What Is Cosmos (ATOM) and How Does It Work?
Cosmos (ATOM) is the native token of the Cosmos network, an ecosystem of independent, application-specific blockchains (“zones”) built with the modular Cosmos SDK and secured by the Tendermint Core consensus engine, which uses a Byzantine Fault-Tolerant Proof-of-Stake mechanism. Zones interconnect through the Inter-Blockchain Communication (IBC) protocol via the central Cosmos Hub, enabling seamless token and data transfers across heterogeneous networks while each chain retains its own sovereignty.
ATOM holders stake their tokens to either run a validator node or delegate to one, earning staking rewards that fluctuate with network participation, and they use their staked ATOM to vote on governance proposals, shaping upgrades, parameter adjustments, and the future roadmap of the Cosmos ecosystem.
What Is the Cosmos Hub?
The Cosmos Hub is the flagship blockchain at the center of the Cosmos ecosystem, built with the Cosmos SDK and secured by Tendermint Core. It serves as a sovereign “router” and governance center where ATOM holders stake tokens to secure the network, vote on protocol upgrades, and, via the optional Interchain Security model, share security guarantees with connected zones. As the Hub accrues more applications and
liquidity, it becomes the nexus for multichain composability, allowing developers to build “superpowered” cross-chain apps that access assets and data across IBC-enabled networks.
How Does the Inter-Blockchain Communication (IBC) Protocol Work?
IBC is an open-source, trust-minimized protocol designed for secure, ordered, and permissionless transfer of tokens and arbitrary data between heterogeneous blockchains. It relies on light client verification: each chain runs a light client of its peer, enabling it to verify consensus states without trusting external notaries. Communication proceeds through a four-step handshake, creating a client, opening a connection, establishing a channel, and then relaying packets, followed by acknowledgments that guarantee atomic delivery or safe rollback.
When you send assets via IBC, a relayer off-chain watches for a committed transaction on the source chain, then submits a proof to the destination chain’s light client, which verifies the proof against the source’s consensus state. Upon successful verification, the destination chain executes the packet (e.g., crediting tokens to your address) and issues an acknowledgment back to the source. This handshake-and-relay mechanism ensures that cross-chain transfers are reliable and censorship-resistant, no central bridge or middleman is required.
Recent Innovation: The Cosmos Hub’s new
IBC Eureka upgrade aggregates zero-knowledge proofs on-chain, cutting relayer and proof costs and boosting throughput as the Hub becomes the “proof aggregator” for
Ethereum,
Solana, and 100+ other IBC-connected chains.
When Was Cosmos (ATOM) Launched?
Cosmos was conceived in 2014 when Jae Kwon and Ethan Buchman, working together at All in Bits Inc., began building Tendermint, the BFT consensus engine that underpins the network. With support from the Swiss-based Interchain Foundation, the project held its public token sale in April 2017, raising $17 million in just 29 minutes to fund development of the Cosmos SDK and the IBC protocol.
After several Gaia testnets to stress-test features and governance modules, the Cosmos Hub went live on
March 13, 2019 with its genesis block, marking the network’s official
mainnet launch, and the next day the first ATOM tokens were minted. Token transfers were enabled on
April 25, 2019, with an initial supply of approximately 236 million ATOM and an annual inflation rate set at 7% to incentivize staking and secure the network.
Cosmos: Key Milestones and Roadmap
1. 2019–2021: Rapid ecosystem growth saw over 50 IBC-enabled zones launch, including
Terra,
THORChain, and Osmosis.
2. 2021 (Stargate Upgrade): Introduction of full IBC support and protocol optimizations, boosting cross-chain throughput.
3. 2023–2024: Activation of
Interchain Security (shared
validator set) and initial Cosmos
EVM integration tests.
4. Q1 2025 Focus: Enhancing Hub stability, performance, and scalability; evolution of the Interchain Stack with zK-powered IBC proofs to reduce relayer costs; Cosmos SDK refinements; and expanded shared-security models such as Mesh Security.
5. Beyond 2025: Continued rollout of on-chain governance enhancements, wider Cosmos EVM deployment, and deeper interchain composability to position the Hub as the “router” for an ever-growing Internet of Blockchains.
What Are the Key Use Cases for ATOM Token?
ATOM is the native token that powers governance, security, and cross-chain liquidity in the Cosmos ecosystem.
1. Governance: ATOM holders vote on proposals to upgrade network parameters, enact new features (like IBC upgrades), and steer the Cosmos Hub roadmap.
2. Staking & Network Security: You
stake ATOM to secure the Hub via Tendermint’s PoS consensus, either by running a validator node or delegating to one, and earn inflation-backed rewards.
3. Interchain Collateral & Liquidity: Many IBC-enabled zones use ATOM as a base asset for cross-chain swaps, liquidity pools, and as collateral in interchain applications under the Interchain Security model.
What Is ATOM 2.0 and Why Is It Important for the Cosmos Network?
ATOM 2.0 is a community-driven vision whitepaper released in late 2022 that proposes a comprehensive overhaul of ATOM’s tokenomics to turn the Cosmos Hub into a value-accruing, revenue-generating “router” for the entire Internet of Blockchains.
Key Features of ATOM 2.0
1. On-Chain Treasury & Fee Sharing: A portion of network and IBC fees would flow into a Hub treasury, funding grants, development, and ecosystem growth, ensuring ATOM holders capture real economic value.
2. Liquid Staking Derivatives: By issuing liquid ATOM tokens that represent staked ATOM, holders can reuse collateral across IBC chains without unbonding delays, boosting capital efficiency and potentially shifting ATOM issuance from inflationary to deflationary over time.
