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Cosmos

Cosmos

Cosmos is an ever-expanding ecosystem of interoperable and sovereign blockchain apps and services, built for a decentralized future.

What Is Cosmos (ATOM)?

In a nutshell, Cosmos bills itself as a project that solves some of the “hardest problems” facing the blockchain industry. It aims to offer an antidote to “slow, expensive, unscalable and environmentally harmful” proof-of-work protocols, like those used by Bitcoin, by offering an ecosystem of connected blockchains.

The project’s other goals include making blockchain technology less complex and difficult for developers thanks to a modular framework that demystifies decentralized apps. Last but not least, an Interblockchain Communication protocol makes it easier for blockchain networks to communicate with each other — preventing fragmentation in the industry.

History of Cosmos (ATOM) Crypto

The history of Cosmos goes back to 2014 when developers Ethan Buchman and Jae Kwon created Tendermint, the consensus algorithm that serves as the backbone to the Cosmos network. In 2016, Buchman and Kwon published the Cosmos whitepaper. That same year, the first token sale for ATOM occurred.

A Swiss non-profit organization called The Interchain Foundation (ICF) helped launch and develop Cosmos, which founders have referred to as “the internet of blockchains.” In 2017, the organization hosted an initial coin offering (ICO) for the ATOM token, raising more than $17 million. Tendermint Inc. raised $9 million in 2019 to continue developing the project.

Who Are the Founders of Cosmos?

The co-founders of Tendermint — the gateway to the Cosmos ecosystem — were Jae Kwon, Zarko Milosevic and Ethan Buchman. Although Kwon is still listed as principal architect, he stepped down as CEO in 2020. He maintains he is still a part of the project but is mainly focusing on other initiatives. He has now been replaced as Tendermint’s CEO by Peng Zhong, and the whole board of directors was given quite a substantial refresh. Their goals include enhancing the experience for developers, creating an enthusiastic community for Cosmos and building educational resources so greater numbers of people are aware of what this network is capable of.

Where Can You Buy Cosmos (ATOM)?

It is now available across a number of major exchanges — many people choose to buy Cosmos on Binance, Coinbase and OKEx. It’s possible to find trading pairs with a number of fiat currencies, and you can find more about the process of converting dollars and euros to crypto

How Does Cosmos Coin Work?

There are three important layers that make up the Cosmos networks:

  • Application layer: This top layer of blockchain software defines the state and state-transition function.
  • Hubs and networking: Cross-chain communications happen here in which each blockchain interacts with one another to facilitate the transactions.
  • Consensus: To facilitate an agreement of the network.

When all of these layers are combined, developers can easily build applications. But it’s only achievable with the outsourcing tools like the Tendermint Byzantine Fault Tolerance (BFT) engine. And that’s what makes the Tendermint algorithm the backbone of the Cosmos network. BFT is a Proof-of-Stake governance mechanism that keeps the distributed network working in sync with Cosmos Hub.

Using the Tendermint BFT algorithm, the network reaches a consensus between all the blockchains in the Cosmos network connected through the IBC protocol. The separate blockchains communicate with the Tendermint core using the Application Blockchain Interface (ABCI), allowing developers to build DApps in the respective networks using different programming languages. Because of this capability, users aren’t required to develop a DApp from scratch. Instead, they use existing codes to replicate the DApps.

ABCI is mainly a bridge between the Tendermint core and the Cosmos software development kit (SDK). The Cosmos SDK allows developers to build projects on the Cosmos network. These systems interoperate and are connected to the Cosmos Hub, which is the main component of the Cosmos network.

But if Cosmos itself is a PoS network, how does it connect with PoW networks such as Ethereum’s? To achieve this, Cosmos uses peg zones. A peg zone is another bridge-like system that provides a solution to PoW networks that do not have fast finality. Since Ethereum has smart contracts, it’s easy to create a finality threshold, communicate the contracts in the pegging zone, and link them to the Tendermint Core using ABCI. But Bitcoin doesn’t have smart contracts, so it’s much more complicated to connect Bitcoin with Cosmos than to connect Ethereum.

The Cosmos SDK provides simple tools for developers without sovereignty issues found in Ethereum. To illustrate, if developers want to create a DApp in Ethereum, they have to abide by certain rules and regulations set by the Ethereum network. That is not the case with Cosmos.

What Makes Cosmos Unique?

A major concern for some in the crypto industry centers on the levels of fragmentation seen in blockchain networks. There are hundreds in existence, but very few of them can communicate with each other. Cosmos aims to turn this on its head by making this possible.

Cosmos is described as “Blockchain 3.0” — and as we mentioned earlier, a big goal is ensuring that its infrastructure is straightforward to use. To this end, the Cosmos software development kit focuses on modularity. This allows a network to be easily built using chunks of code that already exist. Long-term, it’s hoped that complex applications will be straightforward to construct as a result.

Scalability is another priority, meaning substantially more transactions can be processed a second than more old-fashioned blockchains like Bitcoin and Ethereum. If blockchains are to ever achieve mainstream adoption, they’ll need to be able to cope with demand as well as existing payment processing companies or websites — or be even better.

