How Does Polkadot Compare And Compete Against Cosmos?

To understand the distinction between the two blockchains networks, you need to explore the differences in governance, models, and other features.

Cosmos and Polkadot are among cryptocurrencies that have attracted massive interest from crypto investors due to their unique utilities. The two digital tokens come with an interoperability feature enabling different blockchain networks to connect. In addition, they provide developers with a platform to build on top of the platform.


About Polkadot and Cosmos

Polkadot is a multi-chain application environment created in 2016 by Petr Czaban and Dr. Gavin Wood, one of the Ethereum co-founders. The open-source blockchain protocol connects different blockchains into a single network. Polkadot supports both private permissionless blockchain and open, permissioned public blockchain. The current DOT to USD exchange rate now stands at 25.5 USD.


On the other hand, Cosmos is a decentralized network parallel blockchain launched by Ethan Buchman and Jae Kwon in 2014. The POS blockchain network aims to create a network infrastructure that allows the transmission of data and tokens without the need for a central platform. The current ATOM to USD exchange rate now is 22.6 USD.

To understand the distinction between the two blockchains networks, we will explore the differences in governance, models, and other features. Let’s get started. 


1. Interoperability

Interoperability is the accessibility of data across various networks. A use case would be using an Ethereum contract to complete avalanche transactions using the Polkadot network.  The design of inter-blockchain communication is quite different in Polkadot and Cosmos. 


Polkadot enables transfers of data and assets across different blockchain networks.  It supports transfer tokens and other types of communication between two parachains. On the other hand, Cosmos focuses on transferring assets between chains. 

Cosmo and Polkadot also differ in how they handle their interchain communication security. Polkadot uses two security approaches. The first is shared security which involves bringing security of two parachain with varying security levels to a uniform level. For instance, Ethereum security is a notch higher than Avalanche. Polkadot secures interchain communication between the two digital tokens.

The other method involves using fishermen to roll back the whole transaction if an invalid block is identified. On the other hand, Cosmos has validators to ensure that malicious activities on a zone do not affect the entire network. 

Polkadot passes arbitrary messages to each other through a cross-consensus message passing format (XCM). Cosmos does not have a mechanism for sending arbitrary messages. It uses inter-blockchain communication (IBC) chain protocol to pass tokens to access different zones. 


2. Staking

Polkadot selects validators using nominated proof of stake (npos) based on a sequential phragmén algorithm. The algorithm determines the optimal stake allocation. The size of the validators is determined by governance, but stakers who do not want to run the infrastructure can choose up to 16 validators. 

The validators have equal weight in protocol consensus. For example, two-third chain support would require two-third validators commitment instead of two-third stakes. Similarly, validators receive rewards according to the activities such as finality justification and block production rather than the stake amount. 

Unlike Polkadot, where governance and staking are disjoint, rewards and voting are stake-based. The cosmos hub elects validators using the bonded proof of stake. Bonded proof of stake means the stakers should bond funds to delegate token transactions. Rewards and voting are also stake-based. This means a 5% of the total stake will earn you 5% of the rewards. In addition, the validator assumes the voting rights of stakers who do not vote in governance referendums.


3. Consensus

Polkadot uses a BABE (Blind Assignment for Blockchain Extension) hybrid consensus algorithm, which consists of Ghost-based Recursive Ancestor Deriving Prefix Agreement (GRANDPA) and verifiable random function (VRF). Polkadot has a Substrate software development kit containing three consensus algorithms: Aurand,  Grandpa, Rhododendron. 

Grandpa’s consensus mechanism is quick and accommodates many validators ( 1000 validators). The validators do not have to vote on all blocks. The algorithm considers the block with the most votes and passes the algorithm to the ancestors. The votes of the block with supermajority votes become final. 

The task isolation reduces the complexity of block production and finalization. Also, it enables validators to perform extensive validity and availability checks to ensure only valid transitions reach the final transition. 

 On the other hand, Cosmos supports any consensus algorithm according to the ABCI specification. Currently, only Tendermint adheres to this spec. It enables validators to reject or accept a single block. Block production and finalization are on the same path meaning it can only finalize one block at a time. 


