2/ This megathread is split into 3 sections
Section 1
• General overview of Cosmos 🔍
• Vision and tech 💻
Section 2
• Projects building and those coming ⚒️
• @cosmoshub 🌌
• $ATOM tokenomics 🪙
Section 3
• ATOM 2.0 - What's coming? 🤔
• The evolution of $ATOM 🧬
Section 1
• General overview of Cosmos 🔍
• Vision and tech 💻
Section 2
• Projects building and those coming ⚒️
• @cosmoshub 🌌
• $ATOM tokenomics 🪙
Section 3
• ATOM 2.0 - What's coming? 🤔
• The evolution of $ATOM 🧬
3/ SECTION 1 🔍
"The Internet of Blockchains"
Cosmos is an ecosystem of interconnected application-specific blockchains.
Hmm, okay, what does this mean?
"The Internet of Blockchains"
Cosmos is an ecosystem of interconnected application-specific blockchains.
Hmm, okay, what does this mean?
4/ As the blockchain world grows exponentially, the speed and fluidity of navigation and exploration diminish.
Chains become congested, slow, and expensive.
Cosmos envisions a future where applications are sovereign, free from the confines of other chains.
Chains become congested, slow, and expensive.
Cosmos envisions a future where applications are sovereign, free from the confines of other chains.
5/ Erm, naly... explain it simpler...
Envision a multi-chain future.
Cosmos believes that every application should host its own chain and that every chain should fluently be able to communicate with one another.
Envision a multi-chain future.
Cosmos believes that every application should host its own chain and that every chain should fluently be able to communicate with one another.
6/ Instead of applications/protocols building on Layer 1's, the application should operate on its own specific chain.
This limits the congestion of transactions due to any external events.
Application-specific blockchains can seamlessly scale both adoption and speed.
This limits the congestion of transactions due to any external events.
Application-specific blockchains can seamlessly scale both adoption and speed.
7/ Why would applications do this?
Freedom. Flexibility. Fees.
Sovereignty offers developers limitless flexibility with application design.
It also means that gas fees are no longer paid to layer 1's but instead paid directly to the application.
Pretty neat!
Freedom. Flexibility. Fees.
Sovereignty offers developers limitless flexibility with application design.
It also means that gas fees are no longer paid to layer 1's but instead paid directly to the application.
Pretty neat!
8/ So, how easy is it for developers to build an application-specific chain?
3 core pillars lie at the foundation of Cosmos.
1) Tendermint
2) SDK
3) IBC
Let's very briefly break them down.
3 core pillars lie at the foundation of Cosmos.
1) Tendermint
2) SDK
3) IBC
Let's very briefly break them down.
9/ Tendermint
Tendermint is a language agnostic blockchain consensus engine.
It allows developers to replicate applications in whatever programming language is right for them.
Flexibility.
Tendermint is a language agnostic blockchain consensus engine.
It allows developers to replicate applications in whatever programming language is right for them.
Flexibility.
10/ SDK
Cosmos SDK is the very framework for developing application-specific blockchains.
It offers developers a collection of open-source modules and significantly reduces the complexity and time requirement for blockchain development.
Simplicity.
Cosmos SDK is the very framework for developing application-specific blockchains.
It offers developers a collection of open-source modules and significantly reduces the complexity and time requirement for blockchain development.
Simplicity.
11/ IBC
IBC is one of the Cosmos SDK modules.
It defines the standard for cross-chain communication within the Cosmos Network.
In essence, it allows the flow of information within the Internet of Blockchains.
Seamless interoperability.
IBC is one of the Cosmos SDK modules.
It defines the standard for cross-chain communication within the Cosmos Network.
In essence, it allows the flow of information within the Internet of Blockchains.
Seamless interoperability.
12/ Pretty cool stuff, right?!
If you want to dive deeper into the technicals, this article/whitepaper is packed full of information!
galaxy.com/research/white…
If you want to dive deeper into the technicals, this article/whitepaper is packed full of information!
galaxy.com/research/white…
13/ SECTION 2 ⚒️
So, what projects are on @cosmos?
Cosmos hosts over 46 different application-specific chains.
@TheDeFinvestor has done a great job breaking down 5 exciting projects in this thread.
I highly recommend checking it out.
So, what projects are on @cosmos?
Cosmos hosts over 46 different application-specific chains.
@TheDeFinvestor has done a great job breaking down 5 exciting projects in this thread.
I highly recommend checking it out.
https://twitter.com/TheDeFinvestor/status/1569360750107570176?s=20&t=JwjjRFAzDr2iNyarM8o7uA
14/ A few projects that have piqued my interest:
• @SecretNetwork - Blockchain built with customizable privacy at the forefront.
• @SeiNetwork - DeFi-specific blockchain with a built-in order book matching engine.
• @SecretNetwork - Blockchain built with customizable privacy at the forefront.
• @SeiNetwork - DeFi-specific blockchain with a built-in order book matching engine.
15/
• @_gnoland - Jay Kwon's (Cosmos co-founder) new project implements a Proof Of Contribution consensus mechanism.
Instead of Validator rewards hinging on the sum of capital staked, they depend on their contribution to the network.
