Host: Welcome everyone from VBC to AMA with Cosmos Network
Today our guest is: Ms. Chjango Unchained – Cosmos Ecosystem Developer.
First of all, can you have a brief introduction about yourself as well as your project to all of our audience in this community?
Chjango: I’m an Ecosystem Developer for the Cosmos Network. I was an early contributor to Cosmos, joining Tendermint when it was a single-digit team as a technical writer. In 2014, I became fascinated with Bitcoin, seeing its potential and so began my journey in the cryptosphere evangelizing the tech and cypherpunk values across Southeast Asia, specifically Indonesia. I then joined Tendermint in mid-2017.
A quick high level overview of Cosmos: it’s the crypto project that’s ushering in the next Interchain, or the Internet of Blockchains. I hope that throughout this AMA I’ll be able to do a good job of getting your community acquainted with Cosmos technology.
Host: We will start with 5 questions chosen in the form of VBC.
What are the features do you look for a Cosmos developer? How do you evaluate which blockchain project can be part of your ecosystem?
Chjango: Anyone can use Cosmos software. It’s open source. Any project that successfully launches a Cosmos SDK-based blockchain is technically a part of the Cosmos ecosystem. What’s most beneficial to the ecosystem, on the other hand, is when that blockchain connects to Cosmos Hub with IBC. Furthermore, if they decide to bootstrap the security of their chain using ATOM, that further adds to the fundamental value circulating throughout the Cosmos Network.
Host: Assuming Cosmos, ETH 2.0, Polkadot, and other next gen platforms all exist in the future, what is the biggest differentiator for why dApps will choose to build on Cosmos?
Chjango: The biggest value proposition that draws a lot of blockchain app developers to Cosmos, assuming all the above has launched and are mature, is still chain sovereignty and the ability to communicate with other chains outside of their own chains. In both the ETH 2 and Polkadot worlds, the dApp continues to live within a single shared VM. If you imagine a dApp in the future as an appchain, if it lives in ETH 2 or Polkadot, it still cannot speak to other chains outside of ETH 2 or Polkadot’s network. But of course, if we’ve already established connections between Cosmos, ETH 2, Polkadot, and all the rest, then the choice between either of the 3 comes down to the different features each chain offers. But from this vantage point, at this particular time, it’s difficult to realistically assess what features any of those chains can offer that doesn’t live in the abstract. Many features have not been built yet and we don’t have much data to speak of about benchmarks and usability; it’s all theoretical.
Host: Can you tell us about the structure of Cosmos Network? Is it a company or a decentralized open source protocol that anyone can contribute to? Can you describe how Cosmos Network operates, manages and works?
Chjango: Cosmos isn’t a company; it’s a public blockchain network. Contributing to the protocol can be done by starting with the Cosmos SDK here: https://github.com/cosmos/cosmos-sdk
There are many ways to get started in Cosmos even if you’re not a developer. Check out: https://cosmos.network/community and see what kind of microgrants you might be eligible for. If you decide to operate a validator, that’s another way you can engage with Cosmos and contribute to its overall security and participate in governance decisions.
If you are interested in learning more about Tendermint, which is the team behind the Cosmos project, go here: http://tendermint.com/
If you want to learn about receiving research and development grants for building the next killer app on Cosmos, visit Interchain Foundation: http://interchain.io/
Host: What is the biggest challenge you face currently in terms of becoming a successful project or company?
Chjango: The biggest challenge for any blockchain project is generating real users that find what’s on the platform useful. Right now, the only credible use case that’s come out of this industry has been DeFi. That’s something where Cosmos is positioned to drive value.
Host: Which countries/regions are the main markets that Cosmos is focusing now? How do you think about Vietnam in Cosmos market development plan?
Chjango: Vietnam, as well as the greater SE Asia region, is an interesting region for future ecosystem development. I started my blockchain career in Indonesia and am very familiar with Bitcoin Indonesia, the exchange and its reach throughout SE Asia. Through that experience, I know that SE Asia is ripe for cryptocurrency penetration. Future plans for Cosmos to enter Vietnam should be made. I’m open to working with many of you to make that happen.
Generally, however, in this COVID world, we are targeting a much more international audience now that everything has gone virtual. Our flagship hackathon of the year, which is happening in 10 days, HackAtom V, is such an attempt to address a global market. It’s going to be run on every timezone and accommodated for as many languages as we can get it in. Check it out: http://five.hackatom.org/
Host: We have gone through all warm-up questions. In the next part, we have picked some questions from Twitter. Let’s start the first question!
