Threats of Cosmos to traditional blockchain
Cosmos' Threats to Traditional Blockchain
Author: Russian DeFi, Translation: Block unicorn
Modular blockchains may make traditional blockchains obsolete.
Single blockchains were good while they lasted, but eventually ran into the blockchain trilemma (decentralization, scalability, security) problem, as they attempted to do everything (consensus, data availability, settlement, and execution) at every node.
Avoiding this problem with modular blockchains is done by breaking up many of the roles of the blockchain into different layers. This way, blockchains can be scaled in a way that minimizes trade-offs.
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Ethereum and Cosmos are leading the modular race, and the future of blockchains is modular.
Ethereum has enabled smart contract functionality since the introduction of the Ethereum Virtual Machine (EVM), allowing for the development of various DApps in DeFi, NFTs, gaming, and other fields.
Ethereum is a general-purpose public chain that can support DApps competing for various network resources. During congestion, transaction fees skyrocket, leading to poor user experiences in cost and latency.
Another problem with Ethereum and other layer-one chains is their “layer-two (L2)” governance systems. This means that in addition to following their own rules, DApps must also follow the protocol’s rules, making it impossible to change the protocol every time a DApp needs a new feature.
Unlike competing for resources on a single blockchain, Cosmos proposes that each DApp runs on its own independent, parallel, and application-optimized blockchain. Because they are independent, each blockchain can be upgraded or modified independently. Cosmos chains can communicate with each other and even communicate with blockchains that use different proof-of-stake/work consensus mechanisms under certain conditions.
Introduction to Cosmos
Cosmos is a network known as “the internet of blockchains,” which allows different blockchains to coexist and interoperate. Typically, blockchains are independent of each other, although recent technology has enabled two blockchains to communicate and transfer data through bridging, Cosmos goes further. Cosmos improves interoperability by allowing developers to create blockchains with interoperability from the start.
These blockchains communicate through the Inter-Blockchain Communications protocol (IBC), which is a protocol for transferring information between blockchains, with the Cosmos Hub and its ATOM token being one of them.
History of Cosmos
The Cosmos project was first introduced in 2014 by Jae Kwon under the Tendermint consensus protocol. Kwon attempted to create a fully interoperable system but was unsuccessful, so he collaborated with Zarko Milosevic and Ethan Buchman. Eventually, Kwon resigned from his position in the Cosmos project in 2020.
Here is a brief timeline of Cosmos, highlighting some of its key events:
In April 2017, Cosmos conducted its first token sale, raising $7 million in just 29 minutes, demonstrating its ability.
In December 2018, the “Game of Stakes” activity was launched, testing the Cosmos network for the first time.
On March 13, 2019, the Cosmos Hub went live, known as the Big Bang of the universe.
In November 2019, Kava Labs became the first project to launch a mainnet using the Cosmos SDK.
In February 2020, Cosmos split after its chief executive officer and main founder, Jae Kwon, resigned.
In September 2020, Cosmos collaborated with Nym for the first time, introducing anonymous credentials to the Cosmos ecosystem.
In February 2021, Cosmos released its most ambitious project, “Stargate.” Stargate is the first public release to use the Inter-Blockchain Communication (IBC) protocol. This release solidified Cosmos’ position in the blockchain market.
The Interchain Foundation (ICF), a non-profit organization based in Switzerland, is responsible for overseeing the development of Cosmos. Similar to the Ethereum Foundation, the ICF is a coordinating body that acts as a bridge between software development teams, facilitating the coding process.
Unlike a single-layer blockchain, Cosmos envisions a platform for decentralized trading, storage, and value preservation that encourages collaboration, innovation, and competition.
Therefore, Cosmos chooses to build using a modular software stack – the Cosmos SDK and interconnected blockchain networks. This allows the center and regions of the Cosmos ecosystem to launch new blockchains with custom execution environments, while utilizing IBC for cross-chain communication.
The vision of modular and self-governing growth quickly increased the number of regions in Cosmos. At the time of writing this article, 52 out of 56 regions are active.
What are Zones and Hubs?
A zone chain (Zone) is an independent blockchain application created within the Cosmos blockchain network, while a hub is a blockchain that connects these zone chains, and the hub blockchain maintains mutual connection with the zone chains.
