Recently, Osmosis, an automated market maker (AMM) application, received an investment of US$21 million, led by Paradigm, a well-known crypto venture capital firm. The application is based on Cosmos. After this financing news came out, the blockchain network Cosmos became a hot topic of discussion in major communities, and people began to re-examine this long-lost public chain.
During the explosive period of DeFi applications, Cosmos, as a representative of the old public chain, did not have any explosive applications. Its on-chain TVL has no advantage compared to the new public chains such as Solana, BSC, Fantom, etc., but it is still favored by application parties and capital , And why is this? Compared with other public chains, what are its advantages and disadvantages? This issue of DeFi Honeycomb will take stock of the technical concept and ecological progress of Cosmos.
The underlying support of Cosmos
Cosmos is a decentralized network composed of multiple independently operating parallel blockchains. It is one of the underlying systems of the basic blockchain network. In this system, there are multiple blockchains that use the Tendermint consensus algorithm. Parallel operation, chain and chain are independent of each other, but under certain conditions, chain and chain can be connected.
The Cosmos blockchain network system consists of three core sections, namely Tendermint consensus, Cosmos SDK, and IBC (inter-chain communication protocol).
- Tendermint consensus algorithm-The Cosmos network uses a general blockchain development framework. The blockchain networks developed under this framework have a common algorithm, with the same data format and interoperability.
As early as 2014, the R&D team realized that the PoW (Proof of Work) consensus algorithms of Bitcoin and Ethereum were insufficient, and hoped to create a consensus algorithm that does not rely on mining, which is a high power consumption. The algorithm can improve the processing speed and scalability on the chain while ensuring network security.
The Tendermint framework has specially formed the corresponding software, this software can help the network to copy the application, and guarantee the security of the application and the consistency of the data.
- CosmosSDK——It is a development template tool provided by Cosmos for developers. It standardizes and modularizes some common development technologies in the blockchain. Developers only need to adjust or replace part of the content on the basis of the template (SDK), namely The development of a chain can be completed. The goal of the Cosmos SDK is to hope that developers can easily build and customize the blockchain.
What’s rare is that the Cosmos SDK supports developers to build a blockchain network with a variety of PoS (Proof of Stake) consensus algorithms. Developers can customize the Cosmos-SDK module according to their needs, and then import the module content into the new blockchain application , Integrated with the original network module. The well-known stablecoin ecosystem Terra (LUNA) and the cross-chain asset trading application Torchain (RUNE) are all developed based on the Cosmos-SDK tool.
- Inter-Blockchain Communication Protocol (IBC)—It is the core protocol interface of the Cosmos network, through which information can be transferred between the blockchain network chain and the chain, allowing the blockchain to read and verify data on other chains . The connection between multiple blockchains in the Cosmos ecosystem is synchronized through IBC.
For example: there is an IBC interface between the A chain and the B chain, the smart contract on the A chain can know the data facts that occur on the B chain, and the smart contract on the B chain needs to use the block header that stores the block information on the A chain, and Verify the finality of its data and time.
Recently, the Terra chain community has proposed a proposal to launch IBC. If the Terra chain finally launches the IBC interface, then the LUNA, stable currency UST, ANC and other assets and related data information on the Terra chain can be seamlessly transplanted to the Cosmos chain.
The operating mechanism of the Cosmos network
Compared with a separate blockchain chain like Ethereum, Cosmos is building a chain network system composed of multiple chains. Here, new blockchains can be easily created, and the consensus algorithm of each chain is unified as the Tendermint consensus. Independent and parallel operation, through IBC to realize the transfer of assets on the chain between different chains.
Cosmos proposes an idea-each DApp runs on its own blockchain, and Cosmos connects all these chains and applications on the chain through protocols, and then forms the “blockchain internet”.
How to realize information sharing between chains in the Cosmos ecosystem? How does it work? We know that the Cosmos network can implement chain-to-chain interaction functions based on the IBC protocol, so does each chain need to access the IBC protocol interface?
