Recently, Instagram launched Threads and expressly stated that it would later join the ActivityPub federation. After years of cultivation, the concept of federation on the internet has finally garnered some attention from general users. Besides ActivityPub, another point of interest is the blockchain federation, the Cosmos ecosystem.
Navigating Multiple Chains with a Single Wallet
I often analogize Cosmos as a “European Union of Blockchain”. It provides the underlying consensus engine and software development kits, encouraging other communities to build their own blockchains and become part of the federation. This is the biggest difference between the Cosmos and Ethereum ecosystems.
With the emergence of various L2 (Layer 2) and side chains on Ethereum and their growing popularity, more and more users manage Ethereum’s L2 and side chains like Arbitrum, Optimism, and Polygon with the same private key. The user experience of Metamask is gradually converging with that of Keplr. However, there are fundamental differences between the two. In the Ethereum ecosystem, L2 and side chains are hierarchical with the main chain. In the Cosmos ecosystem, although the scale of each federation chain varies, all chains are equally treated as L1. This is just like in the European Union, the most populous and economically strong Germany is constitutionally equal to Malta, which has a population of just over 400,000. This ethos of supporting small communities to be independent and interconnected explains why I always believe in the significance of the Cosmos ecosystem, even though Ethereum dominates much of the market.
Compared to Metamask, which requires switching between chains to operate on the corresponding chain, the multi-chain concept of Cosmos is deep-rooted, so that the desktop version of Keplr directly displays the user’s assets on each federation chain, and basic operations such as transfers, deposits, and purchases can be performed without switching networks.
Keplr’s purchasing function is provided in cooperation with Kado, Moonpay, and Transak, and supported currencies can be purchased directly with a credit card. However, of course, first-time users still need to perform KYC (know-your-customer) checks, which is not very convenient, but it’s a necessary evil. Excluding the KYC part, the entire process is quite smooth.
Transfers and deposits are the most basic functions of wallet software and are similar in nature. The only difference is that wallet addresses of Cosmos federation chains use prefixes representing themselves. For example, Cosmos Hub starts with ‘cosmos1’, Osmosis starts with ‘osmo1’, LikeCoin starts with ‘like1’, and so on. Therefore, when a user provides a wallet address to the payer, they need to choose the wallet address corresponding to the received currency.
It is worth mentioning that Keplr 2.0 has added a very thoughtful function, “Claim all”. If users have staked on multiple chains, claiming rewards becomes super easy, similar to the “one-click sweep” in mobile games, which is refreshing and nothing is missed.
Dashboard: A Financial Statement Updated Every Few Seconds
Besides the browser extension and mobile app, another main interface of Keplr is the dashboard, a concept similar to DeBank but more akin to Metamask’s portfolio view as both are bundled with wallet software and interact with the Chrome extension interface. The dashboard clearly displays various balances and offers the most comprehensive functionality among all interfaces, including the most frequently used transactions, deposits, purchases, reward withdrawals, as well as staking and governance functions, which the extension does not offer.
If you’re a blockchain beginner who’s unfamiliar with DeBank and Metamask, you can think of the Keplr dashboard as a multi-currency bank account statement that lists all your balances, assets invested in various products, etc., all at once. However, this “monthly” statement is not updated monthly, but rather with every block, which in the Cosmos ecosystem is generally every 6 seconds.
Young readers may not have used a bank passbook, let alone the classic HSBC red lion passbook; as for the even rarer and old-fashioned green lion passbook, only true old Hong Kongers would have seen it, as it was used for USD accounts at HSBC in the 1980s. The concept of a bank account used to be one account per currency, and it’s only in the last two or three decades that multi-currency accounts have become the norm. To get back on track, what I’m trying to bring out is that blockchain development has followed a similar trajectory. Early wallets only managed Bitcoin, later ones like Metamask support multiple currencies, managing many ERC-20 tokens in addition to ETH, and then later still evolved to support multiple chains and currencies, as Metamask and Keplr do now.