The Cosmos Hub is the first hub (blockchain) of the Cosmos network. Cosmos Hub is an equity proof of stake blockchain that facilitates communication and interoperability between other zone chains as the center of the network. Cosmos Hub monitors the zone chains connected to it, which are created using Cosmos SDK.
Blockchains (zone chains) built on the Cosmos network include Binance Chain (now Beacon Chain), Cronos, Osmosis, Neutron, Juno, Celestia, Sei Network, Terra, Injective Protocol, Secret Network, Evmos, Regen Network, Kava, Kujira, ThorChain, BandChain, Archway, and others.
In addition to blockchains, Cosmos SDK can also be used to build projects such as ecosystem markets, decentralized exchanges (DEX), wallets, private networks, Dapps, DeFi platforms, and other infrastructure projects on the Cosmos network.
What makes Cosmos unique?
Cosmos considers itself the third generation of blockchain technology (following Bitcoin and Ethereum). It enables developers to create blockchains for specific purposes, called application-specific blockchains, which can be connected to each other to exchange data.
Cosmos aims to encourage Web3 developers to create decentralized projects without relying on Ethereum’s smart contract design. Cosmos does not build dApps on a foundational blockchain, but rather designs a modular architecture that allows developers to create independent blockchains.
Cosmos developers do not need to rely on the consensus or network layer of first-layer blockchains such as Ethereum. When cryptocurrency enthusiasts build on Cosmos, they can create blockchains that meet their design requirements. Unlike creating dApps using smart contracts, Cosmos gives Web3 developers complete freedom to develop blockchains and benefit from the security of its Tendermint algorithm at the same time.
Block unicorn comment: Tendermint is a consensus algorithm based on Byzantine fault tolerance, used to achieve consistency between different nodes in a distributed network. It is the consensus algorithm used by the Cosmos network, aiming to ensure the security and consistency of the blockchain network.
In contrast, Cosmos goes beyond helping Web3 developers create standalone blockchains. Many cryptocurrency enthusiasts associate Cosmos with “interoperability,” which refers to communication between different blockchains.
Connecting different blockchains has always been difficult due to different consensus mechanisms and coding standards. While cross-chain bridges can transfer value between blockchain networks, they are vulnerable to hacking attacks.
Cosmos created the IBC protocol, which enables different blockchains to communicate with each other. Additionally, the Cosmos team is developing blockchains called “pegg-zones,” which can connect to projects outside the Cosmos ecosystem. For example, Cosmos could deploy a pegg blockchain between Bitcoin and Ethereum.
Block unicorn note: Pegg-zones allow assets from external blockchains such as Bitcoin or Ethereum to be anchored to specific tokens in the Cosmos network. The technical means by which pegg-zones connect different blockchains provides Cosmos with broader interoperability and the ability to integrate external assets.
In addition to these benefits, Cosmos can process 10,000 transactions per second (TPS) with low gas costs and has a smaller environmental impact due to its PoS design.
Cosmos Network Layers
Blockchains can be conceptually divided into three layers:
Application layer: The application layer is responsible for updating the blockchain’s state based on the execution of transactions. Here, the functionality of executing smart contracts and processing user interactions are implemented.
Network layer: The network layer is responsible for ensuring that transactions and consensus-related messages are propagated. It handles communication between nodes and ensures that transactions can be broadcast and confirmed on the network.
Consensus layer: The consensus layer allows nodes to reach consensus on the current state of the system. Here, nodes achieve consensus through a consensus algorithm and decide which transactions are valid and add them to the state of the blockchain.
Dividing these layers helps separate different functions and responsibilities, enabling the Cosmos network to build and scale different blockchains more flexibly and achieve communication and interoperability between them through the IBC protocol. Each layer has specific functions and tasks, together forming the overall architecture of the Cosmos network.
Based on the following components:
Tendermint: A consensus protocol that enables developers to create fast, scalable, and secure proof-of-stake blockchains.
Cosmos SDK: Allows developers to build applications on Tendermint-based blockchains. The Cosmos SDK provides a set of tools and frameworks that simplify the development process of blockchain applications.
Inter-Blockchain Communication protocol (IBC): A system that allows different blockchains to connect and communicate. Through the IBC protocol, Cosmos achieves interoperability and communication between different blockchains, enabling them to securely exchange data and value.
These technological components collectively make up the infrastructure of Cosmos, enabling it to achieve a fast, scalable, and secure blockchain network, and promote interoperability and communication between different blockchains.
