Thread by @Curious__J

#EVM & #IBC are two of the most important innovations in crypto. EVM has gained the most adoption as an execution layer, IBC seeks to gain the most adoption as an interoperability layer for blockchains. In this thread we will discuss which has more potential...🧵

First, wtf is EVM?
Ethereum Virtual Machine is a critical component of the Ethereum network and has become a dominant force in the world of crypto. Devs can write and deploy code on EVM compatible blockchains, powering decentralized applications and automated financial contracts.

It has largely contributed to the success of many EVM compatible chains such as BSC, Avalanche, Polygon, and Fantom. Leveraging EVM have had significant benefits from it due to smart contract protocols porting their dapps on these chains due to being faster & cheaper.

It is no secret that EVM's importance in the DeFi space has helped to cement Ethereum's position as the leading ecosystem in the crypto world. It is estimated that over 90% of smart contracts run on EVM.

According to @DefiLlama, the total value locked (TVL) in DeFi protocols built on EVM-based chains sit at an estimated total of $52 billion recently (Tron exclused), which is around 86% of all DeFI TVL. This showcases the immense growth and adoption of DeFi on EVM-based chains.

While EVM has been the dominant virtual machine, it's general purpose build without parallel execution has led to several limitations, such as processing only 270 swaps per second. This isn't sufficient to scale to billions of users. medium.com/momentum6/the-…

EVM's limitations have led to other blockchains building their own Virtual Machine, such as Fantoms upcoming FVM, Cosmos's CosmWasm, and even modular chains & roll ups leveraging other virtual machines such as @EclipseFND using Sealevel VM.

https://twitter.com/EclipseFND/status/1575566324767805440?s=20

In fact, the limitations of Ethereum along with inspiration of Cosmos appchains have given birth to a new paradigm shift in crypto called modular blockchians, separating execution, settlement, consensus & data availability.

https://twitter.com/CelestiaOrg/status/1628810695092613121?s=20

This brings us to Inter Blockchain Communication, which has been the most reliable interoperability protocol in the DeFi space thus far. #IBC enables Cosmos appchains to communicate and transact with each other in a decentralized and trust-less manner. medium.com/the-interchain…

Thanks to IBC, Cosmos ecosystem has been described as the "internet of blockchains," enabling seamless communication between different blockchain ecosystems & allowing users to access liquidity and new assets across different blockchain ecosystems.

https://twitter.com/hoangtheduc1234/status/1640261913992114177?s=20

As of March 2023, there are 54 IBC-enabled chains on the Cosmos ecosystem with a total market capitalization of over $10 billion, and 4.3 million monthly #IBC transactions. This highlights the immense potential of IBC in bridging different blockchain ecosystems.

#IBC has also recently enabled cross-chain communication between Cosmos and several other blockchain ecosystems, including Near, Polkadot, and soon Solana.

https://twitter.com/ComposableFin/status/1531675034095427584?s=20

This has opened doors for new opportunities for DeFi developers and users to access liquidity and new assets across different blockchain ecosystems, leveraging IBC to make defi across chains become more interoperable and more composable.

So which has more potential?
Comparing the two, IBC has far more potential in my opinion as it will also integrate other non cosmos EVM chains as well. This means that Cosmos will be able to eventually connect with virtually any blockchain ecosystem.

https://twitter.com/0xPeterK/status/1632446676333125632?s=20

The ability to connect and integrate with many chains expanding beyond cosmos increases the value and utility of the Cosmos ecosystem and the $ATOM & other IBC tokens as more liquidity will flow into the ecosystem.

https://twitter.com/PolymerDAO/status/1630289493512028162?s=20

Other advantages?
Due to the inherent nature of Cosmos thanks to sovereign appchains & IBC being essentially chain agnostic, the cosmos ecosystem is fundamentally more decentralized on core aspects. The Cosmos onchain governance is arguably the most involved community in crypto.

There have been multiple occasions where participation has been north of 80% and many controversial takes have delayed or outright halted significant developments such as ATOM 2.0. Cosmos drama is a feature, not a bug, which is a side effect due to how outspoken the community is.

