Why can’t Cosmos (ATOM) develop as Ethereum Killer?
Cosmos (ATOM) is one of the competitors of Ethereum (ETH) with one of the best market caps. However, it failed to attract much attention to itself and is losing the popularity contest and capital to other so-called “Ethereum killer” networks such as Cardano (ADA), Solana (SOL) and Tron (TRX).
Cosmos was launched in 2019 and was developed to be an ecosystem where multiple networks can talk to each other, as well as overcome scalability and interoperability issues that plague many cryptocurrencies, including Bitcoin (BTC) and its rival Ethereum.
The cryptocurrency is built around a hub-based architecture, where each hub is an independent blockchain that acts as a bridge between other networks. This allows different cryptocurrencies to be traded and used with each other without the need for a centralized crypto exchange, furthering the idea of an ecosystem without a centralizer.
But why isn’t Cosmos growing like an Ethereum killer?
First of all, Cosmos solves the problem of lack of communication between networks only in its ecosystem or hubs. So, not just any blockchain can reach Cosmos and exchange smart contracts, for example. This breaks the expectation that Cosmos could be a powerful Layer 0 network.
Another factor hindering the growth of Cosmos is the value of the token for its ecosystem. You’ve probably heard that developing on the Ethereum blockchain is expensive and fees are paid through the network’s native token, ETH. However, the same importance that Ether has for the leading smart contract platform, ATOM does not have for Cosmos.
On the altcoin network, appchains can create their own logic, which makes ATOM unnecessary since this technology runs its sovereign blockchain instead of a smart contract implemented on another chain.
Moreover, the ATOM community is far removed from the supporters of other ETH rivals such as Solana and Cardano. The community around it is very important for a cryptocurrency because, without it, hardly any project – even serious ones like Cosmos – cannot survive. Without being able to attract more audience, the cryptocurrency risks continuing to lose ground not only to smart contract platforms but also to altcoins with no real value proposition, such as Dogecoin (DOGE) and Shiba Inu (SHIB).
Does this mean that Cosmos is a bad project?
No. The altcoin, although it has to overcome some challenges, remains in the top 10 assets with the most development activity, proving that its network is growing and that more people could soon use it.
It should also be noted that, although it is not among the cryptocurrencies with a large community, Cosmos has a regular presence on social networks, which is also very important.
Moreover, it has established important partnerships and projects in the blockchain industry using its network. A good example is the arrival of the DeFi protocol dYdX on its blockchain.
Other benefits of Cosmos are:
- Low cost scalable network;
- Passive income through staking;
- Third-generation blockchain;
- Caught the attention of DeFi dApps;
- More developer-friendly environment.