Introduction

I will do you a favour and open your eyes if you've not followed everything that happened in the Cosmos ecosystem in the last couple months which made many defi and tech enthusiasts money even during this "bear" market. I will show you with numbers why the Cosmos Ecosystem is currently the second largest ecosystem by TVL and Market Cap. I will prove that the Cosmos ecosystem has already won and your favourite L1 or L0 has lost (of course this can change in the future). Nothing is financial advice but think about which ecosystem is likely to win. This will be a long read but it will be worth your time.

What is the Cosmos Ecosystem?

Many have no idea what the Cosmos ecosystem is, so I will explain it. Most influencers don't do justice to the Cosmos ecosystem. It's not just the ATOM blockchain. In fact, the ATOM blockchain does not even have smart contracts. Currently, the Cosmos ecosystem consists of many different blockchains that all implement the Cosmos SDK and have implemented IBC (inter-blockchain communication). (for example, BNB has not implemented IBC so I will not consider it as a part of the ecosystem)

Some large cap blockchains and coins that are in the Cosmos ecosystem are:

1. Terra (LUNA) (MC #9)
2. UST (MC #16)
3. CRO (MC #17)
4. ATOM (MC #20)
5. OSMO (Osmosis DEX): Literally has 0 fees. Price is somehow always up. Only down 25% from ATH which was a week ago... Also not listed on any CEX. (MC #57)
6. SCRT (MC #97)

There are much more small cap blockchains that can be traded with 0 fees on osmosis. There are also more large market cap blockchains that haven't implemented IBC, and therefore are not included in this list. (The market caps above are from Coingecko) If you doubt CRO and LUNA are a part of the ecosystem (maybe because you think implementing IBC isn't enough), you can see that pairs using these coins make up a huge part of the liquidity in Osmosis.

How valuable is the Cosmos Ecosystem currently?

Why are Cosmos Projects valuable?

Before we put an exact number on this, I want to first talk about where the ecosystem get it's value from. Notice that all the projects listed above are valuable for different reasons. I will now list the reasons.

• Terra is a defi hub for it's decentralised stablecoin, UST, which is by far the most valuable decentralised stablecoin. Terra is also an attractive blockchain for synthetic asset protocols such as Mirror which allow you to use your UST or your interest bearing UST (aUST) as collateral to mint synthetic assets.
• Crypto.com coin is valuable because of crypto.com
• ATOM is what started the Cosmos SDK. There is no reason to hold ATOM to use the Cosmos Ecosystem. However, when new projects launch in the ecosystem, they often airdrop to ATOM stakers. + In the future updates, ATOM is expected to be useful in inter-blockchain securty.
• Osmosis (OSMO) is currently the inter-blockchain DEX of the cosmos ecosystem that it literally has 0 fees. You can trade all the listed assets above and more. OSMO also allows you to earn high interest on all the assets above by providing liquidity. The demand for the coin comes from the high staking rewards and the high LP rewards for OSMO. Fundamentally, it is a governance token. The price of OSMO usually goes up if any other coin listed above goes up.
• Secret Network has privacy preserving smart contracts. That means not everything on chain is publicly visible. (But of course the code for smart contracts are visible, not their inputs, or outputs). For example, this allows for privacy preserving DEXes, and NFTs that you cannot right-click save (or maybe you can only right click save a blurred version, but you have to own the NFT to see the full content, this already exists on SCRT)

Now contrast this with a competitor like Polkadot. The reason why projects on polkadot are valuable (such as moonbeam) is because people think polkadot is valuable, and moonbeam makes polkadot EVM compatible. This is backwards thinking... Even Terra is larger than Polkadot at this point in time. The Cosmos ecosystem has won against Polkadot already.

The exact value of the Cosmos Ecosystem

The two important metrics we will look at is the total market cap of the cosmos ecosystem and the TVL.

The total MC of all IBC enabled chains is: 56.35b USD. This already beats Cardano. But this still does not beat BNB.

The total MC of all Cosmos SDK chains (i.e. IBC + those that could implement IBC): 128.05b USD. This would make cosmos the second largest ecosystem after ETH. Remember, all that needs to happen is that a few more chains need to implement IBC, this would affect the price of OSMO very directly. Some projects have already vowed to implement IBC anyway.

TVL of OSMO+ATOM+LUNA+CRO+SCRT = 26.02361b USD. (Defi Llama) This makes Cosmos the second largest ecosystem by TVL after ETH. Again Cosmos beats all competition.

How can you make money in the Cosmos Ecosystem?

Airdrops

In the past couple months, many have made close to 5 figures just in airdrops, you can follow cryptocito in twitter for latest airdrop news. You will have to stake some ATOM, LUNA, OSMO, SCRT.

