Interchain Security Simply Explained

Interchain Security is a type of shared security within the Cosmos ecosystem. The endeavor aims to bring more value to ATOM – the native coin of the Cosmos Hub.

What is Interchain Security?

Interchain Security aims to increase the status of the Cosmos Hub. The original purpose of the Cosmos Hub was to make the Internet of Blockchains better and easier to use – f.e. for DeFi services. However, today the Hub is still lacking potential use cases. By introducing Interchain Security, the Cosmos Hub will be responsible for securing the Internet of Blockchains.

Shared security, in essence, describes the fact that a superior network is responsible for securing a subordinate network. One of the best examples is the concept of optimistic rollups. Optimistic Rollups depend on the security of the Ethereum main chain. Every single transaction on the rollups is also stored on Ethereum.

Interchain Security is a type of shared security. The official announcement post of Cosmos describes the relationship in the following way:

Shared Security

Shared security is a family of technologies that include optimistic rollups, zk-rollups, sharding, and Interchain Security.

Interchain Security

Interchain Security is the Cosmos-specific category of Shared Security that uses IBC (Inter-Blockchain Communication).

Cross Chain Validation

Cross Chain Validation is the specific IBC-level protocol that enables Interchain Security.

In plain words, Interchain Security lets a parent chain (the Cosmos Hub) produce blocks for a child chain. The Cosmos Hub would share its set of validators with the child chains. Therefore, the participating validators run two nodes:

  • One node for the Cosmos Hub
  • The other one for the child chain

The validators will then receive fees and rewards from both the Cosmos Hub and the child chains.

To be able to produce blocks on behalf of the child chain, validators have to stake ATOM on the Cosmos Hub, which is slashed if the validator misbehaves.

Giving ATOM More Utility

Interchain Security brings more value to the Cosmos Hub and its native currency ATOM. While the Hub is still lacking use cases, the new concept allows the Hub to become the center of the Internet of Blockchains. After a successful implementation, there are two main value drivers for the Hub:

The demand for ATOM increases because we can use it to secure other chains. Today, people mostly use ATOM to secure the Cosmos Hub. After a successful implementation, we can also use ATOM to validate blocks of other zones.

By turning ATOM into the primary currency of the Internet of Blockchains, the cost of corruption increases. The term “cost of corruption” refers to how difficult it is to attack a blockchain. Previously, a zone was responsible for its own security. Therefore, the cost of attacking a zone increases dramatically. In addition, the barrier of creating a new blockchain also decreases.

In plain words, developer teams will find it easier to build a new blockchain as they won’t have to worry about security issues. They can focus on building great products with good tech.

Interchain Security v2

After a successful update, we can also look forward to Interchain Security v2. This will combine the security of the individual zone with the additional security of the Cosmos Hub. A zone will be able to secure itself with a full set of validators, while also being secured by the Hub. You would have the weight of the child chain’s token market cap – with an additional layer of the Hub’s market cap.

This is possible in both directions. The zone can secure the Hub and the Hub can secure the zones.

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