Cosmos – ATOM

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Cosmos – ATOM

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Cosmos is an ecosystem that binds a network of parallel blockchains designed to scale and interoperate with each other. It enables inter-blockchain communication and open-source tools for streamlining transactions between eachother.

What is Cosmos – ATOM?

Blockchain technology paved the way for decentralization and then Bitcoin was introduced to the world. The basic idea was to irradicate the intermediaries who used to control all the data and the resources involved in making a single transaction. We believe it gave people the hope that there can be a mixed economy where one can make a transaction without involving centralized entities. 

Even though Bitcoin solved the problem related to centralization, it came with certain drawbacks like the disadvantages of the proof-of-work algorithm, limited scripting language, and lack of flexibility. As a result, Cosmos was introduced which aims at solving these hurdles by creating an environment where a network of blockchains can communicate with each other and make transactions easier for the users. 

Cosmos was established in the year 2014 as a product of the Tendermint company. With Cosmos, developers can build blockchains and break the barriers between different blockchains by allowing them to transact with each other. Therefore, Cosmos has been termed as the “Internet of blockchains” by the team behind the project. 

This review of Cosmos – ATOM was created for informational purposes. This article is not intended for promotion.

General info about Cosmos – ATOM

Since Cosmos is an open-source community project everyone is welcome to build additional tools to enhance the ecosystem. So, let us take a closer look at some essential features that sets Cosmos apart from other projects. 

Cosmos Hub 

The Cosmos Hub is a common podium where all the blockchains meet. Also, the first blockchain to be launched on the Cosmos network was the Cosmos Hub. The main function of the protocol is to act as an intermediary between the blockchains. 

A record of the current state of the zone is constantly maintained by the hub. The hub directly connects to each zone in the network. Each zone can independently carry out its essential functions by itself. These functions include authenticating accounts and transactions, creating and distributing new tokens, and executing changes to its blockchain. 


The Inter-Blockchain Communication protocol – IBC enables Zones to connect with the Cosmos Hub. IBC is more of a mechanism that allows information to travel freely and securely between each connected zone. 

And now when a Zone gets connected to the Cosmos Hub, it is interoperable with every other zone connected to the hub. Therefore, blockchains with vastly different applications, validators, and consensus mechanisms can exchange data with each other. 

Zones are nothing but independent networks that can execute any transactions they need to complete their tasks. And without any effects from their Cosmos connectivity these blockchains are empowered in such a way that they can issue and distribute new tokens on their networks, approve new accounts, transactions, vote, and execute protocol upgrades. 

Layers of Cosmos 

There are three layers of the Cosmos Ecosystem which gathers the entire blockchain industry. 

Application layer

Being the first layer of the Cosmos ecosystem, it is responsible for tracking the network state and it is the layer that handles processing transactions.





As stated earlier, different blockchains can communicate within the Cosmos ecosystem. The second layer of the blockchain i.e., Networking makes that possible. Blockchains with completely diverse technologies, consensus mechanisms, and purposes, can leverage each other’s services using this system. 

Cosmos – ATOM Consensus

The Tendermint Byzantine Fault Tolerance – Tendermint BFT is a proof-of-stake – PoS governance mechanism used by computers running on Cosmos to validate transactions, secure networks, and commit blocks to the blockchain. This brings us to the final layer of the ecosystem, the Consensus Protocol.  

Network users can act as validators on the platform. To power the blockchain and to vote on changes the validator nodes need to stake ATOM. The voting power is determined based on the number of ATOMs staked. 

Inter-Blockchain Communication Protocol 

The feature was enabled onto Cosmos by an overwhelming support for activation and by a final vote of 112 to 75million. So basically, IBC securely exchanges data between two independent blockchains. Let us understand this protocol with the help of an example. 


So, assuming Marco has an account on chain A from which he wishes to send 20 ATOMs to Justin on chain B. Now chain B will continuously receive headers of chain A and similarly chain A will receive headers of chain B. This enables each chain to keep track of the validator set of the other chain where each chain runs the light client of the other chain. 

After the IBC transfer is initiated, ATOMs are locked up (bonded) on chain A and the proof confirming that 20 ATOMs are bonded is relayed from chain A to B. Eventually, on chain B, the proof is verified against chain A’s header. And if the proof is valid then 20 ATOM vouchers are created on chain B. Finally, Marco has successfully transferred ATOMs to Justin with the help of the IBC protocol. 

When ATOMs return to their origin chain it is unlocked through a similar process. 

Cosmos Software Development Kit 

Imagine you being a developer had to develop a blockchain and never had to write any code from scratch. This is what Cosmos SDK does for developers, it creates an ecosystem of modules that helps developers to build the blockchain without the need of writing the code from the ground up. 

Cosmos – ATOM Nodes 

The eligibility criteria to become a node is to remain among the top 100 stakers. This strategy is adopted to keep away nefarious nodes as they would have the most to lose from any financial hits. 


A socket protocol called the Application Blockchain Interface – ABCI helps the application to connect with the Tendermint BFT engine. Developers can choose any programming language as this protocol is compatible with all of them. The consensus layer of any existing blockchain stack can be easily swapped out with the help of ABCI.