1. Tendermint Byzantine Fault Tolerance and ABCI
Block unicorn note: ABCI stands for “Application Blockchain Interface” and is an important component of the Tendermint architecture. ABCI defines the interface specification between the application and the Tendermint consensus engine. It allows developers to use custom application logic to build and extend Tendermint blockchains without having to modify the Tendermint engine itself.
Through ABCI, developers can separate their own applications from the Tendermint consensus engine, making application development more flexible and customizable. ABCI provides a set of standardized interface methods, including handling transactions, verifying blocks, querying status, and other functions, allowing applications to interact with the Tendermint network and collaborate with the consensus engine.
Until recently, building a blockchain required developing three layers (network, consensus, and application) from scratch. Ethereum made the development of decentralized applications more feasible by providing a virtual machine blockchain where anyone can deploy smart contracts with custom logic.
However, it did not simplify the process of developing blockchains. Go-Ethereum (Ethereum’s Go language implementation) and Bitcoin are both large technology stacks that are difficult to fork and customize. This is why Jae Kwon created Tendermint in 2014.
Tendermint BFT is a solution that combines the network and consensus layers of the blockchain into a common engine.
It allows developers to focus on application development without worrying about complex underlying protocols.
Therefore, Tendermint saves a lot of development time. Tendermint is also the name of the Byzantine Fault Tolerant (BFT) consensus algorithm used by the Tendermint BFT engine.
The Application Blockchain Interface (ABCI) socket protocol connects the Tendermint BFT engine to the application. This protocol can be wrapped in any programming language, allowing developers to choose the language that best suits their needs.
The following are the characteristics of Tendermint BFT as an advanced blockchain engine, suitable for public or private blockchains:
Tendermint BFT only handles the network and consensus of the blockchain, meaning it assists nodes in propagating transactions and helps validate nodes come to consensus on a set of transactions to be appended to the blockchain.
The application layer is responsible for defining how the set of validating nodes is constructed. Therefore, developers can build public and private blockchains on top of the Tendermint BFT engine.
If the application specifies validating nodes based on the amount of tokens held, then the blockchain is categorized as PoS (proof of stake).
However, if the application decides that only a set of pre-authorized entities can act as validating nodes, then the blockchain can be categorized as a permissioned or private blockchain, with developers having full control over the rules governing changes to its blockchain validating node set.
High performance: Tendermint BFT has a block time of approximately 1 second and can process thousands of transactions per second.
Instant finality: The Tendermint consensus algorithm has the property of instant finality. This means that if over one-third of validating nodes are honest (Byzantine fault-tolerant), then no forks will occur. Users can be confident that once a block is created, their transactions will be completed (which is not the case in proof-of-work blockchains such as Bitcoin and Ethereum).
Security: The Tendermint consensus not only tolerates faults but also has accountability. If the blockchain forks, there is a way to determine responsibility.
Cosmos is one of several platforms based on the Tendermint consensus engine, with other platforms including:
Ethermint, a scalable and interoperable hybrid blockchain that uses the Cosmos SDK and Tendermint.
Terra, a delegated proof-of-stake stablecoin platform used as a blockchain payment solution.
Regen Network, a decentralized environmental asset, data, and climate protocol market.
2. Cosmos SDK and other application layer frameworks
Tendermint BFT reduces blockchain development time from years to weeks, as creating a secure ABCI application from scratch can be challenging, which is where Cosmos SDK comes in.
Cosmos SDK is a general framework for building secure blockchain applications on top of Tendermint BFT.
It is built on two fundamental principles:
Modularity: The goal of Cosmos SDK is to build a modular ecosystem that allows developers to quickly create blockchain for specific applications without having to write every feature from scratch. Anyone can create a Cosmos SDK module and import existing modules into their blockchain.
For example, the Tendermint team is developing a set of basic modules for Cosmos Hub. Any developer can use these modules to create their applications. Developers can also create new modules to further customize their applications. As the Cosmos network grows, the ecosystem of SDK modules will also expand, making it easier to develop complex blockchain applications.
Capability-based security: Capabilities limit the scope of malicious or accidental interactions by constraining security boundaries between modules. This allows developers to better understand module composition and limit the scope of malicious or accidental interactions.
Cosmos SDK also includes a range of useful developer tools for creating command-line interfaces (CLI), REST servers, and various common utility libraries.
