What is the difference between Cosmos and Polkadot?

Polkadot and Cosmos are both prominent players in the world of interoperable blockchains. Here’s how the two cryptocurrencies compare. 

What they do

Polkadot aims to create a unified network where blockchains, called parachains, can connect, communicate, and share data. 

Cosmos also focuses on interoperability but is primarily focussed on custom-built, independent blockchains that serve specific purposes and can easily interoperate within the Cosmos ecosystem.

Consensus mechanisms

Polkadot uses the Nominated Proof-of-Stake (NPOS) consensus mechanism. NPOS combines POS with a unique nominator system, where investors in DOT, the native crypto of Polkadot, can nominate validators. Polkadot says this mechanism enhances network security and governance.

Cosmos uses a variant of proof-of-stake in combination with a coordination mechanism called the Tendermint consensus mechanism, designed by Jae Kwon, the founder of Cosmos. Tendermint provides the foundational layer of consensus in the Cosmos network by coordinating the validators on the various blockchains in the network and allows them to reach consensus. It relies on a predefined set of validators who vote to agree on the order of transactions and secure the network. 

The central blockchain in Cosmos, called the Cosmos Hub, reaches consensus using Bonded proof-of-stake (BPOS), a variant of POS that requires validators to bond a specific amount of ATOM as collateral. 
 

Tokenomics and coin distribution

Polkadot’s native crypto is DOT, which is distributed through multiple mechanisms, including auctions, staking, and council elections. Stakers play a pivotal role in network security and governance, and they receive rewards for their participation.

The native cryptocurrency of the Cosmos network is ATOM, and is distributed through a combination of staking and governance participation. Validators must stake a significant amount of ATOM tokens as collateral, and ATOM token holders can participate in governance and decision-making processes.

Coin supply

DOT does not have a fixed supply cap, meaning there is no maximum limit to the number of DOT that can be created. The supply can increase as new tokens are minted through various network activities.

ATOM doesn’t have a fixed supply cap either. The total supply can increase as new tokens are minted through staking and other network operations.

Both Polkadot and Cosmos are prominent players in the world of interoperable blockchains. They offer distinct approaches and mechanisms for achieving their interoperability goals.

*Investing in cryptocurrency may result in the loss of capital as the value can fluctuate.