The Rise of the Cosmos Ecosystem: Reevaluating Its Undervalued Potential

Cosmos, as a mature blockchain ecosystem, stands out in many ecosystems due to its decentralization and openness. Despite the lack of high-profile market promotion, Cosmos has been a fertile ground for incubating quality projects. As the birthplace of the application chain revolution, Cosmos has experienced periods of stagnation, but it is still regarded as one of the areas in the crypto industry with the greatest potential for hundredfold growth. Recent trends indicate that projects with solid fundamentals and sustainable development prospects will benefit significantly in the upcoming bull market, and Cosmos is well prepared for this.

Reassessing the Potential of Cosmos

Cosmos is an open-source blockchain ecosystem designed to enable interoperability between different chains. Although there are gaps compared to leading systems in certain aspects, Cosmos has significant advantages in decentralization and interoperability. The launch of the Cosmos SDK and IBC has provided convenience for developers and propelled technological advancement across the industry.

However, the market valuation of Cosmos does not match its strength. Compared to other ecosystems, Cosmos is smaller in scale and has not attracted enough developers and users. Additionally, its technology and application scenarios are relatively complex, requiring more time and resources for promotion. In the cryptocurrency market that values data and liquidity, the market capitalization of Cosmos has been long underestimated, currently standing at $3.15 billion, ranking 23rd. Its token ATOM is also valued low due to insufficient utility.

To improve this situation, Cosmos launched the 2.0 white paper, aimed at enhancing the utilization of the Cosmos Hub network and the ATOM token. Subsequently, a series of progress announcements were made, such as upgrading Interchain Security to "Replication Security" and passing the liquidity staking module proposal (LSM), among others. In May of this year, the Neutron mainnet of the Cosmos ecosystem went live, being the first to adopt "Replication Security", and announced airdrops to stakers of Cosmos Hub, reigniting market attention on the value capture of Cosmos, ATOM, and its ecosystem.

Based on these technological improvements, the Cosmos ecosystem projects have experienced a liquidity explosion this year. The daily trading volume of the ecological public chain Canto once surpassed that of Solana. The total locked value of projects like Stride, Injective, and Kujira has increased by 2-6 times compared to the beginning of the year, with a TVL of (. In April of this year, the number of active developers on the Cosmos SDK once exceeded that of Ethereum, ranking second. Recently, the modular blockchain network Celestia, built on the Cosmos SDK, has also attracted attention, with the Celestia + Cosmos model being hailed as the ultimate form of application chains.

The outstanding performance of the Cosmos ecosystem projects has attracted renewed market attention. Many users have expressed high expectations for the future plans of Cosmos 2.0, with even voices saying "Cosmos Summer is coming." In the recent rebound market, Cosmos ecosystem related tokens such as Celestia)TIA(, Injective)INJ(, and Osmosis)OSMO( have all risen more than 20% in the past week, with INJ rising over 110% in a month. These positive trends indicate that Cosmos is gradually gaining market recognition, laying a solid foundation for future development.

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Future Development Plan of Cosmos Technology

Continuous technological innovation is crucial for maintaining ecosystem growth and providing unprecedented liquidity for blockchain applications. In September 2023, the Interchain Foundation announced the Interchain 2024 development plan, outlining the future development blueprint for Cosmos technology.

) CometBFT: The cornerstone of cross-chain scalability

CometBFT is at the core of Interchain scalability. By ensuring that validators reach consensus on block generation, CometBFT allows the Interchain ecosystem to maintain its security, decentralization, and integrity. The foundation plans to further expand the reach of CometBFT, empowering the development of sovereign, interoperable applications. Currently, CometBFT has been upgraded to v0.38, with plans to release v0.39 by the end of the year, featuring efficiency improvements, comprehensive data APIs, and an enhanced indexing system.

Cosmos SDK: Modularization and New Features

The Cosmos SDK is a multifunctional toolkit for developing blockchain or Rollup applications, which has been adopted by several new projects. In future development plans, the Cosmos SDK will focus on modularity and the introduction of new features, enabling developers to create more complex, modular applications, thereby nurturing a broader and more powerful ecosystem.

CosmJS: Improving Efficiency and User Experience

CosmJS helps developers integrate JavaScript clients with the Cosmos SDK blockchain. The foundation plans to enhance CosmJS with a new encoder to improve efficiency, reduce code bloat, and provide a more streamlined and professional development experience. This will enable developers to create more elegant, user-friendly applications, enhancing the attractiveness of the Cosmos ecosystem.

CosmWasm: Achieving decentralized, permissionless deployment

CosmWasm is a smart contract framework built on the Cosmos SDK, allowing for permissionless deployment of decentralized applications and separating the product development cycle from blockchain development. In the future, CosmWasm will be further optimized to simplify application creation and deployment, improving blockchain utilization. The focus will be on IBC adoption and account-based smart contracts.

IBC Protocol: Enhancing Interoperability and Scalability

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

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The Latest Changes in the Cosmos Ecosystem

Recently, the Cosmos ecosystem has once again demonstrated tremendous potential. As an open-source multi-branch blockchain network, Cosmos boasts advantages such as smart contracts, scalability, security, and cross-chain interoperability, with its application chain theory continuously evolving. Here are some recent changes in the Cosmos ecosystem that are worth paying attention to:

) Liquidity Staking Module

Liquidity Staking Module###LSM( provides a modular liquidity staking solution for the Cosmos ecosystem. On June 14, 2023, Cosmos Hub began implementing LSM. Users can now directly liquidity stake their staked ATOM without waiting for the unbonding period.

