What is Cosmos Hub

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Cosmos Hub is the first blockchain launched on the Cosmos network and the initial hub in the Cosmos ecosystem. It acts as the central router for all interchain transactions within the Cosmos ecosystem. Cosmos Hub is responsible for tracking and managing activities on every sub-chain (Zone) within the Cosmos ecosystem to ensure information synchronization.

Currently, Cosmos Hub is the only hub in the Cosmos ecosystem. It is a PoS blockchain network that achieves information synchronization within the Cosmos ecosystem through its governance mechanism. As a decentralized central governing entity, Cosmos Hub connects different Zones within the ecosystem and facilitates cross-chain asset operations with Zones through the Inter-Blockchain Communication (IBC) protocol, enabling asset flow between blockchains. For example, in the Cosmos network, ETH can be transferred from Evmos to Kava through Cosmos Hub. In this process, Cosmos Hub acts as a center for transaction processing, similar to a decentralized World Bank system.

The native token of Cosmos Hub is $ATOM. However, Cosmos Hub does not impose the use of $ATOM on other Zone blockchains. For instance, while gas on Cosmos Hub is paid in $ATOM, each Cosmos Zone can establish its own native token without the need to use $ATOM. While this open design provides flexibility in economic management for each chain within the Cosmos network, it somewhat hinders $ATOM from benefiting from the growth of the Cosmos ecosystem. The value of ecosystem growth is primarily captured by various native tokens of Zones rather than $ATOM. To give an analogy, if each member country of the European Union still issued its own currency, it would render the European Central Bank ineffective.

Source: Adam McDonald's Medium

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