As an established blockchain ecosystem, Cosmos stands out from other ecosystems with its decentralized and open features. However, due to a relative lack of high-profile marketing campaigns, Cosmos has always had a tepid impression on Twitter. But in fact, as the birthplace of today’s application chain revolution, Cosmos has never lacked the ability to incubate and attract high-quality ecological projects. Although the Cosmos ecosystem has been relatively stagnant for a period of time, it currently remains one of the areas in the crypto industry with the greatest potential for hundredfold growth. Recent trends suggest that projects with strong fundamentals and sustainability narratives will benefit greatly from the coming bull run, and Cosmos is well-positioned to take full advantage of this trend. #Cosmos

01

The Rising Cosmos Ecosystem: Reassessing Undervalued Potential

Cosmos is an open source ecosystem based on blockchain technology that aims to achieve interoperability between different blockchains. Although there are still some gaps compared with some leading systems in terms of technology and ecological projects, Cosmos has strong advantages in terms of decentralization and interoperability. In particular, the Cosmos development team launched the Cosmos SDK and IBC, which helped developers solve the problem of reinventing the wheel. Cosmos played an important role in promoting technological progress in the entire industry.

However, what does not match the strength is the market valuation of Cosmos. Compared with some other blockchain ecosystems, the Cosmos ecosystem is relatively small and has not yet attracted enough developers and users. Coupled with the technology and application scenarios of Cosmos It is relatively complex and requires more time and resources to promote and popularize. Therefore, in the encryption market that values ​​data and liquidity more, the market value of Cosmos has long been seriously underestimated. As of now, the market value of Cosmos is only US$3.15 billion, ranking 23rd. Its token ATOM also has a huge gap in market value from other ecosystem tokens due to its lack of practicality.

In order to alleviate this situation, at last year's Cosmoverse conference, the Cosmos 2.0 white paper was launched, planning to change the dilemma of low utilization of the Cosmos Hub network and ATOM tokens. Focusing on these goals, Cosmos has successively announced some progress. For example, Cosmos Hub upgraded the original Interchain Security to "Replication Security" and passed the Liquidity Staking Module (LSM) proposal. In addition, in May this year, the Cosmos ecological chain Neutron mainnet was launched. Neutron used the upgraded security mechanism "Replication Security" for the first time and announced that it would airdrop to Cosmos Hub pledgers. Discussions about Cosmos, ATOM value capture and its ecology have gradually begun. heat up.

It is precisely based on these technical improvements that the Cosmos ecological project has experienced an explosion of liquidity this year. First of all, the daily transaction volume of ecological public chain Canto once exceeded Solana, bringing a successful start to Cosmos. Subsequently, the total locked value (TVL) of the liquidity staking protocol Stride, Layer1 public chain Injective and Kujira continued to rise, increasing by 2 to 6 times compared to January. In April this year, according to Token Terminal data monitoring, the number of active developers on the Cosmos SDK once surpassed Ethereum and currently ranks second. In addition, the recent modular blockchain network Celestia built based on the Cosmos SDK has also attracted market attention. The Celestia + Cosmos model is also hailed as the final form of the application chain.

The outstanding performance of the Cosmos ecological project has rekindled the market's attention to Cosmos. Many users have expressed high expectations for the future plans of Cosmos 2.0, and there are even voices in the market that "Cosmos Summer is coming." In the recent rally, tokens related to the Cosmos ecosystem, such as Celestia (TIA), Injective (INJ) and Osmosis (OSMO), have all risen by more than 20% in the past week. INJ has increased by more than 110% in one month. These positive trends indicate that Cosmos is gradually winning market recognition and attention, and laying a solid foundation for its future development.

02

The future development plan of Cosmos technology: providing technical support for liquidity explosion

As we explore the latest development progress of the Cosmos ecosystem, it is necessary to first understand the future development plan of Cosmos technology. Continuous technological innovation is critical to sustain the growth of the ecosystem and provide unprecedented liquidity for blockchain applications. In September 2022, the Interchain Foundation, which promotes the development of the Cosmos ecosystem, publicly released the Interchain 2024 development plan, outlining the future development plan of Cosmos technology.

CometBFT: the cornerstone of cross-chain scalability

CometBFT is an innovative consensus algorithm that is at the heart of Interchain’s scalability. By ensuring validators reach consensus on block generation, CometBFT enables the Interchain ecosystem to maintain security, decentralization, and integrity. The Interchain Foundation plans to further expand the coverage and applicability of CometBFT and empower the development of sovereign, interoperable applications. Currently, CometBFT has been upgraded to v0.38, and the foundation plans to release v0.39 at the end of 2023, which will feature efficiency improvements, comprehensive data supporting APIs, and an enhanced indexing system.

