Cosmos Ecosystem: The Undervalued Pioneer of Blockchain Revolution

Cosmos, as a well-established ecosystem in the blockchain field, stands out among many competitors due to its decentralization and openness. Despite the lack of high-profile marketing, Cosmos has been the birthplace of the application chain revolution, continuously incubating and attracting quality projects. Although relatively quiet for a period, Cosmos is still regarded as one of the areas with the greatest potential for a hundredfold growth in the crypto industry. Recent trends indicate that projects with solid fundamentals and sustainable development narratives will benefit in the upcoming bull market, and Cosmos is well-prepared for this.

Reassessing the Underrated Potential of the Cosmos Ecosystem

Cosmos is an open-source Blockchain ecosystem aimed at achieving interoperability between different Blockchains. Although there is still a gap in technology and project scale compared to some leading systems, it has strong advantages in decentralization and interoperability. The Cosmos SDK and IBC launched by the Cosmos development team provide convenience for developers and play an important role in promoting technological advancement in the industry.

However, the market valuation of Cosmos is not commensurate with its strength. Compared to other blockchain ecosystems, Cosmos is relatively small and has yet to attract enough developers and users. Additionally, its technology and application scenarios are relatively complex, requiring more time and resources for promotion. As a result, in the data and liquidity-focused cryptocurrency market, Cosmos's market capitalization has been severely underestimated for a long time, currently standing at 3.15 billion USD, ranking 23rd. Its token ATOM also lags far behind other ecosystem tokens due to its lack of practicality.

To change this situation, the Cosmos 2.0 white paper was released at last year's Cosmoverse conference, aimed at enhancing the utilization of the Cosmos Hub network and the ATOM token. Around these goals, Cosmos has announced a series of progress, such as upgrading the original Interchain Security to "Replication Security," and passing the liquidity staking module (LSM) proposal. In May of this year, the Cosmos ecosystem chain Neutron launched its mainnet, adopting the upgraded "Replication Security" mechanism for the first time, and announced an airdrop to stakers of Cosmos Hub. These initiatives have reignited discussions in the market about the value capture of Cosmos, ATOM, and its ecosystem.

Based on these technological improvements, the Cosmos ecosystem projects have welcomed a liquidity explosion this year. The daily trading volume of the ecological public chain Canto once exceeded that of Solana, marking a successful start for Cosmos. The total locked value of liquidity staking protocol Stride, Layer 1 public chain Injective, and Kujira has continued to rise, increasing by 2 to 6 times compared to January. In April of this year, the number of active developers on the Cosmos SDK once surpassed that of Ethereum, ranking second. Recently, the modular blockchain network Celestia built on the Cosmos SDK has also attracted market attention, with the Celestia + Cosmos model being hailed as the ultimate form of application chains.

The outstanding performance of Cosmos ecosystem projects has once again attracted market attention. Many users have shown high expectations for the implementation of Cosmos 2.0 future plans, with voices emerging that "Cosmos Summer is coming soon." In the recent rebound market, Cosmos-related tokens such as Celestia(TIA), Injective(INJ), and Osmosis(OSMO) have all seen increases of over 20% in the past week, with INJ rising over 110% in a month. These positive trends indicate that Cosmos is gradually gaining market recognition, laying a solid foundation for future development.

Future Development Plan of Cosmos Technology: Supporting Liquidity Explosion

When exploring the latest developments in the Cosmos ecosystem, it is essential to understand its technological development plan. Continuous innovation is crucial for maintaining ecological growth and providing unprecedented liquidity for Blockchain applications. In September 2023, the Interchain Foundation, which promotes the development of the Cosmos ecosystem, announced the Interchain 2024 development plan, outlining the future development direction of Cosmos technology.

CometBFT: The cornerstone of cross-chain scalability

CometBFT is an innovative consensus algorithm that is at the core of Interchain scalability. By ensuring that validators reach consensus on block generation, CometBFT allows the Interchain ecosystem to maintain security, decentralization, and integrity. The Interchain Foundation plans to further expand the coverage and applicability of CometBFT, empowering the development of sovereign, interoperable applications. Currently, CometBFT has been upgraded to v0.38, with a plan to release v0.39 by the end of 2023, featuring efficiency improvements, a comprehensive data-supported API, and an enhanced indexing system.

Cosmos SDK: Modular and New Features

Cosmos SDK is a versatile toolkit for developing Blockchain or Rollup applications. It has been adopted by many new projects, including Cosmos-based applications, Fairblock, Berachain, and the upcoming dYdX V4. Future development plans will focus on modularity and the introduction of new features, enabling developers to create more complex, modular applications, thereby nurturing a broader and more powerful ecosystem.

CosmJS: Improve efficiency and user experience

CosmJS is a library that helps developers integrate JavaScript clients with the CosmosSDK Blockchain. The Interchain Foundation plans to enhance CosmJS with a new encoder to improve efficiency, reduce code bloat, and provide a more streamlined and professional development experience. This will enable developers to create more elegant and user-friendly applications, ultimately enhancing the appeal of the Cosmos ecosystem.

CosmWasm: Unlocking decentralized, permissionless deployment

CosmWasm is a smart contract framework built on the Cosmos SDK. It allows developers to deploy decentralized applications without permission, while enabling blockchain developers to separate product development cycles from blockchain development, thereby reducing validator upgrade costs. The Interchain Fund will further optimize CosmWasm in the future, making it easier for developers to create and deploy various applications, improving blockchain utilization. Key focus areas include IBC adoption and account-based smart contracts.

