**A** (0:00):
GM Friends and welcome back to another episode of the Friends Validator show. We are finally back after a crazy conference season in Korea and there's a lot to catch up on, including on Osmosis. But in case this is your first video, I'm your host Juremaibom and this shows the hub that brings together crypto pioneers, exciting projects and a thriving community. With Friends Validator, a core contributor to the staking sector, believe that it will grow into multibillion dollar industry over the next couple of years. On the show you will learn how to profit from the proof of stake run up, how to make passive income in crypto for staking, and how to stay ahead of the curve. If this sounds interesting to you and you want to profit from the staking revolution, subscribe to this show. And today's episode marks the 11th episode of Builder's Diary. If this is your first Builder's Diary episode, this format sheds light on the amazing people behind your favorite proof of stake chains and applications. Let's find out what visions our fellow builders follow, how they got to where they are today, and what future developments they anticipate. And today we are joined by Sunny Agarwal, co founder of Osmosis. We will talk about his early days in crypto, his grand vision for bitcoin osmosis, Cosmos Urbit and his principles in crypto, and so much more. And with that being said, Sunny, welcome to the show. Good to have you back once again.
**B** (1:09):
Thanks for having me back. I think second time in like three months.
**A** (1:13):
Yeah, pleasure as always. Also within such a short period of time. And this will actually be the first Builder's Diary episode that will also be uploaded on YouTube because there are so many things that are so relevant for various audiences. But let's start at the beginning. I think you haven't mentioned that too often, but what does your background actually look like? Where were you born? Can you maybe also talk a little bit about your academic career before entering the crypto industry?
**B** (1:42):
Yeah, sure. I was. Okay, so let's start from the beginning. Beginning. I was born in India, but I moved to North America when I was like two years old. First to Canada, lived there for five years and then moved to the US at the age of seven. So I basically grew up in New Jersey and went to a public high school and just very academically focused. Indian American parents tend to be very academic oriented, but my parents are always also like for Indian American parents, like, also pretty chill and like, you know, just very open to let me like pushing me to explore like, different things. And, like, different things I'm interested in. You know, I was in, like, Boy Scouts and, like, camping and all sorts of, like, different stuff. And then throughout high school, like, I thought I was going to do robotics. Like, that was, like, the. The thing. Like, I. I was in, like, every, you know, high school robotics competition you can think of. I probably, like, participated in it. Like, FRC Vex Zero Robotics for RoboCop. Like, yeah, I was, like, doing all of them, and, like, I just really enjoyed it. And so that's what I kind of thought I was going to do. Like, I thought, like, you know, when it was time to go to college, I was kind of thought I would, like, go into robotics. And, you know, out of the colleges, I ended up going to UC Berkeley, partially because they had, like, you know what? One of the. They had this, like, program called electrical Engineering and computer science. And I was, like, really excited about that because it's, like, great. I got to do, like, both the, like, hardware and software side, which is what I was excited about. And so I got to Berkeley, and, you know, while I was there, I just kind of, like, came across. You know, when you, like, first join, like, when you go to college for the first time, you're just, like, joining all of these different clubs, like, you know, trying to find your tribe, I guess. I went to all, like, a bunch of different clubs, like, some robotics clubs. One day my roommate was going to, like, the bitcoin club meeting. And it was like, I kind of, like, decided, hey, I'll tag along with you. I had heard about bitcoin before, and so I kind of tagged along. And the guys who I showed up with, who are there, like, I walked in this meeting and they were talking, like, Monero ring signatures or something, and it was, like, way over my head. And so I kind of said, like, hey. But I was like, okay, these guys seem really smart. And, like, after the club meeting, we all dinner or something, and I just, like, really like the. The people there. And, like, I like, okay, I'm gonna keep hanging out with these people. I don't know what they're talking about, but, like, if I keep hanging out with them, I feel I'll, like, become smarter through osmosis, I guess. But, yeah, so kind of just. That's kind of how I originally got involved. Yeah. Great.
**A** (4:42):
And I mean, this is also what's, like, very fascinating about crypto. People tend to be very, very smart. And it's, like, very overwhelming in the beginning. I believe that's the case for Most people. But what ignited your fire about crypto at the end of the day? What was like the thing that made you become like a full time member of this industry and get to start building for like a certain principle that you said? Okay, that's the pitch. This is why I believe in crypto.
