The Cosmos Hub (ATOM) helps secure “an ever-expanding ecosystem of interconnected apps and services, built for a decentralized future.” This ecosystem is positioning itself to become the "internet of blockchains" which provides blockchains with the sovereignty they desire, but also the cross-chain / interchain interoperability that they need.
The name Cosmos can often confuse people, because it can refer to both the Cosmos ecosystem and the Cosmos (ATOM) hub. The Cosmos ecosystem are blockchains that utilized the Tendermint Software Development Kit (Cosmos SDK) in order to build their blockchain. These blockchains automatically have access to the Tendermint Consensus Mechanism, which is a BFT consensus algorithm that secures the blockchain.
The general design philosophy of the Cosmos ecosystem is that independent and sovereign blockchains will connect together to make one single scalable ecosystem. This is a different design philosophy than some other Layer 1 blockchains while having its own benefits and potential drawbacks associated.
Over the long-term, it's entirely possible that Cosmos will be a player alongside Bitcoin, Ethereum and other blockchain ecosystems that help form an internet of blockchains.
There are numerous projects building within the Cosmos network, including Terra (LUNA), ThorChain, Secret Network, Compound Gateway, Osmosis, Kava, Akash and of course, the Cosmos Hub. These projects are focusing on everything from Decentralized Finance (DeFi), NFT's, Stablecoins, Liquid Staking Derivatives, Bitcoin Synthetics and even Ethereum bridges.
The Cosmos SDK allows projects to natively integrate CosmWasm, which provides them with an Ethereum-like smart contract system. This means that developers can build almost anything they can imagine, with the long term vision of it connecting to other blockchains as well. In addition, oracle projects like Chainlink and Band Protocol have the ability to provide secure inputs and outputs to make these Decentralized Applications (DAPP) smart contracts more useful for real world use cases.
The most exciting thing about the Cosmos ecosystem is the Inter Blockchain Communication Protocol (IBC). This is a technological framework that allows independent Proof of Stake blockchains to communicate and transfer value with one another. Cosmos aficionados believe that cross-chain / interchain interoperability is important for the future of blockchains. They often compare IBC to the internet's HTTPS protocol, which is a core building block of the internet today as we know it and is what allows the internet users to securely communicate with each other. It’s important to note that IBC is still very much in beta, which means that it’s still being tested and is not yet ready for widespread global adoption. If successful, IBC may be one of the protocols that help bring together the multi-chain future that so many people expect to arise overtime.
It's worth nothing that IBC is not the only interoperability system that is being developed within the crypto industry. Both Polkadot and Ethereum Layer 2 are ecosystems that have their own development framework and philosophy when it comes to a multichain future.
The Cosmos Hub is what many people refer to as the Cosmos (ATOM) blockchain. This is designed to be the centerpiece of the Cosmos ecosystem. In the Cosmos ecosystem, there are Hubs and Zones which are used to securely communicate and pass value between each other. Ecosystem players will want to send their communication through Hubs that are the most secure, which provide more safety guarantees.
The Cosmos Hub has also recently added a native Decentralized Exchange, known as the Gravity DEX. This will allow users of the Cosmos ecosystem to seamlessly swap digital assets from any chain. This will provide an experience similar to Uniswap, but for the Cosmos ecosystem. It would not be surprising to see other applications / services arise within the Cosmos Hub and it become one of the dominant one-stop-shops within the Cosmos ecosystem. The team already has a few additional services in the making, including Interchain Accounts, Interchain Staking, Chain Name Service and Staking Derivatives.
ATOM is the central crypto token of the Cosmos Hub. It’s specifically designed to be staked with validators in order to secure the hub. Overtime, this token is expected to accrue value from services and users that live on top of the network. The more services generate fees, the more rewards will be paid to staked ATOM holders. This helps align the incentives of holders, users and builders of the ecosystem. As the staked (ATOM) value is higher, the more security guarantees exist for users and services, which in turn provides a positive feedback loop.
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