Author: Harvey, CHANHEE KIM Source: xangle.io Translation: Shan Oppa, Golden Finance< /p>
In 2023, the Cosmos ecosystem is developing rapidly, and we have witnessed the blockchain The evolution of technology. Cosmos has attracted many developers and projects with its unique interoperability and modular architecture. It can be said that these features have opened up new horizons for blockchain technology.
In this report, we explore the major changes, major technology updates, and prominent new projects taking place within the Cosmos ecosystem in 2023. We also take a closer look at the ecosystem’s technological advancements and market changes, and how Cosmos is redefining the existing blockchain paradigm.
0.47 version update
Upgrade To CometBFT: The renamed CometBFT is a fork of the previously used consensus engine called Tendermint and is now officially available in the Cosmos SDK. There are no major implementation changes in version 0.47, this update is intended to help chains previously using Tendermint migrate to using CometBFT.
Migrate to cosmos/gogoproto: The Cosmos SDK uses Protobuf, developed by Google, as a way to deliver messages contained in transactions. However, the existing gogo/protobuf is no longer maintained, so it has been forked and started to be managed in the Cosmos ecosystem under the name cosmos/gogoproto.
0.50 version update
ABCI 2.0: ABCI is the interface for data exchange between the consensus engine and the application layer responsible for different functions on the chain. The consensus engine CometBFT (Tendermint) is responsible for block generation and transaction broadcasting, which is the process of determining the order of transactions. Due to the design of ABCI, there are limitations in processing transactions in the required order in the mempool. To overcome this problem, ABCI 2.0 added a new process called "PrepareProposal" to determine the order of transactions in the mempool and pass them to CometBFT.
Optimistic Execution: In the previous Cosmos SDK, all validators needed to reach consensus before they could execute transactions and submit the results to the chain. This slows down the execution of transactions, and to overcome this problem, a feature called "Optimistic Execution" was introduced. This feature allows transactions to be executed and committed without the consent of all validators, resulting in higher transaction throughput.
SDK modules: The Cosmos SDK contains various modules for application development. Previously, the update of each module followed the updated version of the SDK, so it was difficult to track the update history of each module. In version 0.50, version control for each module has been changed to be independent, making it easier to track history. In addition, the data storage model Store and IAVL have been decoupled so that they can be updated independently.
Since there are multiple chains in the Cosmos ecosystem, each chain has an independent address even if the mnemonic is the same. Currently, a wallet service called Keplr is used to integrate and manage them, but a new wallet application is required to take advantage of each new chain that appears on Web3, which creates huge user fatigue and barriers to entry.
The Cosmos ecosystem recognizes this problem and is working on projects to solve it. Against this backdrop, Metamask has launched full support for Snap, allowing custom features to be added on Metamask. Thanks to Metamask, it is now possible to create transactions on Cosmos-based chains, and Leap Wallet is one such service.
Leap wallet (https://cosmos.leapwallet.io/portfolio/overview)
Change In other words, the technical foundation has been laid, making it easier for users who are familiar with EVM-based chains to be attracted to the Cosmos ecosystem.
Unfortunately, the Cosmos SDK does not A virtual machine that supports smart contracts. As a result, several projects have emerged to develop virtual machines that are proven and used in other blockchain protocols or standalone virtual machines that are unique to the Cosmos ecosystem. There have been attempts to integrate various virtual machines (such as EVM, WasmVM, SolanaVM, MoveVM, etc.) with the Cosmos SDK, and support for some virtual machines is highly appreciated. Support for more commonly used virtual machines will make it easier for dApp developers to join the Cosmos ecosystem.
Here are some of the most interesting emerging from the Cosmos ecosystem in 2023 , the most eye-catching project.
The hottest project in the Cosmos ecosystem in 2023 Definitely Celestia. Celestia is a representative modular blockchain project that roughly divides the functions of the blockchain into four parts:
Execution: the ability to process transactions and change chain state.
Settlement: Verify transactions processed by the computing layer.
Data availability: Store information from transactions and blocks and ensure it is always available.
Consensus: The ability to determine the validity of a transaction or the order in which transactions are included in a block.
Among these features, Celestia focuses on data availability. This, combined with the term “L2,” sparked the Rollup craze in the Cosmos ecosystem. For this purpose, a framework called "Rollkit" was created and supported, which supports ABCI between Celestia and the Cosmos SDK.
Celestia Rollkit ( https://docs.celestia.org/developers/rollkit )
It replaces Cosmos’ consensus engine Tendermint (or More specifically, CometBFT) and allows Celestia and the Cosmos SDK to communicate directly. This allows for sovereign aggregation by aggregating transactions in a block and leveraging Celestia’s consensus engine and data availability.
Skip Protocol is a vision for "sovereignty" Blockchain Sovereign Transaction Infrastructure” project. It helps improve the user experience of sovereign blockchains and makes transaction processing order transparent to prevent malicious MEV and qualitatively improve the network.
Among user experience improvements, the project aims to address issues with the Inter-Blockchain Communication (IBC) protocol. IBC is a protocol for exchanging assets between different chains within Cosmos. In order to transfer assets via IBC, a communication "channel" must be created, each of which needs a unique ID for each chain it connects to. The image below shows the channel connecting Axelar and Terra2, representing an example of sending ETH from Axelar to Terra2.
