Cosmos is a blockchain building toolkit to help crypto entrepreneurs build their own blockchain projects, find out all about it in this interview with the creator of Cosmos director Jack Zamplin:
What is Cosmos and what makes it unique amongst so many projects?
Jack Zamplin: Cosmos, and its community centred around the coin ATOM, are unique in crypto for putting tribalism aside and are trying to build an ecosystem where all chains can all live and work together. When projects choose to build on top of the Cosmos SDK they get the advantage of full sovereignty over their own network. The build your own blockchain kit comes with basic governance mechanisms, interoperability enabled through IBC (inter blockchain communication protocol), and is highly scalable due to CosmosSDK leveraging Tendermint, the most battle tested and performant BFT consensus engine.
What advantages would they have building on Cosmos versus other chains?
Jack Zamplin: The sovereignty, scalability, and interoperability are unmatched within the crypto space. This is why the likes of Binance, Crypto.com, Okex, Terra, Rune, etc. have all chosen to use the CosmosSDK or a slight modification to build their own blockchains.
Tell me about the recent “Stargate” upgrade. What’s it done for the Cosmos ecosystem?
Jack Zamplin: There were a number of major improvements all bundled together for the Stargate upgrade. The goal was to put all Cosmos chains on a great foundation for the next phase of the growth of the ecosystem. The major changes include the addition of the IBC module, switching to Protobuf for data serialization, and state sync for node operators. IBC is the inter blockchain communication protocol for Cosmos. This allows coins and data to move between blockchains in a trust-minimized way. This protocol is the key development that allows Cosmos to call itself the internet of blockchains. The protobuf migration is pretty technical, but the short and sweet summary is a more efficient method of categorizing and organizing chain data. This greatly increases the performance and throughput of CosmosSDK chains as well as making it much easier to build UI for Cosmos based chains. The last major upgrade is state synch. This allows blockchains to start up a new node in much less time. This was a huge upgrade for validators.
So, Inter-Blockchain Communication, or “IBC,” was a highly-anticipated protocol included in Stargate. Could you quickly explain IBC?
Jack Zamplin: Sure, the idea of IBC is most closely related to TCP/IP. This is the idea of a common communication standard for communicating data between nodes on the internet. In IBC’s case, it’s a common standard for communication of data between blockchains. When I send coins from one cosmos chain to another, the receiving chain needs to know what type of coin is arriving, the coins on the original chain need to be locked to ensure the proper atomic swap / transfer of assets between chains, & the corresponding coin is minted on the receiving blockchain. This protocol allows data and assets to flow easily between chains, birthing the internet of blockchains.
Why should regular traders like me care about IBC?
Jack Zamplin: In the finance sector, IBC will allow for the democratization of liquidity and financial products more generally. No longer does a quality project need to beg centralized exchanges for a listing and pay an arm and a leg for said privilege. With IBC, anyone can send their coin to any one of a number of cosmos DEXs and get liquidity from day one. Additionally, the scalability that IBC enables will allow people of all backgrounds to get access to financial products, unlike Ethereum or BTC where access to the chain is too expensive for most people on Earth.
In the computer science sector, there are some interesting roles IBC plays but many of these applications are theoretical at this point. As a potential use case, IBC can allow people to have skin in the game with the data they are providing, so it can be a form of trusted data/compute, up to the level the provider has at stake. So, there can be varying levels to how secure data can be, revolving around how much skin in the game the provider has for misbehaviour.
Are there any IBC-supported DEXs live or on the way?
Jack Zamplin: At the moment there are no IBC enabled DEX’s. The Gravity DEX (built on top of ATOM) will be launching mid to late June and will allow any Cosmos projects with IBC enabled to create a liquidity pool in the pair of their choosing. Once gravity bridge goes live in Q3, ETH, ERC20, & shortly after BTC will be eligible pairs on the hub as well. This will allow new projects building in cosmos to have liquidity from day one in many pairs. Additional DEX’s coming soon to the cosmos include Osmosis, which is a sandbox for creating custom & potentially exotic pools for maximizing potential yield and chaos (in a good way). Additionally, Thorchain (RUNE) is looking at enabling IBC sometime in Q2, Crypto.com just enabled IBC, and many more I haven’t listed.
Web3 has only been a hotter and hotter talking point recently. How important would you say interoperability and IBC are to Web3’s future success?
Jack Zamplin: The way that the crypto space is evolving is making it more clear by the day we live in the multi-chain future. At which time you need to ask yourself: Should these chains be able to talk to/interoperate with each other? The obvious answer here is a resounding YES. This is where IBC shines. IBC is a common language that blockchains can use for communicating arbitrary data. This includes projects built outside of cosmos. For example, IBC or something very similar is how ETH2.0 shards will communicate with one another. So, when a project decides to build on the Cosmos SDK they don’t need to worry about designing their own IBC alternative, it comes prepackaged and ready to go for any project building on the CosmosSDK. To extend the point we see all the major ETH protocols moving to so called L2 chains, the need for interoperability between those systems is pressing.
The Gravity DEX is currently in the works, but where did this idea come from? What problems does it solve?
Jack Zamplin: Jae Kwon, one of the founders of Tendermint, originally started working on something to replace centralized exchanges because he had lost money in the MTGOX hack, so decentralized exchanges are deep in the DNA of the Cosmos ecosystem. There have been many designs and prototypes over the years but for the last year most of the team has been working to ship IBC and the DEX work took a back seat. There was however one very talented team (BHarvest) working on this problem and the code they wrote is becoming the Gravity DEX. There is currently a competition ongoing that has 25k participants on top of the gravity DEX to test. We expect to see this live on the Hub sometime in early June. The gravity DEX has a batch mechanism as well as some other front running protections that are a huge improvement over the state of the art.
How will the Gravity DEX compare to something like Uniswap, or even popular CEXs?
Jack Zamplin: One differentiator on day one for the Gravity DEX will be low fees. The price per swap/entering a liquidity pool will range from 1c to 10c, AKA nothing compared to Uniswap. Additionally, Gravity implements batch execution which decreases the ability of major players to extract value from front running and other forms of MEV. Also, there are some improvements around price discovery in the protocol that we are excited to see in the wild.