The demand for staking has increased dramatically nowadays. As per a recent report of JP Morgan, the staking industry size will be worth USD 40b in 2025. The launch of proof-of-stake Ethereum 2.0 is supposed to be a game-changer for the sector. There are endless accusations against proof-of-work cryptocurrencies like Bitcoin for environmental destruction and proof-of-stake cryptocurrencies have attracted amazing investor attention recently. Cosmos is a project which launched staking before many other top platforms and ATOM, the native cryptocurrency of the blockchain, has gained almost 50% in the last 7 days and 105% in the last 30 days against USD. The stellar rise of ATOM/USD is also fuelled by the growth of DeFi or decentralized finance. Let’s have a look at the state of Cosmos DeFi.
Osmosis is an advanced AMM protocol built using the Cosmos SDK and the AMM based DEX was launched in June 2021. It came up with a novel concept of customizable AMM pools rather than going for a ‘one-size-fits-all homogeneous approach’. Osmosis was designed as a cross-chain native platform. Inter-Blockchain Communication Protocol or IBC enables messages to travel between blockchains that have implemented the standard and Cosmos supports it. Osmosis had IBC built-in from day 1 and thus it helped the users to connect to the entire ecosystem of Cosmos. Osmosis has a plan to integrate non-IBC enabled chains like Ethereum and other smart contract chains down the line. A big portion of OSMO, the native token of Osmosis, was airdropped to the ATOM stakers and it created a big hype. The UI of Osmosis received rave reviews from the community.
Image Source – Osmosis Blog
The Gravity DEX Protocol became live on 13th July 2021. The official blog post said, “Gravity DEX marks the biggest stride forward for Cosmos to date. It also marks a big step in realizing our vision for the future of crypto: multiple interconnected blockchains.” Cosmos refers to itself as the ‘Internet of Blockchains’ and it is focused on blockchain interoperability. Cosmos ecosystem is quite big now and it includes Cosmos Hub, Terra, Crypto.com, Akash Network and many other projects. Gravity DEX launch was important as it enabled permissionless swaps between any blockchain of the ecosystem. Gravity DEX didn’t have a graphical front end initially and it was accessible only through the command line.Emeris has recently launched the first beta front end of the DEX. The DEX allows to trade between 5 different chains now and it will also offer attractive yield farming opportunities in the future. The average trading fee on Gravity DEX is USD 0.08 and so it makes trading accessible to everyone. The protocol also uses batch execution to remove the possibility of front-running or price manipulation and this is a significant improvement if we consider Uniswap as a benchmark.
“Emeris has a simple goal: providing access to a wide range of decentralized applications scattered around various blockchain ecosystems in a single, easy-to-use interface. Starting as a non-custodial, cross-chain DeFi dashboard, Emeris will soon extend its line of products with other entries like a mobile app and a browser extension wallet.” – Emeris blog post
It is good to connect Cosmos ecosystem blockchains but Cosmos needs non-native assets to flourish DeFi. Gravity Bridge is being made now and it will connect Cosmos to Ethereum. The bridge is going to be functional in Q3 2021. Non-native asset flow to Cosmos will be brought by the bridge and it will enrich the Gravity DEX trade volume. The Ethereum community will be able to buy Cosmos tokens on Uniswap like DEXs due to the easy and secured decentralized cross-chain bridge.
The developments with Cosmos are really exciting. To take part in Cosmos DeFi, the ideal wallet is Kepler wallet. It has a cool Chrome browser extension and works well for maximum Cosmos ecosystem projects. DeFi can never attain mass adoption if the blockchain interoperability problem is not fixed properly. Cosmos is trying to do that without compromising with scalability and the approach is really novel. Although some other promising projects are working with the same idea, Cosmos seems to be ready with deliverable solutions. It will be interesting to see whether ATOM reaches a new ATH or not in the coming days. Keep a close watch as the daily closing candles are indicating that the bulls have taken the charge.
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VERY NICE WRITEUP!!!
Cosmos came into my life about a week before you started writing here. It was a nice coincidence. Thank you so much for introducing Cosmos to us! I hope we see more.