IBC Protocol: Enhancing Interoperability and Scalability

IBC( Blockchain intercommunication ) is a data transmission protocol that enables secure, decentralized, and permissionless data transfer between blockchains. The Interchain Foundation plans to update IBC in 2024, focusing on scalability and usability. By improving the scalability and interoperability of IBC, Cosmos will further enhance the capacity of its ecosystem, enabling seamless interaction between blockchains, applications, and smart contracts.

Latest Changes in the Cosmos Ecosystem: Accelerated Development and Innovation

With the continuous development of the digital asset market, the Cosmos ecosystem has once again demonstrated great potential in recent months. As an open-source multi-branch Blockchain network, the Cosmos ecosystem has multiple advantages such as smart contracts, scalability, security, and cross-chain interoperability. At the same time, its application chain theory is also continuously evolving. Here are some recent changes in the Cosmos ecosystem that are worth paying attention to.

Liquidity Staking Module

The Liquidity Staking Module ( LSM) is a new module providing a modular liquidity staking solution for the Cosmos ecosystem. The LSM on Cosmos Hub was implemented on June 14, 2023, along with the release of a software upgrade plan. The implementation of LSM allows users to directly liquidity stake their already staked ATOM without waiting for the unbinding period.

Token Economics Upgrade

The economic model of the Cosmos token ATOM has undergone a significant change, shifting from a pursuit of high returns to a focus on real yields. On May 10, the Neutron mainnet was launched; it is a CosmWasm platform that combines the Cosmos SDK and IBC, and is the first consumer chain to use Cosmos' "Replication Security." Neutron aims to address the issue of the lack of apparent utility value in ATOM1.0, bringing a new narrative and driving force.

Interoperability Enhancement

Interoperability has always been the biggest advantage of Cosmos compared to other ecosystems. The launch of Evmos 2.0 in August this year further solidified Cosmos's advantage in this regard. Evmos is built on Cosmos's IBC protocol and has the potential to elevate the multi-chain ecosystem to new heights. Evmos 2.0 achieves interoperability between the Ethereum and Cosmos ecosystems, allowing developers to build applications that can interact with both ecosystems.

The rise of perpetual contracts

Perpetual contracts play an important role in the digital asset market and have recently experienced rapid growth. As a leading perpetual contract exchange in the Ethereum ecosystem, dYdX v4 has announced its migration to the Cosmos ecosystem, which will have a positive impact on the Cosmos perpetual contract module, bringing more liquidity and innovation to the ecosystem.

Native liquidity increase

Native liquidity is crucial for the DeFi space, enabling seamless on-chain interactions and reducing bridging risks. Recently, Tether's stablecoin USDT has been integrated into the Kava Blockchain, solidifying Tether's leading position and introducing new native liquidity to Cosmos. Furthermore, in March this year, the Cosmos ecosystem's native asset issuance platform Noble announced a partnership with Circle to bring native USDC to Cosmos. Noble stated that this integration would bring hundreds of millions of dollars in liquidity to Cosmos in the coming months.

Overview of Popular Projects in the Cosmos Ecosystem

Initia

Initia is a popular project based on Cosmos, dedicated to building a highly interconnected modular Rollup network. By abstracting the complexities of traditional modular and multi-chain systems, Initia supports developers in building scalable and autonomous systems. Its architecture includes L1, L2, and communication layers, enabling developers to easily launch application-specific Blockchains based on Initia L2 without needing to understand the complex chain-level infrastructure or operate a set of validators.

Initia adopts the Cosmos SDK, but uses the MoveVM computation framework based on the Move smart contract language. At the same time, Initia utilizes optimistic rollups as an L2 solution for specific applications. By integrating L1, L2, and communication layers, Initia achieves seamless messaging and bridging between different virtual machines, becoming the first MoveVM computation framework compatible with the Cosmos IBC protocol, and enabling seamless interaction with other blockchain networks in the Cosmos ecosystem.

Recently, Initia secured pre-seed round investment from Binance Labs, and the specific amount of financing has not been disclosed. This funding will be used to support the development of Initia's infrastructure, expansion of product tools, and incubation of key application layer projects, promoting the expansion of the Initia ecosystem. Currently, Initia is still in the development stage of the testnet, and once launched, it will greatly enhance the liquidity of the Cosmos ecosystem.

Celestia

Celestia is a modular Blockchain network based on the Cosmos ecosystem, aimed at providing pluggable consensus and data availability layers. The project's goal is to enable anyone to quickly deploy decentralized Blockchains without the additional costs of a consensus layer, providing developers with more flexible capabilities to build and deploy Blockchain applications.

One important feature of Celestia is data availability sampling. It allows nodes to verify only a small portion of the block's data without needing to validate the entire block. This significantly reduces the hardware requirements for validating nodes and enhances the scalability of the network. In collaboration with Cosmos, Celestia acts as a data availability layer working alongside Tendermint and Cosmos Zones. This enables chains in the Cosmos ecosystem to utilize the data availability capabilities provided by Celestia and achieve minimal trust through fraud proofs. This collaboration promotes interoperability and scalability within the Cosmos ecosystem while providing a unified level of security for the Cosmos ecosystem.

On October 31st, the Celestia mainnet officially launched, and its token TIA has also been listed on major exchanges. The current price of TIA is 2.33 dollars.

dYdXV4

dYdX is a leading L2 Dapp on Ethereum, and its latest version dYdX V4 is expected to be released this December. This upgrade is an important milestone for dYdX as it prepares to migrate to the decentralized network Cosmos. This 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, has attracted a large number of users and