With the launch of the IBC cross-chain function and the gradual access of star projects such as Terra and Injective, the multi-chain ecology based on Cosmos has begun to take shape. However, when we searched for information, we found that there is still a lack of an article on the Chinese Internet that systematically introduces the basic interaction logic of the Cosmos ecosystem.

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1. Do users need to register accounts separately on the chain?

One of the first problems to be solved when entering the multi-chain network is the user's account (address).

In fact, in Ethereum and other EVM-compatible public chains, there is already a relatively mature solution to this problem, which is to use the same set of addresses and public-private key pairs. Therefore, when the user switches between different public chain networks, there is no need to re-register a new wallet address and back up the mnemonic.

The Cosmos multi-chain ecosystem also adopts a similar strategy, and users still only need to remember a set of private key mnemonic words. But Cosmos has one of the biggest differences compared to Ethereum, that is, its native ecological public chains support cross-chain interoperability. Therefore, when a user's account addresses in all Cosmos public chains are exactly the same, once a cross-chain transfer occurs, it will cause great trouble.

Therefore, Cosmos has reprocessed the user's address format on each chain, so that it can directly determine which chain it belongs to through the address format. This is equivalent to directly embedding the opening bank information in the account number of each bank. When the user makes an inter-bank transfer, it is no longer necessary to enter the account opening bank of the payee, but directly enter the account number of the other party. This undoubtedly greatly improves the user experience when performing cross-chain transfers in the Cosmos ecosystem.

Let’s take the addresses generated by the same set of mnemonics in three different Cosmos ecological chains as an example:

Address in Cosmos Hub:

cosmos15s7e2gwyqke4s3tc8wyqt8szm5wv4tjwryelvh

Addresses in the Osmosis chain:

osmo15s7e2gwyqke4s3tc8wyqt8szm5wv4tjwtl2069

Addresses in the Kava chain:

kava1n0qmruvsg90hza0z7a5knz6d5r2j0n76psktfy

It can be seen that in addition to the obvious logo code at the beginning, the addresses generated by users in different chains are still significantly different in the second half. Some users are therefore worried, what if I give the wrong address when someone else transfers money to me, will the transferred funds be lost?

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2. Infrastructure of Cosmos

wallet

wallet

Currently the most mainstream wallet application in the Cosmos ecosystem is the Keplr wallet. Keplr includes a mobile version and a Chrome browser plug-in version, and the plug-in version is the most powerful, and its status is equivalent to Metamask in the Ethereum ecosystem.

Its use logic is also extremely simple, similar to MetaMask, different public chain networks can be switched on the top of the interface, and the unique Stake function of the PoS chain is added below, and the current rate of return is directly displayed. As long as the user clicks the button, it will directly jump to the relevant web page interface, which will not be introduced here.

Blockchain explorer

Blockchain explorer

A multi-chain network naturally needs a blockchain browser that supports multiple chains. Here I directly recommend mintscan.io to everyone.

A multi-chain network naturally needs a blockchain browser that supports multiple chains. Here I directly recommend mintscan.io to everyone.

After entering, the user first selects the network where he needs to query the transaction in the red box above, and then belongs to the account or transaction address in the search box. The operation is similar to that of the Ethereum browser.

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How to call IBC for cross-chain

IBC cross-chain is the most important and unique function in the Cosmos multi-chain ecology. The IBC cross-chain function is integrated in the front-end interface of many ecological applications. For first-time users, it is recommended to use the front-end application Emeris developed by the Cosmos official team (https://app.emeris.com/）。

Emeris is a unified front-end platform for operating the basic functions of the Cosmos ecosystem. It is developed by the official team and will support basic functions such as basic transactions, cross-chain, and PoS pledge (not yet launched). If you need to make an IBC cross-chain transfer, just click the Send button on the homepage of the website.

Click to enter a selection page. Two of the options can call the IBC cross-chain function, the left one is used for IBC cross-chain transfers between any accounts, while the right button only supports IBC transfers between the addresses of the user's own different chains.

Let's take the more general IBC transfer function on the left as an example. In the interface entered after clicking, the user needs to enter the address of the payee (note that only the address needs to be entered here, and there is no need to specify the chain where the address is located, because this information is already included in the address format). Here we enter the Osmosis chain address we just used, and click OK.

The next step is to select the currency and amount of the transfer. Note that there will be an estimation interface for the handling fee at the bottom of the interface. Since the payment chain of this transfer is Cosmos Hub and the receiving chain is Osmosis, it is necessary to call the asset cross-chain function of the IBC protocol and charge an additional cross-chain fee in addition to the gas fee for the transaction. If the transfer-in and transfer-out addresses are on the same chain, the cross-chain fee displayed here is zero.

After clicking Confirm, enter the final confirmation interface of the transaction. The interface displays the transfer-out address and transfer-out chain, the transfer amount and currency, and the transfer-in address and transfer-in chain of this transaction. After clicking confirm, it will enter the wallet signing link (note that there is another transaction gas fee to be paid here), and after waiting for a few seconds, an IBC-based cross-chain transfer transaction is completed.

Seeing this, many readers may feel that this so-called IBC cross-chain function looks very simple, and it seems to be not too different from ordinary transfers. Is it necessary to introduce such a detailed step by step?