**B** (5:13):
Yeah, I mean, so I. So one other thing to add is, along with. So growing up, my favorite subject is history. Like, I, you know, I do all this, like, computer, like, you know, science and stuff, but like, history. History was like my favorite classic. I literally. My AP US History class, I took it three times just because I enjoyed it so much. Like, literally what happened was like, I had. I took it for my class. Then there was like a study hall period that I had, which was like, you know, the open free period. So I used to go to the same history class and just like, watch it again. And then the following year during my like lunch break, I would sometimes just go and like, listen to the history class again because I just like, love that class a lot. And so, you know, when I got to college, I was like, I actually ended up doing. Trying to do a minor in political economy, which is like, you know, it's, you know, it's kind of like intersection of like, economics and like the political infrastructure around it. And so I kind of, you know what I learned. So I've always been interested in like political economic stuff. And for me, like, I wanted to do something that uses technology to impact that. Like, so, you know, that freshman year I also, like, I was exploring other things other than just robotics and crypto. I was doing a lot of like, data visualization work as well. So my first college internship was actually in data visualization, where it was my, my, my thought, my take was like, okay, there's so much data and like, decisions need to be, obviously need to be better made by data. But at the end of the day, it's still humans making the decisions. And so you need to have a way of like, taking data and like, how do you visualize it and express it to humans in the most, like, effective way. So that's kind of what I was doing for a bit. But so, yeah, basically I was always interested in like, the intersection of like, politics and technology. So obviously bitcoin is the perfect fit for that. And then I was always very libertarian, like just growing up. Yeah, always very libertarian. So when I learned about bitcoin, like I said, I recently got into it from the tech side of like, oh, wow. Just these things are really cool and smart and Whatnot. But then I'm just like, when I like it's. I committed to it basically based off of this, like, you know, political impact that it will have. And like, and you know, it's kind of crazy how like far things have gone gotten since then. Like, you know, I was like thinking in like this happened to me like a year ago or something, but I was just like in the shower one day and I was just like thinking to myself and I was like, man, the else. The fact that El Salvador like has bitcoin as a legal tender, we, you know, people was like, oh yeah, it's like El Salvador, what a small country. But it's like, you know, I'm just thinking about like seven years ago, like the, the fact that a country is like making this thing legal tender is just like, that was like not in our like wildest dreams at the time. And it's like, I don't know, it's just really cool to see that like how much, how far everything has gotten from, from those like days. And we were like, just like dreaming of like, oh, will like, you know, how will bitcoin like grow and like, you know. Yeah, yeah, I totally agree.
**A** (8:35):
And there's like so much more to unpack here because now we are even further than that. We finally got the bitcoin etf, which many people did not believe in anymore. And there are like so many developments also going on the bitcoin ecosystem. Many people have forgotten about it after the run up of Defi, that you can actually also build things potentially with bitcoin. We will talk about that in a second. But to conclude what you just have said, it was like kind of a mix of what can you do with this technology to impact real life, to impact power, politics. And looking at the history, how things gone so far, how can bitcoin step in here? Had, had you. Were you also interested in the Austrian School of economics? Was this also something that you was fascinated by?
**B** (9:22):
Yeah, definitely. Like, you know, big fan of like Hayek and stuff and like, you know, free market. Yeah. Open. Yeah. Hayekian systems basically. And I think that still honestly drives a lot of my like world view is like, how do you design, like how do you design Hayekian systems? And like, you know, this is like fast forwarding a lot but like, you know, I think I've like even like, you know, with mesh security and stuff. I always like call it, oh, this is the Hayekian approach to shared security and stuff like that. Because it's all about like, okay, free Market like systems. It's like not top down centralized control but like let bottom up. Like emergent behaviors like emerge basically. And I think like, you know, I, I was a fan of like, like following these like grassroots movements. Right. So like bitcoin was like a grassroots movement. I was also like really? I was like very closely following. It's like. I don't know if people. It's that big anymore but like the Pirate Party at the time was like this like growing this movement.
**A** (10:25):
Germany.
**B** (10:26):
It was like. Yeah. Throughout all of Europe really. So there was like it started originally in Sweden but yeah, then it grew it and you know it was the biggest political party in Iceland for like a little bit. It was. There's some in Germany that the mayor of Prague was Pirate Party. So I was like I. I started like in the UC Berkeley like student government. I started like a Pirate Party and I, I ran and like I won one of the seats and stuff. So. But yeah, so that's another like I. I was always like very interested in following these like know new like libertarian political movements.
**A** (11:01):
Yeah, like I completely forgot about those party. But yeah, they were literally a meme for quite some time in Germany. They're still around there.
**B** (11:10):
There's a. One of my favorite books, it's by Rick Valkman. He's like the founder of the Pirate Party. It's called Swarm Wise. And it's basically like it's his like tactical guidebook to creating like like decentralized political movements. And I think it's like seeing how quick like I think it's great to see how quickly he like developed like the political party. Like how like within like just a few years it became an actual like prominent political force. But then it's also. I think it's just like a really interesting thing to like read on how to like how to lead and run decentralized movements. And I think like anyone who's building daos today should really like read this thing and like take a lot. Take. Take some. It actually runs very counter to how a lot of daos work today and I think it's definitely work worth reading.
**A** (12:09):
Yeah, that's actually one of my favorite parts in this format. We talk about books a lot. What books are important for people, what are the. Their favorite books. So yeah, definitely give it a read.
**B** (12:21):
I actually think so. If you want some of my favorite books or things. If you go to my website, I actually have like a list there's. If you. If you go to sunny a97.com canon c a n o n. So, like, you know, canon is this idea of, like, you know, you have, like, the Western canon. It's like the set of texts that are, like, you know, most important to, like, Western civilization or help you, like, get this, you know, So I have my Sunny's Canon. It's like, it's a. It's. It's the list of, like, all these, like, book. Some of them are books, Some of them are. A lot of them are actually blog posts. Some of them are, like podcast episodes and stuff. But yeah, it's like, here's like, the list of, like, things that I've read that have, like, fundamentally, like, shaped my world view and stuff. So I think Swarm Wise is, like, somewhere on there. Yeah.
