Who Killed the Cross-Chain King? The Rise and Fall of Cosmos

From late 2024 through early 2025, Cosmos attracted attention for troubling reasons: its precipitous decline rather than positive developments. By August 5, 2025, the ecosystem's core token ATOM had dropped to $4.20, representing a staggering 90% decrease from its all-time peak.

The broader Cosmos ecosystem mirrored this collapse, with major projects experiencing similar devastation throughout this period. Osmosis (OSMO) crashed 79%, while JUNO lost 82% of its value and approached near-worthless levels. Even Injective (INJ), which showed relative resilience initially, tumbled from $34 to approximately $12. Other notable projects, including Kava, Evmos, Cronos, and Fetch.AI recorded substantial losses across the board.

This dramatic reversal marked a stunning transformation for an ecosystem that once held the position as the second-largest blockchain network by Total Value Locked (TVL) in 2022. Previously celebrated as the foundation of the "Internet of Blockchains," Cosmos shifted from being a DeFi-era champion in 2021 to becoming one of today's notable market underperformers.

The scale of this decline raises critical questions about the underlying factors driving such widespread value destruction. While market volatility affects all cryptocurrency projects, examining the situation more closely reveals structural issues that extend beyond typical market fluctuations.

Airdrop Frenzy and the Death Spiral

In early 2024, when news of the Celestia (TIA) airdrop spread throughout the crypto community, few participants could have anticipated that this "free money" event would signal the beginning of a nightmare for the Cosmos ecosystem.

Celestia, a modular data availability network constructed on the Cosmos SDK, maintains deep integration with the broader ecosystem through the IBC (Inter-Blockchain Communication) protocol.

During the spring of the previous year, TIA's price surged to an all-time high of $20.17, with social media platforms flooded by testimonies of overnight wealth creation. However, this euphoria persisted for barely two months before a massive liquidation wave sent the price into a devastating 91.9% decline, eventually settling near $1.60.

The collapse extended far beyond Celestia alone, spreading throughout the entire Cosmos network like a contagion. The Celestia airdrop exemplified the destructive "hype-dump" death spiral that has chronically afflicted the ecosystem.

Once an airdrop announcement emerges, speculative capital surges into the project, rapidly inflating prices and creating artificial prosperity. This growth, however, remains fundamentally unsustainable because it builds on expectations rather than genuine utility or value creation.

When early holders begin selling to lock in profits, prices start declining. Panic spreads rapidly, triggering larger-scale sell-offs that ultimately result in price collapse. Osmosis experienced a similar process during the 2022 liquidity mining boom, with its price crashing from a peak of $11 to the current $0.17.

Each successive cycle systematically drains both investor confidence and capital from the ecosystem. Short-term speculation displaces genuine long-term development efforts, creating an environment dominated by opportunistic behavior rather than sustainable innovation.

The ATOM Dilemma: A Figurehead Without Authority

While ecosystem projects desperately clawed at the edges of their death spiral, ATOM found itself trapped in an even more insidious predicament.

Under Cosmos's multi-chain, parallel architecture, ATOM's intended role as the network's primary fuel failed to establish an effective value accumulation mechanism. Numerous sovereign chains issued their own native tokens without directly depending on ATOM, preventing traffic and value from flowing back into the token's economic system.

The token's uncapped, high-inflation model, originally designed to incentivize staking and governance participation, imposed persistent dilutive pressure on price performance. More fundamentally, Cosmos's open "build-your-own-chain" philosophy, while encouraging innovation and competition, scattered both attention and liquidity across numerous isolated projects. This fragmentation stood in stark contrast to Ethereum's model, which consolidates most ecosystem value within ETH itself.

ATOM became the puppet emperor of Cosmos, possessing the ceremonial title but lacking substantive authority. Governance challenges proliferated across the ecosystem, yet the broader federation derived minimal benefit from these scattered efforts.

The JUNO project provides the most telling example. In April 2022, the JUNO community discovered that a whale had circumvented airdrop restrictions through multiple wallet addresses, securing approximately $35 million worth of JUNO tokens. Following intense community debate, JUNO DAO approved Proposal 20 on April 29, 2022, authorizing the confiscation of these tokens, with implementation occurring on May 4.