4. Model

Another distinctive feature between Cosmos and the Polkadot is their model. Polkadot is designed using a sharding model. Each shard has a state transition function (STF) which can be abstract provided the validators execute it within the wasm environment. WebAssembly (Wasm) is a meta protocol in the Polkadot environment. The shards in Polkadot are referred to as parachains. 

Parachains submit a block together with state proof that is independently verifiable by the validators every time they make block transitions. Parachain state is similar to the whole system, meaning a change in one parachain would affect the relay chain and other parachains. 

Cosmos uses a bridge-hub model. The system consists of multiple hubs with Cosmos hub as the primary hub, connected to exterior chains known as zones. The hubs use inter-blockchain communication (IBC) to communicate via the hub. Unlike Polkadot, a reorganization of a zone does not affect other zones.


5. Architecture

The architecture of polkadots is significantly different from that of the cosmos. The relay chain is the main chain of the system and hosts the validators. It also has collators who create and propose parachain to the validators. The collators found in the parachain and do not have security responsibilities. Once they propose a parachain, the validators perform validity and availability checks before passing it to the final chain. Collators can submit one parachain block for every relay chain after six seconds. 

Additionally, Polkadot has parathreads for chains that do not have the resources to book a parachain slot or the necessity to execute block check within a 6 seconds window. Parachain slots of the blockchain network are available at an auction for reservations of up to two years. Parathreads are available on a pay-as-you-go basis. What’s more, Polkadot architecture also has a bridge parachain for two-way compatibility enabling it to interact with other chains. 

Cosmos architecture comprises the main chain known as the hub, which connects with other chains referred to as zones. The hub also maintains a ledger of token balances. Each zone is self-maintaining and has its own validators. The zones send packets through IBC to communicate with each other.

While the hub does not monitor the state of zones, the zones track the main chain. Zones use Tendermint’s deterministic finality algorithm to send messages to other zones through the hub. They also must implement the IBC interface. Cosmos uses peg zones to interact with external chains.


6. Governance

The Polkadot network comprises a relay chain and several parachains supported by the relay chain validators. The maximum number of parachains at the moment is 100 parachains. The network assigns the parachains through auction. Therefore you should have many DOT tokens to become a Polakdot parachain. Voter decisions are also determined by the amount of DOTs the voter has. Polkadot also has a council that makes decisions on behalf of passive members. 

Cosmos has more relaxed rules. Anyone can create a hub which is essentially a blockchain for connecting other blockchains. Examples of hubs are Cosmos and Iris hub. Cosmos does not have a centralized governance system. Each hub follows its own set of rules.  


7. Scalability

Polkadot has a relatively robust scalability feature. It uses parachains which are specialized blockchains running parallel and connecting to the Polkadot network. Parachains use the Polkadot security mechanism to reach a consensus and communicate with each other through cross-chain message passing (XCMP). 

Polkadot would function completely normally without running parachains. However, parachain will enable it to scale up to 1 million transactions per second (tps). Theoretically,  it would be in a position to handle most of the world’s transactions. 

Cosmo’s scalability enables developers to create chains on its network ecosystem. It provides consensus mechanisms, network infrastructure, and application layer technology. Using these tools to launch a new network is known as cosmos SDK. This scaling mechanism of the Cosmos network allows developers to create new networks. The chains run parallel to prevent congestion on the blockchain. Besides expediting blockchain development, it also makes them secure.  

On The Flipside

Currently, Polkadot is more valuable than Cosmos. It ranks tenth while Cosmos is number 32 in the list of cryptocurrencies according to market cap. If Cosmos offers better services, it will become more endearing to users. Eventually, it could overtake Polkadot as the top blockchain network for blockchain interoperability. 

Why You Should Care?

Polkadot and Cosmos enable blockchains to communicate. Developers would be interested to know which platform offers ease of creating and linking chains. This information is important to crypto investors in determining crypto with more growth potential. 

Cosmos and Polkadot are Different Platforms with a Similar Goal

Cosmos and Polkadot have a similar goal of enabling blockchain interoperability. However, they defer on model, governance, and architecture. It is imperative that you understand these differences, especially if you want to choose where to invest your money between the two. That said, enabling multiple blockchains to communicate will revolutionize the blockchain industry and bring more opportunities to blockchain users. 

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.