**A** (13:13):
So if you would need to nail it on, what are your three favorite books that you would strongly recommend everyone to read it?
**B** (13:21):
Books only. Or can it also be, like, blog posts and stuff?
**A** (13:26):
Books only for now and then?
**B** (13:29):
I think 0 to 1 is probably pretty high up there. Let's see Swarm Wise and Sapiens.
**A** (13:42):
Sapiens. Okay, cool. Yeah, I've also read the sapiens and 0 to 1, the 1 from Peter Thiel. Right.
**B** (13:47):
Yeah.
**A** (13:48):
Great. Yeah, I think that's a good. A good selection.
**B** (13:51):
I think I'm looking at the list right now. I think those are the only books on there. That's why I have to say those three. I think the rest of them are all, like, podcasts or a lot of blog posts. That's mostly what a lot of them are. Are.
**A** (14:02):
Yeah. But we will definitely link that in the description below for people to check it out. But yeah, let's get back to the bitcoin topic because, like, I've heard something very interesting from one of the Cosmos community members, like, recently, just in Korea, and I really need to ask you that, because I've heard that in your opinion, proof of work is still the most decentralized consensus algorithm. So where does this statement come from? And yeah, what is still the thing why you're like, such a bitcoin cheerleader? Because even though you are very deep in Cosmos, you attend also a lot of Ethereum hackathons. You are still a big bitcoin cheerleader. I believe it's also in your Twitter profile. So, yeah, what's going on there?
**B** (14:46):
Yeah, I'm not sure where you saw that. I said bitcoin proof of work is the most decentralized. I actually don't think that's true. I think proof of work is actually way too centralized. I think that's one of the biggest faults of proof work. I think, I think proof of work has a lot of. I do think that proof of stake is better than proof of work, obviously, because that's why I spent a long time working on it. But like, okay, so what are the benefits of proof of work? One is, I think it's a it from like a purely like intellectual, ideological perspective. It is a very fair distribution mechanism, right? The idea of that like okay, Bitcoin needs to distribute its everything today launches like distributes by an ICO or an airdrop or something, right? But if you're like the original proof of work thing, original cryptocurrency, how do you distribute? Right? Like, okay, there's nothing to airdrop to or like easily airdrop to. So you have to run an ico, you have to do a sale. But what do you do? Run the sale in. How do you do it? Decentralized, right? Like you can't do it, you know, can't pay in dollars or whatever, right? So it's like, okay, it's an ICO that lasts like 100 years and you buy in with like the universal currency which is energy. And then you, you basically pay energy. And then you like. It's kind of like a burn drop, right? Where it's like, oh, you have to burn something, your energy and then you get these tokens and then it has this like tapering off auction system over the course of like 140 years and then eventually it ends. So I think proof of work is great at that. There are some things that other things that it does which is nice. It's like permissionless entry where you know, even if the network is fully taken over, like you can still add hash power to the system. You can, you get like protection from long range attacks where it's like okay, a block that happened a year ago, it will stay. And so that's something you don't get with proof of stake, right? Where after you're past the unbonding period, you could in theory, like, you know, you, you have to rely on social consensus in order to prevent a fork from happening. Like from a block that's a year old. Those are all like small things. I don't think that's like the reason, like you know, the original product of Babylon is taking proof of stake chains and checkpointing them into proof of work so that the proof of stake chains get that like long range protection. That's nice. I don't think that like, I don't think that long range protection is compelling enough compared to like, I Think you know, the relying on the proof of work electricity consumption for the actual safety and consensus of your protocol is just like as the block reward goes down I think it just becomes like harder and harder. You go like eventually the ICO period of bitcoin has to stop, right? The the block subsidy is going to go to zero. I don't think fees are going to be enough to get the electricity consumption needed to secure it properly. And I think at some point this, here's my hot take. I think that some point bitcoin will have to switch to proof of stake. It it's not going to happen now or next year. Maybe like 10 years from now, probably I think within 20 to 30 years I think bitcoin will have to switch to proof of stake because at some point the block subsidy is going to get too low that you're going to need to use then the proof of work miners are not going to be incentivized to protect the network. Finality periods are going to go up to days and it's going to be terrible. Ux you're going to switch to proof of stake at that point. Now I think what you might have saw was I was like just saying hey, I'm bearish on proof of stake in the sense that it's not the end state. I think it is. You know, I think proof of stake has the faster finality properties of proof of stake. I think stake is more decentralized than hash rate. Right. Hash rate is controlled by a few like large miners. But like you know, capital is more decentralized than like cash power, like access. So it's more decentralized than proof of work but it's still very decentralized. Right? Like rep, like proof of capital. It like it centralizes very quickly. There are other options for how like other consensus protocols. And my point was just like I feel like as an industry it's like, like yes, we solved proof of stake. Yeah, we did it, right. Like you know, I, I what we started in the space like seven years ago. Proof of stake was an idea and it's like yes, we accomplished it, but that doesn't mean we have to stop. It's not the