Subscribe

Get more insider crypto knowledge from the world’s leading crypto wallet.

Subscribeplaceholder
Welcome! Exodus has moved from Exodus.io to Exodus.com. We're taking things up a notch at our new home.
Subscribe
Polkadot vs. CosmosDownloadSubscribe

Polkadot vs. Cosmos

Polkadot and Cosmos are two blockchains with a similar goal: they both want to create an interoperability layer between all of the different cryptocurrencies. Both platforms support smart contracts and have unique scaling solutions to reduce network congestion.

Although they have a lot in common, there are some key differences between the two protocols. In this article, we’ll consider those differences, compare each other’s advantages, and speculate on which platform might be the long-term winner.


    Blockchain Interoperability

    Today’s blockchain networks are like islands. Although they’re close to each other, they’re not connected. While there is some basic interoperability, for example WBTC on Ethereum, there is no efficient connection between all of the networks.

    This is unfortunate because the more connections that there are between blockchains, the more useful they become. There’s a lot of talk in the crypto community about the network effect; the more people use a service the more valuable it becomes. Well, one of the fastest ways to grow the cryptocurrency network effect would be to connect all of the blockchains together.  

    If a smart contract on Ethereum can trigger a stablecoin payment on the Solana network, that brings a whole new value proposition to crypto. It’s much more valuable than blockchains being separated from each other.  


    How Polkadot Scales

    Polkadot scales through the use of parachains. A parachain is a sidechain that runs parallel to the main Polkadot blockchain. Projects built on different parachains can communicate with each other using XCMP (Cross-Chain Message Passing) and they can use the Polkadot security mechanism to reach consensus.

    Currently there is a maximum upper limit of 100 parachains. There is no lower bound to the number of parachains and Polkadot could function normally even without any parachains running.

    Ultimately, Polkadot believes that by using Parachains they will be able to scale up to 1 million TPS (Transactions Per Second). That would enable Polkadot to handle most of the blockchain traffic in the world, even as blockchain usage continues to grow. However it should be pointed out that these scaling claims are theoretical and not yet proven under real-world conditions.


    How Cosmos Scales

    The unique feature of Cosmos is that it allows developers to create blockchains within the Cosmos ecosystem, utilizing plug-and-play tools to speed up the building process. For example, Cosmos provides developers with pre-existing network infrastructure, application layer technology, and an existing consensus mechanism.

    Developers who want to create a blockchain can use these tools to quickly launch a new network. All of this is what’s known as Cosmos SDK. This is how Cosmos scales. Anyone can create a new network. Since all of these networks are running separately, the Cosmos blockchain does not get congested.

    Cosmos SDK lets developers easily create their own blockchains on Cosmos

    These tools are a huge advantage since they speed up the blockchain development process while also making blockchains more secure. Since blockchain technology is relatively new it’s quite common for developers to have mistakes in their code when they create a new network or protocol.

    We’ve seen lots of examples of insecure code in DeFi, where projects are exploited and hacked all the time. SDK provides code that is tested and secure so that the chance of vulnerabilities is much lower. A more in-depth explanation of the Cosmos blockchain is available on the Cosmos website.


    How Polkadot and Cosmos are Bringing Interoperability to Crypto

    Although Polkadot and Cosmos allow developers to build on top of their platform, the larger purpose of both platforms is to bring a new level of interoperability to the blockchain ecosystem.

    Here’s how they’re trying to do that.

    Cosmos

    Cosmos has a technology that they call IBC: Inter-Blockchain Communication protocol. This is the protocol that is used to connect different blockchain networks. Using IBC, networks can exchange data and tokens, with Cosmos as the bridge between them.

    Complexity is reduced via a hub and zone model. Instead of each blockchain having to connect to every other blockchain, they connect via a centralized hub. There is an excellent, in-depth technical explanation of this model available here.

    Once a blockchain has joined Cosmos, relayers scan the state of different ledgers for changes. When a relayer finds a state change they relay that back through Cosmos to another blockchain. More information about relayers and the relay process is available here.

    In addition to connecting external blockchains, there’s also a hub and zone model that Cosmos uses to connect the blockchains built on top of the protocol.

    Polkadot

    On Polkadot, all of the parachains and external blockchains connect to the relay chain (the main chain) via a bridge. According to Polkadot, bridges are:

    “Ways for two economically sovereign and technologically diverse chains to communicate with each other.”

    In other words, bridges are what make it possible to connect blockchains together, like Bitcoin and Ethereum. In fact, Polkadot even has a grant program that can fund developers who want to create bridges between other blockchains using Polkadot.

    In practice the Polkadot bridges and the Cosmos IBC protocol function in a similar fashion and they both enable a similar outcome: interoperability.


    The Interoperability Chain

    There are many important use cases for an interoperability network like those being provided by Cosmos and Polkadot. However, it remains to be seen whether the two competing protocols can both flourish in the long run.  

    Over the long term what we’re likely to see is one of these networks gain the majority of users. Like a social media platform, one protocol will get the network effect, it will attract all new users, and the other protocol will lose most of its market share.

    Which protocol will win out in the end? It’s too soon to tell. Polkadot has attracted a lot of developers, and will probably benefit from the experience of creator Gavin Wood, who was formerly Chief Technology Officer of Ethereum. However, the Cosmos SDK developer toolkit is truly unique and offers a ton of value to people who want to build their own blockchain.


    In Summary

    Cosmos and Polkadot have a lot in common. Although Cosmos offers developers slightly more freedom to build their own blockchains, the Polkadot parachains are also quite flexible in how they can be deployed.

    The core idea for both blockchains is that they force developers to build on a secondary layer. This is very different from a project like Ethereum, where for now at least, all of the applications run on the base layer.

    In terms of connectivity, Cosmos supports multiple hubs so the scaling possibilities are nearly endless. On Polkadot a developer can create a bridge from an external blockchain to the Polkadot relay chain, thus achieving interoperability. The Polkadot team even describes a bridge as a type of “virtual parachain.”

    Polkadot and Cosmos both offer a scalable development environment as well as a way to connect third party blockchains together. Given the similarities between the two projects, it will be interesting to see which one the market favors in the long run, and it might come down to which of the blockchains can achieve adoption the fastest.

    This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

    Share this articleShare on Linkedin
    Get more insider crypto knowledge from the world’s leading crypto wallet.
    Subscribe