In This Article
Cosmos (ATOM) is often referred to as the “internet of blockchains,” while many crypto experts describe it as a “layer-zero network.” It offers essential tools that allow developers to build custom blockchains that can seamlessly connect and exchange data and tokens with each other. Known for its developer-friendly ecosystem, Cosmos has gained strong traction, and its native token ATOM continues to attract growing interest.
So, are you interested in learning what Cosmos is? This Cosmos and ATOM coin review covers everything you need to know about the project, from its history, tokenomics, and use cases to its features, pros and cons.
Key Takeaways
- Cosmos Network is a collection of interoperable blockchains that use a common consensus engine, interoperability protocols, and development kits.
- The Cosmos Hub is the first blockchain built to be a part of the Cosmos Network.
- ATOM is the native token of the Cosmos Hub.
- New Cosmos chains can bootstrap their security by using the Cosmos Hub’s decentralized set of validators.
- The Tendermint Core consensus engine used in Cosmos chains is designed to be highly scalable.
Cosmos (ATOM) Review: Summary
Interoperability remains one of the most pressing challenges that the crypto world faces today. Blockchains typically operate in isolation, creating “islands” of fragmented capital that cannot move freely between networks. The lack of connectivity stifles broader economic activity and industrial growth. Cosmos recognized this problem early on. Today, it is a key player in cross-chain solutions. The project also provides toolkits and common standards for developers to create high-performant and interoperable blockchains.
This article explains Cosmos Network clearly so that everyone, from experts to beginners, can better understand the project. We will begin by learning important technical terms that will help us better understand the cryptocurrency and blockchain industry. Thereafter, we will discuss the Cosmos Network in detail, covering topics such as its history, founders, core development team, and problems that it is trying to solve.
The second half of the article will cover details about the tokenomics of the ATOM. By the end of the article, you will be well-versed in key technologies developed by Cosmos and its core development team. You will also discover the key differences between the Cosmos Network and the Cosmos Hub. Plus, we have included a section with our top recommended crypto wallets that support the Cosmos Network.
Terms You Need to Know Before Understanding Cosmos
Here are the key technical terms you need to know before understanding Cosmos:
- Blockchains: A distributed and immutable ledger that records transactions and account balances.
- Consensus mechanism: A consensus mechanism is a system used by distributed and independent participants of a blockchain network to agree on a single, shared state of the ledger.
- Proof-of-stake (PoS): PoS is a consensus mechanism in which blockchain validators deposit collateral to become eligible to participate in consensus. To learn more about it, read our ‘What is PoS‘ guide.
- Byzantine Fault Tolerance (BFT): BFT refers to a decentralized network’s ability to function correctly even if some network participants behave maliciously.
- Validators: Validators are network nodes responsible for verifying and processing transactions. They create and add new blocks to a blockchain and update the ledger’s state. For honest work, they are rewarded with cryptocurrencies.
- Staking: Staking refers to the act of depositing cryptocurrencies as collateral. If validators misbehave, they risk losing their staked tokens.
- Native token: A native token is a cryptocurrency used for staking and paying gas fees on a PoS blockchain.
- Interoperability: Interoperability refers to the ability of independent blockchain networks to exchange information with each other.
- Smart contracts: Programs that can execute instructions autonomously when pre-determined conditions are met. Learn more this in our ‘What is a smart contract’ guide.
What is Cosmos (ATOM)?
Cosmos is a collection of interoperable blockchains. It is a network of independent blockchains created for specific applications. Some examples of Cosmos chain include the decentralized perpetual trading-focused chain dYdX (DYDX), the data availability layer Celestia (TIA), and the decentralized exchange network Osmosis (OSMO).
Every Cosmos chain is developed using a common toolkit known as the Cosmos Software Development Kit (SDK). All chains use a common PoS consensus algorithm developed by a company called Tendermint Inc. The independent blockchains can communicate with each other using Cosmos’ Inter-Blockchain Communication (IBC) protocol.
The Cosmos Hub is one of the many independent blockchains within the Cosmos ecosystem. It was the first Cosmos blockchain to be created. It serves as a communication and security layer for the entire Cosmos Network.
