When Evmos launched earlier this year, it brought Cosmos, a $3.76 billion blockchain, into direct interaction with Ethereum, the second largest crypto network with the largest collection of decentralized applications, or dApps. We take a look at what the young and growing Evmos protocol represents.
What is Evmos?
Evmos is an Ethereum Virtual Machine (EVM) hub that launched on the Cosmos blockchain in April after years of development. The layer one blockchain allows users and developers to deploy smart contracts and assets from Ethereum for use in the Cosmos ecosystem.
EVM is at the heart of the Ethereum network. It gives developers the ability to create smart contracts and decentralized applications, or dApps. Most of the dApps in use today were and are being created via the EVM.
For that reason, blockchains of all sizes “seek to integrate with Ethereum as its robust liquidity and the diversity of its decentralized applications make it the focus protocol.” BNB Chain, Avalanche, and Polygon have all adopted the EVM mechanism.
“Powerful as Cosmos is, it is not compatible with Ethereum,” Arbi Tularov, chief technology officer at gaming metaverse Farcana, told Be[In]Crypto. “This crucial gap is supposed to be closed with the Evmos protocol.”
There are over 20 interoperable blockchains on Cosmos, just not with Ethereum. Until now.
“Evmos may have a unique technology that enhances any project’s ability to fork its code to make use of it in order to link up with Ethereum,” added Tularov. He explained that the ability to integrate with other blockchains makes a protocol more versatile.
Evmos was first conceived in 2016 by software developers Federico Kunze Küllmer, Akash Khosla, and Nic Z. They named the project Ethermint. After its launch in April, Evmos became interoperable with bridges on Ethereum like Nomad, later hacked for $190 million in August.
The integration makes it easy for users to move assets/funds between the two blockchains.
Evmos is also compatible with the inter-blockchain communication (IBC) protocol, so-called “IP layer of blockchains.” IBC is considered “the safest and most secure decentralized way” to move value across different chains, and within the Cosmos ecosystem itself.
To date, around 14 applications are running on Evmos. That includes DeFi protocols Midas Capital and Diffusion Finance, and non-fungible token outfits Orbital Apes NFT and EvmOS Punks and others, according to the Evmos website.
“Evmos is designed to empower developers,” Kunze Küllmer said in an Oct. 5 interview with analysts Staking Rewards. “Anyone who has built in an EVM environment can easily get started on Evmos using Solidity or Vyper like they’re accustomed to [on Ethereum]…”
Evmos uses the proof-of-stake (PoS) block validation method based on Tendermint protocol, a computing environment that provides blockchains operating on Cosmos with core security and validation features.
The native token of the Evmos blockchain is called EVMOS. Holders can apply to become validators – the guys that process transactions and secure the blockchain. But only the top 150 with the biggest number of tokens staked are selected.
Through delegated staking, EVMOS token holders have the option to support a validator of their choosing by delegating their tokens to the node for a fee. This way, users can receive a portion of the staking rewards generated by that particular validator.
EVMOS has a maximum total supply of one billion. Currently, over 316 million tokens are in circulation, according to CoinGecko. Evmos says that the token is used mainly to pay for transaction fees on the network, staking, and for voting on key protocol proposals.
Developers earn 50% of the transaction fees when users interact with their dApps, allowing “devs to have a reliable source of recurring revenue that scales with their projects,” says Evmos creator Kunze Küllmer. Each day, 40% of all EVMOS released goes to staking.
The token “is highly inflationary at the beginning,” Evmos detailed in a blog post. “Under the initial model, the new tokens will be issued under an exponential decay schedule, where the inflation is decreased every year.”
“This makes the long term of the network technically deflationary but we see Evmos as a token with an uncapped supply,” it said. After four years, the Evmos DAO, which manages the protocol, can propose an alternative token supply model, like linear or constant emissions.
The initial distribution of Evmos at launch was primarily an airdrop of EVMOS tokens to both Ethereum and Cosmos users, said Kunze Küllmer.
Known as “Rektdrop,” it “was designed in a way to maximize decentralization of distribution with whale caps, low barrier to entry, and a system for allocation that benefited smaller shareholders more.” More than two million wallets are eligible for the airdrop.
Price action and prediction
The EVMOS token soared to about $6.68 in April when it was launched. The token has since slumped more than 74% to $1.69 as of writing, per CoinGecko data. EVMOS fell to a low of $1.24 in mid-June and clawed back above $3 in September, before sliding to current levels.
EVMOS boasts a value of $538 million in capitalization, to become a top-five protocol within the Cosmos ecosystem. Analysts forecast that Evmos will continue to grow. Price Prediction has guided the price to reach $6.74 by 2025.
“In my opinion, Evmos is already ‘successful’ in the sense that it’s a functioning EVM smart contract platform connected to the Cosmos Network via IBC,” Sebastian Menge, co-founder and COO at burn-to-earn platform Fitburn, told Be[In]Crypto.
“It’s still a very new and growing ecosystem and is certainly in building mode. “There are applications living on Evmos now – mostly NFT decentralized exchanges and trading platforms, and a lot of projects in the pipeline.”
Continuing, Menge said:
“Evmos alone demonstrates the use-case of Cosmos and should be seen as an accomplishment of community-driven development. It is pushing the boundaries of IBC and laying the foundations for its implementation on existing EVM chains.”
Looking to the future
Evmos is a young blockchain that has ushered in some incredible changes to the Cosmos ecosystem. Since its launch in April, the community has “organically funded” several meet-up events, or hackathons, through governance in an effort to grow the network.
While the protocol suffered a setback with the $190 million Nomad hack in August, Evmos continued to see growth. It has become one of the biggest networks on Cosmos by market capitalization and reached more than 111,000 followers on Twitter. More developments are coming to Evmos.
According to Kunze Küllmer, Evmos will in the “near future integrate Interchain Accounts, a new capability [that]…will open the door for exciting integrations like DAOs on other chains using Gnosis Safe on Evmos or Interchain DeFi applications…”
Evmos is also planning “to implement a shared security setup that will enable developers to continue scaling their applications as distinct Ethermint-enabled chains, while continuing to have the support of Evmos.”
Arbi Tularov, Farcana Metaverse CTO, advises to proceed with caution.
“The protocol (Evmos) is not yet widely used, so it’s worth waiting for partnerships with big companies and the first successful cases. It is imprudent to draw unequivocal conclusions before,” he said.
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