Why Cosmos？
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This report will start from the current situation of Ethereum today, and interpret the development trend of Layer 1 and Layer 2 in the current blockchain world, from which we will introduce the introduction of Cosmos, combined with our comparative analysis of the design of Comos/Polkadot , and finally give our future outlook for the Cosmos ecology.
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With the rapid development of the blockchain field, a large number of on-chain interaction requirements lead to overcrowding of Ethereum, high Gas fees prevent a large number of users from entering the Ethereum main network, Ethereums limited block production speed and TPS also limit the efficiency of user interaction , these ills will remain an indisputable fact for a foreseeable period of time. In this context, we believe that the requirements that EthereumLayer 1 cannot undertake will naturally overflow to the following solutions to Ethereum scalability problems:
Layer 1: The competition on the Layer 1 track that supports EVM is fierce, and various public chains are grabbing the overflow funds and traffic of Ethereum. At present, BSC is the leader of the EVM public chain besides Ethereum. Fantom, Avalanche and other latecomers have also begun to make efforts, and some popular projects have appeared on the chain. However, in the EVM public chain, Ethereum still accounts for more than 70%. Market share (as shown in Figure 1). With the help of the bull market in 2021, Layer 1 has absorbed a large amount of funds, but in the long run, it is still unknown whether Layer 1 other than Ethereum can cross the bull and bear and create value in the public chain ecology.
Figure 1: Total Value Locked EVM Chains in February 2022, and its share over time (data from Defilama)
Figure 2: Total Value Locked Layer 2 Chains in February 2022 (data from Footprint Analytics)
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Other Layer 1: Solana, Near and other new public chains independent of EVM have achieved significant growth in 2021. Although this phenomenon is partly due to the continuous operation of external capital, the low Gas fee does hit the pain point of Ethereum , Solana, Near and other new public chains meet the needs of some users, create real value, and attract many users outside the circle. However, in view of the fact that EVM is still the absolute core of the market (as shown in Figure 3), it is easier for developers to reuse and many infrastructures developed based on EVM, Near launched Aurora, and Cosmos will soon launch Evmos to achieve and Ethereum ecology. butt. In addition, similar to the exclusive chains of Layer 2, there are also many exclusive chains focusing on different fields in Layer 1, such as Flow, which focuses on the NFT field, and Oasis, which is dedicated to private transactions. In addition, there are many game public chains such as Gala, WAX, WEMIX wait.
Figure 3: Total Value Locked of ETH and other non-EVM chains in February 2022 (data from Defilama)
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Figure 4: Schematic diagram of the Cosmos multi-chain universe connection (from the official)
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Different from the narrative of Ethereum, Cosmos adheres to the concept of applying blockchain and believes that the future is a multi-chain universe composed of blockchains focusing on different functional applications. Based on this idea, Cosmos consists of three basic components: 1) Tendermint consensus protocol, 2) Cosmos SDK, 3) IBC (Inter Blockchain Communication) cross-chain communication protocol. Cosmos hopes to create a common development framework for blockchain and solve cross-chain problems, making the multi-chain universe possible.
Tendermint consensus protocol: Generally speaking, the blockchain has a three-level architecture, which is the network layer, consensus layer, and application layer from bottom to top. The Tendermint consensus protocol generalizes or encapsulates the development of the complex network layer and consensus layer. Developers can focus on business-level research and development, and support multiple programming languages at the application layer. (As shown in Figure 5) Tendermint Core encapsulates the network layer and the consensus layer.
Figure 5: Schematic diagram of Cosmos layered architecture (from official)
difference in ecological philosophy
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Figure 7: Hub and Zone structure of Cosmos (from official)
Cosmos vs Polkadot
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value capture difference
Regarding the issue of value capture, in the subsequent development of the ecology, there may be improvement measures for this problem. Just like ETH has become the right trading pair in the Ethereum ecology, ATOM has the potential to become the right trading pair in the Cosmos ecology Yes, it has become a carrier of value interaction in the ecology, widely used in various ecological applications, adding liquidity or drainage to various applications in the ecology. For example, like Osmosis, which focuses on AMM in the Cosmos ecosystem, the pool with the best liquidity is the OSOM/ATOM trading pair. In addition, we believe that in the future Cosmos ecology, when new projects are in the Bootstrap stage, because the new projects are still in the early stages and their overall market value is small, there are hidden dangers in security. These projects can share security by renting ATOMs from the Cosmos Hub (Shared Staking), thereby stimulating the market demand for ATOM and improving the value capture mechanism. Finally, staking ATOM can get airdrops from various projects in the ecosystem, at least in the short term, which is attractive to users and enhances the value capture of tokens. As of February 21, 2022, there are 5 snapshot projects in 2022, namely Nomic (NOM), RAW (RAW), Racoon (RAC), Omniflix, Orbem Wars / Domerium Labs.
In fact, Token is like a stock, which represents the markets attitude towards the companys future development potential, and is endowed with expectations for the future growth of its track. With the growth of the Cosmos ecosystem, its future development is more certain, and the market These expectations will be reflected in its Token price. Although ATOMs ability to absorb blood from Cosmos ecological projects is not strong, ATOM can also be used as a Cosmos index to represent the value of the overall ecology, thus having a good currency price performance. Solana can be a good example with low transaction fees for nodes, but the price performance of SOL is very good. This is because SBF has been using the money it earns to buy back SOL. This phenomenon also shows that the support of the capital behind the project is also a support for the price of Token.
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Secondly, from the perspective of security, the Polkadot ecosystem as a whole is safer, because all chains in the ecosystem have the same level of security depending on the credit of Polkadot itself. The security of each chain in the Cosmos ecosystem is uneven, and the security of initial projects is relatively low. However, in future Cosmos updates, Shared Security may be adopted, that is, the security of the Cosmos Hub is shared by staking ATOMs, which is very beneficial to some early projects.
But from a macro perspective, in the context of Web3.0, openness has more advantages than closedness. Although part of the security is sacrificed, an open environment is more conducive to the growth of the ecology - related technologies and applications have greater potential. of probabilities emerge in the open environment. Compared with Polkadot, Cosmos is a more open path. The threshold for joining the ecology is lower, attracting more developers to join, which is conducive to the development and growth of the ecology in the long run.
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Reference
https://evmos.blog/the-evmos-token-model-edc 07014978 b
https://coinmarketcap.com/zh/currencies/polygon/
https://www.panewslab.com/zh/articledetails/1641626835278374.html
https://www.panewslab.com/zh/articledetails/D 33923458.html
https://www.panewslab.com/zh/articledetails/1643867534028470.html