Cosmos SDK (Software Development Kit) is modular, like other Cosmos tools. Developers can build applications on top of Tendermint BFT. However, it can also be used with any other consensus engine that supports the ABCI protocol. Cosmos is expected to have multiple SDKs over time, each using a different architecture model and compatible with different consensus engines, all within a single ecosystem: the Cosmos network.
The modularity of the Cosmos SDK allows developers to port almost any existing blockchain code library written in Golang to it, and Ethermint is a project that converts the Ethereum virtual machine into an SDK module.
Ethermint is identical to Ethereum and has all the advantages of Tendermint BFT. All Ethereum tools (such as Truffle, Metamask, etc.) are compatible with Ethermint, and you can easily migrate your smart contracts.
CometBFT (Comet Byzantine Fault Tolerance)
CometBFT is a branch and successor of Tendermint Core, released in February of this year, and will become the official replication engine of the Interchain Stack. CometBFT’s long-term goal is to be the preferred replication engine for reliable, secure, and large-scale, application-specific blockchains, and to play a critical role in supporting cross-chain growth.
Block unicorn note: Interchain Stack is a technology stack that facilitates interoperability and connections between blockchains, with the aim of building a unified, cross-chain ecosystem.
More specifically, CometBFT’s goals include:
Emphasizing user needs, developing clear product strategies, and prioritizing user needs. This is to ensure that CometBFT always makes strategic decisions that are relevant and valuable.
Increasing quality assurance and correctness assurance through the use of advanced technologies such as model-driven testing. These technologies can provide strict specifications and testing for implementations, improving quality assurance and correctness assurance.
Modular design with appropriate levels of abstraction, allowing the system to be broken down as needed for gradual integration in projects that depend on it. Cosmos hopes to encourage the use of CometBFT as a library, reducing forks and fragmentation by adding new interfaces to support a growing use case set.
Accelerating feature release speed without sacrificing quality. Achieving faster feature releases by gradually updating the system architecture as a reliable change platform and improving project coordination across the entire Interchain Stack.
Overall, CometBFT’s goal is to continuously improve and develop by focusing on user needs, increasing quality assurance, modular design, and fast feature releases, to become a reliable and well-coordinated blockchain replication engine that supports the development of the Interchain Stack.
3. IBC – Connecting Blockchains
An Inter-Blockchain Communication (IBC) protocol is used to connect blockchains. IBC leverages the instant finality feature of Tendermint consensus (although it can work with any “fast finality” blockchain engine) to enable heterogeneous chains to transfer value (i.e. tokens) or data to one another.
Essentially, there are two aspects:
Different Hierarchies: Heterogeneous chains have different hierarchies, which means they may differ in the implementation of network, consensus, and application components. To be IBC-compatible, a blockchain only needs to meet a few requirements, the most important of which is that the consensus layer must have fast finality. Proof-of-work chains (such as Bitcoin and Ethereum) are not included because they have probabilistic finality.
Sovereignty: Each blockchain is maintained by a set of validators whose job is to come to a consensus on block confirmations. In proof-of-work blockchains, these validators are called miners. Sovereign blockchains have their own set of validators, and in many cases, a blockchain must be sovereign because validators are ultimately responsible for changing state. In Ethereum, all applications are run by the same set of validators, so the sovereignty of each application is limited.
IBC enables heterogeneous blockchains to exchange tokens and data, meaning that blockchains with different applications and validator sets can communicate with each other. For example, it enables public and private chains to exchange tokens. Currently, no other blockchain framework supports this level of interoperability.
How IBC Works
For example, suppose an account on Chain A wants to send ten tokens to Chain B:
Tracking: Both chains must keep track of each other’s validators.
Locking: When a transfer is initiated on the IBC network, the tokens (e.g., ATOM) are locked on Chain A.
Proof Relay: The locking proof is sent from Chain A to Chain B for ATOM.
Validation: On Chain B, the proof is validated against the block header from Chain A; if validated, an ATOM token voucher is created on Chain B.
It is worth noting that the ATOMs created on Chain B are not actual ATOMs (not native) because ATOMs only exist on Chain A. They represent the ATOMs from Chain A to Chain B and prove that these ATOMs are frozen on Chain A. Similar mechanisms will unlock these tokens when they return to their original chain.
