Cosmos Scraps Smart Contracts: Builder Exodus or Strategic Pivot?

Cosmos abandons smart contracts on the Hub, sparking builder exodus concerns. Is it a misstep or a necessary pivot for Cosmos' future?

Cosmos Scraps Smart Contracts: Builder Exodus or Strategic Pivot?

Cosmos, the interoperability-focused blockchain network, recently scrapped its plans to bring smart contracts to the Cosmos Hub, igniting a debate about its future direction and potential builder exodus.

Cosmos' Smart Contract U-Turn

In a surprising move, Cosmos halted its initiative to transform the Hub into a multichain smart contract platform. Citing high implementation costs and weak developer demand, the team decided to refocus its efforts. This decision, however, has stirred up long-standing frustrations within the Cosmos builder community.

Builder Exodus: Real or Exaggerated?

Simon Chadwick, a former Cosmos-based project contributor, announced his team's departure from the ecosystem, highlighting challenges such as liquidity, user distribution, and developer support. While acknowledging valuable Cosmos teams, Chadwick painted a picture of projects struggling to gain traction since the Terra collapse. His concerns echo a sentiment that some top-tier builders are leaving, feeling that their projects haven't achieved their potential within the Cosmos ecosystem.

Interchain Labs (ICL) co-CEO Maghnus Mareneck dismissed these concerns as "doomposting," arguing that all ecosystems face similar hurdles. However, Chadwick countered, questioning the number of genuine "winners" on Cosmos, even among well-known projects.

A Strategic Pivot?

Mareneck argues that onboarding established businesses to Cosmos will accelerate traction, citing new chains like Ondo, Ripple, Babylon, and Stable joining the IBC ecosystem. The focus shifts from competing for mercenary builders and users to attracting established players, potentially a more sustainable path.

Impact on Cosmos Projects

The decision to halt smart contract support has directly impacted projects like Stride, the largest liquid staking platform on Cosmos. Stride, which was developing a DEX for the Cosmos Hub, is now exploring alternative deployment options. Despite the setback, Stride co-founder Aidan acknowledged the difficult decisions facing ICL, highlighting the uncertainty in the space.

TON Blockchain and Tolk 1.0

Meanwhile, TON Blockchain is moving forward with the launch of Tolk 1.0, a new programming language designed to revolutionize smart contract creation within the Telegram-based Web3 ecosystem. Tolk 1.0 is based on the foundations of FunC, and offers a modern syntax and structure and also promises to be more efficient, with contracts written in Tolk consuming up to 40% less gas compared to FunC.

Looking Ahead: Cosmos' Future

Cosmos' ATOM token has underperformed compared to other Layer 1 ecosystems, trading nearly 90% below its all-time high. Daniel Olshansky, CTO of Grove, suggests that Cosmos isn't for everyone, recommending Solana for DeFi protocols or memecoins and EVM chains for wallets or stablecoins. He argues that Cosmos remains a strong option for those focused on building infrastructure that combines vertical integration and horizontal interoperability.

My Two Satoshis

Cosmos' decision is a high-stakes gamble. While the builder exodus concerns are valid, a strategic pivot towards attracting established businesses could be a long-term win. However, the Cosmos team needs to address the underlying issues of liquidity, user distribution, and developer support to retain existing talent and attract new builders. Only time will tell if Cosmos' new direction will lead to a thriving ecosystem or a missed opportunity.

So, is this the end of the world for Cosmos? Probably not. But it's definitely a plot twist. Buckle up, folks, because the crypto rollercoaster is far from over!