In fact, in the Cosmos network, the blockchain forms a hub-and-spoke model. At the center is the Hub Central Hub. The Hub manages many independent branch chains called “Zones”, which can track and record the status of each zone. And each zone will report the status of its own block to the Hub and synchronize its status.
Hub and Zone communicate directly, and Zone and Zone communicate indirectly through IBC. When the Zone establishes an IBC connection with the Hub, it can automatically access other Zones connected to the Hub.
Center and radiation model diagram, the picture comes from the Internet
You can understand Hub as a “port”, and Zone is the “ship” used on various routes, and IBC is the “ticket” for sharing information in the Hub port. Once a ship enters this port through a ticket, it can enjoy various information on other ships, without requiring separate contact between each ship.
In the Cosmos network, its central hub Hub is directly named “Cosmos Hub”, serving as the central connection point of its network branch blockchain, and other independent blockchain zones are connected to the Cosmos Hub in the form of branches.
ATOM is the native token of Cosmos Hub. Staking ATOM can be used as a verification node of the network. This token is also an important tool for voting governance on the chain. ATOM’s current market value is 10.9 billion U.S. dollars, ranking 22nd in the entire crypto asset market.
Cosmos has undoubtedly built a very friendly development environment for the development of DApps-developers can create a dedicated blockchain for the underlying needs of the application without wasting too much time and effort.
For users, the cumbersome operation process brings unfriendly experience, because in this ecology, each DApp has an independent blockchain. When users use different applications, they not only have to switch chains, but also deposit and withdraw encryption. Assets and transfer of encrypted assets in various applications have to go through the process of IBC.
For developers, the environment is friendly and development is convenient, but the links between applications have become estranged. In addition, compared to maintaining the operation of a DApp, the cost of maintaining a chain is relatively high and requires continuous investment in human technology and financial resources, which puts cost pressure on developers.
You should know that the current DeFi needs a “Lego portfolio” to form the circulation of DApps and assets, as well as the expansion of cryptographic revenue. Cosmos has not formed enough attractiveness to the current market demand. This is probably because its overall TVL is not in this wave of DeFi. The reason for the growth in the storm. And a welcome trend is that Cosmos is solving the barriers between the ecological internal chain and the chain in an application way.
Ecological application of Cosmos
- Decentralized exchange Gravity DEX
Gravity DEX is the first native decentralized trading application on the Cosmos Hub mainnet. It was jointly created by Cosmos development company Tendermint and its acquired Cosmos information provider and node validator B-Harvest.
The DEX is created based on the cross-chain communication protocol IBC, and supports the issuance, exchange, trading, and formation of liquid asset pools of Cosmos native Token and its linked multi-chain asset Tokens. These operations do not need to cross bridges. For example, Terra is a zone linked to the Cosmos Hub and has issued its own ecological Token LUNA. Gravity DEX supports the exchange between ATOM and LUNA, UST, ANC and other assets on the Terra chain, and also supports users to form a liquidity pool LP such as ATOM-UST on the DEX.
Gravity DEX official website
Compared with the traditional DEX, Gravity DEX has made improvements in technology, allowing users to trade at their own prices when trading, and can ensure that the price they see is the price that the exchange can get.
Taking Uniswap as an example, the transaction orders of the DEX are executed in order. Ethereum miners can choose which transactions to package first according to the miner fee paid by the transaction party. Of course, normal miners will give priority to processing transactions with high miner fees, but this As a result, large-value transactions will be rushed away or squeezed by the “scientists” of the technology flow, which will eventually bring extremely high slippage losses to ordinary users, and also bring exaggerated price differences to orders.
Gravity DEX uses batch execution of transactions to resist the possibility of preemptive transactions or price manipulation. Batch execution of transaction orders means that orders in the same block will be processed at the same time, which fundamentally eliminates the chance of running away.