History of Cosmos (ATOM) Explained
The origins of Cosmos go back to 2014 when Tendermint Inc. co-founder Jae Kwon published a research paper on a consensus algorithm that does not require proof-of-work (PoW) mining. In 2015, Ethan Buchman joined Kwon to work together on the Tendermint PoS software. Buchman formally became a co-founder of Tendermint Inc., which was also known as All in Bits Inc.
In 2016, Kwon and Buchman published the Cosmos whitepaper, which proposed to create an “internet of blockchains.” The first blockchain in the network was to be known as the Cosmos Hub, and it would have a native token called ATOM. By the summer of 2016, Kwon and Buchman’s work was well received by the crypto community, and they received $300,000 in seed funding to build Cosmos from Paradigm, IOSG Ventures, and Cardinal Capital. Crypto data website ICO Drops reported the seed funding round valued ATOM at a price of $0.025 per token.
According to ICO Drops, in 2017, Cosmos launched an initial coin offering for the ATOM token at a price of $0.1 per token. The proceeds were used to develop the Cosmos SDK and IBC protocol. By 2019, the Cosmos Hub launched its mainnet. Soon, the Cosmos SDK would be used to create many well-known projects, including THORChain, dYdX, Crypto.com, and the now-defunct Terra.
About the Cosmos Team
Jae Kwon and Ethan Buchman are the co-founders of Cosmos and Tendermint Inc. as we already discussed.
Kwon is currently the CEO of Tendermint Inc. He is also the president of the Interchain Foundation, a non-profit organization that funds engineering teams maintaining the Tendermint, Cosmos SDK, IBC, and Cosmos Hub.
According to Buchman’s LinkedIn profile, he served as the CTO of Tendermint Inc. between 2016 and 2019. He also served as a technical director and council member at the Interchain Foundation from 2017 to 2024. Buchman is currently the CEO of Cycles Protocol and Informal Systems.
Vision of the Cosmos Blockchain Project
When the idea of Cosmos was first conceived in 2014, PoW was the most popular consensus mechanism used in crypto blockchains. However, as the idea of PoS consensus gained traction following the launch of Ethereum (ETH), Cosmos co-founder Kwon invented a unique consensus mechanism called Tendermint Core that combined the tried-and-tested Byzantine Fault Tolerant (BFT) system with PoS staking.
Soon, the vision evolved to create a highly scalable network composed of multiple independent yet interconnected blockchains powered by the Tendermint Core consensus. The key advantages of using Tendermint Core are that it can handle high transaction volumes up to a rate of 10,000 transactions per second. Blockchain developers could also take advantage of its flexibility, as it allows code to be written in any programming language.
To sum it up, Cosmos was to create the “internet of blockchain,” made up of a network of interconnected, sovereign, scalable, and secure blockchains.
What Problems Does Cosmos (ATOM) Solve?
Here is a summary of the problem Cosmos solves:
- Blockchain development: Cosmos provides an open-source toolkit called Cosmos SDK that anyone can use to develop a custom blockchain.
- Interoperability: All chains within the Cosmos ecosystem can communicate with each other using the IBC Protocol.
- Security: The Tendermint consensus used in Cosmos chains combines the tried-and-tested BFT system with PoS staking that ensures validator honesty by keeping a collateral or bond.
- Scalability: Tendermint consensus is highly scalable with the capacity to handle transaction volumes up to a rate of 10,000 transactions per second.
- Bootstrap validator set: New Cosmos chains can simply tap into the existing validator set on the Cosmos Hub to bootstrap their security.
Cosmos (ATOM) Tokenomics
ATOM is the native token of the Cosmos Hub. The Cosmos Hub plays a key role in the network by offering interchain security. This means other blockchains in the Cosmos ecosystem can stay secure by relying on ATOM token staking through a proof-of-stake (PoS) system.
Instead of spending time and resources to put together a decentralized set of validators, new chains secure themselves by using the existing validator set of the Cosmos Hub.
ATOM Token Supply
Here are the important tokenomic details you need to know about the ATOM token, according to CoinMarketCap and Mintscan:
- Max supply of ATOM: Infinite
- Total supply of ATOM: 390.93 million
- Circulating supply of ATOM: 390.93 million
- Inflation: 10% per annum
ATOM Coin Distribution & Allocation
Here is how ATOM’s total supply was distributed.
