Cosmos Network is a blockchain network architecture operated by the Interchain Foundation. Established in 2016, the company is headquartered in Zug, Switzerland, and was founded by Ethan Buchman and Jae Kwon. Cosmos consists of different independent blockchains referred to as zones. Zones are linked to each other by Cosmos Network Hubs, and the digital ledgers enable token swapping between zones.
Cosmos Network Hubs directly connect with zones, rather than zones directly connecting with one another, minimizing the risk of double-spending and the unfreezing of tokens. Some projects in development by Cosmos Network include the Cosmos SDK; Cosmos Hub, which launched on March 13, 2019; Tendermint Core, and various Interchain Standards.
On April 6, 2017, Cosmos held its initial coin offering, selling approximately $17 million worth of the platform's ATOM cryptocurrency. The ICO raised $16.8 million in funding.
Several components of Cosmos and open-source tools make up for the network and keep it operating:
- Layers: Cosmos possesses three main layers—the application layer, which processes transactions and updates the network state; the networking layer, which enables communication across blockchains; and the consensus layer, where nodes agree on the state of the network.
- Zones: Every blockchain included in the Cosmos ecosystem is referred to as a “Zone.” The Zones are connected to the major blockchain, the Cosmos Hub.
- Cosmos Hub: This is the inaugural blockchain included in the network, holding a main token called ATOM. Its major task is to interconnect other blockchains to the network without risking security properties. Cosmos Hub utilizes the proof-of-stake (PoS) consensus, which picks network validators based on the amount of tokens they hold.
- BFT—Tendermint Byzantine Fault Tolerance: The Tendermint Core is a consensus integrating the BFT algorithm. Its major task is to replicate an application on different machines. A set number of validators is needed to operate the software. Validators are identified by their public keys.
- Cosmos SDK: This is a software development kit for developers who want to build their applications on top of Tendermint-based blockchains.
- Inter-Blockchain Communication (IBC): This is an end-to-end software protocol that enables interoperability between heterogeneous blockchains by laying down a set of data structures, abstractions, and semantics. The protocol can be utilized in building cross-chain applications with different features, like atomic swaps, multi-chain smart contracts, or token transfers.
- Stargate Upgrade: This refers to a set of upgrades that enable interoperability as a result of the IBC protocol.
Some Projects and dApps built on Cosmos include the following:
- Osmosis: This is one of the blockchains, or “zones,” that are attached to the Cosmos Hub. It utilizes a proof-of-stake system, which provides different professional staking services securing the Cosmos chain. The native cryptocurrency is termed OSMO.
- Akash Network: This is another project operating on Cosmos. Its major purpose is to assist Web3 developers with deploying various decentralized applications (dApps) with reduced configurations, setup, and server management.
- Sentinel protocol: This Cosmos project allows developers to build and deploy dApps. It allows its users to sell their bandwidth on its marketplace.
- Persistence XPRT : This is an ecosystem of icrypto-native DeFi and NFT-focused assets. It offers the infrastructure to connect DeFi and traditional finance in different areas.
- Regen network: This is a proof-of-stake blockchain developed on the Cosmos ecosystem, utilized for verification of claims, agreements, and data related to ecological state.
- Juno: This is an open-source platform for interoperable smart contracts. It automatically controls and documents procedures and actions written in the terms of such contracts.
Cosmos's native and utility token is referred to as ATOM. Holding ATOMS enables holders to pay for transaction fees, stake and validate blocks, and vote on governance proposals. ATOM has three major uses: spam prevention, voting, and staking. Users can utilize ATOM tokens to pay fees, which can be proportional to the amount of power needed to process the transaction.
Validators can vote on project proposals with ATOM tokens and govern the Cosmos Hub. Validators are mandated to bind or lock their tokens to be able to vote. To stake, validators bond their tokens to earn block rewards. Bonding involves locking up tokens for a particular period to gain voting power.
Validators are able to stake ATOM if they are in a blockchain or zone that is connected to the Cosmos Hub. If a validator commits an infraction, such as double-spending, Tendermint's For-Accountability consensus slashes the tokens. Whenever a validator delegates tokens to other validators, they are incentivized with inflationary ATOMs, and block transaction fees.
- 5% of the ATOM tokens to initial donors
- 10% to the InterChain Foundation.
- 10% to Tendermint Inc.
- 75% to private and public fundraisers.
Cosmos Network operates with an on-chain governance system conformed by a set of validators. These validators coordinate on- and off-chain to talk about proposals and begin protocol updates and constitutional amendments.
Members have voting rights, but the protocol is able to suspend their rights for a particular time if the member does not vote on a timed proposal. This rule is called Absenteeism Penalty Period. A validator needs to deposit if they want to submit a proposal, and the deposit can be made with one or more tokens, including ATOM.
ATOM can be bought on cryptocurrency exchanges, such as Kraken, Coinbase, or Binance. Users can receive ATOM as an incentive for becoming a network validator. To purchase ATOM, users can use their desired exchange platform and search for the $ATOM token.
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