Cosmos has finally launched its Inter-Blockchain Communication (IBC) protocol following a majority vote from the community members.
Cosmos IBC Now Lets Blockchains Talk To Each Other
The newly launched protocol would enable the transfers of tokens and data between sovereign blockchains.
More than 1500 Cosmos validators and delegates supported the launch.
The long-awaited IBC protocol would also address scalability issues through sharding technology, according to the development team.
Cosmos also said that this launch opens up a whole new world of possibilities for the decentralized finance (DeFi) space, as decentralized applications (DApps) built on its network would be able to execute multi-chain smart contracts.
According to Tendermint CEO Peng Zhong, the launching of the IBC marks a momentous milestone in the evolution of the Cosmos ecosystem as it builds the foundation for interoperability.
Cosmos has been working on its vision to realize an open blockchain protocol for some time now.
Although the IBC whitepaper was released back in 2016 by Cosmos co-founders Jae Kwon and Ethan Buchman, it was not until 2019 that a mainnet was launched.
In 2020, the ATOM’s native blockchain launched another incentivized testnet for IBC, dubbed Game of Zones, which stress-tested the IBC module pre-launch and distributed over 100,000 ATOMs in rewards to dozens of validators.
Stargate, the last phase of IBC, which completed the original roadmap laid out in the Cosmos whitepaper, was then launched in February 2021. Speaking on the impact IBC would have on the blockchain space, the lead developer of the IBC Protocol Christopher Goes, said,
“IBC will create an ecosystem of politically independent chains that can interact via trade and information exchange. Knitting together many different blockchains can form a new crypto-economic system”.
The Impact of IBC In DeFi Sector
IBC’s launch greatly expands the realm of possibilities for blockchain applications. IBC will be used to transfer both fungible (cross-chain payments) and non-fungible tokens (NFTs) between chains. This will see the subsequent rise of interchain token exchanges and NFT marketplaces.
The launch of IBC is a big deal, especially in the decentralized finance (DeFi) sector, as it could open up opportunities by allowing tokens to zip between chains. A product on an application-specific blockchain could use an asset from a completely different chain.
The initial version of IBC allows users to kick off token transfers between various chains only on the Cosmos Hub, the central blockchain that connects all other Cosmos blockchains or zones. Now for the first time, Cosmos has achieved actual cross-chain token transfers.
Even though Gavin Wood-led Polkadot (DOT) blockchain ecosystem is on the path to end network tribalism through its Bridges protocol, Cosmos seems to have beaten them to the finish line.
Meanwhile, Cosmos also announced its plans to add the Gravity DEX, a decentralized exchange, as the next upgrade following IIBC.
The Gravity DEX will act as an online marketplace for trading tokens from any connected blockchain, including tokens from IBC-enabled blockchains, wrapped ETH (wETH) to wrapped BTC (wBTC) tokens, and from any future networks that implement IBC.