Cosmos – a blockchain network that developed the notion of the “app chain” (a blockchain dedicated to a specific application) – used to be one of the biggest and most well-known crypto networks around, but it’s fallen hard from grace following the crypto meltdown of 2022.
Cosmos isn’t Doing so Hot
Cosmos was largely tied to Terra USD, the algorithmic stable currency that fell apart completely in the summer of last year It appears the network has had a very difficult time recovering from the incident. It’s also being attacked by the Securities and Exchange Commission (SEC). The agency is claiming its native token ATOM is a security, and even named it in its lawsuit against Binance.
Zaki Manian – a leading figure in the Cosmos arena – commented in an interview that 2024 is going to matter a lot to Cosmos and will determine whether it survives or crashes for good. Manian said:
Cosmos has, I would say, like eight to nine months, maybe a year at most, to kind of find a way to create something unique and distinctive, something that differentiates itself and makes it feel like some coherent thing that’s separate from Ethereum or separate from the rest of the blockchain space. I think we have the raw ingredients to have a shot.
Manian recalled a time roughly four years ago in which many crypto firms and enterprises turned their attention to the network and used its open-source coding to develop new software tools for blockchain. Manian said:
In 2019 there were two toolkits. There was Substrate, and then there was Cosmos SDK. As a practical matter, everyone used the Cosmos SDK.
Manian also said the Terra situation is likely to affect things for some time, and it will go down as one of the biggest blunders in the history of crypto. During that period, Cosmos went from a valuation of about $7 billion to $3.8 billion, thus losing nearly half its worth overnight. Manian said:
In many ways, it’s faded from people’s minds, what Terra meant to the Cosmos ecosystem. I think the hit has been massive.
Nowadays, Cosmos is facing a lot of competition from the likes of Optimism, a new blockchain with a toolkit that’s been designed in a similar manner. Manian commented:
We were pretty much batting 100 for exchange chains, where every exchange, when they started to ship a blockchain, was using Cosmos SDK. Now, two of the biggest exchanges have picked different technology stacks.
Still Stronger than ETH?
One of the biggest competitors is Ethereum, though Manian feels Cosmos is still in a stronger place. Manian said of Ethereum:
Their actual ability to build an app chain is at [an] early stage. They could never have built what dYdX has built.