New Opportunities for Liquidity in the Cosmos Ecosystem

Cosmos, as a mature blockchain ecosystem, stands out among many ecosystems with its decentralized and open characteristics. Despite the lack of high-profile promotion, Cosmos has consistently maintained its ability to incubate and attract quality projects. As the birthplace of the application chain revolution, Cosmos remains one of the areas in the crypto industry with the potential for a hundredfold growth. Recent trends indicate that projects with strong fundamentals and sustainable development narratives will benefit in the upcoming bull market, and Cosmos is well-prepared for this.

Re-evaluation of Cosmos Ecosystem Potential

Cosmos is an open-source blockchain ecosystem aimed at achieving interoperability between different blockchains. In terms of decentralization and interoperability, Cosmos has strong advantages. The introduction of Cosmos SDK and IBC has solved the problem of reinventing the wheel for developers, promoting technological advancement in the industry.

However, the market valuation of Cosmos does not match its strength. Compared to other ecosystems, Cosmos is relatively small and has not yet attracted enough developers and users. Additionally, the complexity of technology and application scenarios requires more time for promotion. In a market that values data and Liquidity, the market cap of Cosmos has been long undervalued, currently at only $3.15 billion, ranking 23rd. Its token ATOM is also undervalued due to insufficient utility.

To change this situation, Cosmos released the 2.0 white paper last year, planning to improve network and token utilization. Recently, Cosmos announced a series of advancements, such as upgrading inter-chain security to "replicated security" and proposing a liquidity staking module. In May, the ecosystem chain Neutron went live on its mainnet, using the upgraded "replicated security" for the first time and announcing an airdrop to stakers, sparking discussions about Cosmos's value capture.

These technical improvements have driven a liquidity explosion in the Cosmos ecosystem projects. The public chain Canto's daily trading volume once surpassed that of Solana. The TVL of Stride, Injective, and Kujira has increased by 2-6 times compared to January. In April, the number of active developers using Cosmos SDK briefly exceeded that of Ethereum, currently ranking second. Recently, Celestia, based on Cosmos SDK, has also attracted attention. The Celestia+Cosmos model is seen as the ultimate form of application chains.

Cosmos ecosystem projects have performed excellently, reigniting market interest. Users are looking forward to the implementation of Cosmos 2.0, and there is even talk of a "Cosmos Summer." Recently, during the rebound, Cosmos-related tokens such as TIA, INJ, and OSMO saw weekly gains exceeding 20%, and INJ's monthly gain exceeded 110%. These trends indicate that Cosmos is gaining recognition, laying a foundation for future development.

Cosmos Technology Development Plan

Continuous technological innovation is crucial for maintaining ecological growth. In September last year, the Interchain Foundation announced its 2024 development plan, outlining the future plans for Cosmos technology.

CometBFT: The Cornerstone of Cross-Chain Scalability

CometBFT is an innovative consensus algorithm, serving as the core of Interchain scalability. It ensures that validators reach consensus on block generation, maintaining ecological security and decentralization. Plans are in place to expand its applicability, empowering the development of sovereign interoperable applications. Currently upgraded to v0.38, v0.39 will be released by the end of the year, enhancing efficiency and improving the indexing system.

Cosmos SDK: Modularization and New Features

The Cosmos SDK is a multifunctional blockchain development toolkit adopted by numerous projects. In the future, it will focus on modularity and new features, enabling developers to create more complex modular applications and cultivate a broader and more powerful ecosystem.

CosmJS: Improve Efficiency and User Experience

CosmJS helps developers integrate JavaScript clients with the Cosmos SDK blockchain. It plans to improve efficiency through a new encoder, reduce code bloat, provide a more streamlined and professional development experience, and create more elegant and user-friendly applications.

CosmWasm: Implementing Decentralized Permissionless Deployment

CosmWasm is a smart contract framework based on the Cosmos SDK, allowing for permissionless decentralized application deployment. Future optimizations will facilitate developers in creating and deploying various applications, improving blockchain utilization. It focuses on IBC adoption and account-based smart contracts.

