An article comparing the vision and status quo of Cosmos and Polkadot

By @youssef_amrani

Source: Twitter

Both Polkadot and Cosmos are considered third-generation blockchains with a similar approach to horizontal scaling, while Ethereum and Solana tend to scale vertically.

This article will compare Cosmos and Polkadot from the vision and current status of the ecosystem.

While the uninformed might see the two ecosystems as twins, they actually have some major design differences that make the results quite different.

The core architecture of Cosmos prioritizes the greatest sovereignty of the application chain, and deliberately reduces the importance of the main chain Cosmos Hub . Allowing multiple hubs to coexist was a voluntary design decision, and decentralization was the main driving force behind this choice.

The second reason behind this architecture is: the Cosmos ecosystem must ensure continuity at all costs, and the fall of the most important chain should not bring the entire ecosystem with it.

If you have multiple hubs, the fall of one isn't enough to destroy everything.

The Cosmos Hub acts as trusted neutrality by avoiding rent extraction.

This is why IBC routing can be done outside of the Hub chain.

For example, Osmosis can be considered a second Hub because it handles more IBC transaction volume than the Cosmos Hub itself.

By adhering to its public goods infrastructure role and refusing to collect rent from the ecosystem, the Hub allows other blockchains to shine. Best example: Terra is the application chain of Cosmos, which was much larger than The Hub at its peak.

LUNA has an all-time high market cap of $41 billion, compared to $12 billion for the Cosmos Hub. Before Terra crashed, the Cosmos Hub was only the third largest Cosmos chain by market capitalization, behind Terra ($LUNA) and Crypto.com ($CRO) application chains.

The development of Polkadot is a direct answer to Ethereum's inability to scale. Ethereum co-founder Gavin Wood noticed its limitations and continued to build his vision with Polkadot.

In this vision, specialized chains of parallel chains interact with each other, similar to the idea of application chains on Cosmos.

A key difference between Cosmos and Polkadot is the degree of centralization.

The relay chain is omnipotent. As the main chain of the ecosystem, it is the only security provider of the parachain (all verifiers only verify on the relay chain), rather than any application chain like Cosmos. own set of validators.

This design decision puts a lot of pressure on the relay chain.

If the relay chain fails, the entire Polkadot ecosystem will be at risk.

This centralization is also reflected in Polkadot’s market capitalization, which is much larger than its largest parachain, Moonbeam.

Polkadot and Moonbeam had market caps of $56 billion and $1 billion at their peaks, respectively.

One interesting thing to note: Cosmos’ introduction of Interchain Security will make the ecosystem more similar to Polkadot, but with one key difference.

Interchain Security on Polkadot is handled exclusively by the Relay Chain, and this functionality can be deployed in multiple regions on Cosmos, not exclusive to the Cosmos Hub. @EvmosOrg or @JunoNetwork have already indicated their interest in providing Interchain Security.

Network admission is also an important difference between the two ecosystems: Parachains on Polkadot must pay expensive admission fees through auctions.

For example, Polkadot’s decentralized exchange, Polkadex, had to pay 973,324 DOT ($13.8 million at the time) to acquire a parachain slot with a 2-year lease.

Cosmos, on the other hand, has no barriers to entry and does not charge setup fees or rent for maintaining application chains.

In this regard, it makes sense to compare parachains to tenants and Cosmos application chains to job owners.

Ecosystem and Valuation

It is worth noting that the Polkadot network has two twin ecosystems: Polkadot and Kusama.

The latter is the canary network of the former. A fair comparison with Cosmos should include Polkadot and Kusama, at least in my opinion.

The rationale for including Kusama in the comparison is that it is the home network for projects with real economic value, rather than a traditional testnet like Cosmos.

Circulating market capitalization is from Coingecko, while actual projects are taken from https://mapofzones.com and http://parachains.info .

The reason I didn’t use Coingecko’s ranking is that they list unrelated tokens in the Cosmos and DOTSAMA ecosystems. (The Polkadot and Kusama ecosystems are often referred to together as the "DOTSAMA" ecosystem)

I use the two sites above to identify actual projects building on both ecosystems, and then pull market cap data from CoinGecko.

The total market capitalization of the two ecosystems is close: $11.6 billion for Cosmos and $10.5 billion for Polkadot.

An important factor to consider: DOT + KSM relay chain accounts for 91.4% of the total market capitalization of the DOTSAMA ecosystem, while ATOM only accounts for 25% of the entire universe.

Two observations are made from the data:

1. The advantages of the Cosmos application chain vs. the relative disadvantages of the parachain.

By excluding ATOM, DOT and KSM, effectively comparing Appchain and Parachain (DOT and KSM are not parachains), the total market cap of Cosmos Appchain is $8.7 billion, while the total market cap of DOTSAMA Parachain is $954 million. In other words, the value of the Cosmos application chain is 9.12 times that of the DOTSAMA parachain.

2. The value acquisition ability and high popularity of DOT and KSM are in stark contrast to the lack of value accumulation and utility of ATOM.

developer share

Developer share is probably one of the most important metrics for evaluating a blockchain. According to @ElectricCapital :

December 2020: Polkadot (825 people) + Kusama (175 people) has about 1000 developers. In December 2021, this number climbed to 1,700 (Polkadot's 1,400 + Kusama's 300), an increase of 70% year-on-year

In December 2020, the number of developers in Cosmos was approximately 575, compared to 975 in December 2021, a year-on-year increase of 69.5%

During these two years, DOTSAMA performed better. Remember, it's July, so Electric Capital's latest data is for the last 7 months.

One possible reason why Polkadot has more developers is that the development framework Substrate supports any language compatible with WASM (the widely used Web Assembly), while the Cosmos SDK only supports GO. In other words, the goal of Polkadot is to get more developers by giving more flexibility.

Popularity among general audiences and crypto funds

Polkadot’s official Youtube channel has 46,000 subscribers, while Cosmos has 11,500.

On Twitter, Polkadot has 1.3 million followers and Cosmos has 460,000 followers.

Website Traffic: See detailed data below for March, April and May 2022: Polkadot (red) and Cosmos (white)

Polkadot also seems to be favored by crypto funds, with 14 of the top funds holding DOT in their portfolios, while only 5 of the top funds have ATOM in their portfolios. The data comes from a study published by Messari last April.

The top crypto funds are configured as follows:

It is undeniable that Polkadot has always done better than Cosmos in terms of brand marketing.

Cosmos has always taken a low-key approach when it comes to marketing itself, tending to prioritize the quick rollout of features like IBC or Interchain Accounts.

On the other hand, while Polkadot is better in terms of brand awareness, its ecosystem is immature and its infrastructure readiness lags behind Cosmos.