Cosmos SDK: Modularity and new features

Cosmos SDK is a versatile toolkit for developing blockchain or Rollup applications. It has been adopted by many new blockchain projects, including Cosmos-based applications, Fairblock, Berachain, and the upcoming dYdX V4. In future development plans, the Cosmos SDK will focus on modularization and introducing new features. This will enable developers to create more complex, modular applications, fostering a broader and stronger ecosystem.

CosmJS: Improving efficiency and user experience

CosmJS is a library that helps developers integrate JavaScript clients with the Cosmos SDK blockchain. The Interchain Foundation plans to enhance CosmJS with a new coder that will make it more efficient, reduce code bloat, and provide a leaner, more professional development experience. This will enable developers to create more elegant, user-friendly applications, ultimately increasing the appeal of the Cosmos ecosystem.

CosmWasm: Unlocking decentralized, permissionless deployment

CosmWasm is a smart contract framework built on the Cosmos SDK. It enables developers to deploy decentralized applications without permission requirements, while also allowing blockchain developers to separate their product development cycles from blockchain development, thereby reducing the cost of validator upgrades. The Interchain Foundation will further optimize CosmWasm in the future to make it easier for developers to create and deploy various applications, ultimately increasing blockchain utilization. Key focus areas include IBC adoption and account-based smart contracts.

IBC Protocol: Enhance interoperability and scalability#IBC

IBC (Inter-Blockchain Communication) is a protocol that enables secure, decentralized, and permissionless data transfer between blockchains. The Interchain Foundation plans to update the IBC in 2024, focusing on two themes: scalability and usability. By increasing the scalability and interoperability of IBC, Cosmos will further enhance the capacity of its ecosystem, enabling seamless interactions between blockchains, applications, and smart contracts.

03

The latest changes in the Cosmos ecosystem: accelerating development and innovation

As the digital asset market continues to evolve, the Cosmos ecosystem has once again shown great potential in recent months. As an open source multi-branch blockchain network, the Cosmos ecosystem has many advantages such as smart contracts, scalability, security and cross-chain interoperability. At the same time, its application chain theory is also constantly developing and evolving. The following are some noteworthy changes that have occurred in the ecological field of Cosmos recently.

Liquidity Staking Module: Liquidity Staking Module (LSM) is a new module designed to provide a modular solution for liquidity staking in the Cosmos ecosystem. LSM implementation on Cosmos Hub begins on June 14, 2023, with a software upgrade plan released. The impact of the implementation of LSM on the Cosmos ecosystem is that users can now directly liquidate their already staked ATOM without waiting for the unbonding period.

Token economics upgrade: The economic model of Cosmos token ATOM has undergone major changes, shifting from the past era of pursuing high returns to the narrative of pursuing real returns. On May 10, the Neutron mainnet was launched. It is a CosmWasm (Cosmos virtual machine) platform that combines Cosmos SDK and IBC. It is the first "Replication Security" consumption chain using Cosmos. Neutron's goal is to solve the problems that ATOM 1.0 has been criticized for lacking obvious practical value, and to bring new narratives and impetus.

Enhanced interoperability: Interoperability has always been Cosmos’ biggest advantage over other ecosystems. The launch of Evmos 2.0 in August this year undoubtedly further consolidated Cosmos’ advantages in this aspect. Evmos is built on the Cosmos blockchain Built on top of the Interoperability Communication (IBC) protocol, which has the potential to take powerful multi-chain ecosystems to new heights, Evmos2.0 will enable interoperability between the Ethereum and Cosmos ecosystems, allowing developers to build Applications where two ecosystems interact.

The rise of perpetual contracts: Perpetual contracts play an important role in the digital asset market and have experienced rapid growth in recent times. As the leading perpetual contract exchange in the Ethereum ecosystem, dYdX v4 announced its migration to the Cosmos ecosystem, which will undoubtedly have a positive impact on the Cosmos perpetual contract module because it will bring more liquidity and innovation to the Cosmos ecosystem. .

Increased native liquidity: Native liquidity is crucial to the DeFi space, not only enabling seamless on-chain interactions but also reducing bridging risks. Recently, Tether’s stablecoin USDT has been integrated into the Kava blockchain, solidifying Tether’s leadership in the field and introducing new native liquidity to Cosmos. In addition, in March this year, Noble, the Cosmos ecological native asset issuance platform, officially announced its cooperation with Circle and is committed to bringing native USDC into Cosmos. Noble said this integration will generate hundreds of millions of dollars of liquidity in Cosmos in the coming months.

