It all started with Ethereum and Cosmos having their own unique ambitions, but the challenges provided by elements like MEV, liquidity dispersion, and widespread decentralization prompted the two parties to explore formalizing their relationship. EigenLayer is introduced into the picture. The startup seeks to connect Ethereum with Cosmos in order to introduce a variety of innovations.
This will enable the Cosmos community to establish connections within the Ethereum core source code that pertain to decentralized liquidity and security. In contrast, Ethereum benefits from the numerous experiments conducted within the Cosmos framework.
Ethereum aspires to become a global settlement hub, whereas Cosmos envisions a cosmos populated by a prodigious number of digital city-states. In contrast to Cosmos, which utilized delegated Proof of Stake, Ethereum implemented Proof of Stake.
As the mechanisms expand, the creatives are beginning to converge. Ethereum has refined a rollup-oriented upgrade strategy, whereas Cosmos is actively seeking shared security protocols. As the number of Ethereum L2s increases, endeavors such as Superchain, ZK Stack, and Polygon 2.0 resemble the integrated economic spaces accessible in Cosmos. The objective continues to be the secure upgrade of the crypto framework.
Ethereum is dealing with the MEV challenge, which is affecting its future game plan, and its protocol inventive, proposer builder separating (PBS) appears to be the solution. PBS in Ethereum is now carried out via out-of-protocol creatives known as MEV-BOOST, utilizing a dependable commit reveal method.
This is also true in the case of Cosmos, where MEV is the troublemaker. However, new-age ePBS services are being implemented due to the malleability of each Cosmos chain. Osmosis is experimenting with top-of-the-block arbitrage profit sharing, whereas Skip is experimenting with BlockSDK. Then there’s Fairblock, which tries an encrypted mempool for each chain.
Interoperability is a priority for the Cosmos developer community. The IBC protocol was developed to address interoperability issues by cross-chain light client authentication. It has gathered about 1,000 IBC connections. Similarly, the interoperability issue in Ethereum is being addressed by espresso systems.
The validator set, a tough proposition, is used for most of Cosmos’ ingenuity. EigenLayer solves the problem by providing a foundation for the economic stake, allowing each stakeholder to contribute to each POS network.
The key reason for Etherem’s connection to Cosmos is decentralization. EigenLayer offers the option of connecting to the Ethereum network’s massive validator set from the start. Cosmos is still looking to grow its user base, and Ethereum wL2 has proven to be the most suitable environment for conducting tests.
While Ethereum and Cosmos develop their partnership, EigenLayer will continue to act as a catalyst.