IBC Protocol: Enhanced Interoperability and Scalability

IBC enables secure and decentralized data transmission between blockchains. The 2024 update will focus on scalability and usability, enhancing the Cosmos ecosystem's capacity and achieving seamless interaction between blockchains, applications, and smart contracts.

Latest Changes in the Cosmos Ecosystem

Recently, the Cosmos ecosystem has shown new potential. As an open-source multi-branch network, Cosmos offers advantages such as smart contracts, scalability, security, and cross-chain interoperability. Its application chain theory is also continuously evolving. Here are some recent changes worth paying attention to:

1. Liquidity Staking Module (LSM): Provides a modular solution for liquidity staking, implemented on June 14th. Users can directly liquidity stake their staked ATOM without waiting for the unbinding period.

2. Token Economics Upgrade: The ATOM economic model shifts from high returns to real yields. The Neutron mainnet goes live, utilizing "replicated security" for the first time, aimed at addressing the insufficient practical value of ATOM 1.0.

3. Enhanced Interoperability: Evmos 2.0 launched, reinforcing the interoperability advantages of Cosmos. Built on the IBC protocol, it is expected to enhance the multi-chain ecosystem and achieve interoperability between Ethereum and Cosmos.

4. The Rise of Perpetual Contracts: dYdX v4 announces its migration to Cosmos, bringing more Liquidity and innovation to the ecosystem.

5. Native Liquidity Increase: USDT integrated into the Kava blockchain. Noble collaborates with Circle to plan the introduction of native USDC into Cosmos, expecting to generate hundreds of millions of dollars in liquidity.

Popular Projects in the Cosmos Ecosystem

Initia

Initia is a modular Rollup network based on Cosmos, simplifying the development of scalable autonomous systems for developers. The architecture includes L1, L2, and communication layers, facilitating the launch of application chains based on Initia L2. It adopts Cosmos SDK and MoveVM, utilizing optimistic rollups as the L2 solution. It achieves seamless messaging and bridging between different VMs, becoming the first Cosmos IBC compatible MoveVM framework.

Recently received seed round pre-investment from Binance Labs, used for infrastructure development, product expansion, and project incubation. Currently in the testnet phase, it will enhance the liquidity of the Cosmos ecosystem after going live.

Celestia

Celestia is a modular blockchain network based on Cosmos, providing pluggable consensus and data availability layers. The goal is to simplify the deployment of decentralized blockchains and enhance development flexibility. Its features include data availability sampling, reducing the requirements for validation nodes and improving scalability.

Cooperating with Cosmos as a data availability layer in conjunction with Tendermint and Cosmos Zones. Promoting interoperability and scalability within the Cosmos ecosystem, providing a unified level of security. The mainnet will go live on October 31, and the token TIA is currently priced at 2.33 USD.

dYdXV4

dYdX is a leading L2 Dapp on Ethereum, with the V4 version expected to be released in December, migrating to Cosmos. It aims to address the scalability limitations of Ethereum and provide a decentralized architecture for the rapidly growing user base.

The Cosmos SDK provides an ideal solution for dYdX, supporting the development of independent blockchain networks. The migration will improve transaction speed and eliminate concerns about centralization. As a leading DEX with a daily trading volume exceeding $3 billion, the dYdX migration will bring a large number of users and Liquidity to Cosmos.

Neutron

Neutron is a smart contract infrastructure based on CosmWasm that simplifies dApp deployment. Combining the security of Cosmos Hub and cross-chain functionality, it supports the expansion of DeFi applications to over 51 interconnected blockchain networks.

According to the Interchain 2024 roadmap, Neutron will become the first consumer chain of Cosmos, hosting a DeFi ecosystem built around NTRN and ATOM. It is crucial for promoting the economic development of Cosmos and the implementation of ATOM 2.0.

Completed a $10 million financing round led by Binance Labs in May. The NTRN token will be listed on Binance in October, currently priced at $0.290.