Introduction
Cosmos and Polkadot both emerged to address blockchain interoperability through their unique app-chain theses, aiming to create ecosystems of independent and sovereign blockchains.
Cosmos does this by creating a network that connects blockchains, similar to how the Internet connects computers. On the other hand, Polkadot uses a special setup called “parachains” that lets blockchains work together smoothly.
Once highly anticipated, Cosmos and Polkadot's vision for blockchain interoperability has now faced stiff competition from newer appchains and rollups in other ecosystems. However, they still play important roles in the blockchain industry given their ecosystem sizes.
Today, we will examine the differences between Cosmos and Polkadot including their origins, token use cases, prospects and threats.
Polkadot & Cosmos: Origins and Narrative
Polkadot
Polkadot was founded in 2016 by Dr. Gavin Wood, co-founder of Ethereum and the creator of the original blockchain interoperability project. It enables developers to create their own specialised blockchains, called parachains, that can interact with each other and with the Polkadot network. This is made possible through the use of a relay chain that acts as a central hub for communication between different parachains.
The web of parachains built around Polkadot are able to send not just tokens, but also data between one another. This means developers building around Polkadot can build services that take advantage of multiple distinct parachains, rather than one sole chain.
Each parachain can have its own consensus mechanism, virtual machine, and governance structure, giving developers a high degree of flexibility and customisation. Polkadot also offers a shared security model, allowing smaller parachains to benefit from the security of the larger network.
You could compare this to how countries in the European Union (EU) maintain separate economies but can trade goods, services, and workers freely.
Cosmos
Cosmos was initially birthed by the Tendermint project led by Jae Kwon and Ethan Buchman. It was first conceived in 2014.
Cosmos is a blockchain ecosystem that is well-known for its Inter-Blockchain Communication Protocol (IBC), a standard that allows for the authentication and transport of data between two different blockchains. This means that users can send funds between different IBC-enabled blockchains without needing to use bridges. In other words, communications between Cosmos “zones” (which all have IBC enabled) is very easy. However unlike Polkadot, Cosmos zones do not have shared security and operate more independently in this way.
Despite their different technical approaches, Cosmos and Polkadot both set out to achieve interoperability for sovereign blockchains. Each developed unique standards, consensus protocols, and communication layers, enabling chains to connect and integrate into a broader ecosystem of compatible networks.
Pioneering Bespoke Blockchains: Appchains
Both Cosmos and Polkadot are pioneers in the appchain thesis, bringing this concept first in 2016, prioritising specificity and specialisation over the more popular general-purpose blockchains.
Polkadot parachains are individual blockchains that run parallel within the Polkadot ecosystem. Parachains work similar to appchains as they are designed for specific use cases and can have their own consensus mechanisms, making them highly customisable and tailored for specific needs. They connect to Polkadot’s main Relay Chain, benefiting from its security.
Meanwhile, Cosmos zones are independent blockchains connected to the central Cosmos Hub. They are equivalent to appchains in the Cosmos ecosystem. They enable scalability by allowing multiple blockchains to interoperate.
Each Zone can be designed for a specific application, and they interact and transfer data and tokens via the IBC protocol.
$ATOM and $DOT token: Use Cases
ATOM’s primary use case today is as a token to hold for potential airdrops. Each time a chain releases using the Cosmos SDK — earlier this year, Dymension and Celestia — they typically airdrop to ATOM holders.
On the other hand, DOT tokens are crucial for slot auctions on Polkadot. Slot auctions determine which projects can occupy a parachain slot. Parachains connect to Polkadot by leasing a slot on the Relay Chain for up to 96 weeks at a time (with the option to renew).
Projects can secure a parachain slot by bonding DOT tokens, with the highest bidder winning the slot. They can bid using their own DOT or through a crowd loan, where they raise DOT from their community and supporters.
Cosmos vs Polkadot: Prospects & Threats
Polkadot has a lot of potential with its experienced and reputable team, as well as its active developer community. However, in the long run, it might struggle to attract developers due to its high capital requirements to gain access to a parachain slot compared to other solutions.
With no additional benefits over other contenders, it might be difficult to convince developers to launch with Polkadot. Instead, they might choose more affordable and economically interesting options.
Cosmos’ IBC sets itself apart by offering complete openness and independence from the Cosmos Hub and its native token, ATOM. This is both a positive and negative attribute for the ecosystem. On one hand, it fosters ecosystem growth, while on the other, it is detrimental to the Cosmos HUB’s value proposition.
Supported Cosmos and Polkadot Networks
SubQuery’s first home was the Polkadot ecosystem when we first started our journey, launching an open-souced indexer SDK in February 2021. Polkadot taught us how to be multi-chain from day one. It wasn’t long before we expanded into Cosmos and since then we have evolved into a leading Web3 data indexer, supporting hundreds of networks and providing decentralised indexer and RPCs for over 200 networks as of today.
We currently support 208 networks in our ecosystem including 48 Cosmos chains and 58 Polkadot chains.
Conclusion
Both Cosmos and Polkadot boast thriving ecosystems of decentralised protocols and services that contribute to building the Web3 landscape.
However, recently, numerous projects, especially utilising Ethereum Layer-2 stacks have enhanced these initial ideas with innovative technologies and concepts, positioning themselves as potentially stronger candidates for widespread adoption.
Despite fierce competition in the appchain space, it’s not a winner-takes-all scenario. Diverse architectures and target markets allow projects to cater to various niches and collaborate effectively. Exciting initiatives are already underway, and as the universal infrastructure toolkit, SubQuery will be sure to support them all!
About SubQuery
SubQuery Network is innovating web3 infrastructure with tools that empower builders to decentralise the future. Our fast, flexible, and open data indexer supercharges dApps on over 200 networks, enabling a user-focused web3 world. Soon, our Data Node will provide breakthroughs in the RPC industry, and deliver decentralisation without compromise. We pioneer the web3 revolution for visionaries and forward-thinkers. We’re not just a company — we’re a movement driving an inclusive and decentralised web3 era. Let’s shape the future of web3, together.
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