3 reasons to pay attention to cosmos

ATOM had a rough 2022. If you are an ATOM holder, you might be like its about time. But it seems ATOM is following a logical sequence. If we zoom into the ATOM price chart, you can see a short price spike happened in Feb 2022. 

That might feel random, but the actual cause was the BIG ATOM 2.0 announcement and interchain security. And this is one of the reasons why I am talking about COSMOS right now. But while I was researching ATOM 2.0, I came across 2 reasons not the ones announced at Cosmosverse that will send Cosmos to the moon.

Cosmos has a LOT going on. They have one of, if not the best, ecosystems around. And as Layer 0’s go, they are miles ahead of another project we like a lot, Polkadot. Whether it’s BNB coin, Crypto.com, Kava, Secret, or the now community-owned LUNA Classic, Cosmos has its hands in LOTS of growing, successful projects. So let’s see what’s new. Stay tuned and I will break down the new ATOM 2.0 proposal for you. You can see this video to see Cosmos’ vision.

1) ATOM 2.0 Roadmap

Cosmoverse, this year in Medellin Colombia, is just finishing. Whenever big conferences like this take place, big announcements are sure to follow. If you are up to date with the Cosmoverse updates, you can use the timestamps below to know the 2 BIG reasons why ATOM could explode soon. By far, the biggest thing we heard about the ATOM 2.0 Whitepaper.

The Cosmos lead devs feel that ATOM’s initial goal of enabling interconnected chains through their IBC is complete. The SDK is working for many different chains and IBC is working to connect the chains together.

So, the most important thing to understand here is that this is only a proposal. We have a proposal draft to look at because the community votes on it. So this may or may not happen although I think there is A LOT of community support behind this. This is for the next phase of ATOM development or ATOM 2.0. Among the important developments in this paper are:

  1. An Interchain Scheduler to sell or rent block space. Then they use those revenues to help get newer Cosmos chains started faster.
  2. An Interchain allocator to help Cosmos chains collaborate more easily.
  3. A new issuance policy for ATOM is based on using the new liquid staking options available. Eventually, this will move to a fixed issuance policy as many other chains follow.
  4. The formation of Cosmos Councils and Assembly for governance and to help realize these goals.

So what does this mean for you? First, ATOM should become more valuable. Both the new Scheduler and Allocator will be using it as the allocation and settlement asset. As they say in the paper: “The result is a renewed role for ATOM as preferred collateral within the Cosmos Network”

Next, liquid staking is coming to all Cosmos. The devs are building a module for liquid staking for any chain to use. The new issuance policy will start at 10 million ATOM per month. Then it declines steadily over 36 months now that more ATOM will be staked through liquid staking options than is staked now. By month 8 and beyond, this new issuance will be LESS than the old issuance schedule making ATOM more scarce.

So ATOM will become more scarce. And ATOM’s issuance rate will slow down. Cosmos is making a big bet on liquid staking as a way to help us earn and keep the network secure.

DeFi lovers will see that the new Allocator could help introduce undercollateralized lending to Cosmos. Instead of only overcollateralized lending, where you pledge $10,000 to borrow $5000, you could pledge $5000 to borrow $10,000. And this could work both with individuals and as a fundraising tool between chains. Bullish for DeFi on Cosmos.

The last section deals with governance improvements that you should read if you are bullish on the ecosystem. Again, I see these changes as a big positive and think the proposal will pass.

2) The Terra Shift

I am calling this the Terra Shift. It’s what happened to some of the apps Terra Luna is/was building before the UST implosion. So, thanks to Anchor and its unsustainable 19% helping to bring down UST, many investors lost the plot on LUNA. What people missed because investors lost lots of money was how easy to use and seamless the apps were.

They were some of the easiest apps to use individually and together in any ecosystem in crypto. And that’s gotten lost in the headlines, the implosion of UST, and the arrest warrants for Do Kwon. Two protocols, in particular, Stader and Kujira made the Terra shift. So, instead of staying ONLY in the Terra ecosystem, these 2 protocols made a shift to Cosmos. It’s an easy shift since Terra built on Cosmos too but still a shift.

Kujira decided to build its own Cosmos chain. Now it offers its liquidation services across the entire Cosmos ecosystem. Instead of Terra only, now anyone using any Cosmos chain can access their services. On the other hand, Stader, who specializes in liquid staking, went even broader. They support liquid staking on 6 blockchains now including Hedera, BNB, Near, and Polygon.

3) Ethereum Integrations

EVMOS is an EVM on Cosmos that operates as its own chain. We’ve seen this smart design before like Avalanche’s C-Chain and Cardano’s Milkomeda. That’s where EVM apps are separate from the rest of the chain’s activity.

There are both design and security reasons for this. Cosmos stands up well to attempted hacks and lots of unusual activity. Again, see LUNA for that. But some ETH apps and protocols are vulnerable to hacks. This keeps that activity separate. So, Cosmos is working on 2 HUGE integrations that will make moving within ecosystems easier. Those 2 are the ETH Beacon Chain now that The Merge is complete and Polkadot

 

And that is huge news. Soon, 3 of the 4 biggest ecosystems will have integrations with each to make moving back and forth easier, faster, and cheaper.

Conclusion

The network effect is working in Cosmos’ favor. Their tools and SDK for building blockchains passed the test during the LUNA meltdown and everything worked the way it was supposed to work.

There are so many new apps, protocols, and tools building on it. Not only is Cosmos getting the chance to integrate with more ecosystems like ETH and DOT as we mentioned earlier. Now the Cosmos ecosystem is SO BIG, that other chains are now coming to them and saying how can we integrate our chain with you.

So, Cosmos went from seeking to integrate with others to being the most sought-after project for others to build new integrations. That’s what happens when you have the tools to build out a BNB, CRO, Secret, and Kava.

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