How to start with COSMOS (KEPLR Wallet, Cosmos-SDK based blockchains & Inter-Blockchain Communication)
COSMOS is often refered as the hub for blockchain interoperability. Such a saying definitly caught my attention. Indeed, maybe some of you recall that I am using a lot of different blockchains and bridges to move around the DeFi space (overview of my crypto ecosystem HERE). Thus, as someone that use ETH, BSC, SOLANA, POLYGON, HIVE, TRON and TERRA on a daily basis, I had to try COSMOS, see by myself this "blockchain interoperability", and ultimatly try to improve my own ecosystem.
The point of this short guide is thus to share with you my findings and help you start with COSMOS in the fastest possible way. Indeed, I am not going to present the COSMOS technology or the different wallets. I am going straight to the point, or I'had rather say, straight to four points : setting up the KEPLR wallet, local chain transactions, transfers between Cosmos-SDK based blockchains and transfers with IBC-compatible chains. So, if like me, you just had some ATOM sleeping in a CEX, or if you planned to buy some and do something with it by yourself, then this easy guide is for you!
1 . The KEPLR Wallet
The KEPLR Wallet is the most used wallet to connect and interact with Cosmos-SDK based blockchains. But what are Cosmos-SDK based blockchains?
In order to keep this article as simple as possible, let's just say that Cosmos-SDK based blockchains are blockchains that have been developed based on the COSMOS technology.
Compared to METAMASK, where you have to manually add any EVM-blockchain you want to interact with, the KEPLR wallet natively integrates the most famous and used Cosmos-SDK based blockchains. In the above illustration, (1) allows you to chose the blockchain you want to interact with, in this example the COSMOS one. (2) is your COSMOS address, the one you want to use if you are for example starting by sending some ATOM (COSMOS native token) to COSMOS. (3) allows you to stake the native cryptocurrency of the selected Cosmos-SDK based blockchain, in this case ATOM with an APY of 11.12%. IBC stands for Inter-Blockchain Communication, and (4) allows to send tokens between Cosmos-SDK based blockchains, or else (more information in section 3 and 4).
2 . Cosmos-SDK based blockchains & local chain transactions
They are a lot of Cosmos-SDK based blockchains. At the time of writing, KEPLR natively supports 16 blockchains. Amongst them, some are quite famous, such as OSMOSIS, KAVA, CERTIK or CRYPTO.ORG, the future DeFi blockchain related to the CEX CRYPTO.COM. Each blockchain runs using its native cryptocurrency, for example ATOM for COSMOS, OSMO for OSMOSIS, CRO for CRYPTO.ORG, etc.
List of Cosmos-SDK based blockchains natively supported by KEPLR: Cosmos Hub, Kava, Regen, Persistence, Secret Network, IRISnet, Cyber, Crypto.org, Akash, Starname, Sifchain, CertiK, Sentinel, ixo, e-Money & Agoric.
Each blockchain supports Cosmos-SDK native cryptocurrencies. For example, it's possible to have ATOM both on COSMOS and on OSMOSIS. However, ATOM on OSMOSIS is not native ATOM. Don't try to send non-native crypto from any Cosmos-SDK blockchain to a CEX, or else you are going to lose it. Looks complicated? It's not. For example, if you want to send ATOM to a CEX, you have to do it from COSMOS; you want to send OSMO to a CEX, do it from OSMOSIS, etc.
it is really important to understand the differences between local chain transactions and inter chain transactions. For now, let's focus on local chain transactions. You can send and receive native cryptocurrency and tokens, for any Cosmos-SDK blockchain you are interacting with, using the Deposit and Send functions provided by the KEPLR wallet.
Gas fees for a COSMOS local transaction at the time of writing
If you want to swap native cryptocurrencies and tokens, DEX are available within each Cosmos-SDK blockchain. For example, the most famous one is EMERIS for COSMOS and OSMOSIS for OSMOSIS. At the time of writing, a swap on EMERIS costs around $0.17.
3 . Transfers between Cosmos-SDK based blockchains
Inter chain transactions make use of the Inter-Blockchain Communication (IBC) protocol, which allows IBC-compatible chains to interact between one another. All Cosmos-SDK based blockchains are IBC-compatibles. In order to send native cryptocurencies to other Cosmos-SDK based blockchains, you need to initiate an IBC transfer and select the Cosmos-SDK based blockchain and add the active channel number. You can find the active channel number for each Cosmos-SDK based blockchain HERE. For example, at the time of writing, if you were to send ATOM to OSMOSIS, you have to fill in channel-141.
But, what if you want to send non native tokens from a Cosmos-SDK based blockchain to another? In such cases, you cannot use IBC, but rather the inter-chain tools provided by the different DEX available on each blockchain. For example, if you have OSMO on COSMOS, and you want to send that OSMO to OSMOSIS, emeris provides such a tool to do that HERE.
Sending OSMO to OSMOSIS from COSMOS using emeris
4 . Transfers with IBC-compatible chains
Until now, we mostly explored an ecosystem of blockchains natively supported by the KEPLR wallet. IBC allows sovereign blockchains to communicate between one another, which could potentially go way beyond the blockchains natively supported by the KEPLR wallet. What if I tell you that several well know blockchain are Cosmos-SDK based or compatible, such as TERRA, BSC, SOLANA, etc. This is a game changer for the Defi. TERRA is set to go live soon, as discussed HERE, and with it comes the liquidity of LUNA and the stablecoin UST. This will definitly changes the aspect of my own crypto ecosystem, which you can see HERE.
Thank you for reading, please don't hesitate to follow me, I regularly post about DeFi and crypto in general. I would like to thanks my good friend @woami that helped me understand COSMOS really quickly !