• @_gnoland - Jay Kwon's (Cosmos co-founder) new project implements a Proof Of Contribution consensus mechanism.
Instead of Validator rewards hinging on the sum of capital staked, they depend on their contribution to the network.
16/ If you want to dive deeper into @_gnoland , @curious_j has a great thread here that also dives into some upcoming chains.
https://twitter.com/Curious__J/status/1571187848640102401?s=20&t=wta_m8Czus5crZ0cfzrn2g
17/ One pivotal part of the @cosmos ecosystem we have yet to touch on is the @cosmoshub
The Cosmos Hub is the blockchain that serves as the "economic center of the Cosmos ecosystem."
The Cosmos Hub is the blockchain that serves as the "economic center of the Cosmos ecosystem."
18/ What does this mean?
It aims to act as an interchain token exchange, bridge to BTC and ETH, and is secured by the network's native token $ATOM.
In essence, it is the interconnectivity center for development in the ecosystem.
It aims to act as an interchain token exchange, bridge to BTC and ETH, and is secured by the network's native token $ATOM.
In essence, it is the interconnectivity center for development in the ecosystem.
19/ The Hub set the stage to become a bustling, interwoven community of contributors and developers.
It aimed to be the glue that provides a valuable service to all blockchains connected.
Has it?
Unfortunately not.
It aimed to be the glue that provides a valuable service to all blockchains connected.
Has it?
Unfortunately not.
20/ As the @cosmoshub so eloquently put it, the hub "lapsed into martyrdom."
Connectivity and evolution were hard to find.
Questions have arisen surrounding the effectiveness of the hub and even more so, criticism for the use case for $ATOM.
Connectivity and evolution were hard to find.
Questions have arisen surrounding the effectiveness of the hub and even more so, criticism for the use case for $ATOM.
21/ If every application hosts its own chain, and every chain is secured by its token, what is the need for $ATOM?
It is a question that has arisen multiple times.
$ATOM is fundamentally the governance token that secures the @cosmoshub.
It is a question that has arisen multiple times.
$ATOM is fundamentally the governance token that secures the @cosmoshub.
22/ Validators can stake the token to earn staking rewards and help to secure the network.
These staking rewards are currently around 19.94% APR.
These staking rewards are currently around 19.94% APR.
23/ Staking rewards depend on transaction fees on the Cosmos Hub and the inflation and issuance of newly created $ATOM tokens.
The ATOM token currently has yearly inflation of around 12.81%
The ATOM token currently has yearly inflation of around 12.81%
24/ What about the max supply?
Infinite. $ATOM doesn't have a max supply.
A Hub that has not lived up to its potential and an inflating token with no max supply.
Has the price of $ATOM crashed?
Infinite. $ATOM doesn't have a max supply.
A Hub that has not lived up to its potential and an inflating token with no max supply.
Has the price of $ATOM crashed?
25/ Since its all-time high in January, $ATOM is down 69% (yes, really)
Compared to $BTC ( -72%) and $ETH (-72.3%) $ATOM has actually been performing strongly, the token is up 150% from June!
Wait, what?!
Why has it performed so well?
Compared to $BTC ( -72%) and $ETH (-72.3%) $ATOM has actually been performing strongly, the token is up 150% from June!
Wait, what?!
Why has it performed so well?
26/ One core thesis is the lack of sell pressure. (no shit sherlock)
According to this excellent video by @coinbureau , the lack of sell pressure is "ironically" traced to the breakup and firing of development teams within cosmos.
According to this excellent video by @coinbureau , the lack of sell pressure is "ironically" traced to the breakup and firing of development teams within cosmos.
27/ Former Ignite CEO Peng Zhong inferred that 2/3 of all Cosmos development is funded by the sale of $ATOM.
Due to the reduction in funds to pay out, a vast proportion of sell pressure has subsided.
This does raise the question around development though...
Due to the reduction in funds to pay out, a vast proportion of sell pressure has subsided.
This does raise the question around development though...
28/ With a reduction and dispersion of core teams, will Cosmos' development slow down?
Perhaps.
There are also catalysts set to change the fundamentals surrounding @cosmoshub and $ATOM tokenomics which look to propel cosmos into an exciting future.
Perhaps.
There are also catalysts set to change the fundamentals surrounding @cosmoshub and $ATOM tokenomics which look to propel cosmos into an exciting future.
29/ SECTION 3 🧬
The release of ATOM 2.0 is only one day away.
A live event for all @cosmos enthusiasts begins tomorrow and lasts two days.
During this event, the evolution of the @cosmos ecosystem will ignite.
The release of ATOM 2.0 is only one day away.
A live event for all @cosmos enthusiasts begins tomorrow and lasts two days.
During this event, the evolution of the @cosmos ecosystem will ignite.
30/ One pivotal part of the evolution is the renewed vision for the @cosmoshub
The hub seems to have been invigorated with new dedicated and driven teams.
A core new feature is coming - Interchain Security.
The hub seems to have been invigorated with new dedicated and driven teams.
