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Cosmos Soars 27% Upon Binance Listing, Crypto Community Raves

Last Updated March 4, 2021 2:44 PM
Joseph Young
Last Updated March 4, 2021 2:44 PM

By CCN.com: ATOM, the native crypto asset of the highly anticipated Cosmos  blockchain network, has been listed by Binance, the world’s largest crypto exchange.

ATOM rises by more than 27 percent in the past 24 hours (source: coinmarketcap.com)

Changpeng Zhao, the CEO of Binance, said that the development team behind Cosmos refused to communicate with exchanges regarding listing opportunities but Binance proactively listed it due to its support of the project.

“Here is a project that refused to even talk to an exchange about listing (and we have a good relationship with their tech guys), but we list it anyway. Good tech wins!” said  Zhao.

What is Cosmos and why is the crypto community excited?

Cosmos is a proof-of-stake (PoS) blockchain network that prioritizes interoperability. If rolled out successfully, users on Cosmos will be able to swap tokens between various blockchain networks and communicate with users of other cryptocurrencies on the blockchain.

Once the so-called “validators” on the Cosmos blockchain network agree to activate the “Inter-Blockchain Communication (IBC) protocol, Cosmos will be able to operate as a platform that allows users to interact with other major blockchains.

Previously, Zaki Manian, the director of Tendermint Inc, the company behind Cosmos, said  in an interview with CoinDesk:

In proof-of-stake, the costs and rewards [of the system] are internal. So, we had to come up with a very sophisticated system of distributing rewards, of distributing the speculator taxation system, of punishing people for malicious behavior, of punishing people for going offline. All of it has to be internal to the system and that’s why proof-of-stake is such a significant engineering feat over proof-of-work.

As a PoS blockchain network, Cosmos is expected to compete amongst the likes of top PoS blockchain protocols such as Cardano and EOS over the long run.

Immediately after the listing of Binance, which comes after the release of the live Cosmos software in March, the price of ATOM increased by 27 percent against the U.S. dollar.

The optimism towards Cosmos comes from the fairly active usage  of the Cosmos SDK by many projects such as Binance Chain, e-Money, Loom, Sentinel, TruStory, and Terra within less than a month since the launch of the Cosmos software.

Does interest in Cosmos show rising confidence in the market?

Cosmos is a project at its infancy and it is still in an early phase in development. Hence, it remains unclear whether it could continue to evolve into a promising blockchain project and become one of the most valuable projects in the global market.

The rising interest in an early stage project like Cosmos indicates that the confidence of investors in the long-term outlook of the cryptocurrency industry, at least investors in the crypto market, is noticeably recovering.

Investors are divided on the necessity of PoS blockchain protocols like Polkadot and Cosmos that focus on interoperability and whether the use cases brought on by interoperability are compelling enough to sustain the growth of a blockchain project.

Linda Xie, the co-founder at Scalar Capital, said that she expects the early use cases of blockchains like Cosmos to be asset transfer. Token swaps done on the blockchain in a decentralized manner would provide investors control over their funds at all times.

“I see early use cases being asset transfer (largely on Cosmos) and making it easier for people to start their own chain by leveraging pooled security (slightly more with Polkadot). Whether most of these chains should exist is a different story,” Xie said.

The overall positive stance towards emerging projects with ambitious plans and visions from investors suggest that the sentiment around the cryptocurrency market is improving amidst a 16-month bear market.