- Cosmos is a network connecting many independent distributed ledgers (e.g., Ethereum, Bitcoin) to realize interoperability across blockchains. Its goal is to “create an online of Blockchains”, i.e., “a network of blockchains where each participant during a position|is ready”> is in a position to speak with one another in a decentralized way”.
- Cosmos is made on a group of independent blockchains mentioned as zones, which are powered by the Tendermint Core consensus mechanism – a Byzantine Fault Tolerance (BFT) consensus mechanism wont to scale public Proof-of-Stake (PoS) blockchains.
- Defined as a “blockchain 3.0”, Cosmos relies on three additional core elements:
- Cosmos Hub: the primary of the “interconnected blockchains” that’s mentioned because the Cosmos Network.
- IBC Protocol: the Inter-Blockchain Communication protocol may be a standardized interoperability protocol attempting to attach the worldwide economy with blockchain technology.
- Cosmos SDK: it allows developers to create their custom blockchain and to attach it through the ITB protocol. as an example , Terra and Binance Chain are built with the Cosmos SDK.
- ATOM is that the native asset of Cosmos and is employed for on-chain governance. Specifically, ATOMs are often staked by zone validators to hitch hubs and conversely, their locked tokens would be slashed just in case of malicious behavior (i.e., bonding mechanism). additionally , Cosmos Hub features a similar facility as Ethereum, and requires ATOM to be used for transaction fees.
ATOM is that the native asset of the Cosmos Hub, which may be further subdivided into 1 million micro ATOM (uATOM).
The Cosmos project aims to form a whole ecosystem around a blockchain running on Tendermint BFT consensus to make blockchains easier to use, from providing developer SDKs to enabling interblockchain communication via a “Hub-and-Zone” model. The Cosmos chain will function the primary hub, through which other chains and tokens can transfer information using Interblockchain Communication.
Cosmos Network is an ecosystem focused on the scalability and usefulness of blockchain solutions. Its core products are Tendermint consensus, the Cosmos SDK, and Interblockchain Communication (IBC), built with the vision of enabling an “Internet of Blockchains”Featuring a Bonded Proof-of-Stake mechanism, Cosmos utilizes a “Hub-and-Zone” model to permit for interblockchain transactions to occur.
At its core, it features:
- Tendermint Core: Tendermint Core may be a ready-to-use blockchain engine featuring the eponymous practical byzantine fault tolerant consensus protocol. This core are often wont to build both public and personal blockchains. The consensus mechanism offers instant finality and security, prioritizing safety over liveness.
- Cosmos SDK: the Cosmos SDK may be a package of tools that expedites the building process for developers that want to make their own blockchains for his or her own apps.
- Interblockchain Communication: giving developers more tools to create their own blockchains, subsequent component of the Cosmos project is to enhance the interoperability of various chains, enabling transactions to occur across chains and layers. Utilizing a mixture of zones, one can transact freely during a crypto ecosystem across IBC-compatible chains.
2. Blockchain and network data
Cosmos and Tendermint have several projects that are building within their ecosystem. for instance , projects like Binance DEX, FOAM, and Sentinel run on Tendermint-powered blockchains.
Other projects, like IRIS Network are already building services and support round the Cosmos system for easier adoption in specific targeted geographies.
Cosmos’ Interblockchain Communication (IBC) works by bonding an amount of ATOM, then relaying a symbol of the ATOM bonding to a second chain, then validation of this proof, before a corresponding amount is released on the second chain. This makes it easier to issue and make tokens representing assets on other chains. IBC is compatible with fast-finality chains, meaning blockchains with instant or near-instant confirmation times where a transaction is for certain to be final within a brief period of time; however, chains running on Proof-of-Work that don’t have fast finality can still be utilized in IBC with the assistance of “Peg Zones” that impose a “finality threshold” for a few number of blocks to assume that transactions are effectively final, almost like how accepting parties (such as exchanges) require deposits of Bitcoin to receive a particular number of confirmations to scale back the danger of any double spends or other attacks. This “pseudofinality” from this threshold is relayed back to the Cosmos ecosystem using the peg zones.
