The ANTI-SHILL post for COSMOS. Why the project could fail, and how the data tells that story.

WHAT:

A couple of days ago, I wrote a scathing review of Algorand outlining why it will fail. I have also done negative posts for Solana, Cryptocom and even Ethereum in the past.

In that thread, a user asked me to provide the same sort of negative perspective for COSMOS, and I thought it was an intriguing idea. I also appreciated that it was someone invested in COSMOS asking for a negative post to be produced - it is a good thing to constantly challenge yourself and not "marry a token".

RATIONALE:

Based on the user suggestion, I decided to trial my own ANTI-SHILL series. I have no intention to upset people, and would invite commenters heavily in projects to challenge/clarify the data provided. The overall benefit being that some users will either question their investments or have their beliefs ratified by others. Or better yet, if I cannot find any good reasons to ANTI-SHILL, then maybe this could be a project worth considering.

If this type of post is recived well by members, I will try to do it for other requested major cryptos.

DISCLOSURE:

I do not currently hold COSMOS, nor am I an expert in anything. I am a crypto degenerate.

DATA SOURCES:

Since I'm trying to build this as a series, I'm going to try keep some of the types of evidence and the format consistent, it will include information like supply, usage and decentralisation.

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So here it is, the anti-shill for COSMOS.

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THE ANTI-SHILL FOR COSMOS:

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INFLATION - Much too high. Staking rewards do not offset the supply increase.

There is a significant discrepancy between the inflation calculated by Messari and CoinMarketCap versus the stated inflation from the various Cosmos ecosystem scanners.

Whether it is because of some hidden lock mechanic for some tokens, and since these values are suppose to represent the circulating supply, it is not a good look for investors to have to justify why the stated inflation does not match the calculated one.

The staking rewards are averaged at 21.57% which is below the calculated inflation value, but above the stated inflation value. The staking rewards claimed on the COSMOS website also state the average APY is less than ten percent, which is significantly lower than the stated inflation.

There is a different incentive to holding which is airdrops. Depending on snapshots, you could get lucky with an airdrop that goes ballistic.

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SOURCE	INFLATION	SUPPLY TODAY	SUPPLY LAST YEAR
Messari	26.60 %	286,370,297	226,186,564
Coinmarketcap	26.66 %	286,370,297	226,127,431
Mintscan	13.82 %	313,077,417	Not provided
Atomscan	13.82 %	Not provided	Not provided
Cosmoscan	13.81 %	319,984,721.29	Not provided

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UTILITY - Limited use. There is no reason to hold the token other than speculation

There is actually very little utility for the ATOM token. By staking ATOM, you are able to vote in Cosmos Hub governance decisions, but that is about it. There doesn't seem to be much reason to actually hold it other than it might go up or down and thus you could sell it. For context, other projects require their token to be used for fees or NFT sales. According to cryptofees, the COSMOS chain doesn't seem to actually make any money, the projects built on it do - which still doesn't seem to give a reason to hold ATOM.

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DAILY ACTIVITY - It is a mystery!

Try as I might, I could not find statistics anywhere about how many addresses are actually being used on the COSMOS chain. To me, this is a massive red flag. I can find transactions on several sites quite easily, but not being able to find statistics showing me the total number of wallets created, and what percentage of them are currently being used seems impossible. This is a massive issue in terms of transparency on the chain.

Transactions

For what its worth, the average transactions seems fairly consistent, but until I can see the number of wallets that are active, I have no way of knowing if any of these are real users, bots, or just staking rewards.

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MARKETCAP DOMINANCE - Falling all year

Obviously the entire crypto asset class is down this year, but if you compare like for like, you can still get a sense of whether the token is holding up well or not.

The marketcap dominance for COSMOS is roughly half of what it was at the beginning of the year. Reaching a top of around 0.6 % of the Crypto market in February, it now sits at 0.3 %. All altcoins will lose dominance in a bear market, but you would want the crypto to hold its own in the class as much as possible. Dropping 50% is not a good thing.

The dominance picked up prior to the announcement of 2.0, but has since fallen away again.

Marketcap dominance

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TOTAL VALUE LOCKED - Where is it?

This value helps understand how many people are staking COSMOS and in a sense how commited investors are to the project. Yet once again this is a figure that is difficult to ascertain.

According to DefiLlama, there is no reported TVL directly for the ATOM token. Once again, they list all the projects built on top of the blockchain. The bonded tokens provided on mintscan also seem to correlate to this value. The highest individual TVL seems to CRONOS or KAVA, but I personally dont believe the locked tokens on an individual project on a blockchain should count towards the TVL on another chain. This is not necessarily a bad thing about the TVL for the ecosystem, but it begs the question again, what is the point of holding the ATOM token?

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Total Value Locked

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DECENTRALISATION - Some validators have too much control of the network

There are currently ~175 validators which is gives a Nakamoto Co-efficient of just 7. This is roughly the same level of decentralisation as Binance and is a terrible score. COSMOS really needs to increase the numbers of validators quickly because the distribution of tokens across the staking validators is a significant risk.

Nakamoto Coefficient

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BIGGEST COMPETITION - Polkadot still higher in most cases

All cryptos are essentially in some sort of competition with each other. Due to the rationale, goals and purpose the blockchain, the biggest competitor to COSMOS is likely POLKADOT.

Again, the crypto asset class is down, by comparing marketcap dominance, Polkadot is still more than double the marketcap of COSMOS.

While Polkadot actually has about half the number of validators as COSMOS, the staking mechanism results in a much better Nakamoto-Coefficient of 85. This means Polkadot is 12 times more decentralised than Cosmos.

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Nakamoto Coefficient of Polkadot

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CONCLUSION:

Holding the ATOM token is pretty much only for speculation - you may get some free stuff or see the price rise.

TLDR: Just read the bold headlines

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DISCLAIMER:

I'll always state whether I am involved in the project or not, but you should never trust the word of a degenerate user on Reddit. On top of people shilling their own bags, looking for liquidity exits, there are paid promoters and employers and affiliates in this sub already.

IF YOU HAVE CONCERNS:

The data is publicly available on sites like CoinGecko, CoinMarketcap, Messari and IntoTheBlock, and should be verified on chain. Don't trust me bro.

PLEASE SHOW RESPECT TO OTHERS:

Obviously when telling someone their favourite crypto is bad will illicit some negative emotions, especially if they are very heavily invested. I ask that all commenters try to respect each other's opinions and not downvote "just because you don't like it". If you disagree, respond with facts - justify your point, and agree to disagree if necessary.