Projects on Cosmos – ATOM 

There are 248 apps and services built on the Cosmos to date and more to come. Cosmos has been widely used by developers to build other projects in different sectors of the market. Here is a list of few projects in the Cosmos ecosystem. 

Binance Chain 

Binance is one of the largest crypto exchanges in the world and Binance Chain is a project being developed by Binance. It focuses on the transfer and trading of blockchain assets, as well as provides new possibilities for the future flow of blockchain assets. 

The current implementation of the Binance chain is built on forks of Tendermint and Cosmos SDK. They have made use of a revised edition of Tendermint consensus and leverage its p2p networking logic, and Cosmos SDK features such as “bank” which is used for basic token transactions. 

Kira Network 

Kira is an interchain exchange protocol, engineered for cross-chain transfers and frictionless trading. The platform allows users to earn block and fee rewards from staking any digital asset on multiple chains at the same time while maintaining full liquidity and custody over their funds, whether trading on KIRA or using other DeFi apps simultaneously. 

It comes along with sharding capabilities, which provide trading layers where each layer handles a distinct asset class. 


OKExChain is a set of open-source public chain projects developed by OKEx which is used for building blockchain-based trading applications. The Chain is designed in such a way that it can be used to create a decentralized exchange, or DEX, that features community-based operations, transparent trading rules and allows the users to control their assets. 

The network security is maintained by a set of validators, each of which is a full node that participates in the consensus through voting by broadcast. 

Team and Roadmap 

The Interchain Foundation – ICF, a Swiss non-profit organization that funds open source blockchain projects, supported the development and launch of Cosmos. The Cosmos network was founded by Jae Kwon and Ethan Buchman, CTO, and co-founder of Cosmos. Together they authored the Cosmos Whitepaper and released its software in 2019. 

In the year 2017, the initial coin offering – ICO of the ATOM token raised $17million. Earlier this year, Cosmos achieved all the points jotted down in its roadmap. But the journey for Cosmos does not end here, because it has unveiled the Cosmos Hub Roadmap 2.0 in which it states that it will be focusing on key areas like liquidity, economic security, usability, and participation, to make it more attractive for community members. 

In total there will be six upgrades in the one-year guideline in which stakeholders can anticipate updated features on the Cosmos Hub. 

Use case of Cosmos – ATOM

As ATOM being the native currency of the network, it serves certain vital functions such as executing smart contracts and completing transactions. Whenever a block of transactions receives approval, the network validators receive ATOMs as rewards. 

ATOM is hyper-inflationary meaning it rewards those that stake the token to provide security to the Cosmos Hub while punishing those that don’t stake by decreasing in value per ATOM via inflation. 

With the launch of Cosmos Hub, 3 voters are empowered to make changes to the Cosmos Network at a fundamental level. Few changes that can be made include increasing or decreasing the inflation rate, changing the minimum threshold at which staking influences inflation, the community tax rate, and many more. But the most compelling part is that these changes can be implemented without the need for a hard fork. 

Cosmos zones run arbitrary application logic, such flexibility allows Cosmos zones to act as bridges to other cryptocurrencies such as Ethereum or Bitcoin. And it also permits derivatives of these blockchains, utilizing the same codebase but with a different validator set and initial distribution. 

Furthermore, this makes it possible for many existing cryptocurrency frameworks, such as those of Ethereum, Zerocash, Bitcoin, CryptoNote, and so on, to be used with Tendermint BFT. 

Where to buy and sell Cosmos – ATOM?

What do we think about Cosmos – ATOM?

At the time of writing, Cosmos was securing 77.11 billion USD in digital assets across 32 apps and services. There are 33 wallets and block explorers for Cosmos out of which 9 are web wallets and the rest 24 belong to iOS and Android wallets.  

The team of Cosmos includes experienced individuals from Tendermint and Interchain Foundation, along with capable leaders like Jae Kwon and Ethan Buchman. Therefore, they are aware of the market scenarios and business mechanisms. They have also been very engaged within the community on several social media networks.

Since Cosmos always aimed to become the Internet of Blockchains, the selected algorithm Byzantine Fault Tolerance – BFT is considered extremely reliable in this context. This has also solved the scalability obstacles faced by the other projects in the blockchain arena.  

Gravity DEX is something to watch out for because it is has brought DeFi to Cosmos. Now projects can list their tokens using the platform and avoid regulatory barriers and listing costs on centralized exchanges.  

There are many more projects which are being added to the ecosystem which will add value to the network. And with the release of the upcoming upgrades unveiled in the new roadmap, the functioning of the blockchain will transform.  

However, not every appeal about Cosmos is glamours such as staking on Cosmos can be good but rides along with its own set of cons. When users lock up their crypto holdings to obtain interests or rewards, it takes 3 weeks before their stake can be retrieved. And if you have staked your tokens on any of the validators and if they misbehave on the network, then their staked tokens will be slashed along with your tokens.  

Even though Cosmos has been an early project that achieved interoperability, the newcomers in the market such asAvalanche, and Polkadot provide the same services. 

Cosmos – ATOM conclusion

Cosmos brought hope to developers and investors with its features of scalability and interoperability. Few projects upgrade and keep up with the new technological changes made in the market and Cosmos is one of them. It has revolutionized the blockchain markets and made it easy for projects to connect and grow together through a single network. 


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