Cosmos/ATOM pumping or holding steady for two months now. I think it’s time to address the IBC and interchain security. Small overview

The IBC: Interblockchain Communication protocol. This protocol allows sovereign blockchains that are hooked into it, to communicate freely. This includes but is not limited to coin transfers, but also includes cross chain smart contract deployment and execution. Interchain queries and Interchain Accounts made a lot of this cross chain smart contract functionality come to life. The IBC is a seriously impressive piece of technology, and groundbreaking in the age of interoperability. Retaining sovereignty in your blockchain is necessary for many projects and it why projects like Near, and DYDX are choosing to join the IBC. Solana has a layer 2 being built that will also connect to the IBC, and Polkadot, which already has a IBC connector through Composable. ATOM Dev, Jack Zampolin is also in talks with core Algorand Devs as well to connect to the IBC. IBC has gain traction because of a few simple concepts. Retain your sovereignty and creative edge in your chain, pay fees to cross to new chains, in your native token. Maximum freedom, maximum value via fees paid natively.

Okay, so fees are paid natively. Why the hell is ATOM pumping? Well, probably because Interchain Security is likely going to change ATOM into the best dividend paying in crypto. Also ATOM 2.0 (changing ATOMs economic model, but that will be announced at the Cosmoverse event coming up).

Interchain Security: Interchain Security allows for new or existing black chains, to skip the line of finding validators and let’s them hook into the existing ATOM validator set. This means that projects can retain sovereignty, have fees on chain paid in their native currency AND lease security from a nearly $5 billion dollar blockchain. What does it take from the protocol being added? The chain has to be approved via ATOM Governance. In this approval process they need to show as much info as possible to ensure this addition to the validator set will be worth the extra work a validator will have to do. But while this provides more work, it could show even more profit for ATOM validators and stakers. The reason this is so bullish is that these chains that lease ATOMs validator set, will be paying the ATOM validators and stakers in their native currency. And this will be on top of the staking reward from ATOM (18% at time of writing). What happens when 5-10 chains are paying ATOM validators and push the staking rate up to 50%+? Probably nothing…

IYKYK

Thanks for reading