How is the Interchain Staking/co-validation design on Cosmos Hub different from the sharding mechanisms in PolkaDot and Ethereum 2.0 ?
Chjango: There are many application developers who might want to build applications using the Cosmos SDK, but not necessarily build their own validator set and/or economic security from scratch. In this case, they should be able to leverage the validator set of Cosmos Hub to operate their chain, borrowing a portion of the security from Cosmos Hub.
At first, this sounds like the sharding that Polkadot and Ethereum 2.0 are building. While it is similar, Sunny’s model proposes adding a bit more Cosmos-flavored flare. In sharded execution environments, each of the shards or parachains get equal security using random sortition; the root chain will have, say, 1000 validators, and validators get assigned randomly to validate shards.
In the Cosmos Interchain Staking model, if a chain wants to cross-chain stake with Cosmos Hub, it can register on the hub chain to get shared security. Each validator can then individually decide whether they want to co-validate the chain, based on their personal expected benefit.
When a validator decides to co-validate, they would then put their ATOMs on the hub at risk for slashing penalties they incur on the co-validated chain in addition to ones they might incur on the hub.
Because this feature allows each validator to individually decide whether they want to co-validate a specific chain or not, there will be some chains that have nearly all validators co-validating and some chains that have only a few validators co-validating.
This is more opt-in than the more universal sortition-based beacon chain cross-shard staking as on eth 2, and similarly on Polkadot.
Because CryptoKitties does not need the same level of security as MakerDAO, this more Hayek-ian approach to leased security allows for more allocative efficiency. If all decentralized apps (dApps) received the same security, they’re paying into a universal ticket auction, making users of less critical dApps overpay for security and subsidize users of other, more critical dApps.
From a scalability perspective, this allows validators — hobbyist or professional-grade — to operate as many chains as they have the capacity for.
From a delegator’s perspective, it gives them more optionality to earn rewards in many different tokens while staking only one: ATOM. For instance, they may very well be staked to several validators co-validating many different chains. To illustrate, if Alice is delegated to Validator A on Cosmos Hub but she wants to use ATOM to cross-stake on Foochain and earn Foochain provisions, but Validator A is not co-validating, Alice can delegate her same ATOMs to Validator B, who is co-validating Foochain, while continuing to remain staked to Validator A on the Hub. Her voting power would be slashable both for penalties incurred by Validator A on Cosmos Hub and penalties incurred by Validator B on Foochain.
Host: What are the risks associated with decentralized financial products (DeFi) related to risks? What does the COSMOS do to limit those risks?
Chjango: There are 3 very real risks that users face when playing with DeFi.
1. Token delistings from (Automated Market Makers) AMMs: A lot of times, when you participate in DeFi, you may be playing in pools of tokens that suddenly gain value very quickly and subsequently fall in value, also very quickly. If any of those tokens you’re holding suddenly get delisted, and liquidity goes to 0, then all of the value you used to have goes to $0. Cosmos doesn’t limit those risks because Cosmos isn’t an AMM and doesn’t operate any sort of exchange.
2. Frontrunning: When there is an on-chain DEX, the risk of frontrunning is very real. In every blockchain, there is a mempool filled with unmined transactions. In those mempools, are predator arbitrage algorithms—high speed programs that scour the mempool of the underlying blockchain where a DEX is operating. Once a “natural trader”, or someone like you who wants to buy a coin and hold it for longer than 2 seconds, broadcasts a transaction, these predator algos detect it, frontrun your TX with its own TX, and drive prices up and takes the marginal profit home. This is a problem currently present on Ethereum. It would be a problem on Bitcoin if there were a DEX running on it, and it would be a problem on Cosmos if there were a DEX running on Cosmos Hub. On Cosmos, however, the risk of a catastrophic chain failure due to something called Miner Extractable Value (MEV) is lower than that of Ethereum’s. Very soon, an AMM DEX will be deployed on Cosmos Hub. But Cosmos has a better chance of standing up against MEV than other chains with probabilistic finality because of the nature of Tendermint’s BFT engine, where no forks can happen. Liveness-favoring chains like Ethereum’s will fork, and therefore, is susceptible to time-bandit attacks from miners who are behaving Byzantine.
