Cosmos Connects to Ethereum Via the Osmosis DEX
The Cosmos ecosystem got a boost today by joining Ethereum via Osmosis.
By: Brady DaleByte
Ethereum is now connected to the Cosmos network, courtesy of the Osmosis decentralized exchange and the Gravity Bridge.
“The Gravity Bridge marks a major milestone in the interchain vision of Cosmos as we welcome one of the foremost blockchain platforms into the Internet of Blockchains,” said Sunny Aggarwal, Co-Founder of Osmosis Labs, said in a statement released Jan. 19.
According to Cosmos Cap, the whole ecosystem of interconnected blockchains that can be readily connected through Cosmos’s interblockchain protocol (IBC), has a market capitalization of $163B combined, including chains like Cosmos itself, Crypto.com, Thorchain and Terra.
Direct access to the Ethereum blockchain is likely to be a major boon for many of these markets. At $378B in market capitalization, there’s a lot of value that can now easily move to Cosmos. Osmosis provides much less expensive trades than DEXes on Ethereum, making it easy for investors from Ethereum to come to Cosmos and try out its opportunities.
MetaMask support has been enabled to make the bridging easy for users, according to the announcement. Osmosis has also already prepared pools for ETH and USDC on its exchange.
Cosmos uses a different architecture than other networks. On Ethereum, a decentralized exchange runs on the Ethereum blockchain. Cosmos is built so that each app has its own blockchain (often called an appchain in the Cosmos world). At the heart of the Cosmos ethos is native interoperability between chains. This vision was realized in March 2021 when IBC finally went live.
The stablecoin chain Terra recently joined the IBC network late last year by upgrading its chain.
For new users, it’s worth noting that tokens have to be moved to appchains before they can be used there. For example, if the user bridges to Osmosis and trades for ATOM, the Cosmos network token, the ATOM will only appear in their Osmosis wallet, not their Cosmos wallet. If they want the ATOM to sit on Cosmos, they will need to move it there.
This is, however, faster and vastly less expensive than it would be on Ethereum. The price is typically negligible.
Osmosis has been becoming more and more popular. It currently has $1.4B in total value locked on it according to DefiLlama, up from just under $100M at the beginning of August. The OSMO token has been going through a major rally early this year, trading at TK as of press time.
Disclosure: This reporter owns a very small amount of Cosmos and a few other tokens in the network.