3. Expanded Interchain Security: Extending the Hub’s validator set to secure smaller chains under Interchain Security magnifies the demand for ATOM as the shared security backbone of the Cosmos ecosystem.
Why It’s Important
1. Stronger Network Security & Yields: Liquid staking encourages more ATOM to be bonded, raising total staked participation and validator rewards.
2. Direct Value Capture: Fee sharing and a treasury model align ATOM’s economic value with the success and growth of all IBC-connected zones.
3. Hub as Ecosystem Router: By funding development and expanding security services, ATOM 2.0 cements the Cosmos Hub’s role as the central hub that interconnects and secures the multichain world.
What Is Cosmos (ATOM) Tokenomics?
ATOM is an inflationary token with no maximum cap. The initial supply was 236,198,958 ATOM, and the current circulating supply has grown to over 390 million ATOM through ongoing block emissions. Inflation dynamically adjusts each block to target a 67% staking ratio, with an annual rate bounded between 7% and 20%. This mechanism typically translates to 10-15% yields for validators and delegators.
The 2017
ICO allocated ATOM as follows:
1. 67.9% to public sale contributors
2. 10% to Tendermint Inc.
3. 10% to the Interchain Foundation
4. 7.1% to strategic and early adopters
5. 5% to seed-round contributors
All of these tokens have since fully vested and entered circulation.
As of May 2025, transaction and IBC fees burn or go to validators. Under the upcoming ATOM 2.0 proposals, a portion of network fees will flow into a hub treasury, aligning token value with ecosystem growth through grants and shared revenue.
How to Stake ATOM Tokens on Cosmos
Here’s a simple, step-by-step guide to staking your ATOM on the Cosmos Hub:
1. Install a Cosmos-compatible wallet: Download and set up a
wallet such as
Keplr (browser extension) or
Leap (mobile/desktop). Securely back up your seed phrase.
2. Fund your wallet: Send ATOM tokens into your Cosmos wallet address. You can purchase ATOM on BingX and withdraw to your Keplr/Leap address.
3. Connect to the Cosmos Hub staking interface: In Keplr, click the Cosmos Hub network and choose “Stake” (or go to the
Cosmos staking hub on Keplr). Leap users can navigate to the built-in staking tab.
4. Choose a validator: Browse the list of validators. Consider factors like uptime, commission rate, and community reputation. Click “Delegate” on your chosen validator.
5. Enter the amount to stake: Specify how many ATOM you want to delegate. Remember to leave a small balance (≈0.01 ATOM) for future transaction fees.
6. Approve and submit the transaction: Review validator details, network fee, and unbonding period (21 days). Confirm in your wallet to broadcast the delegation transaction on-chain.
7. Monitor your staking position: After a few blocks, your delegation will be active and start earning rewards. You can view your “Delegations” and “Rewards” in the staking interface.
8. Claim your rewards: Rewards accrue every block but must be withdrawn manually. In the same staking tab, click “Withdraw Rewards” (or “Claim”) to send earned ATOM back to your wallet.
9. Unbonding (if you wish to unstake): To undelegate, select “Undelegate” next to your delegation. Your tokens will enter a 21-day unbonding period, after which they’re free to transfer or restake.
Once delegated, your ATOM helps secure the network and earns you inflation-backed rewards.
Which Wallets Support ATOM Tokens?
Keplr, Leap, Cosmostation, Citadel One and
MetaMask (Snap) are the go-to non-custodial wallets for ATOM, each built on the Cosmos SDK so you can send, receive, stake and participate in IBC transfers directly from the app or extension.
Trust Wallet and Atomic Wallet also support ATOM, letting you manage multiple chains on mobile while earning staking rewards without running a full
node.
For maximum security,
hardware wallets like
Ledger Nano S/X (via Cosmos app) or Trezor can cold-store your ATOM
private keys offline, with easy integration into Keplr or Cosmostation when you need to transact. If you prefer a custodial option, you can simply hold and stake ATOM directly in your BingX spot wallet; no external setup required, and you’ll still earn network rewards.
How Fast and Cheap Are the Transactions on Cosmos Network?
Cosmos Hub finalizes blocks in just 6-7 seconds on average, giving you near–real-time transaction finality and supporting hundreds to thousands of transactions per second under normal conditions (and up to ~10,000 TPS per zone in peak throughput tests). Meanwhile, transaction fees are extremely low; most simple ATOM transfers cost only $0.05 to $0.10 (with on-chain fees often around $0.08 on average), making Cosmos both fast and cheap compared to many other chains.
What Makes Cosmos (ATOM) a Good Investment?
Cosmos’s greatest strength lies in its interoperability and modular design. Built with the Cosmos SDK and secured by Tendermint’s BFT PoS engine, it enables developers to launch sovereign “zones” that plug into the Cosmos Hub via the IBC protocol, streamlining token and data transfers across chains without a central intermediary. This open, customizable framework has already attracted dozens of high-profile projects, like Osmosis, Juno, and Terra Classic, cementing ATOM’s role as the multichain “router” and fostering a rapidly expanding ecosystem of
DeFi apps,
NFTs, and cross-chain services.
On the economic side, ATOM offers compelling yields and governance rights. Stakers can earn up to
20% APY by delegating to validators or via liquid-staking protocols, outperforming many competing PoS networks and aligning incentives toward long-term network security and participation. Meanwhile, growing institutional interest, evidenced by recent capital inflows and strategic partnerships, underscores confidence in Cosmos’s vision as the backbone of
Web3 interoperability.