Thread by @FishMarketAcad

Is Atom 2.0 the next big narrative after the eth merge?

Here are multiple reasons why @cosmos $ATOM may be the next attention driver and why I am bullish on the long-term vision.

This is almost everything you should know before Cosmoverse starts on 26 September!

As we know the Eth Merge was a success, I played it well but now that the narrative is over, what should I trade next?

Looking around, I was surprised at $ATOM's price. My $ATOM position outperformed my entire $ETH position by 2x!

Let me try to explain why $ATOM rallied.

Cosmos has a fascinating technology and great potential, where it's even possible that its ideologies will take over crypto.

Here are just 3 cool features to understand to be a #cosmonaut - Interblockchain Communication (IBC), Interchain Security (ICS), and Atom Tokenomics 2.0.

Let's start with $ATOM.

$ATOM is the governance token of Cosmos, a Layer 0 blockchain that allows other blockchains to be built on it.

These blockchains are Cosmos chains and are built with the Cosmos SDK, which helps developers create PoS blockchains tailored to their needs.

For example, there are chains that are tailored for trading and DeFi like @0xcarbon, @teamkujira, @osmosiszone, etc, and chains that do NFTs like @stargazezone, or chains do liquid staking like @quicksilverzone and @stride_zone, and they won't congest each other.

These are also known as app chains.

This means if a hyped NFT mint is happening on @stargaze, @secretnetwork, or another chain, I can still do my trading, yield farming, liquidations, etc in peace on @0xcarbon and @teamkujira, without having to pay insane gas fees.

What's cool about Cosmos SDK is the IBC module, one of Cosmos's greatest features.

It allows these app chains using IBC to talk to one another seamlessly without a need for bridges.

Let me explain why IBC is a game-changer.

Right now, it is difficult for different blockchains to talk to one another as they are all designed differently.

Think someone born in China talking to someone in America - different languages and behavior make it hard for them to understand and trust each other.

Passing data from one blockchain to another in a trusted way is a huge problem for our current multi-chain world.

The popular solution is cross-chain bridging but we've seen how vulnerable bridges can be with exploits like @nomadxyz_ that resulted in the loss of millions.

With IBC, blockchains can talk to each other in seconds, without centralized or trusted third parties.

This creates cross-chain composability similar to the amazing lego building we see in Ethereum, allowing more powerful apps to be created on top of existing apps.

For example, I want to mint Carbon stablecoin on @0xcarbon to leverage up on @demexchange and I don't have assets on Carbon, but I have $USK on Kujira chain, @0xcarbon talks to Kujira to transfer the $USK in and mint Carbon stablecoin, all on Carbon chain's UI, without bridges.

Essentially, IBC and its upcoming updates like Interchain accounts, Interchain Queries, Interchain Security, etc, make Cosmos scalable and composable.

But how do these increase the value of $ATOM?

That's where Interchain Security as well as Atom 2.0 Tokenomics comes in.

Interchain Security (ICS) is probably one of the biggest revenue drivers to $ATOM and it's coming in Jan 2023.

Let me briefly explain how Cosmos security works before I explain what is Interchain Security.

Cosmos PoS blockchain's security is determined by the economic value (similar to market cap) of its staked assets of the chain validators.

Basically, the higher the market cap of the token, and the more validators there are, the harder it is to attack the chain.

However, when a new chain is created, it may struggle to get validators and a high market cap as its product-market fit or value may not be established.

This is why many new Cosmos chains initially offer high inflationary rewards to incentivize validators to buy and stake.

But this creates high selling pressure on the token price over time, and it may repel investors from buying the token knowing that there is a lot of dumping pressure.

And over time, if the token market cap drops too much from dumping, it again faces an increased risk of attack.

ICS comes in here, where a bigger provider chain is able to provide security to the smaller consumer chain, in exchange, the provider chain receives some of the chain's gas fees and staking rewards.

The provider chain can also use the functionality of the chain it secures.

E.g. Cosmos is securing @quicksilverzone, a liquid staking protocol, and they can also use their liquid staking system.

The consumer chain still gets the majority of its transaction fees, unlike building on a smart contract platform where validators collect most of the gas fees.

Similar to how there are lots of DeFi protocols on Ethereum and EVMs, the future will have endless app chains on Cosmos and instead of spending the effort to secure their own chain, they are secured by Cosmos, one of the largest, neutral and established entities in the ecosystem.

The fees and staking rewards from these app chains are directed to $ATOM stakers, creating value accrual to $ATOM.

It's like a startup paying rent to operate in an MNC building that secures it, instead of getting their own building and securing it.

Lastly, this rally could be due to their upcoming tokenomics 2.0!

@zmanian said that there's a new inflation schedule, and $ATOM may gain value when more tokens enter Cosmos, and it will make EIP-1559 look like a joke!

There are so many more things that are teased!

With all these upcoming big updates, the future of Cosmos looks bright and I am bullish on $ATOM in the long run.

Let's see if $ATOM has what it takes to be ultra sound money and more!

If you want to find out more, you can read this article I wrote:
blog.switcheo.com/atom-the-next-…

Thanks to these amazing people for their work that I referenced:

@Curious__J
@wekaaxyz
@EcosystemCosmos
@demexchange
@0xcarbon
@Cosmos_Tic
@eight_global
@DaveCosmonaut
@zmanian
@jackzampolin
@JasonYanowitz
@santiagoroel
@theempirepod
@TeamKujira
and more!

Oh and of course, if you already bought $ATOM, you can provide $ATOM - $SWTH liquidity on app.dem.exchange/pools for over 70% APR!

$SWTH is the gov token of @0xcarbon.

You can bridge $USDC or $BUSD onto demex from Metamask or Keplr, and buy $ATOM too:
app.dem.exchange/trade/ATOM_BUSD