Cosmos launches Stargate, paving the way for interoperable DeFi applications

After months of development, Project Cosmos (ATOM) launched the Stargate update, which includes the much anticipated Inter-Blockchain Communication Protocol, or IBC.

The Stargate upgrade announced Thursday includes a series of improvements to Cosmos’ protocol and its SDK.

Stargate’s most important feature is IBC, the Interoperability Layer for Cosmos blocks. The protocol is a key component of the Cosmos vision, allowing easy interoperability between the Cosmos SDK and other blockchain protocols. IBC allows tokens and arbitrary data to be connected between all of the blockchains it supports, especially those built with the Cosmos SDK. Other blockchains can also be supported, but they require implementation for each individual case.

There are a number of projects that have been built with the Cosmos SDK in the past, including Binance Chain, Kava, Terra, and Secret. Before the introduction of the IBC, networks were isolated and individual enterprises had to create their own bridges to connect to the wider blockchain system. Kava CEO and co-founder Brian Kerr told Cointelegraph that the project has spent “years of developer time and millions of dollars in investment to build the custom bridges that exist today,” particularly for the Binance ecosystem.

Kerr explained that the launch of IBC would “accelerate the rate at which Kava can add bridges to other Cosmos-SDKs, provide its services, and use its assets as collateral.”

While IBC also supports interoperability with blockchains built on Substrate, the blockchain framework that Polkadot supports, will still be somewhat difficult to integrate other blockchains outside of these ecosystems within Cosmos.

Stargate also brings a bunch of other performance improvements. This includes support for Protobuf serial format, which is a more efficient data flow mechanism; State Sync, which allows nodes to sync with the Cosmos blockchain in less than 30 minutes; Automatic SDK-based blockchain upgrades and lightweight client security enhancements that improve IBC connectivity guarantees. Stargate has been in development for months, as Cosmos released a dedicated bug bonus to ensure its safety.

IBC is currently on the Cosmos, home to its ATOM token. The hub is an important component of the Cosmos ecosystem, allowing its blockchain to communicate with one another without the need to create ad hoc connections. The communication protocol is available on the Cosmos SDK, which means it’s up to each team to get started.

A number of DeFi applications within Cosmos will benefit from ease of interoperability. With IBC, blockchain could connect to most DeFi ecosystems outside of Ethereum, which particularly includes the Binance chain. “Kava is designed like an Apple Store,” Kerr said, allowing only the projects vetted to build on its platform. “While this makes Kava one of the most trusted platforms for organizations looking for DeFi solutions, it limits the rate at which developers can quickly deploy code and iterate ideas,” noted Kerr. Ethereum and Binance Smart Chain provide an environment with less oversight, making both viable options for building DeFi, according to Kerr.

Other DeFi options include Cosmos Secret Network, a privacy-focused blockchain for smart contracts, and Terra, a stable coin-centric ecosystem. “There are hundreds of Cosmos-SDKs that will be able to communicate with the IBC,” noted Kerr.