Allocated to
Percentage of total supply
Public fundraising
44.24%
Block rewards
39.37%
All in Bits Inc (Tendermint Inc)
6.54%
Interchain Foundation
6.53%
Seed
3.31%
ATOM token utility & Use Cases
Below is a summary of the main use cases for the Cosmos (ATOM) token:
- Staking: Validators on the Cosmos Hub blockchain must stake ATOM to participate in consensus. Do you want to learn how to stake ATOM? Here is an easy Cosmos staking guide for you.
- Interchain security: Staked ATOM on the Cosmos Hub can be used to secure independent blockchains within the Cosmos ecosystem.
- Ecosystem funding: ATOM is used as a treasury asset to fund the development and maintenance of software, such as the IBC protocol and Tendermint Core, which are used by Cosmos chains.
- Governance: ATOM holders can propose network improvement proposals and are responsible for voting and passing such proposals.
- Reserve asset: ATOM is designed to be the reserve asset and the settlement asset of the Cosmos Network.
- Gas fee: ATOM is used to pay gas fees on the Cosmos Hub.
ATOM’s Governance & Protocol Control
Cosmos Hub has an on-chain governance system for proposing network improvements, changing consensus parameters, and spending funds from the Community Pool. Note that 2% of all staking rewards generated on the Cosmos Hub are continually transferred to the Community Pool.
Cosmos governance discussions typically begin on community forums, Discord channels, and Reddit. Community members can officially submit a proposal by depositing a minimum of 250 ATOM tokens.
ATOM holders who stake their tokens can vote with either ‘Yes’, ‘No’, ‘Abstain’, or ‘NoWithVeto’. More than 50% of the participating voting power must back a proposal with ‘Yes’ by the end of a 14-day voting period for a proposal to pass.
How Does Cosmos Work?
Blockchains exist in isolation from each other, which is the result of contrasting designs, protocols, consensus mechanisms, programming languages, token standards, and virtual machines used across various blockchains. This isolation does not allow independent blockchains to communicate with each other, preventing capital and digital assets from moving from one chain to another. Cosmos is designed to solve this interoperability issue. It does so by providing a common standard for its network to build blockchains and the use of an interchain communication protocol.
Architecture Behind the ATOM Coin
The Cosmos Hub is the central blockchain in the Cosmos Network that links together independent chains. It also offers security to newer Cosmos chains that don’t yet have the time or resources to set up their own group of validators to verify transactions and maintain their blockchain.
The ATOM token is at the heart of interchain security provided by the Cosmos Hub to its fellow Cosmos chains. All validators on the Cosmos Hub must stake a certain amount of ATOM tokens as collateral. The main purpose behind such a requirement is that it encourages validators to act honestly. Any validator that does not perform its functions properly or acts dishonestly risks losing its collateral.
Cosmos Blockchain Structure
The Cosmos Network is made up of independent blockchains. Most of them are created with a specific application in mind. For example, Osmosis is a blockchain that hosts a decentralized exchange, while the dYdX Chain was created to scale its decentralized perpetuals exchange. To understand the blockchain structure behind Cosmos chains, you need to learn about the key components that power the Cosmos ecosystem. They are as follows:
ATOM’s Token Standards & Smart Contracts
CosmWasm is a platform for writing smart contracts for Cosmos chains using Rust and WebAssembly programming languages. It aims to provide a one-stop platform for developing, testing, and running smart contracts on Cosmos chains. Smart contracts are used to mint, issue, and burn new tokens on Cosmos.
Cosmos ecosystem has a virtual machine called Cosmos EVM that executes smart contracts. The EVM is made to be compatible with the Ethereum Virtual Machine (EVM), which makes it easy for developers to port their Ethereum smart contracts to Cosmos chains. Furthermore, Cosmos EVM is compatible with ERC-20 tokens and other non-fungible token standards, including EIP-721, that the EVM natively supports.
Scalability & Performance
Tendermint Core and CometBFT consensus engines used in Cosmos chains are highly performant and optimized for speed. The use of both these consensus engines allows blockchains to process a high number of transactions per second (TPS). According to Github documents, Tendermint Core enables blockchains to provide transaction finality in the order of one second. The engine also allows network throughput at the rate of 10,000 TPS. When it comes to scaling, Tendermint Core can scale to hundreds or thousands of validators. It is expected to scale further due to advancements in network bandwidth and CPU capacity.
