

Notable dApps in the Cosmos ecosystem include:

Cosmos Ecosystem Overview

Source: Coin98 Analytics

Although the total TVL of chains connected to Cosmos is relatively small today (~1% of the total market), earlier this year it commanded over 15% market share, as Cosmos was the “Layer 0” base chain for Terra (an algorithmic stablecoin that infamously imploded in May, destroying over $40 billion).

Given that the protocol functions as a technology layer for independent blockchains, Cosmos obviously can’t be blamed for this collapse, and if anything, the fact that Terra used it to become the #2 chain speaks highly to the technology.

Like most protocols, Cosmos has its share of fans and detractors. Some of their most common refrains are below:

Cosmos is a project to keep an eye on. As we potentially move to a multichain world, interoperability remains one of the greatest unsolved problems.

Unfortunately, the most popular solution today — cross-chain bridges – has proven troublesome. Today’s bridges are relatively easy to hack (over $2B has been stolen in 2022 alone) and some question whether a secure bridge is even possible from a technical perspective.

Cosmos’s IBC represents a novel way to solve this problem, eliminating many of the problems with traditional bridges. Should the protocol achieve success as the preferred interoperability solution, its potential is nearly limitless.