While the primary peg zone for Ethereum started in 2018, other chains like Loom have already announced compatibility with the Cosmos Hub.
3. Economics and supply
3.1 Token supply distribution
- Seed tokens comprise 5.08% of total supply.
- Strategic tokens comprise 7.03% of total supply.
- Public Fundraiser tokens comprise 67.86% of total supply.
- All in Bits, Inc. (dba Tendermint) received 10.03% of total supply.
- Interchain Foundation received 10% of total supply.
Private sale overview
- Seed Round: Sale conducted at a rate of 1 ATOM = 0.025 USD and raised a complete of USD 300,000, selling 5.08% of total token supply
- Strategic: Sale conducted at a rate of 1 ATOM = 0.08 USD and raised a complete of USD $1.3295 MM, selling 7.03% of the entire token supply.
Public sale overview
- Public Fundraiser sale was conducted in April 2017 for a complete raise of ~$16 MM USD worth of ETH at ~$0.10 per ATOM for 67.86% of the entire token supply.
3.3 Token governance and use of funds
The beat Bits (team) tokens are earmarked specifically for the continued support of Tendermint and building of tools like the Cosmos SDK and therefore the underlying technology for the ecosystem. Tokens given to team members are non-transferrable for 12 months, but are often staked and utilized in governance. the remainder of beat Bits’ tokens are vesting for 22 months with a 2 month cliff after mainnet launch.
Conversely, the Interchain Foundation may be a non-profit entity to encourage and support open and decentralized networks, and intrinsically has funded projects like sponsoring Cosmos’ Game of Stakes testnet competition.
The team uses a multisignature wallet to carry the team’s allocation of ATOM tokens.
3.4 Token overview and use cases
In this proof-of-stake system, the ATOM token is employed as a piece token, whereby users can stake their ATOM or delegate their ATOM to other validators who are participating in validation.
- Based on aggregate token share delegated to a given validator, each validator will have a proportional “voting share” that translates into the proportionate opportunities to validate blocks on the network and earn the accompanying block rewards, very similar to in Proof-of-Work systems where hashrate proportions determines the relative likelihood of finding subsequent block.
- Validators then pass back the proportional block rewards (less a network tax for a reserve pool) back to the delegators, whose token bondings contribute to the mixture voting share of the validators. very similar to a pool in PoW networks, the validators take a fee for the work of aggregating the voting share.
- The network tax will go towards a reserve pool which will be wont to increase the safety round the Cosmos Network.
- As of the present time of writing, the median delegator commission fee sits at 10% for the active validator set.
- Validators compete not only on fees, but also uptime. within the beginning, only 100 validator slots are going to be available upon mainnet launch for the primary year (growing to 300 over subsequent 10 years), and thus the validators that demonstrate high uptime are selected because the genesis validators. to stay active, they need to maintain high uptime, or risk unbonding of their delegated tokens and “jailing” of their validator status.
The network rate of inflation is bounded, with a minimum of seven , and a maximum of 20%; the block reward is adjusted to realize a target network staking participation rate of 2/3 (66.66%). All staked tokens require 21 days to “unbond”, in order that stakers cannot sell their tokens directly after staking.
Cosmos tokens also are used for on-chain governance; for instance , token holders recently voted for the proposal of enabling token transfers.
The project can also release or airdrop a secondary token called the Photon, specifically for transaction fees. This token has not yet been finalized as of the time of writing. Photons within the end of the day would be generated by validators and stakers for his or her transaction processing. The specifics of the Photon are going to be determined via on-chain governance.
4. Roadmap, updates, and business development
Cosmos’ milestones, both upcoming and past, can all be found on the project’s website.
As of your time of writing, subsequent milestones for Cosmos are to propose support for IBC, and a full transfer of governance to the whole Cosmos token holder community.