end state I think. Right? It's like great, we did proof of stake. What else is out there? What are other, what is the rest of the design space look like that we could explore for like other ways of doing consensus protocols. So there's some people working on like proof of storage, right. Access to data thing. Right. So there's some benefits of that compared to proof of work, which is like you're not having to burn electricity, you're just having to. It's more like, it's kind of like staking because you fill up hard drives with data, but then you can, like, if you want to stop, you can, you can empty those hard drives and use them for other use cases, right? So it's not like you're burning something. So there's some benefits of proof of storage. There's people working on proof of useful work, right? Where it's like, okay, let's make it proof of work, but instead of this utterly useless hashing, maybe we use it to solve zero knowledge proofs or we use it to whatever it is, right? Let's make the work that we're doing useful. Or the one that I'm personally interested in is these web of trust reputation systems where you Reputation is also a scarce thing, right? And so I think it's possible to design consensus protocols that don't use a resource like electricity or Stake to limit it, but it's based off of this, a web of trust style system. The closest attempt to build this, well, okay, the first attempt to build this was Ripple. They just failed at it really badly. The only real attempt to build it was Stellar. So Stellar has a web of trust consensus protocol built in. But the way it's designed is it for reasons, you know, we can go into, but like it's, it's, it's not the optimal design for how do you do it? And it ends up being more centralized than you'd want because of how it's architected. I think that there is possibility for like web of trust based consensus protocols as well, right? Like I think you can potentially architect it correctly such that you can, you know, make it so you don't have to stake anything. You just declare your trust graph, your social graph and we'll, and we'll, we'll still have a weight of coming to consensus at the end of the day. Proof of work, proof of stake. All you're trying to do is do civil resistance, right? That's what it's all about. And you know, we can do civil resistance via other systems. So anyways, long story short, my point was just like proof of stake, we did a good job. I think eventually like proof of work will have to make way for proof of working. Proof of stake will have to. Proof of work will definitely have to make way for something different, right? Whether that's proof of stake in 20 years or maybe we invent something new, maybe we Invent proof of useful work or maybe we invent reputation based systems. But it's like, let's not assume proof of stake is the end state.
**A** (22:38):
Yeah, I think, I think that makes a lot of sense. And yeah, there are still some, some gaps in, in proof of stake. And then also the question is what kind of proof of stake do we talk about? Do we talk about the proof of stake design that we know on the cosmos or do we talk about the proof of stake design that we have in the Ethereum ecosystem? So yeah, totally agree that there's still space to innovate. But yeah, interesting hot take that Bitcoin could run on proof of stake in a couple of years from now.
**B** (23:09):
I mean, I've started the process right, because I. So I got Babylon to pivot to bitcoin restaking and that's part of my hidden way of introducing staking to bitcoiners.
**A** (23:21):
Yeah, in a kind of hidden way. But yeah, I think Babylon is a very good keyword here because yeah, lots of people thought, okay, bitcoin, that's it, proof of like a nice storage. But now we see more and more innovations in the bitcoin ecosystem. Actually, besides Babylon, I was also surprised to see so many people thinking about layers like layer two style applications on top of bitcoin. So what are your thoughts on this development? Because it doesn't like really align with, you know, the meme that we had in 2021 as like a secure hedge against inflation with like a finished product that doesn't have too many, yeah, potential security flaws because it's like a finished product at the end of the day. So what do you think about this development that we are now going towards too?
**B** (24:16):
Yeah, I mean, I think the bitcoin product is this like digital gold asset. Right. But now the thing is you want to be able to use digital gold for other things. I think the bitcoin blockchain should be pretty minimalistic. You don't want the bitcoin blockchain to have like smart contracting and all this kind of stuff built on top of it. All you want is the bitcoin blockchain to have secure, decentralized bridging. And that way btc, the asset can flow onto other blockchains to be used there. That's the goal basically. And so a lot of these Bitcoin L2s, a lot of them are actually kind of doing that where they're developing new versions of bridging. Right. So they're like, what do you call it? They are bit vm based bridging stuff that Britannic some software working on. So there's different. Yeah. So I don't think anyone is saying that like the bitcoin blockchain needs to have like smart contracting and stuff on it. It's. What are the things that we need to add to the bitcoin blockchain to make bridging more decentralized. That's, that's the question. And so maybe that involves like, maybe that means we have to have a ZK verifying like a new opcode in bitcoin that just verifies ZK proofs. Right. Because you want to make the bridging process of bitcoin onto these rollups more secure. Right. That's all I think within the relement possibility, but I don't think we would ever, I don't think we should have a smart contracting system on, on bitcoin main chain.
**A** (25:57):
Yeah. Also totally agree on that. And I think there's also nothing where you go forward to, but yet still nonetheless very interesting to see that more and more people are experimenting like generally in the bitcoin ecosystem because everything was very defi focused in Ethereum ecosystem in the past two years.
