Here we are in the first part of a series of analyzes around some public blockchains (including the biggest and new emerging blockchains). In today’s chapter I will present the main elements of Cosmos and Solana for a general understanding of these ecosystems.
COSMOS
1 / A little history
The Cosmos project started to germinate in the head of one of the two founders, Jae Kwon during 2014 but it was only in 2015 when he met Ethan Buchman (the other founder) that things started to take shape. They team up and out about a year later, the white paper of Tendermint (one of the essential aspects of the ecosystem Cosmos that we will see below). Also during the year 2016, they publish the white paper of the Cosmos network. Finally, the ICO was launched in 2017 and they managed to raise $ 17.3 million for their development on April 5, 2017, when the fundraising ended.
2 / How Cosmos works
Cosmos sees itself as “the internet of blockchains” with their quite unique proposition in the market. But what does this mean?
First of all, you have to understand that blockchains are roughly divided into three conceptual layers.
- Applications : Responsible for processing transactions, providing the status of transactions in the broad sense.
- The network : Responsible for the propagation of transactions and messages related to consensus
- Consensus : Allows nodes to agree on the current state of the system
Cosmos offers an architecture that would allow for superior interoperability and scalability through Tendermint, SDK and IBC. These are the major components of Cosmos and this is what they are used for:
Tendermint:
Tendermint BFT (to be very precise), referring to the Byzantine Fault Tolerant consensus algorithm , is a solution that contains the network and consensus layers of a blockchain in a single generic engine. This allows developers to concentrate on the application part without worrying about the protocol part, which is always a very complex and time-consuming task. Therefore, this module saves developers hundreds of hours.
Cosmos SDK (Software Development Kit) :
The Cosmos SDK is a toolkit that facilitates the creation of applications in a secure blockchain. The advantage of the SDK is to provide modules that are already ready to use to prevent developers from having to code their entire development from scratch. (More Info: The network that facilitates micro-payments in Bitcoin grows 200% in a year)
IBC (Inter-Blockchain Communication) :
The IBC allows communication, data transfers and cryptocurrencies ( tokens in the broad sense) between the different blockchains of the ecosystem. It would even allow communication between public and private blockchains. This means that this module allows communication between different blockchains with different applications and validation systems. Currently, no other blockchain would allow this level of interoperability according to Cosmos.
To answer the initial question, why Cosmos wants to be the internet of blockchains, here is the architecture of Cosmos. It works like a “starfish”. This means that Cosmos is the center of the ecosystem, serving as a register for all. Around Cosmos there are “zones” which can be created by anyone and these zones (in the Cosmos lexical field) simply correspond to blockchains. Thanks to the main components explained previously, Cosmos allows communication between all parts of the ecosystem regardless of the languages used and the validation consensus of each blockchain. In addition, what must absolutely be noted is that each zone or blockchain is sovereign despite being built in the Cosmos ecosystem.
3 / Validation protocols – consensus – governance – interest
The validation consensus is based on the PoS (Proof of Stake) or proof of stake in the language of Molière. For validation to take place, it must be done by two-thirds of the validators. In the case of Cosmos, the top 100 holders of ATOM (the network’s native cryptocurrency) become validators (after making the request). To do this, you have to put your ATOMs in staking . With this mode of operation, Cosmos guarantees security provided that less than a third of the validators are dishonest. In the future, the validators will go to 125 then 300 but no date is communicated to date. (Possible Causes of Global crisis 2021: Expert Analysis)
You are probably telling yourself that as a “small” investor you will never be able to opt for a validator position, and you are partially right because you have to set up a node so you need some technical knowledge in addition to a large amount of money. ATOM to staker. However, you can still participate in the validations and receive the rewards. This requires delegating our ATOMs to trusted nodes (research must be done on this subject, this is very important). The return is between 7 and 20% per year.
Regarding governance, it is done by the simple possession of ATOM, however, the only ones who can vote (directly) are the validators of the network. This means that to participate in updates, developments, etc., you have to delegate your ATOMs to a validator with whom you share the same points of view.
