Are you still wondering what Cosmos is? Cosmos Network is a blockchain that connects multiple independent blockchain networks. Its core network is called Cosmos Hub, and other sovereign blockchains can connect to it in order to exchange value and data with each other.
Cosmos Hub aims to achieve interoperability between blockchain networks, ensuring scalability and decentralization, thus guaranteeing its users faster and lower-cost transactions.
How does Cosmos achieve scalability and interoperability of its network?
Cosmos owes its scalability and interoperability to three open source tools: Tendermint BFT, Cosmos SDK and IBC.
Tendermint BFT
It is a software that allows the creation of blockchain networks in a simplified way. It uses the BTF (Byzantine Fault Tolerant) consensus algorithm to guarantee the correct performance of the network.
Cosmos SDK
This is a development kit that facilitates the creation of applications on Tendermint-based blokchains. In Cosmos Hub there is a set of basic modules that can be used by developers to facilitate the creation of applications on their network, so that they can create and customize applications without having to start building them from scratch.
IBC (Inter-Blockchain Communication)
IBC is the protocol that makes possible the connection between the different blockchains and Cosmos Hub, so that they can establish a reliable communication and exchange data and tokens securely.
The conjunction of these three tools makes it possible for the Cosmos network to behave like the internet of blockchains.
Key features of the Cosmos network
Cosmos Hub has unique features that facilitate the performance and economic mobility of users on its network.
IBC: allows secure control of other blockchain accounts, so users can access all networks in the Cosmos ecosystem through a single Cosmos Hub account.
Gravity DEX: allows the secure exchange of assets from all blockchains. In this AMM, users have an orderbook at their disposal, significantly enhancing the trading experience offered by other DEXs such as Uniswap.
Gravity Bridge: allows Cosmos assets to be transferred as ERC-20 tokens to the Ethereum ecosystem and vice versa, and native ERC-20 tokens to be sent to the Cosmos ecosystem to interact with its various networks and applications.
Security between blockchains: Cosmos Hub validators will be able to validate transactions from child-chains or smaller blockchains that voluntarily request it, taking their delegation of ATOM as a guarantee.
Blockchain naming service: like any website domain, blockchains connected to Cosmos Hub will have their own name or domain, allowing them to be more easily identified by users.
Liquid staking: this allows the liquidity of staked ATOM to be released so that users can obtain new tokens that they can exchange, trade or transfer without having to unstake their initial staking.
The ATOM token
ATOM is the main token of Cosmos Hub, and is inflationary. The current total supply is 284,010,631, and it plays two very important roles: governance token and staking token.
By governance token, we mean that ATOM holders can create and vote on proposals that affect the direction of the project. On the other hand, Cosmos, in addition to using the BFT consensus protocol, also uses the Proof-of-Stake consensus protocol, so the ATOM token can be staked to make the network more secure. This duality of consensus protocols fully strengthens its ecosystem against possible attacks by malicious actors.
Staking Cosmos
As mentioned above, ATOM staking can be performed on Comos Hub in order to make your network more secure. Users can perform ATOM staking on the node of their choice and in return will receive rewards that come from transaction fees and newly created ATOM. The latter is what justifies the fact that it is an inflationary token.
On the other hand, it is important to note that staking carries certain risks that can be detrimental to the stakers. Inactivity of the chosen validator, or unsatisfactory performance, will result in ATOM holders losing a percentage of their staked or delegated funds. It is recommended that those in charge of operating the validator nodes be thoroughly vetted and vetted before staking.
The Cosmos blockchain is emerging as one of the most important in the crypto universe. Today, more and more projects are joining its network to build their own blockchains and applications in order to exploit the scalability, interoperability, decentralization, and low costs it offers.
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