What is Cosmos (ATOM) and how does it work? Everything you need to know

What is Cosmos (ATOM) ?

The Cosmos Network comprises interconnected blockchain ecosystems interconnected via the Cosmos Hub. Its primary goal is to function as the 'Internet of Blockchains,' enabling smooth and safe communication, data exchange, and transaction processing among various autonomous blockchains. This is facilitated by the Cosmos Hub and safeguarded by over 180 validators. Its native cryptocurrency is ATOM.

ATOM tokens are utilized for covering transaction costs on the Cosmos Network, while staking ATOM aids in network security. ATOM holders possess the ability to vote on proposals issued by the Cosmos Hub.

Currently, there are over 249 interchain applications and services operating within the Cosmos ecosystem.

How does Cosmos (ATOM) work?

Cosmos empowers decentralized application (dapp) developers to construct their own blockchains, fostering decentralization and interoperability across the ecosystem.

Tendermint constitutes a suite of readily available developer tools within Cosmos, consisting of a consensus engine (Tendermint Core) and a versatile application interface known as the Application Blockchain Interface (ABCI). These tools facilitate the implementation of networking and consensus layers, streamlining development and providing developers with prebuilt engines for applications.

The Cosmos SDK serves as a development framework that simplifies the creation of blockchain applications, allowing developers to craft tailored blockchain solutions with enhanced ease and flexibility. Notable for its modularity and security focus, the Cosmos SDK framework is employed by networks like Cronos, a Layer-1 blockchain.

The Inter-Blockchain Communication Protocol (IBC) is a protocol enabling communication among distinct blockchains within the Cosmos ecosystem. It fosters interoperability and trustless connections between blockchains.

Cosmos SDK applications and their roles in the cryptocurrency space

Industry

The Cosmos SDK serves as a tool for constructing blockchain applications. The process of launching applications within Cosmos entails three main steps:

1. Custom Blockchain Creation: Developers have the flexibility to tailor their own models or utilize pre-existing ones to construct a blockchain according to their requirements.
2. Custom Blockchain Deployment: Cosmos SDK provides versatility in launching tailored blockchains to accommodate various use cases, including applications in gaming, healthcare, prediction markets, cross-border payments, and real estate.
3. Integration with the Cosmos Network: Following the deployment of a blockchain specific to the application, Cosmos SDK facilitates user base expansion and liquidity enhancement by integrating with the Cosmos Network via the Inter-Blockchain Communication (IBC) protocol. This integration opens avenues to connect with over 100 IBC-enabled chains.

What is the utilization of the Cosmos (ATOM) SDK framework by Cronos?

1. Cronos, constructed on the Cosmos SDK framework, is an Ethereum Virtual Machine (EVM) chain that combines advantages from both Ethereum and Cosmos ecosystems.
2. Through Tendermint integration, Cosmos SDK ensures rapid finality, enabling transaction confirmations within seconds at reduced costs compared to Ethereum.
3. Users benefit from effortless digital asset and token transfers within the Cosmos ecosystem and between various Layer-1 and Layer-2 EVM chains via the IBC Protocol.

Cosmos (ATOM) ecosystem

The Cosmos ecosystem has witnessed consistent growth over time, extending beyond the Cosmos Hub to encompass various blockchain projects, such as:

• Cronos: A blockchain compatible with the Ethereum Virtual Machine (EVM), developed on the Cosmos SDK, facilitating swift migration of applications and smart contracts from Ethereum and other EVM-compatible chains.
• Celestia: Distinguished as the inaugural modular data availability blockchain network globally.
  Injective: A Layer-1 blockchain network intricately designed to bolster the evolution of decentralized finance (DeFi) applications.
• THORChain: A decentralized cross-chain liquidity protocol empowering users to exchange assets across diverse blockchain networks.
• Nomic: An additional Layer-1 blockchain featuring a decentralized, non-custodial Bitcoin bridge to Cosmos, allowing users to convert their native BTC into nBTC (an IBC-compatible token).

For a comprehensive list of applications and projects within the Cosmos ecosystem, users can refer to the Cosmos website.

What is the Cosmos (ATOM) token?

The Cosmos Hub holds the distinction of being the inaugural blockchain launched on the Cosmos Network. Its native token is ATOM.

Attributes and functionality of the Cosmos (ATOM) token

• ATOM serves as payment for transaction fees on the Cosmos Network.
• Staking ATOM enhances network security, with stakers earning rewards proportional to their staked amount.
• ATOM stakers and validators receive a portion of transaction fees from chains utilizing the Interchain Security feature provided by the Cosmos Hub.
• ATOM holders have voting rights on proposals from the Cosmos Hub.

Cosmos (ATOM) token economics

• Initial Coin Offering (ICO): In 2017, the Interchain Foundation (ICF) secured US$16.8 million for the Cosmos Network's development.
• Initial Total ATOM Supply: 236,198,958 tokens.
• Current ATOM Supply: 292,586,163 tokens.
• Inflation Rate: Currently at 14.22%.

Distribution Breakdown: The ATOM token distribution is divided as follows:

• Public Contributors: 67.9%
• All in Bits Inc.: 10%
• Interchain Foundation (ICF): 10%
• Strategic and Early Adopters: 7.1%
• Seed Contributors: 5%

Cosmos (ATOM) price

ATOM has demonstrated significant growth potential over time. Previously, its trading price fluctuated between the range of US$1 to US$9. Notably, in March 2020, the token hit a record low of US$1.66. However, in 2021, it experienced a remarkable surge, reaching an all-time high (ATH) of approximately US$44.38 in September 2021.

In summary, Cosmos (ATOM) represents a forward-thinking blockchain ecosystem striving to establish an 'Internet of Blockchains' by facilitating secure communication and interoperability among various blockchain platforms. Through fundamental elements like Tendermint and Cosmos SDK, it streamlines networking, consensus, and application development processes, facilitating the creation of tailored blockchain solutions.

The ATOM token, as the native cryptocurrency of the Cosmos Hub, plays a pivotal role in transaction fees, staking for network security, and governance involvement. This pioneering initiative is at the forefront of advancing blockchain interconnectivity and decentralization.