The main drawback of this approach is that the number of network connections grows quadratically with the number of blockchains. If the network includes 100 blockchains, each blockchain must maintain an IBC connection with every other blockchain, resulting in 4,950 connections, which quickly becomes unwieldy.
To solve this problem, Cosmos proposes a modular architecture that includes two types of blockchains: Hubs (central chains) and Zones (partition chains), as discussed earlier.
Connecting Non-Tendermint Chains
Cosmos is not limited to Tendermint chains; any type of blockchain can be connected to Cosmos. There are two cases: immediate finality chains and probabilistic finality chains:
By modifying the IBC protocol, any blockchain that uses a fast-finality consensus algorithm can be connected to Cosmos. For example, if Ethereum switches to Casper Friendly Finality Gadget, it can establish a direct connection with the Cosmos ecosystem by adjusting IBC to be compatible with Casper.
Block unicorn note: Ethereum’s Casper Friendly Finality Gadget is a consensus algorithm that aims to improve the performance and finality of blockchain systems and is expected to be compatible with Cosmos.
For blockchains without fast finality (such as proof-of-work chains), the situation becomes more difficult. For these chains, Cosmos uses a proxy chain called Peg-Zone.
The Peg-Zone proxy chain monitors the state of another blockchain. Peg-Zone itself has fast finality and is compatible with IBC, and its role is to provide security and finality for the blockchain it connects to.
Block unicorn for easier understanding: In order to explain the characteristics of the two chains, fast-finality chains and probabilistic-finality chains, we inserted a brief explanation into the text.
1) Fast-finality chains: Fast-finality chains are like immediate confirmation when you send a package. Once you hand over the package to the courier, they immediately confirm receipt and provide you with a tracking number, so you can know immediately that the package has been sent and confirmed.
2) Probabilistic-finality chains: For example, the proof-of-work (PoW) mechanism of Bitcoin. Under this mechanism, transactions need to be confirmed by a certain amount of computational work, and there is a certain probability of forking. Just like mail delivery takes time and some uncertainty, the confirmation time of transactions in probabilistic-finality chains is longer, and there is a certain risk.
In simple terms, fast-finality chains can quickly confirm transactions and provide finality guarantees, while probabilistic-finality chains require longer confirmation times and have a certain probability of forking and security issues.
What problems does Cosmos solve?
Cosmos’ free SDK allows developers to build sovereign blockchain applications without ongoing costs. These blockchains can easily connect to each other without relying on smart contracts to exist on different blockchains, avoiding high transaction fees caused by network congestion and allowing for better scaling functionality.
This will drive innovative features in DeFi, NFTs, gaming, DAOs, social networks, marketplaces, and internet-dependent economies, especially in the ownership economy where everyone has a stake.
Cosmos leverages two types of scalability:
Vertical scalability: Vertical scalability refers to the way in which a blockchain scales. By forsaking Proof-of-Work and optimizing its components, Tendermint BFT can achieve transaction throughput of thousands per second.
The bottleneck lies in the application itself, for example, a virtual machine will impose lower limits on transaction throughput, whereas applications that embed transaction types and state transition functions directly (such as standard Cosmos SDK applications) can achieve higher throughput, which is one of the reasons why application-specific blockchains make sense.
Horizontal scalability: Even if the consensus engine and applications are highly optimized, the transaction throughput of a single chain will eventually reach insurmountable limits. Vertical scaling has reached its limit, and multi-chain architecture will be used as a solution in the future. The core idea is to run multiple chains of the same application in parallel, operated by a standard validator set, making the blockchain theoretically infinitely scalable.
Sustainability is ensured by the PoS consensus algorithm to secure the network, which can reduce carbon footprint by 99% compared to the PoW consensus algorithm.
ATOM Token Utility
The ATOM token is a vital part of the Cosmos ecosystem. Its primary use case is for staking to ensure the security of the PoS consensus mechanism. Cryptocurrency investors must stake the same amount of ATOM tokens as the current top 150 Cosmos validators to validate transactions. However, ATOM holders can delegate their tokens to a staking pool to receive a certain percentage of cryptocurrency rewards.
The ATOM token can have three use cases: as an anti-spam mechanism, as a staking token, and as a way to vote in governance.
1. As an anti-spam mechanism, ATOM is used to pay fees. Similar to Ethereum’s gas fees, the fee may be proportional to the computational cost required for the transaction. Charging fees is to prevent malicious actors from abusing the blockchain.
