In the past five years since Ethereum was launched, there have been numerous competitors that came and went.
Although the Ethereum network is working at full capacity for some time now with fees skyrocketing, and ETH 2.0 still not here, the second largest network is still leading the market as the smart contract platform.
However, things might be about to change.
Recently, Cardano finally released its mainnet on the occasion of which its creator Charles Hoskinson who also the co-founder of Ethereum, made some bold predictions, but that is to be seen if they will become a reality.
However, there’s one project that is being used to build, and that is Cosmos. The native token of the platform ATOM is the 20th largest cryptocurrency with a market cap of $1 billion, which gained 40% this past week.
Last year, the first blockchain, the Cosmos Hub, was launched, which aimed to create the “internet of Blockchains” and enable developers to build both permissioned and permissionless blockchains.
Two years before that, Swiss non-profit the Interchain Foundation contracted Jae Kwon founded Tendermint to develop Cosmos software. Kwon also co-authored Cosmos whitepaper, and his for-profit company raised $9 million through Series A funding round in March 2019 for the development of the project.
Now, this platform is hosting projects from every sector, ranging from stablecoins, credit markets to DEXs, oracles, and synthetic assets. Ryan Watkins of Messari noted,
“As Ethereum faces challenges scaling and interest in DeFi goes parabolic, there hasn’t been a better time for a parallel DeFi ecosystem to break out.”
As per Messari Research, the popular DeFi platforms BAND, Kava, THORChain, and Terra are helping Cosmos build a parallel Decentralized Finance (DeFi) ecosystem.
Like LINK, BAND is currently a hot oracle project in the market, which is today getting a listing on Coinbase Pro and is up 6,250% YTD.
Kava is a decentralized lending platform like Maker that enables users to narrow money by posting collateral to a smart contract but has its own independent blockchain. Its governance token secures the Kava blockchain with stakers receiving fees and inflation. Although more flawed than Maker, Kava has a more ambitious vision, such as more synthetic assets, and its interoperability with the Cosmos ecosystem makes it more interesting.
THORChain (RUNE) is a proposed automated market maker (AMM) which is not live yet but has an active community and “a hyper-growth incentive model.” As for Terra (LUNA), it generates the highest transaction fees than any blockchain except Bitcoin and Ethereum, thanks to its payment app Chai that hosts 1.8 million users.
These DeFi tokens are growing, and relatively new, while projects on Ethereum have the likes of Tether and Maker, which have much higher market capitalizations than these Cosmos-based chains.
But they are just starting and having independent chains work in Cosmos favor as Ethereum continues to struggle with scalability.