Skip API ( https://api-docs.skip.money/docs/ibc-routing-algorithm )
Assets transferred to another chain via IBC will have new denominations, following the following naming algorithm:
What needs to be noted here is that even if The same asset is sent to the same chain, and if the value of the channel, or path, is different, its denomination will be completely different. In other words, even if the assets in ETH are the same, they will be recognized as different assets in Terra2. This is especially true when assets are delivered via complex paths, making it difficult to know which assets were delivered.
In order to solve these problems, Skip proposes an optimal routing algorithm to deliver assets within the Cosmos ecosystem and provide a better user experience by determining the denomination of assets .
Skip protocol also provides various APIs that can be used to develop blockchains based on the Cosmos SDK, such as multi-chain transaction tracking and Block SDK. Skip also proposed to the community that Skip’s functionality be included in the Cosmos SDK to contribute to the development of the ecosystem.
Sei
Sei is positioned as a chain specializing in transactions, and its goal is to become a fast Layer1 instead of Rollup, which is also a major trend in blockchain development in 2023. Sei focuses on improving the performance of the chain by leveraging various technologies.
Injective
Injective is committed to building a financial A blockchain ecosystem of applications. Injective has established partnerships with Figment and Binance, and supports various dapps such as Helix and Hydro to join the Injective ecosystem.
dYdX
dYdX is considered the most successful DEX , and has been successfully migrated to Layer1 using the Cosmos SDK.
dYdX strengthens governance through its own token.
Stride
Stride is a platform similar to Ethereum Lido’s Liquidity Staking Protocol. In the Cosmos ecosystem, liquidity staking is inherently difficult because assets are scattered across multiple chains. Stride aims to achieve multi-chain liquidity staking in the Cosmos ecosystem by leveraging ICA (Inter-Chain Account), ICQ (Inter-Chain Query) and ICS (Inter-Chain Security).
Coreum
Coreum is a Layer1 area for enterprises Blockchain, supporting Wasm-based smart contracts, RWA tokenization, NeoBanking applications, etc.
Meanwhile, the number of smart contracts deployed in the second and third quarters of last year was 2,226 and 1,777 respectively, up from 1,701 in the fourth quarter. While development activity did slow down compared to the previous two quarters, given the decline that resulted at the end of Q4, we believe activity levels are continuing.
The most eye-catching event in the Cosmos network is , development activity in Q2 and Q3 translated into growth across the ecosystem in Q4. As shown in the table, TVL in the Cosmos ecosystem continued to decline in Q3 but rose significantly in Q4.
The explosive growth in Cosmos ecosystem TVL in Q4 can be attributed to a combination of two factors. The first was the influx of liquidity across Layer 1 themes in mid-October. During 2H, a large amount of liquidity flowed into the Layer 1 ecosystem, and Solana, Cosmos and Avalanche boosted the overall TVL with explosive performance.
In addition, the developer-friendly infrastructure environment, including the Cosmos SDK, and the vast blockchain connection network built on the IBC ecosystem also Brings practical utility to users. A closer look at the TVL trend reveals that this is not just a temporary uptick, but an ongoing trend. Satisfaction with the protocol’s maturity will likely drive liquidity at Layer 1, boosting Cosmos’ growth and reducing user churn.
Compared to the lowest performance in the third quarter (1,470,050), the number of active wallets in the fourth quarter also increased by nearly 55% to 2,280,335, reflecting a vibrant ecosystem . This is driven by the interoperability of the Cosmos IBC ecosystem, which has led to an increase in on-chain activity, such as user participation on each protocol and usage of tokens through DeFi.
In addition, judging from the TVL trends of key protocols in the IBC ecosystem, the continued hype of Cosmos SDK-based protocols in the second half of the year has also played a role in revitalizing the ecosystem. In fact, we can see a slight increase in the TVL of the protocol. Unlike projects like THORChain, which started growing at the beginning of Q4, the Injective protocol has seen explosive growth in TVL from the end of Q4 until now. We can interpret this as the sequential flow of liquidity and trading activity within the Cosmos IBC ecosystem.
Cosmos currently has a total of 180 active validators. The top 9 validators hold 40.89% of the staked $ATOM supply. There are currently 2.44B $ATOM staked on Cosmos, accounting for approximately 65% of the total supply.
2023 is a milestone for the Cosmos ecosystem. Over the years, we have witnessed the development and major changes of multiple projects. We believe these changes demonstrate that Cosmos is not just one area of blockchain technology, but is driving innovation across the entire blockchain ecosystem.
Celestia, Skip Protocol, and other notable projects demonstrate the diversity and flexibility of the Cosmos ecosystem and how it continues to evolve. These projects pioneer new use cases for blockchain technology and help create more efficient, user-friendly blockchain environments.
The growth and development of the Cosmos ecosystem heightens our excitement for the future of blockchain technology. They open the door to new opportunities for developers, users, and investors, and pave the way for continued innovation for years to come. We expect the Cosmos ecosystem to continue this positive trend in the coming years, and that new technical challenges and opportunities will continue to emerge along the way.
The Cosmos ecosystem will always be one Epoch ahead of the Ethereum community, with Celesita, the modularization cycle, in front and Initia, the chain abstraction cycle, behind.
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JinseFinanceI'm very much looking forward to seeing them move in the direction they envision with their second-tier expansion.
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