ATOM (COSMOS) - Worth Buying?

Atom powers the Cosmos Network, the so called 'internet of blockchains' (I'm sure I've heard that phrase somewhere before?!?)

There's been a decent pace of development since the The Cosmos Mainnet launched in 2019, with the release of Tendermint allowing developers to create completely new blockchains in weeks, Cosmos' IBC going live earlier this year allowing for cross chain interoperability, and the very recent launch of Osmosis - which brought liquidity pools and yield farming to Cosmos.

All of this recent development has meant Atom's seen a more than five times price increase since the beginning of 2021, peaking at almost $30, but it's since dropped back down again and is just under $12 at time of writing.

Unfortunately, I'm not convinced that Atom is worth holding, let alone buying!

What is Cosmos/ Atom?

Like several other projects and their tokens (Polkadot/ Matic) Cosmos bills itself as 'The Internet of Blockchains' - The Cosmos network is a collection of blockchains and Cosmos is just one Hub within this collection.

The Cosmos token is used to stake to the Cosmos Mainnet and is used as a governance token across all other Cosmos blockchains.

Cosmos (Tendermint) Blockchains are thought to be some of the most secure and scaleable - they can theoretically handle up to 10 000 transactions per second and can continue to operate even if one third of nodes are offline.

There are, however limits on the number of validators - currently set at 125.

Thanks to the Cosmos SDK - several projects run on COSMOS and several new blockchains have been developed using the Cosmos architecture, all of which can easily inter-operate across the Cosmos Hub thanks to the IBC which went live in 2021.

Want to understand Cosmos - Just Look at ThorSwap

Thorswap/ Rune is built using Tendermint (Cosmos) architecture - and you see all the features (and limitations) enacted there:

Cross chain swaps are now possible on Thorswap, without having to swap for a pegged token first.
Thorswap clearly boasts it can operate even when a third of its nodes are down
Thorswap clearly states it has a maximum of 125 validators.

Thorswap works, but what's the payback for COSMOS?

HOWEVER, the example of ThorSwap/ Rune also shows us one of the key limitations of ATOM/ Tendermint - anything built using it is able to operate independently of the COSMOS network and the Atom token - you simply don't need to buy ANY ATOM or pay any ATOM or burn any ATOM to do ANYTHING on Thorswap.

Thus, even thought Thorswap as leveraged COSMOS software there's absolutely no payback for ATOM holders AT ALL.

This is because over the last year or so the COSMOS team has made available all its software and support for free - and a lot of projects seem to have said 'thank you very much' and used those freebies to develop projects completely independently of ATOM/ COSMOS.

I quite like the tokenomics...

You can earn 7-20% per year by staking ATOM, with the inflation depending on how much is staked

And there's a 21 day unlock period, making sudden dumps less likely.

Also, the original Vesting supply has all been unlocked, so any major sell offs are probably done with.

Future Developments

There are some plans to try and 'claw back' some ground for ATOM with the development of their Cross Chain Dex - Gravity Dex and 'staking derivates' which will burn ATOM are planned for 2022.

In Conclusion - There is No need for ATOM!

To be honest, they lost me when I realised that other projects have leveraged their architecture with there being no payback for ATOM/ COSMOS.

Cosmos is designed for interoperability with other blockchains, theoretically at least, but in practice, there is no reason why anything that has been built using its architecture has to link to the COSMOS network - thus the whole chain could become redundant along with the token.

It is a great project, but I think they've shot themselves in the foot by being too nice and giving away too much too early for free!

ATOM - Find out more....

As usual this CoinBureau video is one of the best sources for understanding COSMOS!

https://www.youtube.com/watch?v=y4d8XMBVF1A

Matic - Worth Buying? (To my mind, yes)

Disclaimer - for ENTERTAINMENT purposes only, not financial advice!

Posted Using LeoFinance ^Beta