How Many Cosmos (ATOM) Coins Are There in Circulation?

ATOM has a very specific total supply — 260,906,513 to be exact. Of these, at the time of writing, about 203,121,910 were in circulation. It is worth noting that these cryptocurrencies aren’t mined — instead, they are earned through staking.

Two private sales were held in January 2017, followed by a public sale in April of that year. This raised a total of $16 million, which is the equivalent of about $0.10 per ATOM.

Breaking down the token distribution, about 80% was allocated to investors, while the remaining 20% was split between two companies: All In Bits and the Interchain Foundation.

Cosmos has compared ATOM tokens to the ASICs that are used to mine Bitcoin. As a technical paper written by the Tendermint team explained: “It is a piece of virtualized hardware (economic capital) that you need to obtain in order to participate as a keeper in the network.”

How Is the Cosmos Network Secured?

As we mentioned earlier, Cosmos uses a proof-of-stake consensus algorithm. Validator nodes that stake a higher quantity of ATOM tokens are more likely to be chosen to verify transactions and earn rewards. Nodes that are found to be acting dishonestly are penalized — and they can end up losing the tokens that they had at stake.

Where Can You Buy Cosmos (ATOM)?

It is now available across a number of major exchanges — many people choose to buy Cosmos on Binance, Coinbase and OKEx. It’s possible to find trading pairs with a number of fiat currencies, and you can find more about the process of converting dollars and euros to crypto here.

Cosmos Network is a blockchain network architecture run by the Interchain Foundation. The company is headquartered in Zug, Switzerland and was founded in 2016 by Ethan Buchman and Jae Kwon. Cosmos consists of various independent blockchains called zones. Zones are connected to each other by Cosmos Network Hubs; the digital ledgers responsible for token swapping between zones. Cosmos Network Hubs connect directly with zones, instead of zones directly connecting with each other; reducing the risk of double-spending and unfreezing of tokens.

Diagram of a Cosmos Network Hub.

Notable projects in development by Cosmos Network include the Cosmos SDK, Cosmos Hub (launched on March 13, 2019), Tendermint Core, and several Interchain Standards.

Funding
Initial coin offering (ICO)

On April 6, 2017 Cosmos held their initial coin offering selling approximately $17 million worth of the platforms ATOM cryptocurrency. The ICO raised $16.8 million in funding within the first 30 minutes of raising money making it one of the most successful ICO's in blockchain history.

Cosmos is a network of sovereign blockchains that communicate via IBC, an interoperability protocol modeled after TCP/IP, for secure data and value transfer. The Cosmos Hub, also known as "Gaia," is a proof of stake chain with a native token, ATOM, that acts as the primary hub for IBC packet routing among blockchains within the Cosmos network. The Cosmos Hub, like the majority of blockchains in the Cosmos network, is secured by the Byzantine Fault-Tolerant (BFT) Proof-of-Stake consensus algorithm, Tendermint.

History

Cosmos aims to combine the utility of open-source software, decentralized networks, and time-stamped blockchain data storage to accelerate the scaling, adoption, and use-case experimentation of blockchains. To bypass hindrances such as limited performance and ad hoc governance that inherently exist in PoW chains, Cosmos was envisioned as a decentralized network of independent, scalable, and interoperable PoS blockchains. The ideal solution, according to Cosmos, was a tool for interacting with multiple parallel blockchains such that the unique value proposed by a chain can be expanded to any other chain.

The idea of a Proof-of-Stake blockchain with Byzantine Fault-Tolerant (BFT) consensus mechanism originates from the year 2014 when the future Tendermint Inc. co-founder Jae Kwon explored the possibilities in his research. With the participation of Ethan Buchman, the other Tendermint Inc. co-founder, this idea was further developed in 2015, and Cosmos was introduced to the public in 2016. Tendermint Inc. and Interchain Foundation (ICF) have been responsible for the development and adoption of the technologies underlying the Cosmos network, Tendermint Core —a BFT consensus mechanism, and Cosmos SDK —a developer-friendly modular framework for building blockchains.

ICF ran a successful initial coin offering for ATOM in 2017 and used the collected funds to boost the development of Cosmos SDK, IBC, and Peggy. The first blockchain of the network, Cosmos Hub, launched on mainnet in 2019, and since then, many well-known projects have sprouted in the network such as Terra, THORChain, and Crypto.com.

ATOM

ATOM is the native token of Cosmos Hub, the PoS blockchain that constitutes one of many hubs on the Cosmos network. Since the PoS consensus mechanism requires validators to own ATOM to participate in the validation process, the main purpose of ATOM is the security and sustainability of the Cosmos Hub network. ATOM owners can stake their tokens to ensure network security, and in return, get a portion of the network transaction fees and block rewards distributed for validation. The token is also necessary for taking part in Cosmos Hub governance. ATOM owners can delegate their tokens or actively take part in governance by holding ATOM in their wallets.