) Token Economics Upgrade

The ATOM economic model has undergone significant changes, shifting from the pursuit of high returns to the pursuit of real benefits. On May 10th, the Neutron mainnet was launched, combining Cosmos SDK, IBC, and CosmWasm, becoming the first consumer chain to utilize "Replication Security." Neutron aims to address the issue of ATOM 1.0 lacking apparent practical value, bringing a new narrative and momentum.

Enhanced Interoperability

In August, the launch of Evmos 2.0 further solidified Cosmos's advantages in interoperability. Built on the IBC protocol, Evmos has the potential to elevate the multi-chain ecosystem to new heights. Evmos 2.0 achieves interoperability between the Ethereum and Cosmos ecosystems, allowing developers to build applications that can interact with both ecosystems.

The rise of perpetual contracts

Perpetual contracts play an important role in the digital asset market and have seen rapid growth recently. The leading perpetual contract exchange in the Ethereum ecosystem, dYdX v4, has announced its migration to Cosmos, which will bring more liquidity and innovation to Cosmos.

Native liquidity increase

Native liquidity is crucial in the DeFi space, enabling seamless on-chain interactions and reducing bridging risks. USDT has been integrated into the Kava blockchain, introducing new native liquidity to Cosmos. In March, Noble, a native asset issuance platform in the Cosmos ecosystem, announced a partnership with Circle to bring native USDC to Cosmos, with expectations of generating hundreds of millions in liquidity in the coming months.

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Popular Projects in the Cosmos Ecosystem

) Initia

Initia is a Cosmos-based project dedicated to building a highly interconnected modular Rollup network. It abstracts the complexity of traditional modular and multi-chain systems, enabling developers to create scalable and autonomous systems. The Initia architecture includes L1, L2, and communication layers, facilitating developers to launch application-specific blockchains based on Initia L2.

Initia adopts the Cosmos SDK but uses the MoveVM computing framework based on the Move smart contract language. It utilizes optimistic rollups as an application-specific L2 solution, achieving seamless messaging and bridging between different virtual machines, becoming the first MoveVM computing framework compatible with the Cosmos IBC protocol.

Recently, Initia received seed round pre-investment from a certain trading platform's lab, and the funds will be used for infrastructure development, product tool expansion, and key application layer project incubation. Initia is currently in the testnet development stage, and once launched, it will greatly enhance the liquidity of the Cosmos ecosystem.

Celestia

Celestia is a modular blockchain network based on Cosmos, providing pluggable consensus and data availability layers. It is designed to allow anyone to quickly deploy decentralized blockchains without the extra cost of a consensus layer, giving developers the flexibility to build and deploy blockchain applications.

Celestia's data availability sampling allows nodes to only validate parts of block data, reducing the hardware requirements for validating nodes and improving network scalability. In collaboration with Cosmos, Celestia operates as a data availability layer in conjunction with Tendermint and Cosmos Zones, enabling the Cosmos ecosystem to leverage Celestia's data availability features and achieve minimal trust through fraud proofs. This promotes interoperability and scalability within the Cosmos ecosystem, providing a unified level of security.

On October 31, the Celestia mainnet officially launched, and its token TIA was listed on major exchanges, with the current coin price being $2.33.

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) dYdXV4

dYdX is a leading L2 Dapp on Ethereum, with its latest version dYdX V4 expected to be released this December. This upgrade is an important milestone for dYdX, preparing to migrate to the Cosmos decentralized network, aiming to address the scalability limitations of Ethereum and provide a more decentralized architecture for the rapidly growing user base and trading volume.

dYdX, as a popular L2 Dapp, attracts a large number of users and transactions, putting pressure on Ethereum. The scalability limitations of Ethereum hinder dYdX's expansion, prompting the search for more advanced solutions. Cosmos and its SDK provide the perfect solution for dYdX, supporting the development of decentralized independent blockchain networks to meet the growing demands of dYdX.

After migrating to Cosmos, dYdX V4 will enhance trading speed and eliminate centralization concerns. The decentralized network of Cosmos allows dYdX to continue honoring its commitment to transparency and fairness, providing users with a safer and more reliable trading experience. As a leading decentralized exchange, dYdX's daily trading volume has exceeded $3 billion, and its migration will bring a large number of new users and liquidity to the Cosmos ecosystem.

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) Neutron

Neutron is a smart contract infrastructure based on the CosmWasm platform, allowing developers to easily deploy dApps without complex governance voting or whitelist verification. By collaborating with Cosmos Hub and other projects, Neutron combines security and cross-chain functionality, enabling DeFi applications to safely scale across more than 51 interconnected blockchain networks.

According to the Interchain Stack 2024 roadmap, Neutron will become the first consumer chain of Cosmos, aiming to host a DeFi product ecosystem built around NTRN and ATOM, supporting token generation utility and demand. This is crucial for promoting the economic development of the Cosmos ecosystem and the implementation of ATOM 2.0.

In May of this year, Neutron completed a $10 million financing led by a certain exchange platform's lab. Other participants included CoinFund, Delphi Ventures, LongHash Ventures, Semantic Ventures, and Nomad Capital. The Neutron token NTRN was launched on a certain exchange platform in October, and its current trading price is $0.290.

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