Cosmos plans to accelerate DeFi growth with Gravity

Almost halfway into this year and it’s certainly been eventful. But if you manage to filter out the noise and focus on development in the space, you’ll find many projects like Cosmos that have been making rapid progress. 

The large and expanding network that includes Binance Coin, Crypto.com, and Terra, now has around $100 billion of digital assets under management. The 240+ blockchains, apps, and services in its ecosystem run on energy-efficient Proof of Stake (PoS). With all the recent fiery debates triggered by Tesla CEO, Elon Musk, that’s a huge point in its favour.

As Tendermint co-founder Ethan Buchman replied to Musk’s tweet of May 12 that send the markets into a tailspin, “Cosmos pioneered energy efficient Proof of Stake. We’re the Tesla of blockchains”. 

According to recent calculations by Cosmos, a Cosmos-based PoS blockchain uses less energy per year than Bitcoin and Etherum in a single day. In fact, even 100,000 Cosmos blockchains combined would still use less annual energy than Ethereum alone.

Gravity on Cosmos

As well as building a real alternative path forward for sustainable blockchain growth, Cosmos continues to deliver on its mission of allowing blockchains to scale and interconnect. Earlier this year, the network launched Stargate and, shortly after, shipped its Inter Blockchain Communication (IBC) protocol allowing for blockchains to interoperate and seamlessly transfer tokens and other data.

This was a first for the blockchain industry and potentially a game-changer for its development. As long-time cryptocurrency proponent and ShapeShift CEO Erik Voorhees pointed out, the birth of IBC was “one of the defining events of the year”.

Now, Cosmos is planning to step up its game even further using Gravity to (quite literally) pull DeFi over to the Cosmos Hub. With a combination of the first interchain decentralised exchange, Gravity DEX, built by B-Harvest and Tendermint, and a decentralised and secure bridge to Ethereum (Gravity Bridge) built by Althea Network, Cosmos wants to accelerate DeFi growth and attract billions of dollars of liquidity to the network.

Gravity DEX is set to hit the mainnet in the coming weeks with an incentivised testnet competition showing promising results. Using IBC, the DEX allows traders to swap and pool digital assets between any blockchains in the Cosmos network–and beyond. This will make it easy for users to access promising Cosmos tokens such as Akash’s $AKT or Regen Network’s $REGEN that aren’t listed on centralised exchanges. 

It will also give blockchain developers a faster way to gain price discovery on their tokens; by building a production-ready blockchain with Cosmos’ Starport technology and permissionlessly listing their digital assets on Gravity DEX. Far more liquidity flowing through the Cosmos Hub will greatly increase the utility of its native ATOM token. 

Tendermint CEO Peng Zhong commented, “A DEX that’s powered and secured by the ATOM is going to encourage new chains to start trading and create liquidity, more traders to start arbitraging, and developers to see that they have a new path to start listing their tokens permissionlessly and getting people to invest… That’s really huge”.

A decentralised bridge to Ethereum

Beyond the Cosmos ecosystem, of particular note is that work is already underway to connect to major blockchains like Celo and Polkadot. Even more interestingly, however, is the Gravity Bridge to Ethereum, the indisputable home of DeFi, which will open up a wealth of new opportunities for the sector.

As CEO of Althea Network, Deborah Simpier, points out, “DeFi is increasingly difficult for retail traders to access. Gravity Bridge is democratising DeFi for everyone”.

How so? Well, as the popularity of DeFi has soared in recent months, so too, have the fees required to transact with the Ethereum network. In fact, as many traders know, placing a trade on Uniswap for less than $1000 hardly makes sense anymore due to the punishing fees.

Gravity Bridge batches transactions in order to perform cheaper ERC-20 sends, reducing gas fees to a mere fraction of the cost on Ethereum. In fact, the Althea testnet found that an ERC-20 send on Ethereum cost around 30-50K gas/send. Using Gravity, that cost was reduced to 12,793 gas/withdraw.

Through the Gravity Bridge and Gravity DEX, Cosmos has a real chance of accelerating DeFi growth even further and enabling everyday people to take part and enjoy its many benefits once again. As Simpier also commented, “Most people have access to the terrible parts of banking… But only the very few wealthy folks actually have access to being able to invest and earn wealth and to leverage their assets for themselves. I think what’s exciting about Gravity Bridge is that it democratises access to financial services… It really brings back that kind of core freedom and empowerment”.

With so many plans in the pipeline and many successful initiatives already launched, Cosmos will certainly be one to watch for the rest of this year, especially if you’re looking for a cheaper, more environmentally-friendly way to access the benefits of DeFi.

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