Author: Curious J, Crypto KOL
Translation: Felix, LianGuaiNews
The best investments are the ones that no one talks about. The Cosmos ecosystem has been stagnant for too long and is currently the most promising area in the crypto industry with the potential for hundredfold returns. Recent developments indicate that strong and sustainable fundamentals should benefit from the upcoming bull market. Here are 10 reasons why the Cosmos ecosystem is worth paying attention to.
Perpetual Contracts on the Rise
In just this year alone, the trading volume of derivatives has exceeded $400 billion, with 44% coming from dYdX. The upcoming launch of dYdX v4 helps illustrate the enormous power that the application chain theory possesses. (Note: The application chain theory is that as each protocol built on the blockchain wants to scale, they will seek to transition into sovereign chains, giving them full control over their protocols without relying on the existing L1.)
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- This time, Chainlink’s pricing scheme has achieved great success.
Related reading: Analysis of dYdX Token Economy Model and Potential Solutions
Native Liquidity
In DeFi, native liquidity is king. Native liquidity not only creates seamless on-chain activities but also eliminates bridging risks. Cosmos does not have native stablecoins, but this situation will change.
Recently, Tether’s stablecoin USDT has been integrated into the Kava blockchain, consolidating Tether’s dominant position in the field and introducing new native liquidity to Cosmos.
In addition, there are native chains aiming to introduce new and more native liquidity to Cosmos. Chains like Agoric focus on expanding their algorithmic stablecoin IST and Noble, issuing native USDC. Liquidity on Cosmos is only a matter of time, not if.
Native Liquidity Staking Module
Through this module, users can automatically unlock 25% of staked ATOM or unlock Cosmos as liquidity staked derivatives. This innovative feature significantly improves the liquidity of Cosmos assets, especially considering that most assets are currently staked. (Note: In early May this year, the Cosmos Hub passed a new proposal on liquidity staking, replacing the existing Cosmos Hub staking, allocation, and slashing modules with the liquidity staking module. ATOM holders are no longer restricted by the previous 21-day lock-up period and can freely stake their ATOM, enjoying staking rewards while using ATOM for other use cases.)
Security
One of the main advantages of application chains is the ability to protect and control their own block space. By leveraging various economic zones, Cosmos can provide security to new or established chains in a cost-effective manner.
Currently, there are several key security measures being implemented and developed:
- Babylon Chain brings security to POS chains similar to the Bitcoin chain (related reading: Understanding the middleware Babylon Chain: Borrowing “Bitcoin Security” for other POS chains)
- Cosmos and interchain security
- Osmosis’s mesh security
These solutions are designed to make Cosmos scalable, secure, and cost-effective.
Upgrade of Token Economics
There have been significant changes in Cosmos tokens. We have now bid farewell to the era of extremely high annual returns and are now focusing on real income narratives. Osmosis recently upgraded the OSMO token to fully adapt to this market change.
ATOM is the largest market capitalization token in Cosmos and has been actively committed to returning value to holders and stakeholders. Their key areas of focus include:
- Reducing inflation
- Increasing the value of ICS
- Liquidity owned by the protocol
- Expanding Subdaos
- Expanding the community pool
Enhanced Interoperability
IBC is expanding its influence beyond the Cosmos ecosystem, such as expanding to ecosystems like NEAR Protocol, Polkadot, and Avalanche. This development benefits not only users but also builders because it makes communication and development easier.
We also see that Axelar Network’s universal messaging has gained attention on various EVM chains. All of this is aimed at promoting greater liquidity in the entire ecosystem.
Enhanced Composability
Excellent builders are constantly improving the communication experience for users and builders. So far, the following have been launched:
- squid: The ultimate multi-chain trading tool
- Skip Protocol: Utilizing MEV
- TFM: DEX aggregator on Cosmos
Interchain BD
In many ecosystems, business development work is decentralized, and the methods to expand market share vary. Cosmos has taken a different approach. Through initiatives such as Osmosis Grants and ATOM Accelerator, they collaborate to promote the development of Cosmos.
New Chain Launches
There is continued interest in application chains and the benefits they bring to users and builders in terms of greater composability and customization. Upcoming launches include:
- Bera Chain (related reading: A quick look at the value capture chain Archway, which will soon be available for public sale on Coinlist)
- Archway (just launched)
- Duality Labs launches as a consumer chain
Modularity
For those who attended the Modular Summit held in Paris last week, modularity is thriving. With Celestia about to be released on Cosmos, this trend continues. This release will facilitate the seamless deployment of numerous chains.
If you think the Cosmos ecosystem is dead, then you clearly haven’t been paying attention to the latest developments in the Cosmos ecosystem. Liquidity is on its way, applications are being built for long-term goals, and users will follow suit. Cosmos provides functionalities that dApps on Ethereum cannot offer.
Related reading: LianGuaintera Capital Partner: Core Advantages and Current Status of Cosmos Ecosystem
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