**B** (26:14):
It was inevitable. Right? I mean I've been calling this for this for a long time. I've been like. But I go to Satoshi Roundtable, I tell people, come on, we got to defy on bitcoin. There was no excitement around it. I think I've told you before, but I started working on Cosmos to build the Apple Arrow for bitcoin. Right. I didn't want to work on Ethereum because I wanted to be like, okay, I want to build stuff for bitcoin and bitcoin is the original app chain and the asset is going to flow onto every chain. But the energy just wasn't there in bitcoin. Right. No one wanted to do it. And so we were kind of just like there's no vitality there. And so it was not a focus for Cosmos. Right. But then ordinals came along and changed everything. Ordinals were like the trigger. And then the work that UD and did on like changing there was a cultural shift in bitcoin and I, and I was like telling people this like a year ago when I just, when I saw it happening, I don't like last East Denver, I saw the, the, the trinkets of it. This year it's like it's fully blown out at NFT nyc. It's like I feel like ordinals were like the Hot thing at NFP nyc. Not, not anything else. And it's like there's been a huge, huge, huge cultural shift in bitcoin. And now, like, the demand is there, the excitement is there. And I think bitcoin ecosystem will probably be bigger than Ethereum ecosystem. Ethereum has what Bitcoin has, like 2 to 3x the market cap, right? There's just so much capital there waiting to be unleashed. And I think that the bitcoin ecosystem is like the only thing that can replace Ethereum, right? So why am you asked earlier why am I so pro Bitcoin? It's like, for me, it's just like, I know, maybe it's like your first love, you'll always remember that one, but it's also like, it's the flag of the industry. Right? I feel like the ethos of bitcoin, like what it represents, it represents the crypto movement as a whole. Right? Everyone knows what bitcoin is. You can go, I can go out on the street right now and ask a random person, do you know what bitcoin is? And they probably do you know what Ethereum is? They actually probably don't know what it is, right? And I feel bitcoin is so easy to pitch. People I talk to, even friends who work in Silicon Valley tech companies, I can pitch, pick Bitcoin to them, no problem. They get it. They're like, yes, okay, you pitch the vision of digital gold, why it's useful, all this stuff. Like, yeah, that makes sense. I can pitch osmosis to them very well. They're like, okay, yes, I understand the point of a decentralized exchange, privacy, all this kind of stuff. I don't know how to pitch Ethereum. Maybe I'm just bad at it, but I can't explain why a platform for building applications should be worth a trillion dollars. It doesn't. It doesn't connect for me at least.
**A** (29:26):
And what do your people think when you pitch Urbit?
**B** (29:32):
I think they find it, like, intriguing. The concept, I think, I think urban. Like I said, it's like more of just like a, a technically interesting thing. I think. I think they're also pretty skeptical that it's gonna like, work because, like the, the client server architecture of the web is just like so powerful. It's easy and I think urban. Like, I think everyone, when I pitch it, it's like, it's very much a very, like, yeah, this is a very idealistic thing that's not going to work because of how centralized natural forces push things towards centralization. But sometimes in the world you just need some people to vehemently like try to push for the decentralized architecture. Like you could say the same thing about like the Internet architecture. Like you know, the fact that we had like a, a much more decentralized version of the Internet than the early networking. You know, you had the earlier networking systems that were like more centralized and you just had. Basically what you just had was you had a. And the natural state of things was like you probably would have actually ended up with the Internet being controlled by like the telecom companies because they would have owned all the pipes and everything. But then like what ended up happening? You just had a few like vehemently like passionate people like pushing for the decentralized approach and they ended up winning the like, you know, the Internet war. And so I think, you know, I think that likelihood of success of like, of something like urbit, it doesn't have to be URBIT necessarily, but something that pushes for like I think it's honestly in my opinion I think it's too late. Right. I think the web has just existed for so long in this more client server architecture that it might be too late to try to shift it towards a decentralized architecture. But I'm happy that there are passionate die hards still working to try to make it happen.
**A** (31:32):
Yeah, and if you're interested to dive deeper into orbit, actually we just released an episode with Sunny a couple, couple of weeks ago. So please feel to, please feel free to check that one out as well. Because Urban is really about decentralizing the entire infrastructure of the the Internet actually that you have like true decentralized applications. So yeah, very, very interesting topic. So if you want to dive deeper into that, please feel free to do so by checking out the episode in the link below. But yeah, like actually Urban is another, is another topic that is like driven by a lot of principles that we've also seen in Bitcoin and like the narrative of everyone who is in, in crypto. So to basically form this a little bit, you mentioned your interest in politics. Like what are like, what is like the biggest principle you follow? Your like your inner compass in this industry that is full of mania and partially greed. What is like the principle that you follow the most? Keeping in mind that you are so much into bitcoin, interested into a bit building a decentralized exchange. Where does this all fall into?
