Since the launch in March of the Inter-Blockchain Communication (IBC) protocol, which has made it possible to connect and transfer digital assets across different blockchains, it seems that the development activity of the Cosmos Network (ATOM) has accelerated.

Transaction volumes, the establishment of decentralized applications and the number of IBC networks have been on the rise in recent months. Speakers at the Cosmoverse conference, which took place last week, presented several of the latest technologies being developed at the blockchain. His biggest hackathon ever takes place tomorrow in Lisbon.

Tendermint is the main developer of Cosmos blockchain and acts as a gateway to the ecosystem. On Wednesday morning, CEO Peng Zhong joined Cointelegraph for an exclusive interview to discuss the future of Cosmos Network.

Cointelegraph: What are some of the highlights of the Cosmos blockchain in terms of decentralized finance or the DeFi ecosystem?

Peng Zhong: I think the biggest thing happened earlier this year when Inter-Blockchain Communications (IBC) was first launched on Cosmos. After that, nothing special happened. People said, “Okay, IBC is live, what do I do now?” But now we see 22 blockchains supporting IBC. They were all able to connect to many of the decentralized exchanges (DEX) available in the Cosmos ecosystem, such as Osmosis and Gravity DEX. So there was a lot of activity online, much more than anyone expected. We see a very positive growth cycle with IBC activated.

The total volume of transactions on Cosmos blockchain in the last 30 days. | Source: ATOMSc

CT: I wonder where you see the IBC ecosystem in, say, five years from now?

PZ: This is a very distant future. I was going to imagine tomorrow that we are watching 22 episodes today, and after that we will see around 200 episodes connected via IBC next year. I have not thought about five years, but my long-term vision supports Tendermint and our focus on getting more users to Cosmos and a better development experience for Cosmos Stack. We will see one million blockchains in the future. I expect that in five years this number will be in the tens of thousands, if not hundreds of thousands of chains linked together through IBC. And it would be absolutely fantastic, but we have a lot of work on the infrastructure side to handle all this encrypted data.

CT: In connection with the recent Cosmosverse, there has been an interesting development on the concept of freezing liquid. Can you give more information about this?

PZ: I think there are at least three different fluid storage applications in Cosmoverse. It was a great conference. I have met many people who worked at this place during the pandemic, and until now I have never had the opportunity to see them face to face. Then the people who have worked in Cosmos for over five years and still exist – and this says something about the power of the ecosystem. So high-level liquid collection is an opportunity for users to dive into their assets twice. More often than not, in Proof of Stake (PoS) protocols, you need to share your tokens to protect the network that uses it. And by collecting your tokens, you make money. For Cosmos Hub, this is from 7% to 20% per year. But then you look at some of the DeFi protocols like osmosis or other DEXs based on Cosmos, and you see that when DEX is launched, they [developers] want to increase liquidity.

Thus, APY can reach thousands of percent in a few weeks, or hundreds of percent in a few months. This is a much higher dividend. So there is a constant battle or tug-of-war between the desires for foreplay, which is to keep the net safe, and it’s good for everyone, but you earn little in return. This can be compared to the incentives that DEX offers to act as liquidity providers, which is very confusing. Thus, cash bets are an opportunity to let you as a money holder deposit your assets, but at the same time you receive a token that represents your bet position.

So if you bet 100 ATOM, instead of getting something in return other than a continuous stream of bet rewards, you [both] will get bet rewards in ATOM, and you will get a linked copy of ATOM, say sATOM. And it’s only with IBC support, which means you can transfer it without DEX permission and use it to provide liquidity in the pools. This general idea of ​​liquid storage is a great advantage for several blockchains.

The version that goes to the Cosmos hub is more standard where you can share assets and you get a token that you can use between chains.

Source: CoinTelegraph