Pros & Cons of ATOM
Cosmos allows various blockchains to interact with each other. The consensus engines Tendermint Core, CometBFT are used to optimize for speed. Cosmos SDK allows developers to create custom blockchains from scratch. New chains secure their network by tapping into PoS security. The native token has limited utility across the ecosystem. New tokens are regularly minted to reward validators, which can lead to inflation. ATOM may struggle to capture value across independent chains Long-term success of ATOM depends totally on the growth of Cosmos.Pros
Cons
Cosmos Analytics
In this section, we examine important Cosmos Hub on-chain metrics to learn more about this interoperability-focused blockchain project.
On-Chain Metrics
Here are interesting stats and key on-chain metrics that ATOM investors will find insightful:
What Do Experts Think About Cosmos (ATOM)
Research firm Messari listed “major interoperability breakthroughs” as a bull case for Cosmos Hub following the successful launch of an Ethereum-to-Cosmos bridging protocol called IBC Eureka in April 2025. Messari said the IBC Eureka, which enables fast and affordable one-click connections between Ethereum and Cosmos chains, positions Cosmos Hub as a “key coordination hub for multichain activity.”
The research firm also added that Interchain Foundation’s investment in liquid staking protocol Stride will enhance Cosmos Hub’s decentralized finance (DeFi) landscape.
Elsewhere, crypto asset management firm 21Shares quoted Metcalfe’s Law, predicting Cosmos will see “exponential growth when continuing to plug in new blockchains into its ecosystem.”
This ultimately wouldn’t only increase the value of ATOM, but every crypto network that’s being part of the network. This is a win-win situation for all parties involved.
The firm said technological risks stemming from bugs, code vulnerabilities, and smart contract failures were risks to Cosmos investors that needed to be considered, alongside market volatility and regulations.
Is Cosmos (ATOM) a Buy?
Cosmos’ blockchain development tools are widely popular among developers. They have been used to create popular chains such as dYdX, Osmosis, THORChain, Akash Network, and MANTRA. But one shouldn’t forget that there are many risks associated with the ATOM token, volatility being one of them. However, if you are interested in buying the ATOM token or any other Cosmos cryptocurrency, you should always do your research (DYOR). Your decision to buy ATOM should depend on your risk tolerance, market outlook, available capital, and financial goals.
Head to these safest platforms to buy ATOM. For a step-by-step process, check out our ‘How to buy Cosmos (ATOM)‘ guide.
Check out our exclusive Cosmos Price Prediction guide to learn what price the ATOM token could be trading at in 2030.
Top Wallets To Store ATOM
After you have bought ATOM, you must store it safely. Non-custodial crypto wallets are incredible tools that allow you to maintain complete control and ownership over your digital assets. Some of these self-custodial crypto wallets allow you to use your tokens across DeFi apps, blockchain games, and NFT marketplaces. Here are the top wallets that support holding ATOM:
Despite the tremendous growth of the Cosmos ecosystem since launch, the ATOM token continues to disappoint investors with its lacklustre price performance. Critics point out that the ATOM token is not indispensable within the Cosmos Network, as independent Cosmos chains can survive without ATOM. These chains have the freedom to create native tokens for gas fee payments, governance, and staking, making ATOM non-essential in many cases. Nevertheless, core developers are actively working on bringing more token utility to ATOM to attract investors. See Also: ATOM is mainly used for staking, gas fee payments, and governance on the Cosmos Hub. It is also used to power interchain security on the Cosmos Network. Cosmos stands out by enabling blockchains to interoperate and share data through its Inter-Blockchain Communication (IBC) protocol. Not just that, it also allows developers to build custom, application-specific chains using its developer toolkit. Cosmos Hub is the first blockchain created for the Cosmos Network. Cosmos SDK is an open-source toolkit for building public PoS blockchains and permissioned blockchains. The goal of the Cosmos SDK is to allow developers to easily create custom blockchains from scratch. Cosmos (ATOM) was created by Jae Kwon, Ethan Buchman, and the team at Tendermint Inc. Cosmos develops tools for developers to create custom and permissioned public blockchains easily. Cosmos connects blockchains via the Inter-Blockchain Communication Protocol (IBC). Established in 2013, 99Bitcoin’s team members have been crypto experts since Bitcoin’s Early days. Weekly Research Monthly readers Expert contributors Crypto Projects Reviewed
Conclusion: What is Cosmos (ATOM)?
References
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