2. ATOM can be staked to earn tokens as rewards, and the amount of staked ATOM determines the economic security of the Cosmos Hub. The more ATOM staked, the greater the economic incentive and the higher the cost of attacking the network. Therefore, the more ATOM staked, the higher the economic security.
3. Governance: ATOM holders can manage the Cosmos Hub by using their staked ATOM to vote on proposals.
Blockchain on Cosmos
The flexible architecture of Cosmos has attracted many Web3 developers. Some of the most notable Cosmos projects include:
Osmosis: Osmosis, created in 2021, is currently the largest decentralized exchange (DEX) in the Cosmos ecosystem.
Cronos Chain: Sponsored by centralized crypto exchange Crypto.com, Cronos Chain is an Ethereum-compatible blockchain built on Cosmos. Cronos operates on a PoS algorithm and uses Crypto.com’s CRO token as its primary cryptocurrency.
Binance Chain: Centralized crypto exchange Binance also used a suite of Cosmos tools to build its Binance Chain. Similar to Cronos Chain, Binance’s blockchain features many DEXs, crypto lending platforms, and NFT marketplaces.
Thorchain: Thorchain is a decentralized exchange on Cosmos that aims to achieve cross-chain exchange, making it possible to securely exchange native tokens and tokens on any blockchain, including Bitcoin, Dogecoin, and Ethereum. Thorchain operates on a PoS algorithm and uses its native RUNE token to ensure network security.
The Cosmos Ecosystem
With over 274 applications and services and over $62 billion in managed digital assets, the Cosmos network has a diverse and rapidly expanding ecosystem. Here are some of the most important Cosmos projects:
One of the blockchains connected to the Cosmos Hub, Osmosis uses a secure proof-of-stake system and provides many of the same professional staking services as the Cosmos chain. OSMO is the name of its native cryptocurrency.
OSMO token holders can delegate their tokens to these professional stakers to protect the network from malicious and harmful behavior. Osmosis is a peer-to-peer decentralized blockchain that cryptocurrency holders can use to generate liquidity and trade IBC-enabled tokens.
Secret Network is a smart contract platform focused on privacy and enabling programmable privacy. The Secret Network will provide an ecosystem with a privacy center, making it ideal for privacy advocates.
It is building a “Healthy Earth Proof” network that primarily supports carbon sequestration. Through Regen, we can use the power of blockchain to make the world a better place. Regen has worked with Chorus One to develop the first green validator business model.
G-Bridge is a cross-chain bridge that allows users to transfer assets between blockchains. G-Bridge is a highly experimental and innovative system managed by user networks.
Akash Network is another project running on the Cosmos blockchain. Akash’s primary goal is to help Web3 developers deploy a variety of dApps with minimal configuration, setup, and server management.
The project is called the “Airbnb of cloud computing,” offering the first decentralized open-source cloud computing, providing developers with permissionless cloud computing resources to build dApps.
When discussing Akash Network, it is also worth noting that it offers one of the most competitive pricing solutions for dApp deployment.
Persistence XPRT is a crypto-native DeFi and NFT asset network. The project is well-organized technically and provides infrastructure for connecting DeFi and traditional finance across various domains.
Regen Network is a proof-of-stake blockchain built on the Cosmos ecosystem. It is used for validating environmental state claims, protocols, and data.
The Regen Ledger allows multiple users to interact and transact with each other, forming a public ecological accounting system. It is a global marketplace and platform primarily for asset, service, and data related to Earth’s ecosystems.
Top Cosmos ecosystem tokens ranked by market cap:
Cosmos discovers major system flaw
According to a report last year, 42 blockchains enabled the IBC feature, including Cosmos Hub, Osmosis, Cronos, and Evmos.
OKX Chain, Luna Classic, and Thorchain were the major blockchains that had previously integrated IBC. Fortunately, their functionality had either been disabled or was never fully enabled.
The co-founder of Cosmos said the issue has been addressed through a patch that will be applied to all currently vulnerable blockchains.
Polymer’s goal is to solve this problem by bringing IBC outside of Cosmos
IBC is a message passing protocol that has been successful within the Cosmos ecosystem. However, its use outside of Cosmos is limited.
