What is Interchain Security in Cosmos

TL;DR

In the dynamic world of blockchain technology, security is a paramount concern. One fascinating development in the Cosmos ecosystem is the introduction of Interchain Security, a concept designed to enhance the safety and functionality of the entire network. In this blog, we'll dive into what Interchain Security means for Cosmos DeFi and explore its potential impact on the ecosystem.

Video: https://youtu.be/NqLh87cr1EM

Learn the Basics

Before delving into Interchain Security, it's important to grasp the fundamentals. In proof-of-stake networks like Cosmos, security is closely linked to the value of staking tokens. Higher token values translate into greater network security. However, smaller or newer networks often face security vulnerabilities due to limited stake participation or low value at stake.

To address this challenge, some networks, including Cosmos Hub, have started collaborating to bolster their security. Cosmos Hub, for instance, shares its staking resources with other chains, creating a collaborative security ecosystem.

What is Interchain Security?

Interchain Security allows a consumer chain to inherit the security of a provider chain, which is a more established Cosmos blockchain with a high value staked on it. This means that the consumer chain does not need to operate its own validator nodes, and it can rely on the validators of the provider chain to secure it. 

How Does Interchain Security Work?

Interchain Security, a unique tool within shared security, relies on the Inter-Blockchain Communication (IBC) protocol to monitor and manage validators. It works by enabling the Cosmos Hub to generate blocks for a Consumer Chain. Validators running nodes for both Cosmos Hub and the Consumer Chain stake ATOM tokens for participation.

By approving a governance proposal, a Consumer Chain can utilize the same validator set as Cosmos Hub, thus gaining enhanced security. This integration ensures that both the Cosmos Hub network and participating Consumer Chains benefit from the staking of ATOM tokens, reinforcing security and stability.

Learn more: What is IBC?

Consumer Chains: A Vital Component

A critical factor in the success of Interchain Security is the commitment of Consumer Chains to share rewards with their delegators, who contribute to the security of the network by staking ATOM. This synergy creates a win-win situation: delegators support network security and reap rewards in return.

Cosmos serves as the pioneer ICS Hub in the ecosystem, with Consumer Chains sending a portion of their rewards to ATOM delegators via the provider chain. Delegators simply need to choose a reliable validator, and they'll witness their rewards grow, adding value to their ATOM holdings.

Benefits Beyond Security

Interchain Security offers more than just enhanced security; it provides Consumer Chains with the advantage of utilizing Cosmos Hub's resources while maintaining their own scalability and sovereignty. This collaborative approach eliminates the need for Consumer Chains to search for validators, as Cosmos Hub validators can extend their services through governance votes.

Consumer Chains also introduce new functionalities to the Cosmos Hub. 

Learn more: UX’s Security & Audits

Independence in the Ecosystem

Consumer Chains retain the flexibility to become independent at any time by establishing their validator groups. Although they remain interconnected through Cosmos Hub, they also establish connections with other independent chains via IBC, expanding their reach and influence.

Interchain Security V2

For established blockchains on Cosmos, Interchain Security V2, known as Layered Security, combines the staking tokens of the Consumer Chain with those of the Cosmos Hub, bolstering security with increased market capitalization.

In conclusion, Interchain Security promises a new dimension of security and functionality for the Cosmos ecosystem. It enhances security, fosters collaboration, and streamlines blockchain launches, making Cosmos an even more attractive environment for DeFi projects. As we eagerly await its launch, Interchain Security stands as a testament to the continual evolution of blockchain technology.