**B** (32:45):
Yeah, I think that's interesting question. I think my driving principle is one of like experimentation and like localism where you know, people are like oh what is your political like, Like I think I'm a localist, right Where I want to see many experiments, right. I don't, I don't know what policies work the best, right. Like whether in like the real world with like national level like policies or on crypto architectures and designs. And so my, I just am against one size fit all solutions. I'm against one world government, I'm against one world chain. And I just want to see like as many experiments as possible and let like competition figure out what, which ones work. I'm a big believer in like you know, natural selection style systems and like, you know, let letting competition play out and seeing you know, you can, hi, you can theorize as much as you want about what's the best architecture for things, but it's just a matter of putting stuff into practice and seeing what works. So yeah, I mean I think with Bitcoin, like I said, I believe in bitcoin, but I think I'm happy that there's many other attempts at like different monetary policies, right. Ethereum does a very different monetary policy architecture than Bitcoin. Adam does a very different monetary policy architecture than Bitcoin. And I want multiple like systems to like coexist. And I think what will happen is naturally there'll always be power laws and things and you know, the bigger one, some things will, you know, there'll be 80, 20 rules, right? Some, some things will be much bigger than others. But I think that having that competition is important. And what's like kind of, you know, you can see actually in, in the canon one of the other things that's there that's a big driver for me is like Schumpeter's like theories of creative destruction. So you know, Schumpeter, he's like a, like an economist and so he has this idea of creative destruction where like, you know, what happens is like different industries. Okay. So my interpretation of like how it is like competition doesn't exist at a snapshot in time. At any snapshot in time you look at stuff, things will look relatively monopolistic, right? Where you'll always have like in any industry, like oh, one company will own like 80% of the market share. And you're like that's not, that's not like a competitive industry. But what actually competition occurs over time. You have to look at it temporally. As long as that company that owns that 80% market share is cycling and like changes over the course of like every 20, 30 years. That's how competition really plays out. You have everyone striving to become that monopoly for a little time. Bit of time. Right. Like, and you know, once upon a time, you know, if you look like a tech stuff, right. Microsoft was the biggest and now it's like been replaced by Apple or like, you know, Google had its period of like absolute monopolization of like the web. Right. But it's like they're like getting hit pretty hard, right. I think OpenAI is like giving them a serious, serious threat. And it's like as long as competition takes place over, over periods of time and so you just want to build frameworks and like, you know, as a platform designer or like you just want to design like you want to design frameworks and environments that allows competition to breed.
**A** (36:37):
Yeah, I think this is like a very good way to think of especially the crypto industry generally and also speaks for like a multi chain future. But yeah, you also mentioned Atom for the first time on the show. Now you have also worked a lot on Cosmos Hub related things in the very, very early days. So before we basically form everything together with osmosis, with Bitcoin, the Cosmos, eventually even Urbit, can you talk us a little bit more about you entering the Cosmos, the early Cosmos days in Berlin? What fascinated you about it and your feelings about the interchange today?
**B** (37:20):
Yeah, the question was how did I get into Cosmos? Right?
**A** (37:26):
Yeah, into Cosmos, where we are today with the Cosmos and maybe the early Cosmos days in Berlin.
**B** (37:33):
Yeah, so I was actually. So how I got into it was I was like, I said I was at Consensus. It was like a Ethereum dev company in New York. This was like the summer after my sophomore year of college. And so I was doing some cool stuff there. I was working on this project called Alethio, which was like, I would say kind of like the early version of the graph. Like it, the, you know, right idea, wrong timing, I guess. And then I was also helping with like Consensus Academy, which is like their like developer course. But I wanted to like. So I got, what happened was I got really interested in Proof of Stake that, that, that summer, like I had a friend who I made at Consensys, still a very close friend of mine, his name is Nate Rush. But he got me like super into Proof of Stake and I wanted, I just got obsessed. And so at the time Consensus wasn't really doing anything with like Proof of Stake work. They were kind of more focused on like building out a lot of apps and stuff. And so I was like, I want to figure out how to get involved with Proofsake Stuff. I read all the Proof Stake white papers, and the one that I found the most compelling was Tendermint. And so I kind of knew one of my friends from college. He knew Jim Yang, who was like, who used to work at. At the. All In Bits, the. The company. And he put me in touch with him and I kind of like, like, you know, pitch him, like, hey, I have these ideas about Tendermint. Like, hey, I read the paper. I thought, I think there's actually this improvement you can do here. And so he like, yeah, he was pretty impressed. And so I kind of started working with them and then they pitched Cosmos to me and like, this idea of like, the app chains and stuff. So I'd heard about Cosmos before, but I kind of like ignored it because at the time I was like, very anti proof of stake. I was Bitcoin maxi. I was like, what is this crap? But. But then he put Cosmos to me and it actually, like, a lot of it clicked, especially after, like, while I was thinking about it after talking to them, I met David Vorick, who was like the. From Saya. I met him that's like, just at a conference and like at a bar. And he like, explained to me, like, I was like. I asked him at the time, like, so right around this time, storej, if you remember that project, it just moved to Ethereum. It just launched their token on Ethereum and stuff. And I was asking David, like, hey, why is Saya not also moving onto Ethereum? It seems like that's the hot thing now. Everyone's moving on to Ethereum. And