Nomic: A Layer1 bringing BTC into the Cosmos interchain ecosystem
TechFlow Selected TechFlow Selected
Nomic: A Layer1 bringing BTC into the Cosmos interchain ecosystem
Nomic is one of the most anticipated L1s in the Cosmos ecosystem.
Navigating Web3 tides with focused insights
Author: Stepyt
Compiled by: TechFlow
What is Nomic?
Nomic is one of the most anticipated Layer 1 blockchains in the Cosmos ecosystem. Cosmos is an ecosystem composed of sovereign, interoperable application-specific blockchains built on the Tendermint consensus engine and connected via the Cosmos SDK.
Thanks to the Inter-Blockchain Communication (IBC) protocol—a universal standard—all these networks can freely communicate and exchange value with each other. The so-called Peg Zone even allows non-Tendermint networks to interact with the Cosmos ecosystem, effectively bridging Proof-of-Work (PoW) blockchains such as Bitcoin and Ethereum.
Nomic’s role is to enable BTC to be freely used across the entire Cosmos ecosystem.
How Does It Work?
Users can deposit $BTC into the protocol and receive IBC-compatible $nBTC in return. Once users have this token, they can use BTC for DeFi activities across the Cosmos ecosystem. For example, users could open a collateralized debt position backed by $BTC to borrow other tokens, or participate in liquidity mining by depositing $nBTC into LP pools.
The Nomic chain will be secured by its native $NOM token, allowing validators and their delegators to earn both $NOM staking rewards and $BTC bridging fees.
Another distinctive feature of Nomic is that it will be the first IBC-compatible chain not built using the standard Cosmos SDK. The Nomic team has developed a new high-performance blockchain application framework called Orga.
Orga
Orga is a new deterministic state machine framework written in Rust, enabling developers to build blockchain applications on top of Tendermint consensus. But what makes Orga so unique?
- Compared to Go, Orga achieves 100x better performance. Throughput on Cosmos SDK-based blockchains is typically limited by the application layer, but this new framework enables products capable of processing over 10,000 transactions per second (TPS).
- Thanks to the Rust programming language, building applications requires 10x less code and offers enhanced security at the code design level.
How Is Nomic Different From Other Cross-Chain Bridges?
Before explaining how Nomic differs from other cross-chain bridges, we must understand two key features related to security and cryptography.
Schnorr Signatures
Schnorr signatures are a digital signature scheme described by Claus Schnorr in 1989 and covered under a U.S. patent that expired in 2008. Due to the assumed computational hardness of the discrete logarithm problem, this scheme is characterized by simplicity and strong security. It also serves as a more efficient alternative to the widely adopted Elliptic Curve Digital Signature Algorithm (ECDSA).
With Schnorr signatures, multi-signature schemes and batch verification become significantly easier to implement.
Taproot
Taproot is one of the most significant upgrades to the Bitcoin network, aimed at enhancing user privacy. In addition to improving transaction privacy, it reduces fees and enables the creation of more complex transactions.
Nomic Bridge
Nomic is designed around a public network Bitcoin reserve. Each validator acts as a signer of the reserve, which will be managed on-chain through reserve scripts in a decentralized, democratic manner.
Schnorr signatures allow Nomic to establish a shared Bitcoin reserve. This reserve is controlled via multi-signature by all validators.
Taproot will enable Nomic to efficiently implement reserve script schemes, creating spending conditions for the reserve funds on Bitcoin.
How Will Nomic Change DeFi?
By enabling BTC to be used in a decentralized manner across the Cosmos ecosystem, Nomic will foster the emergence of new applications:
- Over-collateralized, low-volatility stablecoins backed by BTC reserves. We’ll be able to create a Cosmos-native stablecoin based on the DAI model—but fully decentralized and censorship-resistant.
- Smart contracts that leverage the Bitcoin network without modifying the original Bitcoin protocol.
- A new type of Cosmos L1 chain combining Proof-of-Stake (PoS) and Proof-of-Work (PoW), benefiting from the security of both.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
