Outlier Ventures’ 6 Cosmos portfolio projects at a glance

Author: Victor-Cristian Florea, Outlier Ventures; Translated by: 金财经0xjs

Cosmos Ecosystem Update

"Cosmos Hub White Paper v1.2"

In order to solve the 51% attack faced by the new chain, Cosmos introduced a cross-chain security mechanism in their new white paper, and the on-chain function of this mechanism will be launched in the second quarter of 2023. This mechanism allows the chain to rent security from the Cosmos Hub, similar to Polkadot’s shared security model. However, Cosmos’ cross-chain security provides greater flexibility, allowing application chains to pay validators a percentage of transaction fees for security. To reduce dependence on Cosmos Hub, the co-founders of Osmosis came up with the Mesh Security solution. Through this technology, each chain can have its own set of validators, and Cosmos Hub’s validators can participate in the consensus of the consumer chain. This mesh structure ensures economic communication and promotes closer collaboration, increasing the power of validators and promoting equality between chains.

Another important proposal in the new white paper involves the introduction of liquid staking across chains. Cosmos Hub’s new liquid staking model generates revenue from a variety of sources, including interchain transaction fees and interchain security fees. The redesign of the ATOM token issuance scheme aims to increase its weight and value capture capabilities, making it consistent with the new features of the Cosmos Hub. The white paper envisions that this “cross-chain liquidity market will serve as a catalyst for ATOM’s overall cross-chain deployment, building a new wave of innovation for secure Cosmos-based native collateral.”

In order to provide a common system for decentralized autonomous organizations (DAOs), Cosmos Hub also introduces a governance stack. The framework includes a consensus council, a cross-chain security council and a distributed DAO, providing a standardized governance model for all DAOs. The power hierarchy model defines the relationships and responsibilities between different organizations, enabling Cosmos Hub to make important decisions regarding the balance of interests between treasury funds and Dapp chains.

The proposed Cosmos Hub upgrade aims to address the broken state of the Cosmos ecosystem and enhance the value capture capabilities of the ATOM token. By building new modules and implementing advanced features, Cosmos Hub seeks to become the core of the network. With the recently announced native USDC implementation, the ATOM/USDC trading pair is expected to generate significant fee revenue and unlock new use cases for the ATOM token. However, the proposed upgrade to refactor the Cosmos Hub failed to pass the community voting session and never reached the production stage.

Figure 1 – Osmosis Blog

IBC

The Inter-Chain Blockchain Protocol (IBC) solves a specific problem - cross-chain communication. It does this by providing a permissionless way to pass packets between blockchains. While IBC initially focused on token transfers (Figure 2) and cross-chain state interactions, its potential use cases have expanded to include more complex applications such as transfer security and trust (Figure 1). Aditya Sripal of Informal’s and Interchain GmbH deserves praise for her efforts in designing and implementing cross-chain security.

In addition to the core development team, some projects are actively exploring innovative IBC applications and working hard to integrate IBC with other ecosystems. Exciting initiatives include IBC bridges connecting to Polkadot, Ethereum, Avalanche, and cross-rollup communications. Additionally, projects like Babylon and Penumbra are leveraging IBC to enhance security and unlock new functionality for IBC-enabled chains. Secret Network uses IBC to provide fast and secure VRF access to the entire ecosystem, providing on-chain randomness.

Figure 2 - "IBC Token Transfer" - Cosmos Developer Portal

6 Cosmos Portfolio Projects from Outlier Ventures

So our portfolio has 6 projects focused on building within the Cosmos ecosystem. Here are the latest updates on Outlier Cosmos investment projects:

Agoric

In 2022, Agoric, the blockchain that enables Java smart contracts in the Cosmos ecosystem, reached the end of Mainnet-1 after four years of development, a major milestone for the platform. The launch of Mainnet-1 occurred on October 27, 2022, and was followed by the Mainnet-1B upgrade, which introduced enhanced features such as Agoric VM, an Oracle network, and a set of Hardened Java smart contracts.

The first decentralized application of the Agoric blockchain is Inter Protocol, the hub for the first IBC-enabled stablecoin in the Cosmos ecosystem, known as IST. In the first half of 2023, users will only be able to mint IST using stablecoins such as USDC, USDT, and DAI, but starting this summer, they will also be able to use volatile assets as collateral for the minting process. The Inter Protocol team has just launched the ATOM vault on the Mainnet version of the app, allowing users to deposit ATOM tokens and mint IST against their collateral.