then he pitched to me like, no, this is why Saya is like an independent, standalone blockchain. And I was like, wow, that makes a lot of sense. And so then, like, the causal stuff all clicked for me. I'm like, okay, yes, a network of independent app chains. This is like, so obvious. And so, yeah, I got this. I started working with them. I was just like. When I started, I was just doing, like, I don't know, random stuff. I was like, they were holding a hackathon in New York and I was just like, helping them run the hackathon and like, just like, small tasks. But then I went to. I met Jay. I talked a lot about how a lot of the ideas for ICS came about during. Jay came to New York that summer for some conference at Cornell. And so I remember we came up with the idea of ICS on the whiteboard. And yeah, so I kind of. Basically, I just enjoyed what I was doing at Cosmos so much. They Were giving me so many learning opportunities and learning, like, opportunities to kind of, like, be, like, up front and, like, be like, a spokesperson for casas, which is something I really like to do. Like, I was at a conference and, like, you know, they like, let me. I'm like, hey, can I be on the panel? And they're like, yeah, sure. And I was, like, on a panel with, like, Joe Lubin and stuff like that. And so, like, they gave me a lot of opportunity and stuff. And so I kind of basically. But then come. Come. Come September, I had to go back to school. And I was like. I was already, like, contemplating whether I should, like, drop out and focus on Cosmos stuff. And, like. But I was planning on going back to school. And then what happened was the day before my class. Classes are supposed to start, or like, a few days before the syllabus for some of the classes started coming out, and I saw that the midterm for one of my classes conflicted with devcon. And so I was like, oh, I want to. I really want to attend, like, devcon. So I kind of emailed the professor and said, like, hey, there's this, like, conference I want to, like, attend. It's a crypto conference. Like, can I attend? By the way, this professor, his name is Nick Weaver, he's, like, infamously hates crypto. So I don't know if that was a roller in it or not, but he's like, no, like, you know, you can't. You have to take a zero on the midterm. It's like. And I'm like, oh, I don't want to do that. So I was like. I went on. So the day before classes, I was a little bit drunk because, you know, the day before classes, people are partying and stuff. Everyone just got back to school. I went on the site to, like, delete. Like, just drop that one course. Like, cancel that one course. And I did that. And I'm just sitting on the site and I'm like, you know what? Like, this is going to keep happening. Like, you know, school is going to keep coming into conflict with, like, some of this crypto stuff I want to do. And I'm like, you know what? Fuck it. I'm dropping all my courses. So, yeah, I basically, I dropped out. And then I reached out to the Cosmos team, like, hey, can I join full time? And they're like, yeah, sure. So that's how I got involved with Cosmos.
**A** (43:10):
Yeah, lovely. So you went full time crypto essentially because of defcon?
**B** (43:14):
Yes.
**A** (43:15):
It was like a catalyzer yes.
**B** (43:17):
So thank you to Nick Weaver. He got me into crypto full time.
**A** (43:20):
So even though he doesn't like crypto.
**B** (43:22):
Which hates crypto, like he, you can see his like Twitter threads. He like oh, every like. So he teaches like the computer security course at Berkeley and every year he has this one lecture where he just talks about like shits on crypto for like the whole lecture.
**A** (43:37):
Yeah. Is. Are these online? I think there's like probably. Yeah, very funny to watch.
**B** (43:43):
Yeah.
**A** (43:43):
Another recommendation. But yeah, then you were like part of, of the interchange and like what year are we in right now?
**B** (43:52):
2017.
**A** (43:53):
2017. So there was no much talk about ABC Osmosis was like still years, years ahead. So yeah, if you reflect like I had like a small presentation in Seoul about the interchange and if you just compare the interchange from 2021 to now, it's like an ex. It's like an explosion. And if you now Compare it with 2017 it's like even more impressive what has happened in the past years. So yeah, what, what are your thoughts of the interchange? Like everything that you guys Talked about in 2017 already? Would you say that, yeah, mission accomplished or. Yeah, what, what are your thoughts on the interchange? Are we, are we on track and where are we. Where's the Cosmos hub?
**B** (44:41):
Yeah, I mean I think in some ways. Okay, I'll take these separately. Right. Like the interchange has happened. Right. I think like all of our ideas that we had have. Are. Have started coming to fruition right where it's like okay, even with Ethereum shift towards like more L2s like going multi chain like the single chain sharding, that's not going to work. You have to have multi chains and now you even have app specific roll ups and stuff. So that I think we were right on all this restaking stuff. Like I said, Jay and I came up with ICS and stuff at the time. That's all playing out right now with ein layer and everything. We were right about that. We were right about. I think we were right about proof of stake. That's. I think something that's easy to forget is that at the time we were pretty radical on the proof of stake stuff. And I think that has eventually. Now it's the default for everything. I think that's definitely changed. We were right about. I think things we were not right about is I thought okay, I think we were more bearish the EVM than we should have been. I think like at the time we were like, oh this EVM stack is like so bad and it's like it's not going to last and it's like here, you know, here we are. Like it's, it, it's, it's bad but it has so much network effects that the tooling is built around it. It's okay. I'm still, I still think that, you know, Java lasted for years and with its network effects but eventually got replaced. Right. And I, I still am long term kind of bearish on the current state on the EVM unless they like develop rapidly. But like I, so I think like, you know, I still think I'm slightly bearish on evm but I will give it credit that it has succeeded much more than we would have expected. At the same time I actually do think that like it's a good thing Cosmos didn't use the EVM because I think that Solana and Cosmos both have unique missionary non mercenary devs because we have a unique developer stack. Even after FTX collapsed, developers stayed