Investing in Cosmos

By   |   Verified by David Boyd   |   Updated 15th August 2022

Cosmos (ATOM) is a fast-growing ecosystem of independent interconnected blockchains developed for a decentralized future. It aims to create the Internet of Blockchains using the IBC (Inter-Blockchain Communication) protocol for communication between independent distributed ledgers.

Before Cosmos, it was not possible to relay messages between blockchains as they maintained a ‘supercomputer’ approach that limited transaction throughput.

Read on to find out more about the project and how to invest in its token.

What is Cosmos?

The Cosmos network supports more than 200 apps and services, including Binance Chain, Terra, Crypto.org, and Cosmos Hub. The Cosmos Hub uses the Inter-Blockchain Communication protocol to connect apps and services. ATOM tokens are required to use these apps and services.

ATOM is the native token of the Cosmos ecosystem and the primary medium of exchange used to perform transactions across independent blockchains connected through the Cosmos protocol. ATOM has been listed on many crypto exchanges.

The token is what enables interoperability between different blockchains. As Cosmos uses a proof-of-stake (PoS) consensus mechanism, the holder of ATOM can stake their tokens for the maintenance of the network. ATOM holders can also receive more tokens as a reward for validating transactions.

Rewards received by ATOM holders are set to increase exponentially as more services are introduced to the ecosystem. Validators that stake higher amounts of coins are more likely to be chosen to validate transactions and receive rewards. The network also penalizes nodes that are found to be acting fraudulently by removing whatever tokens they had staked.