DeFi Differences: Cosmos, Ethereum, Polkadot, and Wanchain

What are the key differences between the Cosmos, Ethereum, Polkadot, and Wanchain blockchains? These are the world’s most popular DeFi platforms, and each one offers something a little bit different from the others. Which project or network you decide to invest in or build your own project on will depend on what your needs are and what kind of system you are looking for. Here we give you a rundown of these industry leaders. Image for post

1. What is the Cosmos Network (ATOM)?

Cosmos was created in 2016 by Founders Billy Rennekamp, Ethan Buchman and Jae Kwon. Cosmos raised over $16 million in an initial coin offering (ICO) in 2017. The Cosmos network is made up of many independent blockchains which utilize byzantine fault tolerance (BFT) consensus mechanisms, including Tendermint BFT. Each individual blockchain maintains control of its own governance, but is interoperable with other blockchains in the network. Blockchains that do not utilize BFT algorithms can be connected to the Cosmos network via “adaptor” blockchains. Cosmos was not designed for one particular use case, but to be adaptable to suit many different use cases.

Cosmos has two types of blockchains: Zones and hubs. Zones are regular blockchains, while hubs are blockchains that connect zones with one another. The Cosmos Hub was the first blockchain (and hub) to be launched in the Cosmos ecosystem. It is a public, proof-of-stake (PoS) blockchain whose native token is ATOM.

What is ATOM?

ATOM is the staking token that is mainly used for governance on the Cosmos network. Zone validators can connect to hubs by staking ATOM, at the risk of having their stake reduced if fraud or other misdemeanor happens in their zones. The current annual yield on ATOM is around 6.5%.

🔹Trade ATOM

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2. What is Polkadot?

Polkadot (DOT) was founded in 2016 by Gavin Wood, former Co-Founder and CTO of Ethereum. Polkadot raised more than $145 million via a token sale in October 2017. However, $98 million worth of Polkadot’s Ethereum (ETH) tokens were frozen due to a bug in Parity wallets.

Polkadot unites a network of heterogeneous blockchains called parachains and parathreads. These chains connect to and are secured by the Polkadot Relay Chain. They can also connect with external networks via bridges. With Polkadot, one can create a custom blockchain in minutes using the Substrate framework. Developers can connect their chain to Polkadot and get interoperability and security from day one. Chains remain independent in their governance but united in their security.

Why Polkadot?

Polkadot builds on the basic functions of previous DeFi blockchain networks while offering several distinct features.

Blockchains in isolation can only process a limited amount of traffic. Polkadot is a sharded multichain network, meaning it can process many transactions on several chains in parallel, eliminating the bottlenecks that occurred on legacy networks that processed transactions one-by-one. Think of a single lane road to a road with multiple lanes. This parallel processing power significantly improves scalability and creates the right conditions for increased adoption and future growth. Sharded chains connected to Polkadot are called “parachains” because they run on the network in parallel.

What is DOT token?

DOT is the token native to Polkadot. DOTs serve four key functions in Polkadot: governance over the network, staking, bonding, and fees.

🔹Trade DOT

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3. What is Ethereum 1.0?

Ethereum (ETH) was created in 2015 by Vitalik Buterin, Charles Hoskinson, Mihai Alise, Amir Chetrit, Joseph Lubin, Gavin Wood, and Jeffrey Wilke. Ethereum is the first and most prominent decentralized open-source blockchain featuring smart contract functionality. Ethereum revolutionized the crypto-space by bringing in smart contracts on the blockchain. Smart contracts help users exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.

Ethereum uses a Proof-of-Work (POW) system. In a PoW system, miners, who use various types of computer hardware like computer processors, graphics cards, and specialized mining devices, use their processing power to solve complex mathematical puzzles in a race to verify new network transactions. By being the first to solve a given puzzle, a miner adds new transactions (which together form a “block”) to the record of all transactions (the “blockchain”). For their efforts, they are rewarded in newly minted crypto like ETH.

What is Eth token 1.0?

Ethereum applications and contracts are powered by ETH, the Ethereum network’s currency. ETH is used broadly for two purposes: it is traded as a digital currency exchange like other cryptocurrencies, and it is used inside Ethereum to run applications and even to monetize work.

What is Ethereum 2.0?

Ethereum 2.0 will replace the current Proof of Work (mining) model that the blockchain uses with staking. There are two primary improvements introduced by Ethereum 2.0 that do not exist in Ethereum 1.0: Proof of Stake and Sharded Chains. It will likely take many years for the Ethereum 2.0 upgrade — in all its complexity — to be complete. Phase 0 of Ethereum 2.0 will launch in 2020. Phase 1 is anticipated in 2021. Phase 2 and beyond are anticipated for 2021 or later.

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What is ETH token 2.0?

ETH 2.0 will be governed by a Proof-of-Stake consensus. 32 ETH is required for staking and earning rewards on the Ethereum 2.0 network. Individuals who are not able to stake the full 32 ETH can also choose to do so in a pooled group with others to make up the total staking fee.

The rate of return for staking ETH is expected to be 4% — 10 %.

🔹Trade ETH

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4. What is Wanchain?

Wanchain (WAN) was created in 2017 as a non-profit public blockchain project initiated by Jack Lu, the co-founder, and CTO of Factom. Wanchain is now a Proof-of-Stake blockchain implementing its own version of Cardano’s Ouroboros consensus mechanism called Galaxy POS. It provides smart contracts, cross-chain transactions, and ring signature-based private transactions designed for decentralized financial applications. Wanchain’s founding vision is to make Cross-Chain DeFi a reality by allowing assets to flow freely between blockchains without any centralized third party limiting their movement.

What is the WAN token?

WAN is Wanchain’s native token. All Wanchain transactions, cross-chain transactions, and smart contracts are powered by WAN. WAN is used as a stake in Wanchain’s Galaxy Proof of Stake system, and also serves as a bond for Wanchain’s cross-chain wanSM “Storeman” nodes. Investors can earn passive income by staking WAN either to validators or to Storeman nodes. The current annual yield for WAN validators is around 9%.

What is an example of a project built on Wanchain?

FinNexus (FNX) — FinNexus is a DeFi focused project which recently went live on Wanchain. FinNexus is building a suite of open finance protocols to power hybrid marketplaces that trade both decentralized and traditional financial products across multiple public blockchains. The first FNX platform is a decentralized options protocol powered by a single liquidity pool on both Wanchain and Ethereum.

🔹Trade WAN

Summary:

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