A core new feature is coming - Interchain Security.
https://twitter.com/cosmoshub/status/1573727971558449154
31/ Interchain Security
Every chain on Cosmos must ensure its security via its own validation process.
This has its downsides.
It can lead to certain smaller chains having relatively risky levels of decentralization.
Every chain on Cosmos must ensure its security via its own validation process.
This has its downsides.
It can lead to certain smaller chains having relatively risky levels of decentralization.
32/ Projects must find validators at inception, and to do so, they commonly issue highly inflationary tokens.
Not only does this push some investors away, but it can lead to a select minority of validators controlling a dangerous proportion of the supply.
Not only does this push some investors away, but it can lead to a select minority of validators controlling a dangerous proportion of the supply.
33/ This issue opens the chain up to potential government attacks and hinders the prospect of true decentralization.
Interchain Security (ICS) solves this dillema.
Interchain Security (ICS) solves this dillema.
34/ ICS allows smaller chains (consumer chains) to "rent" security directly from the Cosmos Hub. (provider chain)
The Validators on the hub then verify transactions on these smaller chains.
The Validators on the hub then verify transactions on these smaller chains.
35/ The provider chain then receives a portion of transaction fees and staking rewards.
25% of the transaction fees flow back to $ATOM stakers.
25% of the transaction fees flow back to $ATOM stakers.
36/ Want more information? Check out this thread by the thread master himself @TheDeFinvestor
https://twitter.com/TheDeFinvestor/status/1565319832869883904?s=20&t=JwjjRFAzDr2iNyarM8o7uA
37/ Interconnected security is one promising step in increased utility for the $ATOM token, but are there other fundamental changes that may take place?
It seems likely.
It seems likely.
38/ Inflation reduction.
Simple yet effective, fixed issuance and supply change lie at the core of tokenomics.
Here are some of the ways that $ATOM tokenomics could change.
Simple yet effective, fixed issuance and supply change lie at the core of tokenomics.
Here are some of the ways that $ATOM tokenomics could change.
39/ Demurrage
Initially, cosmos founders designed $ATOM to incorporate a Demurrage model.
A mechanic that would see users' $ATOM holdings reduce over time.
This reduces the supply while incentivizing users to stake to avoid a negative interest rate.
Initially, cosmos founders designed $ATOM to incorporate a Demurrage model.
A mechanic that would see users' $ATOM holdings reduce over time.
This reduces the supply while incentivizing users to stake to avoid a negative interest rate.
41/ EIP-1559
Ethereum's EIP-1599 is a procedure that burns a portion of the fees for every transaction.
Combined with network activity, this mechanism unlocks the possibility/potential for a deflationary token.
A similar mechanism would be an interesting avenue for $ATOM
Ethereum's EIP-1599 is a procedure that burns a portion of the fees for every transaction.
Combined with network activity, this mechanism unlocks the possibility/potential for a deflationary token.
A similar mechanism would be an interesting avenue for $ATOM
42/ INDEX token
At the basic level, $ATOM Airdrops are an example of this.
This model could become even more interwoven in the tokenomics of $ATOM, granting stakers an INDEX of tokens connected to the hub.
At the basic level, $ATOM Airdrops are an example of this.
This model could become even more interwoven in the tokenomics of $ATOM, granting stakers an INDEX of tokens connected to the hub.
43/ These are just a few examples of potential avenues that the $ATOM tokenomics could change.
You won't have to wait long to find out, as ATOM 2.0 is released tomorrow.
You won't have to wait long to find out, as ATOM 2.0 is released tomorrow.
44/ I sway to the side of a sell the news event, but long term, I believe @cosmos will play a pivotal role in the future of the blockchain world.
I am super excited to find out about the ongoing developments.
I am super excited to find out about the ongoing developments.
45/ If you want to explore the cosmos ecosystem further, make sure to follow these cosmos gurus:
@CryptoChem0000
@johnniecosmos
@alex_valaitis
@TochiXYZ
@Curious__J
@Thyborg_
@danku_r
@BerryBrains3
@RobbStack_sats
@CosmosCoco_
@Jessicalevi13
@Talkmuzikdotcom
@Joshyysmartt
@CryptoChem0000
@johnniecosmos
@alex_valaitis
@TochiXYZ
@Curious__J
@Thyborg_
@danku_r
@BerryBrains3
@RobbStack_sats
@CosmosCoco_
@Jessicalevi13
@Talkmuzikdotcom
@Joshyysmartt
46/ If you got this far, respect to you, that was a long one!
Now you’re here, you may as well hit that like and retweet button - I appreciate it.
If, you’re new, welcome! 👋 I’m naly and I write about DeFi.
Now you’re here, you may as well hit that like and retweet button - I appreciate it.
If, you’re new, welcome! 👋 I’m naly and I write about DeFi.
https://twitter.com/defi_naly/status/1574037700155305984?s=20&t=TbyX4pVHzgeyqL_cH0tCzw
There is a lot here...
For those of you who prefer reading it in an article format, I have added it into my substack.
You can find it here👇
defiverse.substack.com/p/the-internet…
For those of you who prefer reading it in an article format, I have added it into my substack.
You can find it here👇
defiverse.substack.com/p/the-internet…
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