While Eth has Layer 2s that leverage it's security, they essentially run on a sequencer and are ultimately dependent on Eth to operate. Cosmos on other hand is currently experimenting with their own methods to help secure the ecosystem.

https://twitter.com/gogoDiegocrypto/status/1634340991934111747?s=20

One of the most important features to come to Cosmos hub is its replicable security model. This means that smaller appchains can leverage the security of Cosmos hub by using the same validator set, making them equally secure as the Cosmos hub itself.

https://twitter.com/cosmoshub/status/1635917476331438080?s=20

This is a unique feature of Cosmos and one that finally gives $atom a direct source of value accrual within the #IBC ecosystem, as it previously there have been many who didn't understand the value proposition of this token.

https://twitter.com/curious__j/status/1616661514622046209?s=46&t=qYJxbrEkwFgMcjoIXUhMaQ

Osmosis is integrating it's own version of interchain security called mesh security, allowing cosmos chains to simultaneously receive security and provide security to the corresponding chains, creating a mesh network of chains helping secure each other.

https://twitter.com/sunnya97/status/1633626111614812160?s=46&t=qYJxbrEkwFgMcjoIXUhMaQ

Terra is also integrating it's own version called Terra alliance. This will leverage interchain staking to form economical alliances between IBC chains.

https://twitter.com/terra_money/status/1621651378715398144?s=20

Cosmos EVM is also gaining traction, with several EVM-based chains like Canto, Evmos, Kava, Cronos, and upcoming chains like Berachain. Cosmos EVM chains are currently responsible for nearly 80% of all Cosmos TVL.

$canto gave us a glimpse of the potential of Cosmos EVM as it went from 60mil to 200mil in just a few months. $bera chain is looking ripe for success, more here:

https://twitter.com/curious__j/status/1579893568738820096?s=61&t=Yd7TbXWiiVcnhYP56Gq5rw

It's also important to discuss and give credit to @EvmosOrg as it pioneered Ethermint. Current EVM chains are built thanks to it. $EVMOS has been very active with development recently as well.

https://twitter.com/EvmosOrg/status/1634283564496764928?s=20

Beyond EVM, many app-specific non-EVM chains are onboarding to the Cosmos ecosystem, including DYDX, Sei Network, Babylon Chain, Archway, Neutron, and Duality. This demonstrates the growing interest and development activity within the Cosmos ecosystem.

https://twitter.com/curious__j/status/1571187848640102401?s=61&t=CX7x3f1-JuuoDz6aho-Xhg

Why so much dev interest?
The Cosmos SDK makes it easy for devs to build custom appchains, and the interoperability provided by IBC and the security provided by the Cosmos Hub make it an attractive choice for developers. Cosmos eco is catching up to Ethereum in development.

In fact not just catching up but outpacing it on some aspects. Recently Osmosis recently flipped Uniswap in active developers, the largest dex in crypto.

https://twitter.com/Flowslikeosmo/status/1639990621984407553?s=20

In addition, the expansion of the #IBC outside of Cosmos and EVM development in Cosmos will attract more liquidity and developers, thus increasing the value of Cosmos chains and thus making this ecosystem become a hot spot for all things defi.

https://twitter.com/MixWeb3/status/1638958014999965696?s=20

As more Cosmos appchains onboard & IBC expand beyond Cosmos, we can expect to see significant value driven to the Cosmos ecosystem especially tokens such as $atom, $osmo, $strd and many others that other #IBC protocols of product market fit.

https://twitter.com/etereomatic/status/1640028019300368384?s=20

Overall, Cosmos IBC and EVM are driving significant value to the world of crypto. With the growing interest in DeFi and the expanding use cases for blockchain technology, the future looks brighter for IBC, as it shows much more untapped potential meanwhile EVM has limitations.

Please like & retweet if you enjoy, and follow these peeps for the best cosmos content as I feel some are underrated:
@interchainriley
@The_BendyOne
@Thyborg_
@youssef_amrani
@Flowslikeosmo
@CCosmonaut_
@N1C0_B_
@cosmoscoffeeDFI
@CosmosClub_
@maria_dedotfi
@sooper__

As always please like, retweet and follow me or comment below & roast me on anything I missed out. We’re here to learn after all…

https://twitter.com/curious__j/status/1640278430049767424