[Feature] Analysis of Cosmos' Latest Upgrade

Compiled By: Coinlive
Author: BEICHEN

For a long time, due to its decentralized governance mechanism, Cosmos' ecosystem prosperity had no direct relationship with its native token ATOM, resulting in a market value ranking outside the top 20. In contrast, Polkadot, another "cross-chain giant," has a market value twice that of Cosmos, despite its lack of a strong successor ecosystem.

The key issue is whether their platform tokens have value capture.

The Cosmos community recognized this and began pushing for the Cosmos Hub to assume the validation tasks of blockchains in the ecosystem, thereby capturing value within the ecosystem, starting last year.

However, the initial plan had a high inflation rate (as well as other flaws) that was not favorable to ATOM holders and did not pass. Therefore, the plan was adjusted and re-voted on in the past two weeks, with a formal approval rate of 99.48%. It will be officially launched on March 15.

The core of this upgrade is "Replicated Security (RS)," which is the original Interchain Security that allows blockchains in the Cosmos ecosystem to share validation resources to improve security, and the Cosmos Hub is the security provider.

This means that blockchain based on IBC can directly share security from Cosmos Hub without having to set up its own validation node, and can also directly share new features released by Cosmos Hub in the future.

The cost is to send a portion of the fee (default 25%) and a portion of the platform token's future inflation (in the form of continuous airdrops) to Cosmos Hub, which will be a reward for validators and delegators.

So, this Cosmos upgrade can be understood as a mechanism similar to Polkadot's parallel threads, but without the need to raise DOT to auction relay chain slots. Only adding proposals to Cosmos Hub and passing a two-thirds vote of validators (as long as the criteria are met, validators will not reject clients) is required to launch.

However, for security reasons, at any time, if one-third of validators do not want to validate the chain, the service will be terminated immediately.

In fact, the Cosmos ecosystem has been growing quietly, and its technology stack is increasingly perfect in the open-source ecosystem. This upgrade has a considerable attraction for projects in the Cosmos ecosystem, and some top projects have shown a strong interest in Cosmos Hub's Replicated Security.

It is believed that in the future, more and more blockchains based on IBC will choose Cosmos Hub to provide security, which not only saves the cost of building nodes but also allows ATOM to truly capture value.

Especially under the narrative of "Next Billion User," there will be a continuous influx of developers coming in to develop their blockchains. Cosmos' ecosystem, which has accumulated significant technical advantages (such as the Cosmos SDK for fast blockchain development, the IBC protocol for permissionless cross-chain, and the Tendermint consensus protocol at the level of the Internet), is a good choice.