This highly controversial decision profoundly divided the community and substantially undermined investor confidence in JUNO's governance framework. Rather than addressing the project's underlying technical and market challenges, the governance breakdown accelerated its deterioration. JUNO's price plummeted from $43 to $0.09, representing a catastrophic 99% loss of value.

However, these structural and governance issues represented only part of Cosmos's broader challenges, many of which extended beyond the ecosystem's unique circumstances.

The Multichain Ecosystem's Midlife Crisis

When discussing Cosmos's predicament, the analysis actually reveals the collective anxiety facing the entire multichain ecosystem: a profound disconnect between technical innovation and market adoption.

In April 2025, Cosmos ranked first among blockchain projects in development activity. This seemingly impressive position, however, could not mask the underlying fatigue of a gradually declining number of active crypto developers.

According to developer report data, other multichain ecosystems showed similar weakness: Ethereum's developer count dropped 2.54%, BNB Chain's development metrics fell 9.45%, while Polygon, Arbitrum, Optimism, and Avalanche declined 10.35%, 7.62%, 6.82%, and 12.08% respectively.

Polkadot ranked tenth with 3,400 development activities, but contributors decreased 0.91% to 325. Facing slow responses to the JAM upgrade and market competition, the community even issued an urgent call: "React or die."

Multichain ecosystems all face similar structural challenges:

• Network effects deficit: Compared to Ethereum, these networks lack sufficient user base and application scenarios to form self-reinforcing ecosystem loops.

• Insufficient developer incentive mechanisms: Despite advanced technology, they lack adequate economic incentives to attract and retain excellent development talent.

• Unclear market positioning: In competition with Ethereum, these projects often fall into the trap of technical superiority but application scarcity.

These inherent difficulties have been further amplified by recent changes in the market environment.

In Q2 2025, the crypto market's total capitalization exceeded $3.5 trillion, but this growth was driven by institutional capital, which operates with completely different investment logic: controlled risk, adequate liquidity, regulatory compliance.

For institutional investors pursuing stable returns, Bitcoin and Ethereum are obviously more attractive than innovation-driven multichain projects. This shift in capital flows directly led to further marginalization of multichain projects in financing and liquidity.

Even more damaging, the institutionalization process brought another unexpected consequence: the "Matthew effect" in infrastructure construction is accelerating.

Stablecoins are becoming the core infrastructure connecting traditional finance with the crypto world. But this infrastructure construction mainly revolves around mature networks. When stablecoins become the water, electricity, and gas of the new financial system, multichain ecosystems find themselves standing on the margins.

This predicament forces these ecosystems to reexamine their value propositions, shifting from pure technological competition toward a more pragmatic approach focused on user experience and practical application scenarios.

This transformation is not only a necessity for survival but could potentially become the starting point for the next innovation cycle.

Crossroads: Rebirth or Decline

Standing at the 2025 time point, the Cosmos ecosystem finds itself at a life-or-death historical moment.

From the grand vision of the "Internet of Blockchains" when the mainnet launched in 2019, to the market's fervent pursuit of interoperability when ATOM reached its all-time high of $44.70 in 2021, and to the deep reflection during the 2022-2024 bear market when prices fell to around $3.50, Cosmos has followed a path that is both typical and unique among blockchain project growth trajectories.

In this darkest moment, although the data appears dismal, Cosmos is indeed undergoing a profound self-revolution.

Different institutions' predictions for the Cosmos (ATOM) ecosystem and price trends show diversified expectations. Short-term forecasts vary significantly: CCN and Changelly lean pessimistic, emphasizing bearish pressure shown by technical indicators (such as RSI and moving averages), while CoinLore and CryptoNewsZ are more optimistic, expecting bull market momentum to drive prices breaking through $20-$40.

Regarding Cosmos's uncertain future, ecosystem expansion, technical upgrades, market sentiment, regulatory environment, and competitive pressure are all frequently mentioned consideration factors.

Undeniably, the actual effects of technical upgrades and governance reforms require time for verification. Competitive pressure from Layer-2 and other interoperability solutions continues to exist. The impact of Federal Reserve policies and geopolitical risks on the entire crypto market cannot be ignored either. More importantly, this transformation from idealism to realism is a painful process, requiring finding a delicate balance between technological innovation and market adoption.

History shows that truly great technologies and ecosystems are often born in the darkest moments. Cosmos also needs time for verification, to determine whether what lies ahead is the future or an even deeper night.