- Avalanche, a high-performance blockchain, is integrating with Cosmos through the Landslide Network, marking a significant move in the blockchain space.
- This integration is anticipated to strengthen decentralized finance (DeFi) activities, allowing for seamless asset flow between the two ecosystems and enhancing interoperability.
In a remarkable development in the blockchain realm, Avalanche, renowned for its impressive throughput capabilities and utilization of the Snow Protocol for consensus, has announced its integration with Cosmos. This strategic move, unveiled in a recent update from the Interchain Foundation (ICF) on October 31, indicates a robust step forward in blockchain interoperability and decentralized finance (DeFi).
Bridging Two Giants: Avalanche and Cosmos
Landslide Network, serving as the bridge facilitating this integration, is in the process of developing a light client on Avalanche. This client is poised to connect Avalanche’s scalable layer with the Cosmos Hub, alongside other compatible blockchains such as Kava and the BNB Chain. The Cosmos Hub stands as a pivotal component in this ecosystem, ensuring seamless connectivity and communication across different blockchains via Inter-Blockchain Communication (IBC).
With the launch of the incentivized testnet on November 1, Landslide has laid down the first substantial steps towards enabling IBC to interact with Avalanche. The overarching aim of this initiative, as outlined by the ICF, is to invigorate DeFi activities across both ecosystems, fostering a landscape where assets can circulate without hindrance.
However, it is crucial to acknowledge that by default, Avalanche and Cosmos operate on distinct consensus algorithms, which introduces a layer of complexity in their direct integration. While Avalanche relies on the Snow Protocol, Cosmos and its affiliated blockchains are built on the Tendermint consensus mechanism. This disparity necessitates a customized solution or a bridge to facilitate a seamless connection, a challenge that Landslide, in collaboration with Cosmos development teams, is actively addressing.
Unleashing DeFi Potential
The successful resolution of this challenge has the potential to unlock a plethora of opportunities for developers and protocols within both networks. Although they currently trail behind Ethereum in terms of DeFi activity, Avalanche and Cosmos exhibit substantial activity, with their DeFi applications accounting for hundreds of millions of dollars in total value locked (TVL).
At the heart of Landslide’s development efforts is the IBC, a secure, efficient, and scalable solution built on the Cosmos Software Developer Kit (SDK). This technology enables protocols to engage in secure data communication and transfer, laying the groundwork for enhanced interoperability and fluid asset movement between ecosystems.
Despite these advancements, it is important to note that DeFi activity remains relatively subdued, with TVL lingering below the $50 billion mark over the past 18 months, predominantly concentrated on Ethereum. As of November 1, according to DeFiLlama, the total TVL stands at around $42 billion, with Ethereum protocols managing over $22 billion, Avalanche dapps controlling over $539 million, and those in the Cosmos Hub accounting for less than $1 million.
In terms of market performance, both AVAX and ATOM prices remain resilient, showcasing a bullish trend from the lows of Q3 2023. However, it is pertinent to remain cautious as the upward momentum appears to be losing steam, with potential pullbacks on the horizon in upcoming trading sessions.