What is Evmos Blockchain?

Evmos is a new, scalable, high-throughput Proof-of-Stake blockchain launched in April 2022.

However, what makes Evmos special is that it connects Ethereum-based applications to the Cosmos Network without Ethereum being built using the Cosmos SDK or the Tendermint consensus mechanism.

Specifically, Evmos enables decentralized interoperability between Ethereum-based applications and the Cosmos ecosystem of decentralized blockchains.

Evmos can be seen as an evolution of Ethermint.
A concept developed back in 2016 as a way to launch Ethereum Virtual Machine-based smart contracts on Tendermint.

What is an Ethereum Virtual Machine (EVM)?

Before we get there, we must quickly break down what a typical “virtual machine” is.

Virtual machines, or VMs, are machines that attempt a greater level of abstraction than is found on typical operating systems, or OS for short. This is the process by which, through pattern recognition, a computer can discard irrelevant information to process information faster.

Unlike Windows or iOS, which most of us will use, VMs are created on top of the original operating system. They recreate the physical components through virtual architecture, allowing VMs to function like a physical computer.

As these VMs can run on top of most operating systems, they are perfect candidates for being the engine of a decentralized ecosystem, such as Ethereum and Cosmos, and many more.

An Ethereum Virtual Machine is a VM specifically optimized for Ethereum and Ethereum-based apps.
These virtual machines can be accessed worldwide by anyone running an Ethereum or Cosmos node, meaning through VMs, anyone can access the network’s resources, such as its combined computational power.

You can think of a virtual machine as a global processor whose computational power can be accessed by the community. For example, this could be required by new developers to launch new software, run apps, or simply complete smart contracts on the network.

In case you’re curious where this processing power comes from, it is donated by its users, with the choice to donate is entirely optional. Although, you are typically rewarded for doing so, should you choose to donate.

Why does EVM compatibility matter?

Anyone who has used Ethereum during the 2021 bull run can tell you all about the issues when it comes to using Ethereum during peak activity.
In short, transaction fees skyrocket, transaction times decrease, and failed transactions increase.

However, an EVM-compatible layer 1, such as Evmos, allows developers to launch these same applications to a new large group of token holders.

These token holders can then also access the utility of the apps, thus increasing the user count and security due to its Proof-of-Stake consensus mechanism.

The benefit for the apps here is that they can keep their transaction fees down and their transaction completions high by accessing the computational power of the Cosmos network.

But, as I’m sure you’re wondering, are there any rewards for helping EVMOS bring Ethereum apps over to the Cosmos ecosystem?

Network validators can earn rewards for taking part in staking to the network, a familiar theme for the Cosmos network’s Tendermint consensus mechanism.

We’ve previously broken down the topics of the Cosmos SDK, IBC, and Tendermint in the Cosmos Network article.

In a very brief summary, Proof-of-Stake assumes those who have staked the most to the network, for the longest time, have the most to lose by cheating the system and, as such, are asked to validate incoming blocks.

Asking one person is quicker and less energy intensive than getting a 51% majority from validators, as is present when using Proof-of-Work as a consensus mechanism.

So, how does this work?

When staking to a Cosmos Network blockchain, because of the Tendermint consensus mechanism, you will be staking to an individual validator rather than the network overall.

As such, it’s vital to pick a validator who is honest and has the record to prove it, as your rewards will be based on their performance. In extreme examples, if they misbehave, your stake can be slashed.

Alternatively, you can become a full node instead of a validator node and store a full copy of the blockchain’s history that can be recalled for data when required, which also comes with a reward.

The Evmos active set is made of 150 validators, chosen based on the total amount staked to the network. With the validator selected to propose the next block based on their individual stake relative to the group pool of those 150 validators.

For example, if you had contributed 10 EVMOS tokens, and the pool was 100 EVMOS tokens in total, you would be chosen 10% of the time.

Currently, there are 200m EVMOS tokens in circulation, of a 1 billion total supply. This current supply will increase 150% in year 1 and 400% by year 4.

At least for year 1, the expected reward rate is around 60%, although this is variable. The catch here is a 3-week unbonding period, during which time you are not generating additional rewards.

There is no minimum stake for entry or delegation currently on EVMOS.

Those looking to earn through EVMOS staking should be aware that the reward distribution must be withdrawn manually, as is re-staking to achieve reward compounding.

The reward frequency is per block, but given the network’s speed, that practically means as soon as you start staking.
Additionally, there are four main ways to earn rewards through Evmos.

1. Through transaction fees – which are distributed equally through active set validators and application developers.
2. Inflationary rewards – which is the percentage reward distributed to all active participants.
3. Proposer rewards – if you successfully propose a change through the governance protocol, there is a 1-5% block reward for doing so.

However, all the details are still not fully defined by Evmos itself. While the basic principles are the same as other Cosmos network blockchains, the parameters which dictate the more minor details have yet to be finalized.

In summary, Evmos’ EVM compatibility and IBC connectivity enable developers to build with features from Ethereum with a Tendermint consensus setting.

Ultimately, through Evmos’ EVM, users and their assets from the Cosmos ecosystem can access the utility seen on the Ethereum network and vice versa.

This grants Cosmos developers more tools when building apps, but it also gives Ethereum users a potential escape from increased gas fees. A win-win for both parties.