Cosmos, one of the leaders of the Blockchain 3.0 movement Implements scalable and sustainable Inter Blockchain Communication Protocol, as well as offers blockchain interoperability. Cosmos just experienced a new feel as Interchain accounts took it’s interoperability to a new level, speeding up its data sharing process with IBC-enabled chains and bringing composability to Interchain transactions. The need for interoperability may be said to have been underscored for a while until the surge it came with through Defi, even through the various aspects or sectors of technology which it is boosting today.
From the tempest high, the issue of gas fees on the Ethereum Blockchain has been one of great concern, with the cost gearing up as high as $200 per average transaction, making hundreds of DeFi dApps built On-chain struggle for scalability. With this looming roadblock, DeFi began to spread its wings, reaching out for a plethora of solutions from alternative layer 1 to layer 2 scaling solutions and side chains. Yet, with all this innovation to offer cheaper, faster and improved usability come with significant trade-offs in terms of decentralization and security.
Interchain Accounts Bring Composability to Cosmos
The notable act deployed by Interchain towards Cosmos to aid compatibility cannot be treated with levity. In a composable system, various different components can be removed, reshuffled, or reintegrated. What this implies is that highly complex financial instruments can be traded permissionless over different smart contracts, with each smart contract handling a part of an overall business process.
In Cosmos, with the exception of CosmWasm smart contracts, applications don’t have immediate access to each other because each application is essentially a blockchain itself. Taking a leap from this point, Cosmos has already become the number 2 blockchain ecosystem by TVL behind Ethereum and this gratitude is owed to IBC.
What Interchain Also Provided
With Interchain Accounts providing composability and interoperability of smart contracts across different blockchains, these services go further to create DeFi explosion for application-specific blockchains in the Cosmos ecosystem. With composability in IBC, innovation in distinct applications can be deployed easily without significant upgrades.
Better still, unlike in Ethereum or similar ecosystems where applications have to relinquish their sovereignty and are subject to the constraints and governance of the layer 1 they are built on, using IBC as the protocol, blockchains remain entirely sovereignwhile ac hieving interoperability. In other words, the composability that Interchain Accounts introduce doesn’t take away the benefits of application-specific blockchains.
Watering Cosmos Ecosystem
The Cosmos Hub which includes Sommelier and Osmosis will succinctly be early beneficiaries to implement the Interchain Accounts module on their chains, moving it forward to take a Lead on the next phase of Cosmos interoperability. Cosmos Hub in particular has the Interchain Accounts module upgrade scheduled to be implemented as part of the Theta Upgrade by the first quarter of 2022. This will be, pending governance approval. While IBC buds it’s tentacles with this project, all applications and protocols that succeed will draw more users to Cosmos which will benefit the entire ecosystem, and make DeFi a more engaging and rewarding experience for all, prospectively taking Cosmos closer to mass adoption.