Messari analyst: What does the launch of the Cosmos cross-chain account today actually mean?
This module may significantly enhance the interoperability, capacity, and composability of blockchain networks.Author: Youssef Amrani, Messari Analyst
Organizer: Linqi, Chain Catcher
Today, @Cosmos Theta upgrade has been quietly launched. This upgrade marks the official introduction of cross-chain accounts, a module that could significantly enhance the interoperability, capacity, and composability of blockchain networks.
Cross-chain accounts will drive more possibilities, further strengthening Cosmos's position as a pioneer and mature leader in blockchain interoperability.
It is understood that cross-chain accounts grant blockchains the ability to open their native functionalities as "APIs," which can be customized and written by another chain, and then execute state writes to these endpoints through cross-chain account channels.
So, what exactly are cross-chain accounts? You can think of them as an additional IBC layer that brings more potential opportunities. While the current IBC allows tokens to be traded and transferred between Cosmos sovereign chains, cross-chain accounts take it a step further.
It enables end users to authorize their assets on blockchain A to perform operations on blockchain B. The following example illustrates my point better: currently, let's assume I am using Osmosis (the largest DEX platform based on IBC trading volume in the Cosmos ecosystem) to handle my transactions.
Suppose I want to withdraw some UST that I have placed there and then deposit this UST into Anchor to earn a 19.5% yield. Currently, to do this, I have to withdraw my UST from the Osmosis platform and then transfer the UST to my Terra wallet via my @keplrwallet.
Then I have to go through additional steps to stake the UST in Anchor (either from Terra Station or the Anchor app). Now, if both Terra and Osmosis have set up the cross-chain account module and opened a channel within it, there would be a completely different user experience.
Suppose the Osmosis team made some modifications; I could essentially withdraw the UST from Osmosis and send it directly to Anchor. The entire process might not require leaving the Osmosis site and could be completed in just 2-3 steps.
Here’s another example: I want to withdraw some ATOM from Osmosis and stake it in liquidity on Cosmos Hub. Similarly, this should be achievable through Osmosis. The Osmosis DEX would withdraw ATOM for me and execute all necessary steps on the Hub chain to release the liquidity of my staked tokens.
The main advantages of cross-chain accounts are as follows (@L1am_Crypto contributed to this): optimizing the user experience of the Cosmos ecosystem; unlocking new inter-chain services and business models; enhancing composability; increasing cross-chain activity.
By watching this video, I believe it will give you a better understanding of cross-chain accounts.
Cross-chain accounts are the next logical (and complex) step in interoperability, showcasing a significant advantage that could change everything: the ability of one chain to write state on another blockchain.
This means that end users no longer need to "follow" their tokens every time they want to perform an "activity." The method is to allow one chain to open a specific cross-chain account channel on another chain it is already connected to, and vice versa.
The direct result is exciting: current chains will be able to develop new composable primitives, transitioning from their native single-chain business models to inter-chain native business models, significantly increasing their impact.
As @buchmanster said: I don't think people realize how significant IBC really is. It's not just another bridging technology for token transfers. It’s a universal communication protocol for community computers. We will amaze you with cross-chain accounts and Interchain Security launching on @cosmoshub this year.
This new feature, along with the Shared Security module, will create unprecedented use cases and applications, fostering innovation and rapid iteration in the Cosmoverse, further solidifying Cosmos's dominant role in interoperability and multi-chain applications.
Personally, I believe cross-chain accounts are the third major innovation of Cosmos, with the first two being: the ability to build sovereign chains using Tendermint and Cosmos SDK; and the ability to transact between them via IBC.
Undoubtedly, this third innovation will attract more developers and users, establishing a top-notch user experience and interface. Hats off to all the Cosmonauts participating in this significant milestone.
