Comos gets a makeover – Cosmos is a project launched in March 2019 that wants to focus on blockchain interoperability. Like any blockchain, Cosmos has its own token, the ATOM. More than three years after its launch, the ecosystem is evolving with the release of a new whitepaper. This aims to improve the usefulness of the ATOM token.
ATOM 2.0: the rebirth of Cosmos
Since its launch in 2019, the network Cosmos met with great community enthusiasm. Indeed, Cosmos offers an ecosystem composed of multiple blockchains, each with their own utility.
At the center of these blockchains, we find the CosmosHubkind of economic center of the network. Its mission is to ensure the security of the network as well as to connect the different blockchains via its IBC protocol.
However, over time, many users have come to the same conclusion: the ATOM token and the Cosmos Hub lack utility. Indeed, ATOMs can be staked to secure the Cosmos Hub, without it having any real use.
Thus, on the occasion of the Cosmoverse conference, organized in Medellín in Colombia, the Cosmos teams unveiled a new version of their white paper.
“The inaugural role of Hub Cosmos was to create the internet of blockchains. It did this by funding the development of the Cosmos SDK, IBC, and Tendermint, the leading open-source primitives of blockchain applications that now populate the interchain. However, with an active and increasingly sophisticated IBC network, interchain needs have evolved. As a result, the Cosmos Hub must also take on a new role: developing a resilient cross-chain economy. »
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Initially, the new white paper introduces the notion of “cross-chain security”.
Indeed, until now several Proof of Stake systems are evolving in parallel on Cosmos. So, we have the Cosmos Hub PoS, where users go to stake ATOMs to secure the Hub. Then we have as many PoS as there are blockchains in the Cosmos ecosystem, each with their own token and set of validators.
However, in the case of blockchains that have just launched, the number of validators and the quantity of tokens in stake (ie “in play”) can be reduced. Therefore, the security of these chains turns out to be relatively low.
This is why the Cosmos teams imagined the cross-chain security. For simplicity, cross-chain security is nothing more than a solution for sharing security.
So, via this update the Cosmos Hub will be able to produce blocks, and thus secure, any other blockchain in its ecosystem.
“At a very high level, Interchain security allows an infrastructure provider chain (like the Cosmos Hub) to be in charge of producing blocks for a consumer chain. To do this, it shares the set of validators who are responsible for producing the blocks. Participating validators manage two nodes, one for the Cosmos Hub and the other for the consumer chain, and receive rights and rewards on both chains. »
the liquid staking is a concept already widely popularized on Ethereum via protocols such as Lido Where RocketPool. In short, when a user stakes his tokens via a liquid staking protocol, he receives in exchange tokens which represent its deposit in tokenized form. Therefore, the user does not have to tie up his capital and can resell his tokenized tokens at any time to recover his deposited tokens.
“The user experience and improved capital efficiency offered by liquid staking are so significant that it is expected that liquid staking assets will become the dominant medium of transaction, especially for use cases exogenous to the chain. »
Therefore, the new version of Cosmos will integrate a Liquid Staking module at the Cosmos Hub level.
More value for the ATOM token
As you will have understood, this update mainly aims to give greater importance to the Cosmos Hub and the ATOM token in the Cosmos ecosystem.
Indeed, thanks to interchain security, the ATOM token gains utility by becoming the central asset for securing Cosmos and all of its blockchains. Thus, many chains in the ecosystem will rely on the ATOM token as the main asset for securing the blockchain.
In addition, the introduction of liquid staking will facilitate access to staking of ATOM tokens and will give the token a greater liquidity.
Finally, this update will introduce a modification of the monetary policies of the protocol. Thus, we are going to witness a reduction in the issuance of ATOM tokens. This change in monetary policy will take place in two parts:
- The transition ;
- The state of equilibrium.
Initially, the transition will take place over a period of 36 months. During the first nine months, the issuance of ATOM tokens will increase to help provide initial funding for the Cosmos Hub’s treasury. Period after which the issue will be drastically reduced.
Thereafter, steady state will take over, issuing 300,000 ATOM per month.
Take advantage of this update ASAP by putting your ATOM tokens to work. Indeed, it is extremely easy to stake your ATOMs via the Keplr wallet. The Cosmos galaxy is in the midst of a transition and should continue to be talked about in the coming months as fundamental new things begin to be implemented.
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Cosmos (ATOM) gets a makeover and unveils its new whitepaper
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