ATOM

What Is Cosmos (ATOM) ?

Cosmos is a decentralized network of independent, scalable, and interoperable blockchains, often referred to as the "Internet of Blockchains." It is designed to enable the transfer of value and data between different systems, creating the foundation for a new token economy. Cosmos makes use of Tendermint BFT and the modularity of the Cosmos SDK to make blockchains powerful and easy to develop.

The network is an ever-expanding ecosystem of interoperable and sovereign blockchain apps and services, built for a decentralized future. The native cryptocurrency of the Cosmos Network is ATOM, which powers and secures the ecosystem of blockchains within the network. ATOM tokens are earned through a hybrid proof-of-stake algorithm and play a key role in maintaining interoperability between the various blockchains in the Cosmos Network, as well as in the network's governance.

History of Cosmos (ATOM)

History

1. Whitepaper and Fundraising (2016-2017): The concept of Cosmos was introduced in a whitepaper titled "The Internet of Blockchains" published by Tendermint Inc. in 2016. Tendermint is the core technology behind Cosmos. In 2017, the project raised funds through an Initial Coin Offering (ICO).
2. Mainnet Launch (2019): After a period of development and testing, the Cosmos Hub, the main blockchain in the Cosmos ecosystem, officially launched its mainnet on March 13, 2019. The Cosmos Hub serves as a hub for various interconnected blockchains within the Cosmos network.
3. Inter-Blockchain Communication (IBC) (2020): One of the significant features of Cosmos is its Inter-Blockchain Communication (IBC) protocol, enabling communication and transfer of assets between different blockchains within the Cosmos network. The launch of IBC was a crucial milestone in achieving the project's vision of interoperability.

How Does Cosmos (ATOM) Work?

The Cosmos blockchain works on the principle of creating an interconnected network of blockchains, allowing them to communicate and transfer assets seamlessly. The Cosmos project aims to address issues related to scalability, usability, and interoperability in the blockchain space. The key components and mechanisms that enable the functioning of Cosmos include:

1. Tendermint Consensus Algorithm:Cosmos utilizes the Tendermint consensus algorithm as its underlying consensus mechanism. Tendermint is a Byzantine Fault Tolerant (BFT) consensus algorithm designed to provide security and finality in a decentralized network.
2. Hub-and-Zone Architecture:The Cosmos network operates on a hub-and-zone architecture. The Cosmos Hub is the main blockchain, and it acts as a central point of communication for various independent blockchains called zones.
3. Inter-Blockchain Communication (IBC) Protocol:IBC is a protocol designed to facilitate communication and the transfer of assets between different blockchains within the Cosmos network. It allows tokens and data to move between zones and the Cosmos Hub in a secure and trustless manner.
4. Zones:Zones are independent blockchains that can be connected to the Cosmos Hub. Each zone can have its own consensus mechanism and token. The interoperability is achieved through the IBC protocol, enabling assets and data to flow between the Cosmos Hub and its connected zones.
5. IBC Relayers:IBC relies on entities called relayers to facilitate communication between blockchains. Relayers are responsible for submitting transactions and proofs between the sender and receiver blockchains, ensuring the integrity and security of the transferred assets.

The overall goal of Cosmos is to create an internet of blockchains, allowing different blockchains to interoperate and share information without sacrificing security. This architecture aims to address scalability issues and enable a more interconnected and versatile blockchain ecosystem. The design of Cosmos seeks to provide a scalable and sustainable solution for the broader blockchain industry.

Tokenomics

What Is ATOM Used For ？

ATOM is the native cryptocurrency of the Cosmos Hub, the main blockchain within the Cosmos network. It serves various functions within the Cosmos ecosystem, providing utility and value to participants. Here are some of the primary use cases for ATOM:

1. Staking:ATOM is used for staking within the Cosmos network. Validators, who secure the network and propose new blocks, are required to stake a certain amount of ATOM as collateral. In return, they can earn staking rewards. Users can also delegate their ATOM to validators, contributing to the security and stability of the network while earning a share of the staking rewards.
2. Governance:ATOM holders have the right to participate in the governance of the Cosmos Hub. This includes proposing and voting on network upgrades, parameter changes, and policy decisions. The more ATOM a user holds, the more influence they have in the governance process.
3. Transaction Fees:ATOM can be used to pay transaction fees within the Cosmos Hub. When users transfer assets or perform other operations on the network, they may be required to pay fees, and these fees can be denominated in ATOM.

Token Distribution

Genesis Distribution

• Cosmos Fundraiser: 75%
• Lead Donors: 5%
• Cosmos Network Foundation: 10%
• ALL IN BITS, Inc: 10%

Further Distribution

From genesis onward, 1/3 of the total amount of atoms will be rewarded to bonded validators and delegators every year. In 2022, Cosmos published 2.0 Whitepaper. The proposed new tokenomics for ATOM involves a two-phase approach, as outlined in the Cosmos Hub 2.0 Whitepaper. In the transitory phase, there is a significant increase in token issuance over three years, starting at 10 million ATOM per month and decreasing gradually. This phase aims to bootstrap the Cosmos Hub treasury for network support and expansion. The goal is to reduce security subsidies, transitioning to revenue from Interchain Security. However, concerns have arisen as 2/3 of the inflation goes to the treasury, with only 1/3 to stakers. During the steady phase, all ATOM issuances go to the treasury, raising worries about dilution for existing ATOM holders. Debates surround the issuance, considering the existing treasury funds and potential market impact.Furthermore, the Cosmos Hub's transaction fees currently benefit the Community Pool, delegators, and validators. In 2023, the implementation of Interchain Security is expected to introduce additional revenue from consumer chains to the distribution module, replacing the existing security subsidy. Discussions and concerns within the community persist as stakeholders evaluate the implications of the proposed changes on ATOM distribution and market dynamics.

Why Is Cosmos (ATOM) Valuable?

Cosmos (ATOM) is considered valuable for several reasons, reflecting its unique features and the underlying technology. Here are some key factors that contribute to the value of Cosmos:

1. Interoperability: One of the primary features of Cosmos is its focus on interoperability. It enables different blockchains to communicate and transfer assets with each other through its Inter-Blockchain Communication (IBC) protocol. This interoperability allows for greater connectivity between various blockchain networks, fostering collaboration and the seamless transfer of assets.
2. Scalability: Cosmos aims to address the scalability challenges faced by many blockchain networks. The Cosmos Hub uses a modular architecture that allows for the creation of independent blockchains (zones) that can scale horizontally. Each zone can have its own consensus mechanism, optimizing performance and scalability.
3. Security: Cosmos employs the Tendermint consensus algorithm, which is known for its robust security features. Tendermint is a Byzantine Fault Tolerant (BFT) consensus algorithm, providing a high level of security and resistance to malicious attacks.
4. Self-amendment: Cosmos has a self-amendment mechanism that allows the network to upgrade without hard forks. This feature enables the Cosmos ecosystem to adapt to changing needs and incorporate improvements without causing disruptions to the network.
5. Ecosystem Development: The Cosmos ecosystem is home to various projects and applications that leverage its technology. The diversity of projects within the Cosmos ecosystem contributes to its overall value, as it demonstrates the versatility and utility of the platform.