According to data from the Gravity DEX official website, there were 710,000 transactions in the testing phase, more than 20,000 trading users were used, and the amount of funds locked in the fund pool (TVL) reached 190 million US dollars.
- One-stop DeFi application portal Emeris
Emeris is a one-stop DeFi application portal for the Cosmos ecosystem launched by the Cosmos development company Tendermint. Currently, the application integrates DEX and native asset management functions in the Cosmos ecosystem. In the future, it will also become a one-stop asset management platform for users to enter the Cosmos ecological application to facilitate users to centrally manage assets on multiple chains on Emeris.
Emeris integrates the functions of GravityDEX, and users can directly complete the exchange and transaction of multi-chain assets in the Cosmos ecosystem on Emeris without jumping to the Gravity DEX page.
Emeris also provides an asset dashboard, which can display the asset price of the Cosmos ecosystem in real time. All assets and distribution in the user’s wallet are also visualized. Users can adjust their holding strategies and manage their own multi-chain assets at any time according to the asset return rate. .
At present, the beta version of Emeris has been launched, and users can enter this application through the multi-chain wallet Keplr. When users experience this application, a certain amount of ATOM is required in the wallet. The Emeris application also supports users to purchase ATOM with a credit card. It should be noted that Emeris has not yet issued any tokens.
- Cosmos Gravity Bridge, a bridge linking Ethereum
CosmosGravity Bridge is a cross-chain bridge of Ethereum to Cosmos assets designed for Cosmos Hub. The bridge links the IBC, allowing multi-chain networks built on Cosmos to bridge Ethereum’s ERC-20 standard assets through the bridge.
CosmosGravity Bridge official website
Gravity Bridg was created by the Althea team. The main purpose is to solve the problem of asset interoperability and transfer between the Cosmos network and the Ethereum Layer 1 public chain.
Unlike common cross-chain bridges, Gravity Bridge operates as an independent blockchain and will provide asset liquidity for the Cosmos Hub and the entire Cosmos ecosystem.
Gravity Bridge is also a two-way cross-chain bridge. Not only can ERC-20 assets (such as WETH, DAI , USDC , W BTC, etc.) be brought from Ethereum to the Cosmos ecosystem, it can also bring assets in the Cosmos ecosystem to the Ethereum Fang network. In the future, Gravity Bridge will also inject other Ethereum-compatible on-chain assets into the Cosmos ecosystem.
This also means that the Cosmos ecosystem will be connected with other blockchains, and assets will be able to circulate in a broader and diverse application. It should be noted that the Gravity Bridge has not yet issued any tokens, and its mainnet launch date is November 8.
- Automated Market Maker (AMM) Osmosis
Osmosis is a decentralized trading application with an advanced automated market maker (AMM). It uses the Cosmos SDK to build an independent blockchain, allowing developers to design, build and deploy their own customized AMM strategies according to their own needs.
Osmosis official website
In Osmosis, the underlying structure of AMM can be changed, and developers can adjust and change the weight parameters of exchange assets at any time according to the transaction requirements of the assets. The simple understanding is that Osmosis has built an AMM decentralized transaction application template for developers. Developers only need to fill in the content according to their own needs. There is no need to spend time and effort to build an exclusive AMM application.
Osmosis has built-in IBC, which allows it to connect to native assets in the Cosmos ecosystem. Later, with the help of Gravity Bridge, it can also integrate ERC-20 assets based on Ethereum.
At present, Osmosis supports multi-chain asset exchange and transactions in the Cosmos ecosystem. Users can enter this application through the multi-chain wallet Keplr to provide liquidity for ATOM-OSMO and assets in the Cosmos ecosystem to obtain OSMO rewards. OSMO is the native token of Osmosis, with a total issuance of 1 billion, and the current provisional report is US$5.6.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/can-cross-chain-technology-bring-a-second-spring-to-cosmos/
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