Tendermint CEO: How does the Cosmos ecosystem connect to the multi-chain world?

Cosmos, which aspires to be the “blockchain internet”, has experienced tremendous growth in 2021, with more than 260 blockchain projects. Well-known projects such as Binance Smartchain, Terra and Crypto com all use the Cosmos SDK software development kit Constructed. According to the data, the Cosmos ecosystem already has more than 170 billion U.S. dollars in funds.

Cosmos is an ecosystem composed of interoperable but autonomous blockchains. With the introduction of the inter-chain communication protocol IBC, Cosmos underwent a major upgrade in March. The IBC protocol allows independent blockchains to be connected to each other to exchange data and assets. In the past month, more than 1.7 million cross-chain transactions have occurred between more than 20 IBC-enabled blockchains (such as Osmosis, Cosmos Hub, and Terra).

Peng Zhong, CEO of Tendermint, a core contributor to the Cosmos ecosystem, said in an interview that IBC will create a new cross-chain industry. “By the end of 2021, we should see about 30 IBC-enabled zones (independent blockchains in Cosmos), and I predict that there will be more than 200 by the end of 2022. This is where innovation will happen.”

According to data from DeFi Llama, Ethereum is a smart contract platform that hosts most stablecoins, decentralized finance (DeFi) and NFT agreements, and the total value currently locked is US$170 billion. 

Zhong Peng believes: “This is a dazzling complexity, even beyond the smart contract framework of Ethereum. Ethereum has tens of thousands of smart contracts, but in Cosmos, there may be tens of thousands of Ethereum. And each of them has tens of thousands of contracts.”

Zhong Peng used to be a web developer and joined Tendermint at the end of 2015 as the company’s chief design officer. Since then, Tendermint has continued to develop Cosmos infrastructure and tools, such as the Tendermint core engine, Cosmos SDK, and IBC protocol, to help developers and projects quickly build their own blockchains and realize cross-blockchain data and asset exchange.

The following is the edited interview content:

Why is Cosmos called the “blockchain internet”?

Cosmos was originally an idea proposed by founders Jae Kwon and Ethan Buchman in 2016, and outlined in the white paper what the “blockchain internet” is. 1C0 in 2017 was initiated by the Interchain Foundation, and the first blockchain Cosmos Hub in the Cosmos ecosystem was launched in early 2019. 

By 2021, the framework for building the Cosmos blockchain has become very popular, with more than 250 blockchains built using the Cosmos Software Development Kit (SDK). Although many valuable blockchains have been built using the Cosmos SDK, since the writing of the 2016 white paper, the Cosmos ecosystem has been unable to transfer assets to each other. 

It wasn’t until now, five years later, that inter-blockchain communication (IBC) was enabled. This was launched on the first blockchain Cosmos Hub in Cosmos in March this year. More than 20 Cosmos blockchains have enabled IBC, and these blockchains have already had a considerable amount of traffic.

How does Cosmos compare to Polkadot  ? Do you think Polkadot is a competitor of Cosmos?

Currently, there is no competition between Cosmos and Polkadot, and I think “projects aimed at improving interoperability between blockchains” will not really compete. 

The main difference between Polkadot and Cosmos is the initial direction. Cosmos focuses on permissionless cross-chain data exchange, which allows any Cosmos blockchain to send data to any other Cosmos chain. It allows developers to build a new chain and send their tokens to the Cosmos Hub, and the Cosmos Hub sends tokens such as ATOM to this newly created chain, which is possible in today’s Cosmos. 

Polkadot first started to build shared security, which means that it is not a permissionless ecosystem that cannot allow anyone to build new chains and send assets back and forth between these chains. On the contrary, it is a more orderly system. It does allow a relay chain to connect to up to 100 other parachains, but to become a parachain, you will need a lot of DOT Tokens and be able to win auctions to become a parachain. . This means that in the Polkadot ecosystem, as the holder of the DOT, you have a lot of power, which projects you want to allow to become parachains, and which projects will bring value to Polkadot.

In Cosmos, holders such as ATOM currently have no say in which chains can be connected to Cosmos. Therefore, they will be able to connect to Cosmos the moment the new chain is launched. 

Of course, for Polkadot, it is more valuable to be a DOT holder because you can protect all parachains. But in Cosmos, we believe that developers are free to build anything they imagine and connect it to the Cosmos network, which will bring more innovation and growth to Cosmos.

How is security managed in the Cosmos ecosystem?

Now, each Cosmos blockchain chain has its own security and has its own verification node. On the Cosmos Hub, there are 150 validating nodes, which are usually small and medium-sized enterprises that run the infrastructure for a specific blockchain. Each verification node runs exactly the same software to ensure that the blocks created are valid. 

Now we are innovating, and the technology being built will allow shared security similar to Polkadot, but not exactly the same. For Cosmos Hub, we are studying cross-chain security, which will allow Cosmos Hub validators to verify another chain or multiple chains at the same time.

