Cosmos is a decentralized network of independent parallel blockchains, each powered by BFT consensus algorithms like Tendermint consensus. Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. Projects built with the Cosmos Software Development Kit (SDK) can incorporate with each other more easily. The three pillars of the Cosmos ecosystem are the Tendermint consensus protocol, the Cosmos SDK, and The Inter-Blockchain Communication protocol (IBC).
Cosmos’ origins can be dated back to 2014, when Tendermint, a core contributor to the network, was founded. In 2016, a white paper for Cosmos was published — and a token sale was held the following year. $ATOM tokens are earned through a hybrid proof-of-stake algorithm, and they help to keep the Cosmos Hub, the project’s flagship blockchain, secure. This cryptocurrency also has a role in the network’s governance.
In Cosmos, every blockchain is called an application-specific chain, when they open IBC with another App-chain, this chain will be called a Zone. A hub is a Zone that has a lot of channels connected to it, thus making the hub act as a center to facilitate IBC between chains.
$ATOM is the native token of Cosmos Hub. Since the PoS consensus mechanism requires validators to own $ATOM to participate in the validation process, the main purpose of $ATOM is the security and sustainability of the Cosmos Hub network. $ATOM owners can stake their tokens to ensure network security, and in return, get a portion of the network transaction fees and block rewards distributed for validation. The token is also necessary for taking part in Cosmos Hub governance. $ATOM owners can delegate their tokens or actively take part in governance by holding $ATOM in their wallets.
$ATOM's initial token distribution
The Interchain Foundation ran multiple private investment rounds, and a public fundraiser event ended on April 6, 2017. The foundation categorized recipients of these minted $ATOMs into four different blocks: Private Contributors, Public Contributors, All in Bits Inc (AiB), and the Interchain Foundation (ICF).
- The strategic and early adopters received 7.1% of the initial supply equivalent to 16,856,718.97 $ATOM
- The seed contributors received 5% of the initial supply, equivalent to 11,809,947.91 $ATOM
- The public contributors received 67.9% of the initial supply, equivalent to160,293,050 $ATOM
- All in Bits Inc (Tendermint Inc.) received 10% of the initial supply equivalent to 23,619,895.81 $ATOM for developing the open-source IP that is used in Cosmos Network
- ICF received 10% of the initial supply equivalent to 23,619,895.81 to pursue their R&D activities for Web 3.0
- In total, 236,198,958.12 $ATOMs were allocated at genesis to 984 accounts
Both Cosmos and Polkadot are Layer 0 projects. Their networks are separated into a base chain and various application-specific chains (app chains). In Cosmos, the base chain is called the Cosmos Hub, and the other chains are called Zones.
The app chains execute transactions independently and simultaneously, offloading network congestion and improving scalability. Cosmos can have multiple Hubs, while Polkadot has only one Relay Chain. In addition, developers can freely create new Zones on Cosmos.
Creating app chains is more challenging than building smart contracts on typical layer 1s. But app chains allow much greater customization. Between the two, the Cosmos ecosystem is more vibrant.
Smart Contract/Public Chain
The Interchain Foundation (ICF) is a Swiss non-profit foundation that was formed to support the development of Cosmos and the ecosystem that will contribute to the Cosmos Network. The ICF is accepting applications for grants. All in Bits Inc (dba Tendermint Inc) is a software development company contracted by the ICF to develop the Cosmos Network.
IRIS Foundation Ltd. is supported by the ICF to build IRISnet, a Cosmos Hub that facilitates construction of distributed business applications. Learn more about IRISnet.
Cosmos Hub is the first hub among many hubs that has launched within the Cosmos Network of sovereign blockchains.
Tendermint BFT is the name of the Proof-of-Stake consensus protocol that powers the Cosmos Hub and the Cosmos SDK.