By
Temitope Olatunji
May 9th, 2024
Launched on March 29, the Cosmos Inter-Blockchain Communication is a significant milestone in enabling seamless connectivity in the decentralized financial ecosystem.
After years of meticulous work and planning, Cosmos, a network of distributed ledgers, has launched the Inter-Blockchain Communication (IBC) that enables transfers of digital assets on various independent blockchains.
“After 5 years of research and development, Inter Blockchain Communication is being rolled out onto the Cosmos Hub! This is the first step of enabling cross-chain communication, which activates IBC token transfers – allowing you to send fungible tokens from one chain to another,” said Cosmos developers.
Launched on March 29, the Cosmos Inter-Blockchain Communication is a significant milestone in enabling seamless connectivity in the decentralized financial ecosystem. As a result, independent blockchains that have integrated with the IBC protocol can now communicate with other blockchains in the IBC network.
“As of March 29th, 8:45 AM UTC, a parameter change on the Cosmos Hub has enabled IBC-compatible blockchains to send their tokens to the Hub, as well as allow the Hub’s native ATOM tokens to be transferred to other blockchains,” Cosmos noted through a series of tweets.
The company further noted that the newly launched IBC protocol can be used to scale the NFT market that has experienced an increased demand in the past few months. “The introduction of IBC greatly expands the realm of possibilities for blockchain applications. IBC can be used to transfer both fungible (cross-chain payments) and non-fungible tokens between chains, allowing for interchain token exchanges and NFT marketplaces,” Cosmos further explained.
Cosmos and IBC Background
According to Cosmos Whitepaper, the Cosmos protocol is a network of several independent blockchains dubbed the Zones. Notably, the Cosmos Zones are powered by Tendermint (BFT), which enables a consistent, and high-performance system.
The first zone on Cosmos is called the Cosmos Hub. Thus zone is a set of multi-asset proof-of-stake digital assets with easy to use user interface Through the newly launched Inter-Blockchain Communication protocol, the hub and zones can communicate seamlessly.
The Cosmos developers saw the need to allow different types of blockchains to communicate in order to open up the DeFi ecosystem. The level of fragmentation in the crypto industry has hampered growth, especially in the DeFi ecosystem.
For instance, the newly launched IBC can enable DeFi apps on the Ethereum ecosystem to communicate with DeFi apps on the Binance Smart Chain if they are integrated with the IBC protocol.
The announcement, however, did not have a huge impact on the Cosmos native token ATOM market price. According to metrics provided by CoinGecko, ATOM was trading around $20.18, after adding approximately 2.6% in the past 24-hours. The asset has a market capitalization of $4,819,913,743 with its daily trading volume at $935,415,871. There are 238,526,146 units of ATOM coins in circulating supply with an infinite supply.