Polkadot vs Cosmos: Multi-Chain Showdown

During your time managing crypto, you will have probably heard the term “interoperability”, which has become a popular buzzword in the crypto sphere. To put it simply, anyone who’s interested in interoperability is secretly looking for new ways to utilize their tokens and digital assets, and two exciting platforms which allow for this are Polkadot and Cosmos. 

On the surface, these two multi-chain networks might seem more or less identical. After all, they’re both designed to allow individual blockchains to “operate” with one another, something which for a long time had not been possible. 

When getting under the hood though, it’s clear these two were built for different sorts of crypto users, so why don’t we break them each down to see what they offer, and determine if one or the other can help you move to the next step of your crypto journey. 

What is Polkadot (DOT)?

2016 saw Gavin Wood, the co-founder of Ethereum, leave his company in order to pursue a new project which he believed could be more ambitious in its infrastructure. This would eventually become known as Polkadot, and was built by Gavin with assistance from the Web3 Foundation. 

Polkadot’s entire purpose revolves around gathering individual blockchain networks together, such as BTC and ETH for example, so that they can share data and process transactions between one another. 

Think of the network like a t-shirt. The blockchains which are added to it are like individual polkadots which, while separate, are still all part of one larger network that helps govern them and keeps everything running smoothly. 

How Does Polkadot Work? 

So, what makes Polkadot so special that it can allow blockchains to speak with one another? This all comes down to the parachains – custom-made bridges which pass information between the blockchains and are all hooked up to the relay chain. 

Think of the relay chain as the central hub of Polkadot. It runs everything in the background, and is the central governing body of the entire network. All of Polkadot’s parachains rely on the relay chain to operate, but the parachains themselves still function on their own, so it’s like multiple different workshops all working in the same town square. 

What is Cosmos (ATOM)?

After the rapid emergence of Bitcoin competitors in the early 2010s, software architects Jae Kwon and Ethan Buchman had the bright idea of making a multi-chain service that could allow all of these networks to communicate. 

What resulted was Cosmos, a network of interconnected blockchains that are specifically crafted, designed and governed by developers on the network. 

How Does Cosmos Work?

Cosmos has earned the nickname the “Internet of blockchains”, or interchain for short, as it gathers multiple chains into one network, while still granting them complete freedom and individuality. So in a way, Cosmos is like the internet, and the blockchains are websites – while they’re all on the same page, they do entirely different things, and have their own sets of rules. 

Similar to Polkadot’s relay chain, Cosmos has a central component called the Cosmos Hub, but the difference is that it doesn’t provide governance for all of its blockchains (Zones) on Cosmos. 

So while Cosmos allows blockchains to come together and form their own zones, it doesn’t burden them with any requirements or rules, and lets them operate on their own terms rather than being part of a bigger community. 

Do Polkadot and Cosmos Share any Similarities? 

Polkadot and Cosmos are striving for the same goal; granting investors and developers greater freedom by allowing them to escape from the restraints of the everyday blockchain. 

Blockchain’s have always been known for being isolated, but by being able to share and borrow data from multiple, it means developers can create some truly ambitious projects, and investors can use their crypto in ways not possible before. 

Both have also gained a fair amount of popularity and recognition since their launch. Polkadot is receiving frequent upgrades to this day, and Cosmos has been used by numerous big-time developers including Binance Chain, which was created through the use of the Cosmos network. 

Polkadot vs Cosmos: Key Differences

Polkadot and Cosmos may seem the same, but if this were true, then there wouldn’t be a need for two of them to exist at once, so what actually makes them so different? 

Infrastructure

We already know about the basic multi-chain capabilities of both the Polkadot and Cosmos ecosystem, but let’s dig a bit deeper into their infrastructures to understand where they differ. 

While Polkadot uses its parachains to allow blockchains to communicate with another, Cosmos does this through its IBCs (Inter-Blockchain Communication Protocols) which provide blockchain interoperability. 

Though they both contain a central hub in the form of the relay chain and Cosmos hub, the important point to keep in mind is that the latter doesn’t hold everything together and govern them all as one. People will use Cosmos as a platform for connecting blockchains and building new projects, but after this is done, the network will let the chain be free to do what it wants without imposing any rules onto it. 

Polkadot on the other hand doesn’t grant quite as much freedom due to it always being interconnected and bound by rules. For example, smart contracts can be built into a blockchain on Cosmos through an integrated program called CosmWasm, but on Polkadot, only a select view parachains currently support it. 

Think of it this way: if one parachain were to be re-organized on the Polkadot network, then they would all need to be since they’re interconnected, but this wouldn’t happen on Cosmos since they’re all truly independent blockchains. 

There isn’t one ecosystem that’s objectively better than the other, it’s just that they are built for their own specific purposes. Polkadot prioritizes accessibility, and Cosmos is more complex but also grants greater freedom. 