DeFi

• Osmosis has very stable APR and a rising price!
• Terra has Anchor where you can earn ~20% APY in UST on your UST, guaranteed. Anchor is not a scam please read up on how it works, if the borrowers haven't paid their loans yet, and their collateral value (of ETH and LUNA) ever reaches 65% of the borrowed amount + interest, then their collateral is liquidated to pay the lenders the promised 20%, has been working well for a long time
• Other defi protocols on other chains such as SecretSwap on SCRT and many other protocols in CRO.
• Mirror Protocol on Terra.

Investing (DYOR)

You can invest in Cosmos projects that you like. Like LUNA, or OSMO, or SCRT, ... If you believe in Cosmos ecosystem, LUNA, OSMO and ATOM seem to be the way to go with OSMO being the most direct way to invest in the ecosystem currently. I'm not saying YOLO, you can just add some % of these coins to your buying the dip strategy or your DCA strategy.

What is the future of Cosmos?

Of course nobody can predict the future, here are some confirmed developments that will affect all of Cosmos.

Upgrades to IBC

Currently IBC only allows for transfer of native coins among blockchains. For example, you can transfer native LUNA or UST from Terra to Osmosis Chain or Secret Network without using a bridge. However, you cannot make inter-blockchain smart contract calls. Future upgrades will enable this. This might mean that you could use the privacy of SCRT without ever using SCRT.

Inter-blockchain Security

Usually one advantage many people give for Polkadot over ATOM is that Polkadot secures its parachains, so that the chains don't need to worry about their own security. Even though Tendermint consensus is very secure, each chain is responsible for implementing it for themselves and tweak the parameters. In the future, ATOM plans to add an interchain security feature where if chain want to, they can secure each other.

Liquid-staking and more...

ATOM will implement native liquid staking. This will allow staked assets to be used as collateral in DeFi.

Speculation Time

I predict that as time passes, we will see more and more Cosmos blockchains, as this seem to be the go to SDK for when companies want to create their own blockchains. For example: BNB, CRO, OKExChain, KuCoin Token, Thorchain and etc. I also predict that more of these chains as listed here will enable IBC and pump OSMO and ATOM. There are also many other projects still building that you can invest in, DYOR.

Many purpose specific chains will join Cosmos, since we already have so many such as DVPN, OSMO, SCRT, ROSE, AKT, ...

Competition

We must also look at the competitors of Cosmos. Most people usually point to Polkadot as the competitor of Cosmos ecosystem. If the question was ATOM vs DOT, which one to buy, then we would have to consider the tokenomics and their use cases, however, this is an ecosystem comparison. Cosmos ecosystem clearly has a more mature ecosystem and has already captured higher TVL and a higher MC with many opportunities still lurking around. But the main difference between the two is this:

Cosmos has had its ecosystem built first, all the independent chains built using Cosmos SDK years ago have finally come together. They all went through different journeys to get to this point. The ATOM token is still trying to find a use case for itself but the ecosystem is solid. Whereas Polkadot was built with DOT at its centre (literally) and it is just now starting to build its ecosystem through parachain auctions. To me, it's clear that the Cosmos model is better but this is best for the reader to decide for themselves.

ETH L2's are a completion as well, look at all the chains trying to become EVM compatible to increase their TVL. Cosmos is not EVM compatible. However, EVMOS is about to launch, this will be IBC connected EVM compatible Cosmos chain, follow their twitter for airdrop details. This will also increase the TVL of Cosmos ecosystem in the short term, and it will cancel any possible technological advantage EVM chains could claim to have over Cosmos.

Then there are L1s, such as Solana, Cardano, and etc... This is really hard to predict as Cosmos is a L0. It's reassuring that Cosmos ecosystem currently has higher TVL and MC. But each L1 has its pros and cons. One thing I like about cosmos ecosystem is that it's very scale-able and decentralised. Decentralisation is very high in cosmos due to the fact that it consists of many chains which are governed by different validators and by different parameters. Also note that no L1 can be perfect at everything. Cosmos ecosystem allows for all the different chains to focus on what they are good at. Also since there is more than one chain, the congestion is not so bad in demanding times. Look at what happened to Solana and etc... they stopped working.

Conclusion

The metrics above show that Cosmos is currently the second largest ecosystem in crypto thanks to Terra. It climbed to it's current situation very silently and there are still a lot of opportunities in the ecosystem. The ecosystem is bound to grow more as many companies chose to build new blockchains using Cosmos SDK. And some of the older Cosmos projects are bound to eventually implement IBC. I also made a case for Cosmos against it's competitors. Please let me know what you think about this.