The Cosmos network is comprised of numerous independent, parallel blockchains known as zones, each utilizing classical Byzantine fault-tolerant (BFT) consensus protocols, such as Tendermint (already utilized by platforms like ErisDB). Certain zones function as hubs, facilitating interoperability among multiple zones through a shared hub.
This architectural approach extends the concept of
Bitcoin sidechains, employing classic BFT and Proof-of-Stake algorithms in place of Proof-of-Work. Cosmos excels in interoperability, enabling seamless interaction with various applications and cryptocurrencies—an aspect where many other blockchains face limitations. Introducing a new zone allows the integration of any blockchain system into the Cosmos hub, facilitating token transfers between zones without requiring intermediaries.
The Cosmos Hub, functioning as a multi-asset distributed ledger, features a distinct native token known as the atom. Atoms serve three primary purposes: acting as a spam-prevention mechanism, serving as staking tokens, and functioning as a voting mechanism in governance.
In the context of spam prevention, Atoms are utilized to pay fees, with the fee being proportional to the computational requirements of the transaction—a concept reminiscent of Ethereum's "gas." Fee distribution is carried out in-protocol, as detailed in the protocol specification.
As staking tokens, Atoms can be "bonded" to earn block rewards. The economic security of the Cosmos Hub is tied to the quantity of Atoms staked, with higher amounts of collateralized Atoms contributing to increased network resistance against attacks. Thus, a higher number of bonded Atoms enhances the overall economic security of the network.
Atom holders play a crucial role in governing the Cosmos Hub by participating in the voting process on proposals using their staked Atoms.