Polymer is a new protocol that brings IBC outside of Cosmos by acting as a message router, allowing any chain or Rollup to use IBC to send messages to each other, getting functionality previously limited to Cosmos.
IBC outside of Cosmos
IBC has proven its worth by protecting 57 chains within Cosmos and transferring over $160 million in value. However, due to strict compatibility requirements with instant-finality consensus systems like Tendermint, its success has not yet extended to other systems. Probabilistic-finality systems, such as Ethereum’s proof-of-work, violate IBC’s security guarantees.
Active teams working to bring IBC to Ethereum include:
Electron Labs is working to bring IBC to Ethereum, but connecting Tendermint chains and EVM chains requires a lot of work. Cosmos requires the use of ed25519 signatures for light client verification, and verifying this signature on EVM requires a lot of Gas.
To solve this problem, Electron Labs will use proofs of zero-knowledge signature validity and verify this proof on Ethereum to reduce costs. One downside of this approach is dependence on a smart contract controlled by a single team, which does not scale IBC’s trust minimization.
zkBridge (Zero-Knowledge Bridge) also has a vision of connecting Cosmos and Ethereum. Similar to Electron Labs, zkBridge uses light clients and runs an Ethereum smart contract. It uses a relay network where relayers pass block headers to the target chain for verification.
This system allows parallel proofs, achieving a cheaper and faster proof system, and eliminates the need for a trusted setup with a trusted party generating private keys. Although dependent on a centralized smart contract, zkBridge has fewer trust assumptions due to its proof system.
Polymer is a Cosmos application chain that acts as an IBC hub, allowing communication between chains. Polymer allows connected chains to choose their own validation method while providing default ZK light client verification by standardizing IBC as a transport component (similar to the implementations of Electron Labs and zkBridge). Chains connected to Polymer will also have access to the Cosmos SDK and Interchain accounts (Interchain accounts refer to a type of account in the Cosmos ecosystem used for cross-chain asset transfer and interaction).
Polymer has implemented IBC in Solidity and uses the Plonky2 proof system for verification to achieve connectivity with Ethereum. Plonky2 is a recursive proof system that verifies and ensures the correctness of sub-problems before combining them into the overall problem to prove the correctness of the original problem. It can generate a single proof from a set of proofs, which further reduces the cost of proof generation and verification. Similar to the current zero-knowledge rollups, ZKP (Zero-Knowledge Proof) will be verified on the target chain.
For example, if Ethereum and Osmosis communicate through Polymer, the following will happen:
Ethereum verifies Polymer’s consensus through the ZK Tendermint light client. Conversely, Polymer verifies Ethereum’s consensus through the Ethereum light client.
Polymer verifies Osmosis’s consensus through the Tendermint light client (due to the native light client of the Cosmos chain), while Osmosis verifies Polymer’s consensus through the Tendermint light client.
Cosmos Connection and Modular Blockchain
Polymer not only standardized the chain bridge connection for non-IBC chains but also improved the way Cosmos chains work.
As the IBC center of Cosmos and other chains, Polymer effectively eliminates redundant connections between chains. Currently, chains are connected by connecting to the Cosmos Hub, but through Polymer, they only need to connect to Polymer once and can inherit the interconnectivity of all other chains connected to Polymer, which is achieved through multi-hop upgrades.
Although IBC has been proven to be impermeable within the Cosmos ecosystem, it has not yet dealt with large-scale capital flows. Although it may be too early to announce that IBC is the clear interoperability leader, it is currently the most promising model of inter-chain bridging. However, there are some assumptions for future multi-chain and trustless inter-chain connections, which will have a net positive impact on the entire field.
Polymer plans to use Plonky2 as its validator, which is a new and unaudited system, and using zero-knowledge proofs may require trade-offs between proof cost and delay.
Cosmos is undoubtedly one of the most exciting and unique projects in Web3, and by fully supporting a multi-chain future, it has established itself as a clear leader in a unique field. The future of Web3 and Cosmos will ultimately be determined by the values that developers value most. As more and more companies begin to integrate blockchain into their processes, the need for a platform that allows blockchains to communicate with each other becomes crucial.
As an interoperable blockchain platform, Cosmos has high growth potential due to an experienced team, a clearly defined roadmap, potential use cases, and ongoing partnerships.
However, if developers decide that sovereign and application-based blockchains are the future direction of development, Cosmos would be perfectly positioned to take advantage of this sentiment.