<aside> <img src="/icons/info-alternate_gray.svg" alt="/icons/info-alternate_gray.svg" width="40px" /> The Cosmos ecosystem offers developers a variety of choices when building decentralized applications. In this article, we will discuss the differences between building a blockchain and a smart contract within the Cosmos ecosystem, focusing on the benefits and trade-offs of using the Cosmos SDK, CosmWasm, and EVM-enabled blockchains.


Blockchains built with the Cosmos SDK

The Cosmos SDK is a modular framework that enables developers to build custom blockchains tailored to their applications. Using the SDK has several benefits:

  1. Flexibility: Developers have the freedom to define custom logic for their applications, enabling more complex use-cases and a higher degree of control over the network's behavior.
  2. Performance: Building a custom blockchain allows for performance optimizations specific to the application's needs, resulting in faster transaction processing and lower fees.
  3. Sovereignty: A custom blockchain provides a dedicated environment that allows for independent governance, enabling the community to make decisions without relying on external influences.

However, building a blockchain with the Cosmos SDK also has some trade-offs:

  1. Development complexity: Building a custom blockchain requires more in-depth knowledge of blockchain technology and requires a larger initial investment in development resources.
  2. Security: To run a sovereign blockchain, you’ll need validators to secure the network through Proof of Stake (PoS) or some other consensus mechanism. If using PoS, your chain will need a significant market capitalization in order to guarantee the security of the chain. Shared security solutions like Interchain Security solve this problem, although they currently have limited capacity to onboard a high amount of chains.
  3. Upgradability: in order to upgrade a Cosmos SDK based chain, the chain will require a new binary to be developed and run by all the validators in the network, also known as a fork. This process can cause short downtimes on the network.

Smart Contracts with CosmWasm and EVM

CosmWasm is a smart contract platform built for the Cosmos ecosystem that enables developers to write secure and efficient smart contracts using WebAssembly. It plugs into the Cosmos SDK as a module and there are currently many chains already offering permissionless access to deploy CosmWasm contracts, such as Neutron, Juno and Secret Network, among others.

The EVM (Ethereum Virtual Machine) is another popular choice for building smart contracts, with several EVM-enabled blockchains available in the Cosmos ecosystem using the Ethermint module, such as Evmos and Canto.

The benefits of building a smart contract on a CosmWasm or an EVM-enabled blockchain include:

  1. Easier development: Writing smart contracts is generally more accessible than building a custom blockchain, as developers can leverage existing tools, libraries, and frameworks. Solidity is a particularly popular framework available to EVM-enabled chains.
  2. Portability: Smart contracts can be deployed on multiple networks, allowing developers to reach a broader audience and benefit from network effects.
  3. Upgradeability: Developers can update smart contracts to fix bugs or add new features, which is more challenging with a custom blockchain.