Cudos

Cudos is a Layer 1 blockchain and Layer 2 community-governed cloud computing network that provides an Infrastructure as a Service (IaaS) marketplace to deliver decentralized, permissionless access, high-performance cloud computing at scale. Cudos' blockchain computing technology merges cloud and blockchain into Web3, and its native utility token CUDOS plays a vital role in promoting the platform. Cudos aims to fully integrate cloud and blockchain services, advocate user privacy and sustainability, and provide decentralized computing resources to the public.

One of the newest decentralized applications on the Cudos Blockchain is Cudos Markets, a sustainable asset NFT marketplace that allows users to buy, sell and collect Bitcoin mining power NFTs. Ownership of the NFT gives users access to mining power for 4 years, during which time the holder will receive mining rewards related to the mining power they own on Cudos Markets. Its long-term goal is to provide a fully decentralized marketplace for all computing needs.

Secret Network

In May 2023, Secret Network launched Secret VRF, a secure and verifiable random number generator (“RNG”) that is now available to developers. This RNG allows the creation of truly random numbers on the blockchain without compromising security or usability. It eliminates the need to rely on off-chain solutions that are often unreliable, centralized, expensive, and detrimental to user experience. Secret VRF solves the technical challenges of on-chain RNG by generating unpredictable but still deterministic random numbers within a Trusted Execution Environment (TEE). Secret VRF is designed to provide verifiable on-chain randomness, opening up many new Web3 use cases for the Cosmos universe. This is a major breakthrough for the Cosmos universe in reducing dependence on the Chainlink VRF Oracle. This useful tool can be used by both the Secret Network community and other IBC-enabled Cosmos chains as the foundation for secure randomness in the Interchain.

Fetch.AI

Fetch’s Agentverse has launched its latest version, Agentverse v5, which includes a new feature that allows agents to own wallets. With this update, agents can interact with the Fetch.ai ledger, send and receive transactions, and take advantage of endless possibilities. Developers can now leverage the ctx.ledger and ctx.wallet objects to interact with the Fetch.ai ledger and conduct transactions seamlessly. This new feature enables agents to send tokens directly from their wallet to a specific address, facilitating payments or enabling token transfers. The Agentverse editor displays the agent's wallet address at the top of the page, making it easier to manage the agent's wallet. It also enables agent-to-agent transactions, thanks to Agentverse wallet integration.

Agentverse provides a user-friendly platform to create, test, and deploy agents regardless of the user's level of experience with agent-based technologies. Leveraging the new capabilities of v5 will help build intelligent agents that can interact seamlessly with the Fetch.ai ledger.

Checkd

Zero-knowledge proofs (ZKPs) are a hot topic in Web3, and it’s fascinating to see multi-protocol initiatives for new tools that provide consumers with a more private and independent online experience. As a result of collaboration with Hyperledger Indy and Hyperledger Aries, two well-known SSI frameworks, as well as Cheqd's primary partner Animo, Cheqd recently announced support for zero-knowledge certificates (ZKCreds). They now offer their famous "AnonCreds" verifiable certificates to partners.

Recently, Cheqd launched creds.xyz, a new protocol for ZKCreds. Creds are a core component of the project, providing a way to build reputation and prove authenticity in a private and secure environment. In contrast to NFTs and SBTs, Creds are both transferable and adaptable across a variety of platforms and ecosystems, private, giving users control over who can access their information, and revocable, giving users configurable Access control. Creds can also help users prove that they are human and not AI.

Finance Assessment

Kima aims to eliminate the fragmentation of DeFi by providing open infrastructure and building blocks for cross-chain applications. DeFi is currently fragmented due to technical, financial and regulatory obstacles, resulting in liquidity pools, options, vaults, strategies and futures contracts being locked within the boundaries of the network and smart contracts. This fragmentation results in poor user experience, limited functionality, lack of liquidity, and high costs. To increase adoption and unlock value, DeFi must become non-fragmented, interoperable, interconnected, user-friendly and have smart services.

The Kima Protocol provides robust technical infrastructure, pre-built functional blocks, tokenomics, and applications to solve these problems and create a more seamless DeFi experience. They have just announced a public demo of their application deployed on Devnet, allowing users to test various features of their product suite.

Conclusion

Cosmos is an ever-growing ecosystem, with new innovative chains constantly being developed. Through smart improvements around IBC and cross-chain support, as well as continued development of existing application chains, security, interoperability and user experience, they are already better than ever.