Cosmos, denoted by the ATOM token, is a decentralized network that aims to address certain issues in the blockchain industry. It proposes a solution to the limitations of proof-of-work protocols, such as slow transaction speeds, high costs, scalability issues, and environmental impact. Cosmos aims to create an ecosystem of interconnected blockchains, simplifying the technology for developers by creating a modular framework and facilitating communication between different blockchain networks. The ATOM tokens, obtained through a hybrid proof-of-stake algorithm, play a vital role in maintaining the security of the Cosmos Hub, the project's primary blockchain, and in the network's governance.

Cosmos operates on a three-layered network: the application layer, the networking layer, and the consensus layer. The application layer processes transactions and updates the network's state, the networking layer enables communication between transactions and blockchains, and the consensus layer helps nodes agree on the system's current state. Cosmos employs a set of open-source tools to connect these layers and enable developers to build decentralized apps. The network uses a proof-of-stake consensus algorithm, where validator nodes that stake a higher quantity of ATOM tokens have a higher chance to be chosen to verify transactions and receive compensation. Nodes found to be acting dishonestly can be penalized by losing their staked tokens.

Cosmos aims to address the fragmentation in the blockchain industry by enabling communication between different blockchain networks. It seeks to make blockchain technology more accessible and less complex for developers, allowing them to build networks using existing chunks of code. This modularity could potentially make the construction of complex applications more straightforward. Cosmos also prioritizes scalability, with the goal of processing a higher number of transactions per second compared to some traditional blockchains. This could potentially pave the way for mainstream adoption of blockchains, as they aim to handle demand comparable to existing payment processing companies or websites.

The origins of Cosmos can be traced back to 2014 with the founding of Tendermint, a core contributor to the network. In 2016, a white paper for Cosmos was published, and a token sale was held the following year. The co-founders of Tendermint, Jae Kwon, Zarko Milosevic, and Ethan Buchman, played a significant role in the development of the Cosmos ecosystem. Kwon, who stepped down as CEO in 2020 but remains as principal architect, was replaced by Peng Zhong. The Cosmos Hub, the first blockchain established on the Cosmos network, was designed to function as a mediator for all the unique blockchains within the network, known as "zones". The Cosmos software development kit (SDK) was also created, allowing developers to use Tendermint's consensus algorithm to create blockchains.