Where Cosmos and Filecoin Are Unlocking Value in Web3

Over the next several weeks, Coinage is coming to a consensus on which Web3 endeavor shall be crowned Crypto Project of the Year — and it’s truly up to you. Vote to crown the winner from 16 crypto hopefuls — and choose between Filecoin and Cosmos.

When it comes to various projects in the crypto space, each project is distinct in its own way. In the case of Filecoin and Cosmos, their associated tokens serve vastly different purposes, even though both projects have an eye toward decentralized finance or DeFi.

Protocol Labs Ecosystem Lead Colin Evran said that Filecoin, as a decentralized network for file storage, enabled more ways for its token — of the same name — to be used within its network this year, beyond payments and staking. Meanwhile, Osmosis Co-founder Sunny Aggarwal said that ATOM, as Cosmos Hubs’ native token, holds unique value because of the project’s history. 

Osmosis was constructed using the Cosmos SDK, a framework that enables it to operate across all chains. Designed with automated market makers or AMMs in mind, Osmosis supports the Osmosis DEX, a decentralized exchange.

The Osmosis DEX has a total value locked or TVL of $129 million, according to data from DefiLllama. Over the past 24 hours, the decentralized exchange had notched $26 million in trading volume, which comprised $40,000 in fees.

Cosmos was co-founded by developers Jae Kwon and Ethan Buchman in 2014. And even though “that original dev team kind of split splintered,” Aggarwal said, “everyone kept working in the cosmos ecosystem.”

ATOM, which is used to keep Cosmos Hub secure and govern the projects’ direction, is effectively connective tissue, Aggarwal said. He compared the way that independent projects built using the Cosmos SDK share an interest in ATOM from a governance perspective as akin to capitalism.

“There's not one global empire in the world,” he said. “We live in a world of nation-states — [with] different political systems — but we all still have some notion of a larger, shared economic layer.”

Cosmos Hubs’ community became embroiled in a contentious proposal this year that centered on ATOM’s tokenomics. After a debate over what ATOM’s maximum inflation rate should be to ensure the network’s security, proposal 848 narrowly passed, reducing ATOM’s maximum inflation to 10% from 14%. The vote garnered historic levels of turn-out, per The Block.

Last month, Cosmos co-founder Jae Kwon called for Cosmos Hub’s native token, ATOM, to be forked. He proposed the community “coordinate a split” on X to establish a separate network dubbed AtomOne, where a new token, ATOM1, would maintain a higher inflation rate.

“Whether it's the right bet or not, is TBD,” Aggarwal said of the proposal 848’s passing. However, in light of the contention, he said, “I do think that ATOM does have a unique value proposition in the crypto ecosystem as a whole: I would say it is probably the most decentralized governance token in all of crypto.”

While Filecoin has positioned itself as an alternative to centralized data storage services, the network expanded into new use cases in 2023, Evran of Protocol Labs said. One element of that was the introduction the Filecoin Virtual Machine, introducing a similar mechanism to the one that enables Ethereum to host and run smart contracts.

“The launch of the Filecoin Virtual Machine enabled a whole bunch of DeFi activity that was not possible before,” he said. “So with the launch of smart contracts, token holders can now lend their Filecoin to storage providers, so they can use it as collateral and grow their businesses, onboard more data, and then return some of that yield to token holders.”

At a conference hosted by Protocol Labs this year in Istanbul, Turkey, Evran highlighted the launch of the Filecoin Virtual Machine and its associated impact on the decentralized storage network. The network’s TVL had grown so far in 2023 to become ranked 25th among all chains, a graphic on-stage claimed.

But that doesn’t mean Filecoin isn’t being increasingly tapped as a storage solution by organizations — that have very little if nothing to do with Web3. 

In 2023, Filecoin’s network was tapped by the Victor Chang Cardiac Research Institute in Australia, where the medical organization is based. Per Blockworks, 137 terabytes worth of medical data was hosted on the network with the storage provider Distributed Storage Solutions. Yet, that pales in comparison to all the data that’s been stored on Filecoin so far.

“There are about 2 million terabytes of client data stored on Filecoin,” Evran said. “That’s the equivalent of 500 million 1080p movies.”

Which project deserves to progress in Coinage’s Crypto Project of the Year? Coinage Membership Pass holders can watch the full video above and vote on which projects advance in our celebration of crypto’s top projects. Don’t have a Membership Pass? Mint one now!