Cosmos is one of the many cryptocurrencies I see on the way to zero and already irrelevant in the space of today's technology in crypto. If you're holding Cosmos, or you just want my opinion on it, you'll love seeing why. In my view, this is going to be an investment that does not work out. Just as over the last year, when many cryptos like Bitcoin, Ethereum, and ICP have doubled or more in price, Cosmos is actually down about 30% in price. And I think we have a lot further down to go based on what I'm about to tell you. To be clear, this is my opinion and my own experience as an investor, not financial advice.
A $2.5 billion market cap with no network effect
First, this has a two and a half billion dollar fully diluted market cap. So this is a bigger project. And for a bigger project, you really need to be growing explosively, having the network effect. The question is, does Cosmos have that? Not from what I see at all.
So first things first, I was looking for the Cosmos team, which was difficult to even find. I finally found that Tendermint was behind launching Cosmos. And I don't see any people actually working on Tendermint. I mean, I Googled and found a few things. But one of the first things I found is that the two people who founded Cosmos are splitting. To me that already says something: it technically wasn't that relatively difficult to make Cosmos if a couple of people could found it. And now they're splitting, so that drama is causing some big problems in the Cosmos community. That's something you really can't afford to have when this technology is already seriously outdated when you consider things like Internet Computer.
The inflation vote that split the community
If you read some of the stories, there was this proposal to reduce the inflation from 14% to 10%, which I have to say, as an outsider, doesn't look like that big of a deal. But then the community splits based on this. And this is happening when the whole thing is already outdated compared to something like Internet Computer.
Where Cosmos is basically like a slightly upgraded version of Ethereum that you can use to launch your own kind of chain. Some of these networks you might recognize: you have Akash, Celestia, CRO, Fetch.ai. They've run their own chain on Cosmos. These are just chains that people have spun up, which is relatively easy to do on Cosmos. And then people from the outside think, oh well, CRO has its own chain, Celestia has its own chain. But really, this is just on the Cosmos mainnet. And in terms of what it can do computationally, that is nothing compared to what ICP can do, where you can build an entire application like Discord or Telegram. There's one called OpenChat, which is like a fully on-chain Discord or Telegram. You can build an entire application, website, pictures, videos, crypto functionality, swaps, decentralized exchanges, all fully on chain. If you want to go deeper on the coin reviews where I keep making this comparison, I keep them all in my Money playlist.
The 2021 hype is gone, and the network effect never showed up
Now, Cosmos, when it came out a few years before ICP, in the wake of something like Ethereum where you've got these high gas fees, the idea of launching your own blockchain was certainly pretty exciting. That's part of how it got hyped up to its roughly $40 height at the bull run insanity in 2021. And almost all those gains are gone. The price, sadly, is right about where it was when it first launched four years ago. That's why I say this is going towards zero: it has done nothing. There's no network effect that's picked up despite all these other chains that are, quote, "on" Cosmos.
Everything they're doing is really off of Cosmos. So CRO, Cronos: when you're on the Crypto.com app, unless you're swapping CRO and withdrawing it to your own address, you're not doing anything that's actually on chain. All of it's off chain on Crypto.com's infrastructure, and holding the CRO token gives you no legal ownership of that. I went deeper on that specific one in my breakdown of why I believe Cronos CRO and Crypto.com are going to zero. So all these blockchains on Cosmos are generally proof of stake, and the functionality in terms of what can actually be done on chain is almost zero. You can certainly do it faster than you can on Ethereum, for example. But the next crypto to hit the top three is not going to be, to me, some Ethereum competitor, because you've already got BNB, you've already got Solana that are basically copies of Ethereum.
Why I think the next top-three coin won't be another Ethereum competitor
If you're going to have something that's drastically going to outperform the rest, it's going to be drastically superior to the rest. So when you look at Internet Computer and compare it to Cosmos, Internet Computer has a market cap that is, to me, 10 to 100 times more advanced than the Cosmos technology. ICP — the DFINITY Foundation — has cracked some of the hardest problems in crypto. User experience, being able to sign in across all these different devices, being able to put everything on chain makes a huge difference for AI. It makes a huge difference for decentralized exchanges, and for applications like OpenChat.
With Cosmos, the only reason you would want to launch your own blockchain these days is because you didn't know that you could build your entire application completely on ICP. On ICP, if you use the Network Nervous System, you could launch your own coin with a DAO that actually governs everything directly on chain. That can prevent things like what recently happened when CoinStats was hacked and people lost millions of dollars of crypto, because all these other crypto apps are not on chain. And when you consider the founders fighting, and you scroll through Cosmos posting on X, there's no transparency about the team of engineers that's actually working on this.
