HOW THE COSMOS SOLUTION CAN BE APPLIED TO AFRICAN PROBLEMS

HOW THE COSMOS SOLUTION CAN BE APPLIED TO AFRICAN PROBLEMS


One of the fundamental challenges blockchain startups in Africa have to surmont is the choice of the best architectural approach. Whether to set up independent blockchains like the Bitcoin model or to build on already existing infrastructures that offer smart contract features, like the Ethereum Virtual Machine (EVM), Binance Smart Chain, (BSC), Tron, Tezos etc. 

The choice of an independent blockchain infrastructure comes at a cost, as users will not be able to find easy liquidity and exchange for the native coin of the independent blockchain till it is listed on a centralised exchange. Listings on centralised cryptocurrency exchanges often comes at a huge financial cost for exchanges. Exchanges with greater liquidity means more listing cost. Listing on smaller exchanges would mean limiting the economic chances and the general growth prospects of the blockchain project. 

Even spending huge funds to list on bigger exchanges does not guarantee a permanent and consistent growth process. This is because we have seen exchanges delisting projects they have originally listed on the basis of poor performance.

The underlying blockchain also provides liquidity by way of enabling the swapping of the native token of the new project with the native coin of the underlying infrastructure and, in some cases, with the token of other projects built on the underlying infrastructure and vice versa; without necessarily undergoing the rigours of listing it on an exchange.

The flip side of building on already existing blockchain infrastructures is the relinquishing of some or most of the controlling powers of the smart contract to the underlying infrastructure. Transactions on the smart contract relies on the consensus mechanism of the underlying chain for scalability. What this means is extra costs for end users, as they have to pay double transaction fees for their transactions to pull through.Deciding the best smart contract infrastructure to build a project on is another huge hurdle the African Blockchain startup has to surmount. Choosing the right infrastructure is often akin to making a choice between the devil and the deep blue sea. Smart Contracts service providers with a large user base often come with high transaction costs. For instance, the transaction cost on the Ethereum Virtual Machine is outrageous because it is the most popular smart contract enabler with a very huge user base. Users of native tokens of projects built on these smart contract machines would have to contend with paying the same transaction fees as those directly using the underlying coins as well as paying any transaction fee chargeable on that project. This is irrespective of the fact that the economic value of the underlying coin is way higher than that of the project token. This naturally discourages users, who would rather engage in pump and dump than a long term hold of such project tokens; thereby adversely affecting the survival chance of such project.

The bane of most African startups is access to adequate funds. They do not have the financial strength to favorably compete with their counterparts around the globe. Most African Blockchain Project startups have to contend with applying their scarce resources to achieve similarly big goals as their counterparts in other continents. This has been suicidal for these projects as they end up choked and naturally phase out, after spending their scarce resources. Thereby, discouraging old participants from re-attempting and new ones from proceeding with their ideas. Some do not  even have the financial strength to try. Blockchain Startup projects on the continent can take advantage of the interoperability features of the Cosmos Blockchain to build independent blockchain infrastructures that can interoperate and interact with other blockchains within the Cosmos Hub to perform interchain or cross chain transactions without haven to go through the financial hurdles associated with listings on centralized exchanges or escrow service providers.

Apart from the question of cost, it also takes care of the nagging issue of which smart contract infrastructure to build on. In fact, startup projects do not need to be in the form of smart contracts ,anymore and do not have to surrender part of their controlling powers to the underlying blockchains with the accompanying high transaction costs. They can be built as independent blockchains with the ability to interoperate with other blockchain on the Cosmos Hub.The  Cosmos Gravity Decentralized Exchange (DEX) is the latest effort by the Cosmos team to democratize and bring about equality in the blockchain space.Once fully operational, the Cosmos Gravity Dex will enable African blockchain projects to be on equal pedestal with their counterparts around the word with reference to exchange listings. It will give every project equal listing rights and level the transaction fees across chains, thereby giving equal advantage at survivor to all projects. I daresay, Africa will be the biggest beneficiary of the DEX as it takes care of the core of its problem: “listing”.The Cosmos Gravity Dex will equally poll liquidity from two of the major smart contracts machines vis a vis Ethereum Virtual Machine (EVM) and Binance Smartchain, as well as from other independent chains. This is an, undisputed, goldmine for the African blockchain community and market.

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chidi
chidi

i am a blockchain evengelist, a networker and a smart worker going around the world and working towards mass adoption of decentralization


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