What is Tendermint and how does it fit into the Cosmos ecosystem?

Tendermint is essentially the oldest company in the Cosmos ecosystem. The co-founders of Cosmos, Jae Kwon and Ethan Buchman, are also the co-founders of Tendermint Inc., which was founded in 2014, even before the advent of Cosmos. 

I joined Tendermint as the first employee at the end of 2015. When I joined, we focused on the Tendermint consensus protocol of enterprise blockchain. But after we decided to focus on Cosmos, our mission changed to build a network, create as many sovereign blockchains as possible, and allow people to control their own network online, that is, blockchain governance, but at the same time allow these blockchains Transfer assets between each other. Blockchain has the potential to truly reshape global collaboration, connectivity and decision-making.

Cosmos is an idea created by the founder of Tendermint, but at the same time, Cosmos is much bigger than any other company’s idea, and due to the license-free nature of our tools and the open source licenses that these tools have, there are many The company uses Cosmos technology to build and contribute to Cosmos.

What are some of the key characteristics of the Cosmos ecosystem?

At a higher level, Cosmos is about autonomy, sovereignty, and scalability.

The developer’s ability to launch a blockchain in Cosmos and be able to send tokens without permission is truly unique. This means that developers and teams with insufficient funds can use Cosmos to build for free. I am very keen to maintain this core value, because I used to be a web developer and usually develop things on the web, you can do almost anything for free. The completely free and permissionless nature of Cosmos will be the direction of Web 3.0 development.

Whether in an ecosystem or across chains, DeFi has risks, just as hackers use errors in smart contracts or manipulate oracles. And Cosmos has been developing on IBC for 5 years, and our technology is well-known in the industry for its high standards. Many top blockchain projects are built using Cosmos technology, including Crypto com, Terra, and Binance Smart Chain. Everything we do is fully audited to ensure additional security.

IBC aims to become a framework similar to the traditional Internet messaging protocol TCP/IP. So just like today, there are many different web development frameworks, and the Cosmos SDK may not be the final solution. But as long as other blockchain frameworks adopt the IBC protocol, then all the blockchains connected to the IBC can be interconnected. 

Other blockchain ecosystems that hope to adopt IBC are undergoing a lot of development and research. So you can imagine what the future will be like if Polkadot adopts IBC. Polkadot uses the Substrate framework. If Substrate uses IBC, it means that every Polkadot parachain or even relay chain will transfer tokens to and from Cosmos without permission. You can even see the future where the Polkadot chain can talk to the Kusama chain through IBC.

As more and more blockchains decide to adopt the IBC protocol, this will be a very powerful network effect. The next network may not only need to be connected to the Cosmos chain, but: “Oh, if I adopt IBC, then I can connect to Cosmos and Polkadot”, and the next network may be: “Oh, I can connect to Cosmos , Polkadot and Avalanche”.

Using the IBC protocol can make multi-chain a breeze.

What do you think are some of the factors driving the growth of Cosmos?

The main reason why Cosmos has gained more popularity is that this year is the year of the rise of “multi-chain interoperability”-the idea of ​​cross-chain bridges between popular blockchain ecosystems has emerged. We predicted this future in 2016, when there will be many valuable blockchains, and they will be able to send assets to each other. Today, we have seen the rise of DEX and the decline of centralized exchanges, all thanks to the development of cross-chain bridges. 

With so many blockchains already in place, can you see industry consolidation?

From the perspective of Web3.0, Cosmos and the Cosmos SDK allow small teams to create new projects very easily, and all other blockchains in the Cosmos ecosystem can directly access them.

At the technical level, many people want to be able to use multiple protocols in different Cosmos blockchains and connect them together in one way. If they want to make some kind of automated investment, multiple Cosmos chains can operate on your assets in a similar way to Ethereum smart contracts and send them back to you. 

But at the user level, I expect many users to be troubled by the idea of ​​managing assets on thousands of blockchains. How do they track their assets? So we will have some integration, but it may happen on the UI or on the wallet. A wallet is a good way to hide the back end of the blockchain and completely break away from the abstraction of the blockchain. 

What are your thoughts on the highlights of 2021 and the forecast for 2022?

The Cosmos ecosystem has completed the activation of the IBC protocol and will create a brand new cross-chain industry. Cross-chain DEXs such as Gravity DEX and Osmosis have allowed people to understand the value of the multi-chain world and have really brought a large number of users to Cosmos.

There is still a lot to do in the NFT field. I am a little worried about the NFT prediction. People worry that anonymous addresses have the ability to buy, sell, and exaggerate the value of NFTs, making them beyond one’s actual ability to pay. This will attract the attention of regulators. But at the same time, supervision is to protect consumers. So we are happy to work with regulators to ensure that what we are building is truly suitable for all users and not a scam.

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