Introduction: Cosmos is a hub-and-spoke blockchain network that has developed open-source tools for the seamless creation and launch of application-specific blockchains. The Cosmos SDK allows developers to easily create their own blockchains and smart contract applications. Tendermint consensus powers the Cosmos SDK and allows for 1-2 second transaction finality.
Table of Content
People often confuse the Cosmos Hub for the Cosmos Ecosystem as a whole. The Cosmos Hub (ATOM) is one of many application-specific blockchains in the Cosmos ecosystem which also include Osmosis, Terra, Thorchain, Binance Chain, Crypto.org and many others. The Cosmos vision is based on autonomy and interoperability between blockchains compared to siloes and monopolies. As of today, the Cosmos ecosystem comprises over 250 application-specific blockchains that combined are valued at over $60 billion dollars.
The Cosmos Ecosystem is powered by the Cosmos SDK (Software Development Kit) and the Tendermint consensus algorithm. With the Cosmos SDK, developers can easily build application-specific blockchains designed for various use cases. With Tendermint, blockchains can be validated by up to 200 validators (before performance degradation) and reach finality within 1-2 seconds.
The Cosmos vision is to have thousands (and one-day millions) of application-specific blockchains that interoperate and communicate via the Inter-Blockchain Communication Protocol (IBC).
Cosmos Hub features include:
The ATOM token is the native token for the Cosmos Hub and is used to pay for network fees and staking. ATOM currently has a yearly inflation rate between 7-20% depending on the number of ATOM tokens that are staked. The more ATOMs staked the lower the staking APR and vice versa.
While the Cosmos Hub is responsible for creating world-class, free, open-source products like the Cosmos SDK, Tendermint and IBC, the question still remains how the Hub and the ATOM Token will manage to accrue value over time. We are bullish on ATOM because the team has proven they can develop software that has achieved product market fit with the Cosmos ecosystem rapidly growing.
The Cosmos Hub is now focused on building additional features such as shared security which will, if successful, enable the Hub to play a crucial role in in the growth of the ecosystem while also capturing some of that value.
Below we have outlined some metrics to keep an eye on to help you decide if to invest in the ATOM token.
The ATOM token has a price of $10 at the time of writing and a fully diluted market cap of almost $3 billion. We think there is a significant upside in the ATOM token if the Hub is successful in launching features like shared security.
Van Eck also recently came out with their bullish prediction that they think the price of the ATOM token could reach $140 by 2030.
Based on our discounted cash flow analysis of potential Cosmos ecosystem value in 2030, we arrived at a $140 price target for the ATOM token, with downside to $1. With ATOM’s price at $10 as of 8/2/2022, we like the 14-1 odds presented and believe this is a buying opportunity for the token.
If you wish to buy ATOM, we recommend buying through eToro and Kraken as they are both safe and regulated companies with 10 years of operational experience. They both offer a wide range of cryptocurrencies and are beginner friendly.
Buy ATOM on Kraken
After making a purchase (on any exchange), we recommend withdrawing your funds to a hardware wallet like Ledger to secure your assets from possible exchange hacks or insolvencies.
Secure your assets with Ledger