Launch & Initial Token Distribution

The Interchain Foundation ran multiple private investment rounds, and a public fundraiser event ended on April 6, 2017. The foundation categorized recipients of these minted ATOMs into four different blocks: Private Contributors, Public Contributors, All in Bits Inc (AiB), and the Interchain Foundation (ICF).

The strategic and early adopters received 7.1% of the initial supply equivalent to 16,856,718.97 ATOMs, in exchange for their contribution of $1,329,472.3.

The seed contributors received 5% of the initial supply, equivalent to 11,809,947.91 ATOMs in exchange for $300,000.

The public contributors received 67.9% of the initial supply, equivalent to160,293,050 ATOMs, in exchange for $16,029,305.06 collected in BTC or ETH.

All in Bits Inc (Tendermint Inc.) received 10% of the initial supply equivalent to 23,619,895.81 ATOMs for developing the open-source IP that is used in Cosmos Network.

ICF received 10% of the initial supply equivalent to 23,619,895.81 to pursue their R&D activities for Web 3.0.

In total, 236,198,958.12 ATOMs were allocated at genesis to 984 accounts.

Consensus Mechanism

Cosmos is designed to operate as a network of zones and hubs. Zones are application-specific blockchains with sovereign security and governance models while hubs are intermediary blockchains that observe the state of connected zones and facilitate asset transfer between them. Cosmos is not a blockchain but a toolbox to design new blockchains. However, Cosmos Hub is the first PoS blockchain that works as a hub between zones and contains a multi-asset ledger, and lets other subsequent zones interact with each other through the inter-blockchain communication protocol, IBC. Their interaction is powered by Tendermint Core, a secure consensus protocol that provides fast finality and is easily adaptable with Proof-of-Stake (PoS) blockchain. Interacting with the IBC protocol requires chains to have a consensus mechanism that offers fast finality, meaning that Cosmos cannot use IBC for asset transfers between proof-of-work blockchains like Ethereum and Bitcoin. In order to bypass this shortcoming, Cosmos introduces account-based blockchains called peg zones (Peggy) and offers fast finality through implementing finality thresholds to blockchains with probabilistic finality.

What Problems Does Cosmos (ATOM) Solve?

The main goal of Cosmos is to tackle the lack of interoperability in the market. Together, the blockchain sector encompasses a huge variety of services and functionalities. However, every blockchain operates as an island currently. This weakens the overall ability of the market to accomplish important tasks such as lobbying for more pro-crypto legislation, or other vital improvements to the industry.

Through Cosmos, different blockchains can coexist with their own specialized use cases. This allows developers to focus efforts on improvements rather than spending efforts on marketing and other competition-related activities. Cosmos even allows different blockchains to leverage the capabilities of other platforms to improve their usability.

Timeline

February 6, 2022
What is Interchain Security and why is it so important to the Cosmos (ATOM) ecosystem?
July 2021
Delta Upgrade

Introducing Gravity DEX to enable enhanced liquidity for Cosmos Hub tokens.

March 2021
IBC Transfers

Cosmos Proposal 41 enabled the transfer of assets using the Interchain Standard 20 (ICS20) on the Cosmos Hub. IBC asset transfers allow IBC assets available in the Bank module of the Cosmos Hub and ATOM to be available on Zones connected to IBC (Inter-Blockchain Communication).

February 2021
Stargate

Stargate introduced an extensive set of upgrades to the Cosmos Hub, including new interoperability abilities and various performance improvements. It involved the transition of the third version of the Cosmos Hub (Cosmos Hub 3) to a fourth iteration (Cosmos Hub 4). Stargate's primary new feature was the Inter-Blockchain Communication (IBC) protocol, the interoperability standard that enables the exchange of cryptoassets and data across other Tendermint-based chains. Stargate also included several user-experience and performance upgrades, such as:

Protobuf Migration to increase transaction throughput and lower gas costs by increasing block capacity. It also introduces a composability standard.

State Sync to shorten the time it takes to sync a Cosmos node.

Full-featured light clients to help accelerate full node sync times.

Chain upgrade module to increase the efficiency of network upgrades.

April 2019
Atom Transfers Enabled

The Cosmos Hub's on-chain governance system unlocked token transfers roughly one month after its launch.

March 2019
Launch of the Cosmos Hub

The Cosmos Hub and its Tendermint Proof-of-Stake (PoS) network launched in March 2019.

April 2017
Cosmos raises a $17,000,000 initial Coin Offering from Kenneth Bok.
2017
Cosmos was founded by Ethan Buchman and Jae Kwon.

Funding rounds

Products

Patents

Further Resources

Title
Author
Link
Type
Date

10 Reasons Why Cosmos Atom Will Be MASSIVE!

Web

May 29, 2021

Cosmos (ATOM) - Computing, IBC Protocol, Bitcoin & more! - Interview with Jack Zampolin

Web

April 14, 2021

Cosmos (ATOM) Staking Guide | Earn rewards with #Cosmos

Web

March 4, 2020

...

News

Title
Author
Date
Publisher
Description
Omar Faridi
April 29, 2021
Crowdfund Insider
Brent Xu, Head of Strategic Partnerships at Tendermint, is leaving project to start cross-chain DeFi initiative

References

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