Cosmos has been one of the standout success stories this year. The layer-one blockchain rivaling Ethereum is up over 400% since the beginning of 2021. Peng Zhong, the CEO of Tendermint, the company behind Cosmos, announced in an interview that he expects to see more growth in the future.
What is Cosmos?
Cosmos is sometimes also called a “blockchain of blockchains” or a “blockchain 3.0” because it aims to solve the problems that first and second-generation blockchains like Bitcoin and Ethereum face. These first-generation blockchains struggle with enormous electricity consumption due to their resource-intensive proof-of-work consensus mechanism, making scaling incredibly difficult. That is why Ethereum aims to switch to a proof-of-stake consensus mechanism that will greatly reduce electricity consumption. Other second-generation blockchains like Solana and Avalanche already do that and have seen increased interest from investors this year.
Third-generation blockchains like Cosmos go a step further. They consist of not one but several blockchains, thereby reducing the computational load on the main chain, preventing congestion, and doing away with extortionary gas fees.
Tendermint CEO expects further growth
Sounds good, you’ll say, but does anyone actually use Cosmos? Absolutely! In fact, Cosmos logged a record one million transfers in September and is well on its way to becoming one of the main Ethereum rivals. Its decentralised applications, developer activity, and the number of chains connected via IBC have surged in recent months. In early November, Cosmos held its biggest-ever hackathon at the Cosmoverse Conference in Lisbon, with a total prize pool of $1 million.
Tendermint CEO Peng Zhong was more than pleased in a recent interview with Cointelegraph, highlighting that Cosmos had already connected 22 blockchains through its Inter-Blockchain Communications, the infrastructure allowing different blockchains to connect to the Cosmos main chain. Zhong stated that he’d expect to see about 200 chains connected through IBC in the coming year and tens to hundreds of thousands of chains within the next five years.
He also underscored how Cosmos was the only ecosystem working on democratising access to finance since there was no need to buy a token to participate in its ecosystem. He added that gas was not needed, unlike other chains that pursue a similar structure like Cosmos, such as Ethereum 2.0 or Polkadot. This was a massive roadblock removed for new developers to experiment in the Cosmos ecosystem.
Cosmos aiming for the multichain future
Crypto veterans should recognise and approve of this approach, as it is becoming increasingly clear that the future will indeed be multichain, as Zhong predicts. Even though Cosmos is still lagging behind more popular chains like Ethereum or Avalanche, its long-term bet is clear: take a piece of the multichain pie and bet on interoperability between different blockchains.
It is quite probable that this will eventually materialise. Similar to how not all smartphones are produced by Apple or Samsung, even though a majority are and there is a clear market leader, not all blockchain transactions of the future will be processed by Ethereum. However, it’s still too early to tell how big Cosmos’ share of the pie will be.