Count the engineers: DFINITY's talent versus Cosmos
I would guess at the talent gap, because I don't know it directly, but I remember Dominic Williams said that if you really want to research an altcoin, look at how many engineers and technical staff are actually working on the protocol itself, adding technology to the protocol itself. So on the Internet Computer Protocol, DFINITY has hundreds and hundreds of technical staff. I was just reading some of Paul's posts on the forums. Paul got a PhD from Yale and was a research scientist at Intel Labs, and look how far down Paul is on the page — you have to scroll down and find Paul, and he has a PhD from Yale and was a research scientist at Intel. That's the level of talent they have at DFINITY. That's why they've been able to make technology like my website being fully on chain. You can't run your website fully on chain on Cosmos. You can't put NFTs fully on chain on Cosmos. It all has to be hosted off chain, which then depletes the value of what's actually on chain, depletes the security and the integrity of what's on chain.
The smartest people in the world, like Elon Musk, understand this: you're not going to sell me a JPEG that's hosted on Amazon Web Services and fool me by doing that, while a lot of people in crypto have been fooled with exactly that. To me, the next generation of crypto that's really exciting is being able to do your entire application all on chain, and then you've got everybody's tokens all on chain too. This is the whole reason I spend my time in communities built around that idea, and if you want to talk through any of it with me, you're welcome to join the Jerry Banfield Family.
My own experience buying and staking Cosmos
One thing from my own experience: I bought Cosmos last year, and I staked it. You have to do that through something — I did it through a Ledger wallet, and there were weeks between when I staked it and getting my Cosmos back. I believe I also had to stake it through a third-party validator, and I'm using a third-party wallet, a Ledger wallet, to do all of this in the first place.
Then there's voting. All this drama started because of a vote, but the actual vote is not executed on chain. Maybe the inflation change, in theory, could be executed on chain, but the way most of these work, you have to pay to vote on Cosmos. That's outrageous — you have to pay gas fees just to vote. To me that's so ridiculous. You go on Internet Computer Protocol, into the Network Nervous System, and if you lock up just one ICP, you can go directly vote for stuff yourself, and it gets executed on chain. With Cosmos, in most cases they have to actually manually go in and change the blockchain themselves, and that's how they're forking it. So even just based on the technology, I wouldn't want to invest in Cosmos. But then you've also got the founders splitting and forking the chain, and at this point this is just a disaster.
The interoperability problem
All these chains on Cosmos are not very easily interoperable, either. For example, on Internet Computer, when I'm using OpenChat, I have Chain-Key Bitcoin in there, I have Ethereum that I can use in the form of Chain-Key Ethereum, I have ckUSDC I can use in there, and all these other projects, from meme coins to real-world assets on chain — all of these are in the OpenChat wallet. So I can go in there and send people money, I can do giveaways in OpenChat. All these coins easily work together when they're on Internet Computer. This is the same gap I keep running into with so-called interoperability coins, like in my take on Axelar and why I say its realistic price is $0.
But on Cosmos, if you're running stuff on CRO, it's not very easy for all these other chains to work together. Now, I imagine they do promote each other, and you've got the new Terra Luna on Cosmos, which is just sad that it even exists at this point. But these chains can't work together that well either, because they each have their own chain and their own properties, and it's not that easy to try and put all of these into one single application — which isn't even on chain anyway. So I see nothing exciting at all about Cosmos.
Cosmos has restaking, and I remember restaking on Cosmos. On ICP, you can automatically restake — you can just set it to automatically restake so you compound your rewards, and it gives it to you in maturity, which then is not taxable. That's unlike getting paid in ATOM directly and restaking that, which is taxable immediately, as soon as you receive it.
My verdict on Cosmos (ATOM)
So, in my opinion, in every single way that matters, ICP is where I want to invest. ICP is vastly technologically superior, and in terms of things that are similar to Ethereum, there are others that have more users than Cosmos as well. The more ICP gets adopted, the more I think you'll have some of these coins and chains on Cosmos move over to ICP, and these tokens from other chains, especially Ethereum, will get set up on ICP. There's no reason, if you have an Ethereum token, that you'd want to move it over to Cosmos at this point. For more of how I think about all of this and why I keep landing on the same conclusion, you can dig through my Money playlist of crypto reviews, and you're always welcome to bring your own thesis and challenge mine when you join me in the Family.
So to me, Cosmos, on average, does just one thing from here: go down. And that's my review of Cosmos. This is my honest opinion and my personal experience, not investment advice — do your own research before risking your own money.