As mentioned earlier, Metamask and Keplr are increasingly alike, not only because Ethereum now has L2 but also because of PoS updates, for instance, the Metamask portfolio view now also allows staking of ETH, letting users choose between Lido and Rocket. Compared to Ethereum’s evolution from PoW to PoS in a “mid-air engine change”, Cosmos has been using PoS since its launch in 2019. For holders of ATOM and other Cosmos ecosystem currencies, operations such as staking and withdrawing rewards are daily routine. In this sense, the dashboard can be said to be the dining table for Cosmos holders, where they can stake, withdraw rewards, unstake, restake, and view various data on all validators to make informed decisions.
Federal Government Chamber
As for the governance interface, Keplr is quite unique.
Each chain in the Ethereum ecosystem uses off-chain governance, where discussion and voting processes vary, but all are unrelated to asset management; Cosmos uses on-chain governance, where every chain must vote through updates, parameter modifications, and use of community pools, and the code will execute accordingly. The whole voting process is integrated within the wallet.
As for what level of community decisions are made through on-chain voting, it varies from chain to chain. Frequently, such as with Osmosis, there is a resolution to be voted on less than every 2 days; only the die-hard fans can keep up with everything. Another extreme is Band, which has only had 12 resolutions in several years. LikeCoin is in the middle, with a total of 66 resolutions in three and a half years since its launch in November 2019, averaging 1-2 per month.
Keplr’s governance interface deserves praise for being very user-friendly, offering users a summary of all the resolutions in the voting period of all federated chains they hold stakes in, clearly marking the voting end time, whether the user has voted, and so on. Clicking into a resolution displays not only the details of the clause, but also the validators’ voting preferences and reasons, just like in a federal government chamber. Of course, it also provides all historical resolutions of the federated chains, letting users understand the context.
In the past, when introducing validators in the Cosmos ecosystem, we have compared them to banks and congresspersons on the chain, corresponding to the roles of bookkeeping and representation. The design that ties the two together in Cosmos has its pros and cons. Due to economic incentives, the staking ratio of the Cosmos federated chains is generally around 2/3, and the design that equates staking with voting rights has allowed validators with a representative identity to collect about the same 2/3 of voting rights. In contrast, some projects in the Ethereum ecosystem, despite emphasizing governance, either uses direct democracy which is both hard and inefficient or allows delegation to representatives, but without economic incentives and with the high transaction fees, few people do it. These factors combined make the voting rate for resolutions in the Cosmos ecosystem much higher than that of Ethereum and other ecosystems.
As the saying goes, “a loss is as good as a gain”. What’s needed for bookkeeping is technical ability and resources, especially reliable servers, sufficient storage, and fast connections. Governance, on the other hand, requires a certain understanding of the ecosystem and its development, to make judgments on various resolutions. Some validators may be excellent bookkeeper, obtaining a lot of stakes and thus holding a large voting right, but do nothing in terms of representation. Coinbase, Binance, and Kraken on the Cosmos Hub are prime examples of this. These top-ranked validators have never voted on any of the past 79 resolutions, a strange phenomenon that at best affects the quality of governance and at worst hinders the passing of resolutions, stagnating development.
For Cosmos’ liquid democracy, Keplr provides a voting interface exclusively for validators, using Cosmos’ unique Authz function to allow validators to delegate voting rights to individual wallets, making frequent daily operations convenient. It also allows validators to comment on their reasons when voting and allows stakeholders to respond. If stakeholders disagree with the validator, they can actively persuade the validator, or be persuaded in the process. Otherwise, users can also exercise direct democracy by casting their own vote to override the representative’s option. Moreover, users can also immediately transfer the delegation to a validator who better represents their own opinion, demonstrating the ‘liquidity’ of democracy.
Keplr’s simple and clear governance interface gives Cosmos’ liquid democracy a boost, greatly lowering the threshold for participating in on-chain governance. However, a tool is just a tool. Even if Keplr is doing well and the operation is simple, it’s a necessary but not sufficient condition for on-chain governance. Users who do not pay attention will still not pay attention. Attention is the most scarce resource at present. Getting stakeholders to pay attention to community development is the hardest step for each project, and also the most valuable one.