Yes, this is actually the biggest advantage of the IBC protocol in terms of user experience. Although it is cross-chain, from the perspective of user experience alone, the whole process is basically an ordinary transfer transaction. There is no need to teach in advance at all, you can get started with a little exploration, and the account is extremely fast.

Recall the other cross-chain bridges we have used before. Users first need to log in to a separate front-end interface before operating. Secondly, these bridges often only support some mainstream assets, and some cross-chain bridges require users to wait for a long time for confirmation. The experience of the entire cross-chain process is extremely poor, so different public chain ecologies are also greatly fragmented, making it difficult to form a unified ecosystem.

The IBC protocol in the Cosmos ecosystem is equivalent to setting up high-speed railways between different public chains, connecting satellite cities into urban agglomerations, and further generating synergies to promote the economic development of each public chain.

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3. Trading platforms in the Cosmos ecosystem

In the single-chain ecosystem, trading platforms are basically deployed on the chain in the form of smart contracts, and different projects only have slight differences in market-making functions. In the multi-chain ecosystem including native cross-chain protocols, the way to deploy applications has been greatly expanded. In addition to traditional smart contracts, application chains can also be directly deployed as a carrier for carrying applications.

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Gravity DEX

Gravity DEX is also a trading platform developed by the Cosmos official team. Its smart contracts are deployed on the Cosmos Hub, and the front-end address is: https://app.emeris.com/. Yes, it is the same front end that we used when we experienced IBC cross-chain above. Gravity DEX did not develop an independent front end, but chose to integrate the functions directly into Emeris, which is also officially supported.

We can directly find the operation interface of Gravity DEX on the right side of the Emeris home page. The whole transaction logic is basically the same as the exchange in Ethereum.

It needs to be emphasized here that although Gravity DEX is deployed on the Cosmos Hub, the core of the Cosmos cross-chain ecology, it still cannot be regarded as a cross-chain DEX. Any assets that want to be traded through Gravity DEX must first cross-chain to the Cosmos Hub chain through IBC before they can be traded in Gravity DEX.

Therefore, when selling assets and buying assets are on different chains (as shown in the figure below), traders need to pay a total of two fees. One is the cross-chain fee for calling IBC (red box 1), and the other is the Swap fee (red box 2).

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Osmosis

Osmosis is an independent application chain built on the Cosmos SDK, also developed by the team that developed the Keplr wallet. At present, its main network has been connected to the Cosmos Hub through the IBC protocol, so it can smoothly interact with other assets in the Cosmos ecosystem across chains.

Unlike other applications built through smart contracts, Osmosis's transaction logic is fully deployed on its own public chain. When we refer to Osmosis, it can mean either a public chain or a decentralized application. The Osmosis chain and its applications are organically combined.

The market-making function of Osmosis is built based on the Balancer model. LPs in Osmosis can define the ratio of the two assets and the ratio of handling fees in the fund pool created by themselves.

In addition, due to the adoption of the underlying architecture of the application chain, the Osmosis team has gained more room for development. Osmosis provides liquidity mining incentives for mainstream trading pairs. As for the OSMO tokens in the fund pool, because they are also the original assets of the public chain, they can also enjoy PoS Staking when making the market. income.

Under the reward of this triple incentive (transaction fee, liquidity mining reward, PoS pledge reward), the current annual return rate of its fund pool is generally higher than 50%, and the amount of locked positions is also much higher than that of Gravity DEX. TVL has reached a scale of 600 million US dollars.

In addition, as of now, transactions on Osmosis are still free of gas fees. This is the advantage of the application chain, which can adjust the underlying financial policy at any time according to the development needs of the upper-level applications in order to better support the development of the upper-level applications.

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Thorchain

We have repeatedly mentioned above that neither the smart contract-based Gravity DEX nor the application chain-based Osmosis is a true cross-chain DEX in essence. The prerequisite for trading on these DEXs is to first transfer assets to the target chain where the DEX is located.

So is there any trading platform that directly conducts matching transactions between chains without changing the chain where the assets are located?

Yes, Thorchain is this type of DEX. Thorchain is also an application chain developed based on the Cosmos SDK. Although it is not connected to the Cosmos Hub through the IBC protocol, it can also be regarded as a related project of the Cosmos ecology to some extent.

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Four. Summary

It is obviously impossible to systematically introduce the Cosmos multi-chain ecology and the usage scenarios of IBC in just a few thousand words. Therefore, this article just hopes to bring readers into the multi-chain ecology to find out briefly.

Here, the public chain may be both a platform and an application. The transfer can be either payment or IBC cross-chain. As the current single-chain ecology gradually evolves towards multi-chain, there will be more and more multi-chain ecology in the future (Polkadot's heterogeneous sharding, Octopus network's application chain system, etc.).

Although there are still various problems in the current multi-chain network, even the Cosmos ecology is difficult to capture the ecological value of the native token ATOM due to the design of the economic structure. But in this higher-dimensional environment, more valuable innovations may be born, just like the star project Terra in the Cosmos ecosystem.

The above content is for reference and exchange only, and does not constitute investment advice. If there are obvious understanding or data errors, feedback is welcome.

The above content is for reference and exchange only, and does not constitute investment advice. If there are obvious understanding or data errors, feedback is welcome.

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