3. Impermanent loss. If you are providing liquidity to an AMM, and then something happens extraneous to the AMM which affects the token price, then you’ll experience what’s called impermanent loss. It’s a problem with Constant Function Market Makers, which are “dumb markets” because they aren’t as sophisticated as centralized exchanges are in pricing in these market factors. By using a centralized exchange with more sophisticated instruments to better provide price discovery, you mitigate the risk of impermanent loss.
Host: Why do you think $ATOM token is necessary for your project? What is the main role of $ATOM in your project? What are the benefits of holding $ATOM in long-term?
Chjango: ATOMs are the red blood cells of the circulatory system that runs Cosmos. Without ATOM, Cosmos cannot run.
It provides the security premium that makes the whole system behind an Interchain Staked world secure and robust.
Holding onto ATOM and staking it allows you to participate in the future of the Cosmos Hub, and, subsequently after we have Interchain Staking, the future of many IBC connected Cosmos SDK-based blockchains as well. I expect that in the future, as new SDK chains are launched, many will want to airdrop tokens to ATOM holders to get the Cosmos community incentivized the provide Interchain Staking for their zone.
Host: Many top projects have focused on the Decentralized Finance(DeFi) market. Regarding Cosmos UniFi DAO, How does Cosmos participate in DeFi today?
Chjango: Cosmos has built the infrastructure for many DeFi projects that have emerged in the ecosystem in the last ~2 years. Here’s a high level look at which projects have launched DeFi solutions that were built with Cosmos tech and how they potentially interoperate in a world post-IBC.
I’m going to show you some visuals that aid in your understanding of where cosmos sits in the grand scheme of Interchain Finance.
And here’s a list of projects that have currently launched DeFi solutions:
Host: Could you tell me more about Byzantine fault-tolerant consensus protocol (byzantine fault) ? What is its advantage with liveness , especially in security? Can I use Tendermint Core to build both build public and private blockchains?
Chjango: Yes, Tendermint Core can be customized to cater to both public and private blockchain applications.Tendermint is that protocol BFT protocol that powers most Cosmos SDK-based blockchains. Tendermint favors safety (security) over liveness, which means that it does not ever fork. Chains like Bitcoin and Ethereum are liveness-favoring, which means that they soft-fork all the time asynchronously, before a miner finds the next block and mines the longest chain every average block time for a specific chain. But because Tendermint BFT is safety-favoring, it means that Tendermint must utilize extra incentives to get validators to remain online at all times. That’s where slashing comes into play. Cosmos Hub will slash validators if they’ve been offline for too long. So while the Tendermint consensus protocol doesn’t directly implement a protocol that gets validators to stay live, the entire system ultimately works together to make that happen.
Host: Thank you for your informative answers. We have passed through all warm-up questions. Let’s move to more challenging part – live questions from community.
Community: Can you share with us the upcoming Stargate upgrades? How can users contribute to the ecosystem by participating in the Stargate Testnet? What problems will this upgrade solve for blockchains built with Cosmos SDK?
Chjango: Yes. You should participate in Stargate testnet. It is the testnet that’s going to be stress testing IBC.
Get more details here https://stargate.cosmos.network/
Community: Why should investors buy and hold the ATOM token and what is its long term prospects-can it be a top 10 crypto?
Security and audit are of utmost importance for any platform. How steps have you taken to make Cosmos secure?
Chjango: Cosmos is the most battle-hardened PoS protocol, as it was one of the earliest to market on bringing PoS networks to reality
Community: Can you list 1 or 2 deadly features that make your project stand out from its competitors? What competitive advantage does your platform have that make you feel the most confident in yourself?
Chjango: IBC and chain sovereignty as well as ease of use of deploying a dAppchain through the help of Starport
Community: I understand that the Cosmos protocol technology solves the existing problems in blockchain 1.0 and 2.0, but then, why does it seek to achieve a blockchain network with problematic technologies instead of positioning itself only as a solution?
Chjango: Because no man is an island. That’s the positioning that all eth killers take and in the end, did they kill eth? No. Cosmos is more realistic than that. There won’t be one chain to rule them all in the future; there will be many winners.
Community: I understand that Cosmos solves big problems of other blockchains such as scalability, usability and sovereignty, but are these really the only problems? where is the problem of the low liquidity of the stake capital of the users or other problems?