04

An inventory of popular projects in the Cosmos ecosystem

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Initia is a popular Cosmos-based project dedicated to building a highly interconnected modular Rollup network. By abstracting the complexity found in traditional modular and multi-chain systems, Initia empowers developers to build scalable and autonomous systems. Its architecture includes L1 (Layer 1), L2 (Layer 2) and communication layers, enabling developers to easily launch application-specific blockchains based on Initia L2 without having to understand complex chain-level infrastructure or run validators gather.

Initia adopts Cosmos’ software development kit (SDK) but uses a computing framework called MoveVM, which is based on the Move smart contract language. Meanwhile, Initia leverages Optimistic rollups as an application-specific L2 solution. By integrating L1, L2 and communication layers, Initia enables seamless messaging and bridging between different virtual machines such as EVM, WasmVM and MoveVM, making it the first MoveVM computing framework compatible with the Cosmos IBC protocol and implementing Seamless interaction with other blockchain networks in the Cosmos ecosystem.

Recently, according to The Block, Initia has received pre-seed investment from Binance Labs. The specific financing amount and further details have not been disclosed. The funds will be used to support the development of Initia infrastructure, the expansion of product tools, and the incubation of key application layer projects to drive the expansion of the Initia ecosystem. Currently, Initia is still in the development stage of the test network. Once online, it will greatly enhance the liquidity of the Cosmos ecosystem.

Celestia#tia

Celestia is a modular blockchain network based on the Cosmos ecosystem, designed to provide a pluggable consensus and data availability layer. The goal of the project is to enable anyone to quickly deploy decentralized blockchains without the cost of additional consensus layers, and to provide developers with more flexible ability to build and deploy blockchain applications.

An important feature of Celestia is data availability sampling. It allows nodes to verify only a small portion of a block's data, rather than verifying the entire block. This greatly reduces the hardware requirements for validator nodes and improves the scalability of the network. In partnership with Cosmos, Celestia works with Tendermint and Cosmos Zones as a data availability layer. This allows chains in the Cosmos ecosystem to take advantage of the data availability features provided by Celestia and enable minimal trust through fraud proofs. This collaboration promotes interoperability and scalability of the Cosmos ecosystem while also providing a unified level of security for the Cosmos ecosystem.

On October 31, the Celestia mainnet was officially launched, and its token TIA was also listed on major exchanges. The current price of TIA is US$2.33.

dYdXV4

dYdX is the leading L2 Dapp on Ethereum. Its latest version, dYdX V4, is expected to be released in December this year. This upgrade is an important milestone for dYdX as it prepares to migrate to the decentralized network Cosmos. The move aims to address Ethereum’s scalability limitations and provide a more decentralized architecture for dYdX’s rapidly growing user base and trading volume. #dydx

As a popular L2 Dapp, dYdX has attracted a large number of users and transactions, which has put pressure on the Ethereum blockchain. However, Ethereum’s scalability limitations have hindered the expansion of dYdX, prompting the need for more advanced solutions. Cosmos and its cutting-edge SDK provide the perfect solution for dYdX’s growth, enabling the development of a decentralized and independent blockchain network that can meet dYdX’s growing needs.

By migrating to Cosmos, dYdX V4 will not only increase transaction speeds but also eliminate centralization concerns. Cosmos’ decentralized network allows dYdX to continue to adhere to its commitment to transparency and fairness, providing users with a more secure and reliable trading experience. As a leading decentralized exchange, dYdX’s daily trading volume has exceeded $3 billion, and its migration will also bring a large number of new users and liquidity to the Cosmos ecosystem.

Neutron#NTRN

Neutron is a smart contract infrastructure based on the CosmWasm platform that allows developers to easily deploy dApps on this platform without the need for complex governance voting or whitelist verification. Through partnerships with Cosmos Hub and other projects, Neutron combines security and cross-chain capabilities to enable DeFi applications to securely scale into a massive network of more than 51 interconnected blockchains. Simply put, Neutron provides developers with a convenient and secure way for their applications to run smoothly across multiple blockchains.

Although Neutron was not well-known before and many people may not know much about this project, in fact, Cosmos has been actively preparing. According to the Interchain Stack’s 2024 roadmap, Neutron will become the first consumer chain on Cosmos. It aims to host an ecosystem of DeFi products built around NTRN and ATOM, providing support for token generation utility and demand. This will play an important role in promoting the development of the Cosmos ecological economy and the implementation of ATOM 2.0.

In May of this year, Neutron successfully completed a funding round led by Binance Labs, raising a total of $10 million. Other participants include CoinFund, Delphi Ventures, LongHash Ventures, Semantic Ventures and Nomad Capital. Neutron token NTRN was listed on Binance in October and is currently trading at $0.290.