Even compared to other tech markets, movements in the crypto-sphere are unwaveringly fast. A most recent shift has been seen in communities supporting application-specific blockchains. In fact, if it weren’t for these advances in approach and available ecosystems, Rebus might not yet exist. So what are they? Why are they exciting, and why did we (Rebus) choose the Cosmos ecosystem as its starting point?
To start, the Rebus Platform has one purpose: to provide mainstream financial houses with DeFi products that can be sold to customers. This makes access to DeFi easier by involving TradFi and increases utility by providing common uses of the asset class that traditional investors will recognize. This mission requires overcoming a sleuth of daunting technical and regulatory challenges. First, we need to be able to exchange DeFi assets across numerous blockchains, efficiently and securely. Second, we need to make such transactions satisfy banking regulations in order to be carried by mainstream banks, insurance companies, or asset managers. By choosing an ecosystem like Cosmos, we are given a flexible and proven framework that supports all technical requirements for us to build out the core functionality as well as satisfy regulators.
Application-specific blockchains are blockchains created for a single purpose, or application, using a common ecosystem like the CosmosSDK. What does that mean? For one, it means developers can add or change features based solely on their applications’ needs without considering third-party applications or tertiary use cases. This flexibility and freedom opens an immense and much needed amount of power to the development community that began reaching limits with virtual machine (VM) based blockchains like Ethereum.
In short, because it provides development teams, like Rebus, the ability to truly expand the utility of DeFi assets. When VM-based blockchains first appeared in 2014, they brought much needed programmability via smart-contracts. Smart-contracts are like single-use products, great for a simple purpose but leave many wanting as more complex use cases arise.
Application-specific blockchains allow developers to say goodbye to these limitations:
For example, the Ethereum Virtual Machine (EVM) limits developers to an account-based set of functions and does not allow automatic code execution. App-specific chains grant developers the choice of framework, consensus engine, and programming language, among others. With these limitations behind them, developers can focus on performance and scalability.
These limitations meant some fundamental issues with common needs, such as pushing critical hotfixes. How quickly the fix is executed is subject to shared resources on a VM. A lack of control in this regard can be quite problematic when establishing and keeping trust with customers, key stakeholders, and regulators.
With EVM, everything is running on the same VM, which is not exactly decentralized and raises eyebrows due to the limited sovereignty that comes with such a setup. This is particularly problematic for a platform like Rebus, which must show the required security controls and governance to satisfy regulators. When a developer’s application is forced to co-exist with other dApps, sharing ambiguous governance protocols not specifically related to their application, achieving any significant security or regulatory sign-off can prove futile.
These are just a few of many examples why app-chains are enabling teams like Rebus to do incredible things, like bring DeFi to traditional investors, at scale.
To fully deliver on the expanded utility of DeFi investments, Rebus’ products must support interoperability among many coins and blockchains. Therefore, we needed a diverse ecosystem built around interoperability. Ultimately, we chose Cosmos as their ecosystem heavily resonates with the functional requirements through their IBC and ICA (Inter-blockchain communication & Interchain Accounts).
Satisfying banking regulations is tough enough without all the limitations of a VM-based blockchain. By choosing Cosmos, we benefit from:
Essentially, we can achieve certification with Cosmos, whereas we could not with EVM.
There’s great benefit to building upon a platform with extensive resources and shared networks of users–your application will get used. The Cosmos community is a tremendous asset to everything from using a Testnet for additional QA, opening the platform to 3rd party contributions, seeking resources for general help, to launching our product to the market.
You can begin to see the underlying responsibility application-specific blockchains take in making our vision a reality. It’s impossible for us to overstate the importance of Cosmos as we march towards each milestone.