Finally, the interest in the ecosystem is represented by the 255 applications and services developed at Cosmos, including Kava and Loop Finance among the best known.
SOLANA
1 / A little history
The Solana project began to emerge at the end of 2017 during the previous bull run but it was only in 2018 that the official white paper was published. The main founder, Anatoly Yakovenko, and creator of the Proof of History concept (which we will see later), is teaming up with one of his former colleagues at the giant Qualcomm, Greg Fitzgerald to launch this company. After a round of financing which raises a little more than 20 million dollars and years of development and tests, the mainnet beta is launched in 2020. Since the launch, the Solana project and its native token, the SOL, have experienced tremendous success which continue to expand to this day. This is possible thanks to the enormous scalability of the Solana blockchain and in particular thanks to the invention of the Proof of History.
2 / How Solana works
The Solana blockchain is also special thanks to a technological overlay called Proof of History (note: this is not a consensus mechanism), and it is this component that allows this blockchain to perform.
Understanding this concept can be complicated, personally it took me several readings, videos, and re-readings… So I will try to explain this concept in the simplest and most understandable way possible. I apologize in advance if it is not clear to everyone, the assimilation will differ from one person to another according to their basic knowledge. (Related: Ethereum becomes more popular than Bitcoin: Analyst says)
So how does it work ?
The invention of Anatoly Yakovenko consists of a technique which allows to maintain the same notion of temporality (a common clock roughly) between computers which do not trust each other. He knew that by setting up a common trusted clock, network synchronization would become very easy. Therefore, if the synchronization is simple, the result in terms of speed can be increased tenfold.
To make the comparison, when you make a transaction in another blockchain, you must wait for the block in which the transaction will be registered to be validated. Example: When you make a Bitcoin transaction, it takes an average of 10 minutes, the time for the transaction to be registered in a block and for it to be duly validated.
With the Proof of History, the transactions (and I mean each of them individually), will carry a “temporal identity” thanks to the common timestamp of the network. This “temporal identity” will then allow the validators of the network to verify the conformity of the data by making a simple check against the common clock. In this way, we will be able to differentiate the true from the false by checking the chronology of transfers or events because each transaction represents a unique “period” in the blockchain.
This invention is a new way of thinking about the update / synchronization of the network and it already allows an unequaled scalability at the present time (50,000 TPS according to different sources) in the blockchain environment because like you Get it (I hope!), transactions will no longer need to wait for blocks to be created each time. They answered the following question with great success: how do you ensure that transactions are valid without having to systematically wait for the next block?
In conclusion of this part, this technology can significantly improve speed while reducing transaction costs. (Also check:El Salvador: Chivo Wallet has more users than any domestic bank)
3 / Validation protocols – consensus – governance – interest
The validation protocol is also a Proof of Stake (PoS) . The PoS will validate the block sequences by taking the information already stamped by the PoH. Today, the network consists of more than 1000 validators. You can see the evolution live here.
To become a validator there is no minimum SOL to place in staking , however, there are a whole bunch of minimum technical requirements to be able to mount your node and become a validator of the network. If you are interested, you can see the requirements in the Solana documentation to become a validator .
If you don’t want to become a validator yourself, you can always stack SOL with validators to be able to benefit from the rewards of the network. Currently the APY (Annual Percentage Yield) is 7.35%.
Another important aspect that must be taken into consideration in terms of decentralization at Solana is Halt Power . Basically, Halt Power is the minimum number of validators, which together account for over 33% of the staking . This means that, theoretically, if these validators agree to attack the network, they could cause problems and make it fail. That number is 19 to date. Finally, the interest that this blockchain carries is growing. We currently count according to figures from the Solana website338 projects developed or under development including Serum and Raydium, to name just these two. In addition, Solana enjoys the support of the founder of the FTX platform, Sam Bankman-Fried, who is a great supporter.
Here is the end of this first installment of the blockchain analysis series that has just started. As I always remember, if you want to invest, trade, staker or anything else in the crypto sphere, always learn more, never place all your eggs in one basket and may the force be with you in this crazy world.