Security

This is where the two differ the most, but the easiest way to understand this is by starting with the validators – individuals on the network who are responsible for verifying transactions. 

Polkadot’s validators are nominated by DOT holders as part of the Nominated Proof of Stake (PoS) model, and they will work across the entire network and all of its chains. 

This is what is meant by the Polkadot ecosystem having open-source shared security, in the sense that the security of the whole network is distributed and shared among all chains, since they are all registered with the relay chain.

Cosmos validators on the other hand are dedicated to one individual chain or zone first and foremost, but there is an opportunity for users to sign up for the platform’s fairly recent interchain security, which works the same as shared security. 

To obtain this though, Cosmos users must first send a governance proposal ensuring that the chain will be economically viable to support, meaning it isn’t quite as accessible as Polkadot which shares its security with everyone automatically. 

Polkadot’s shared security model is convenient and reliable, but those who want maximum control over their projects may be more comfortable laying down their own rules with Cosmos. 

Use Cases

In terms of the blockchains themselves, because they can be custom-made and bring together the best aspects of different blockchains, they have quite a few use cases. Some examples include triggering smart contracts, monitoring the flow of goods, gaining access to DeFi apps,or simply managing a particular type of token. 

For the token use-cases, on Polkadot, DOT holders can stake some of their earnings to nominate a validator, and will earn rewards if they behave themselves. 

ATOM holders on Cosmos can similarly delegate a validator. The difference is, if stakers don’t vote on a proposal, then the validator will assume their vote, giving them some semblance of voting power. For Polkadot, validators aren’t directly involved with the governance system. 

DOT tokens can also be used in more ways than the ATOM, such as for parachain auctions for example which allow users to acquire a parachain of their own. 

Holding DOT or ATOM means you have a say in how the network is run, it’s just that Polkadot has a few extra staking options, which can appeal to those who want to get the most out of their on-chain digital assets. 

Accessibility 

Polkadot is often seen as more accessible compared to Cosmos, especially for newcomers to crypto and blockchain development.

Being able to benefit from a rigid security model from the get-go makes Polkadot easy to jump into, but the addition of learning resources like PolkadotWiki, and the Kusama tesnet, where users can stake their DOT in a low-risk environment before jumping onto live trading servers, help to make it that bit more user-friendly. 

Both platforms also have tools which can assist developers with building a blockchain, these being Substrates for Polkadot and Cosmos SDK or Tendermint for Cosmos. 

Polkadot wins this time around for how well it eases users into the experience, while Cosmos is moreso leaning towards developers and investors who already have some knowhow when it comes to establishing projects on a network. 

Scalability 

Ever since the parachain auctions first began back in November of 2021, Polkadot’s network has been confined to 100 parachains at a time, and while this number is expected to rise, it does harm the scalability a little bit. There’s only so many parachains that can go around, and as a result, users must participate in auctions to secure one for themselves. 

This means not everyone can gain access to a parachain right away, and it can often take a lot of work securing support through crowdloans to compete against others on the network. 

In stark contrast, Cosmos doesn’t have any limit to the number of blockchains that can exist on its network since they are all technically individualist, and not conjoined together in one large hub. As a result, anyone and everyone can acquire a blockchain right away, and it also results in Cosmos being a lot faster, capable of processing 10,000 transactions a second compared to the 1,000 from Polkadot. 

How to Choose The Right Platform for You

The biggest factor to think about here is your experience and comfortability with multi-chain networks. Say you’re someone who’s interested in making use of multiple blockchains, but you are new to the whole blockchain-building experience, then Polkadot would be more ideal since it automatically provides security and governance, along with extra learning resources. 

If you already have some cross-chain hands-on experience, or you simply have an ambitious project in mind which you want to govern without being tied down to other rules, then Cosmos is the more technical and individualist alternative. 

Essentially, do you want to be part of a big network that can help you operate on the network? Or would you rather do your own thing and have a greater sense of personal freedom when establishing a blockchain?

On the Flipside

• Both Polkadot and Cosmos are already facing fierce competition from other like-minded multi-chain networks. Avalanche for example is gaining steam due to its off-chain functionality, particularly with smart contracts, while the Internet of Things (IoT) is similarly allowing for communication between real world and digital data.
• These sorts of platforms are bringing something new to the table, and they can be well worth checking out for anyone looking to break free from the restrictions of standard blockchain technology. 

Why This Matters

Let’s go back to the central aims of cryptocurrency; offering true decentralization by allowing users to buy, swap and trade digital assets in any way they would like, without regulation. 

The isolated nature of blockchains put a fork in the road for a while, but now, with platforms like Polkadot and Cosmos, users are finally able to utilize their assets freely and in brand new and exciting ways by combining the best parts of each of the networks that they support. 

FAQs