on Solana because it's a stack that they knew and they spent time learning. Or after Terra collapsed, a lot of those developers still stayed in Cosmos because they liked Cosmos. This is a stack they knew, they spent time learning, they built expertise around. And this is why actually I tell all the Bitcoin L2 people I'm bearish EVM Bitcoin L2s. I think Bitcoin is a strong enough brand that you can build a unique developer stack and people will, you need people to chew glass. Developers will chew glass to learn a new stack. But once they've done it, they will stick around. You're not going to get these mercenary like what happened on Avalanche was you got all these mercenary copy, copy pasta stuff and then no one's like really like that aligned like we'll stick around with Avalanche so go to the next place that gives them the grants, right? And so in that sense I think it was the right thing to not use the evm. But just, you know, like I said, I think we were more bearish than we should have been. I think there's more consensus protocols than we would have expected. We would have expected Tendermint to become. I think Tendermint is very dominant, but I think we would have expected it to be more dominant so that way we can use IBC in more places now. Okay, let's talk about the elephant in the room is what happened with the Cosmos hub. I think honestly the problem with the Cosmos hub is the dev team fell apart, right? So after aib, I mean I'm sure a lot of people might Be aware with the story. But basically, you know, that's actually, you know, in all fairness, let's talk a little bit like, what happened before, you know. Yes, everyone knows the public. Oh, Jay went insane, yada yada. But like, I think even before that, there was like a problem where it was like, I would say that the first two years I was at aib, everything was like, everyone was. So basically everyone knew that we had to launch the Cosmos Hub. That was like prime directive. That was like prime directive where it was like, we had committed to the world that we would launch the causes hub by December 2017. We ended up launching like March 2019. So almost like a year and a half delayed. But what those did was it made it so it just like any hour you weren't working on helping launch the Causes Hub, it's like we just delayed Causes Hub launch by an hour. And it's like everyone was so aligned. So mission of like, we have to launch the Cosmos Hub. That was like, all we did after the Cosmos Hub launched. I think there was a little bit of like, now what. What do we work on next? Right? Like, should we go work on ICS stuff? Should we go work on Bitcoin and Ethereum bridges? Should we go work on ibc? There was not a lot of Claire, should we go work on improving the developer stack to make it easier to onboard more projects onto Cosmos? I think there was a little bit of a lack of direction and vision. And this is what I told Jay. I'm like, hey, Jay, the company is lacking direction right now. You need to come up with a direction for everyone. And he, like, kind of came up this whole. I don't know if you remember this. This thing called Virgo. And like, it was this, like, wacky thing. It like, didn't make a lot of sense. And everyone was like, what the fuck? And so that kind of like, caused a lot of strife where it was like, people. Yeah. And there was like a divide growing between a lot of the engineers and then a lot of, like, the management of the company. A lot of the management was in the SF Bay area. A lot of the engineers were in Berlin. And, you know, just the physical separation caused like, some like, you know, communication issues and stuff, whatnot. So that all, like, was like boiling. And then it hit a tipping point. Like, we all, like, went away for Christmas break and then we came back. And when we come back, Jay's on. On a. On a different plane of existence. And like, and, you know, he's. He's Jesus Stein now. And like. And so, yeah, after that, the coal company kind of fell apart. All the engineers like, what, what is this? We don't want to work for this company anymore. So we all kind of left. Everyone wanted to still keep working on Cosmos, right? That's the thing where. So we all had to go start our own things. Like, you know, I started work, started working on Osmosis. Ishmael started Celestia. Zaki started Somalia. Jack started like Juno and Strangelove and all that kind of stuff. You had all of these offshoot projects where people started things but no one had any atom, right? And so we're all like, okay, why are we going to work on Adam? Right? And some people did, right? The ICF did its part to try to fund people to work on the consensus hub, but the core team just wasn't there anymore. Like, Chris started Anoma. And so it's like, basically what ended up happening was Adam was this ghost coin that was left without a dev team. And it kind of never really built a proper dev team up or like, you know, I don't think it ever built like an ATR dev team out of it. Like, I think the team that we had at AIB was like an A tier team. Like, you know, just the fact if you look at all the projects that were started by all of the engineers after spinning out, it's like that was like a world class dev team we had there, but it's like, unfortunately it blew up and then, yeah, Adam was just left like, as an orphan. And so now it's like, I feel like now what's like, interesting, like the position Adam is left in is it needs to. A lot of the products that you wanted to build require dev teams, right? To build a bit. We were like, okay, let's build a bitcoin that Adam was supposed to be, have the bitcoin and Ethereum bridge built in. But the problem is you need a dev team for that or to build ICS properly, right? Like the end state, which is something more like mesh security. You need a dev team for that. To build all this sorts of stuff, you need dev teams around. And Adam just doesn't have a dev team. And so I think what the position that Adam was stuck in now is like, okay, you have to figure out what is a product that you can do to monetize your lendiness and market cap that doesn't require an A class dev team. And that's kind of like the position Adam has been stuck in for the last two years. Like building a Dex, right. It tried to do a Dex as well. Problem is if you don't have an eight year dev team, you're going to get out competed and it's like you have to figure out what are the products you can build that don't require a dev team.
**A** (54:00):
Yeah, I think that's like a conclusion. How many people feel about the Cosmos Hub right now and like the pain points actually that so much talent like primarily got lost. So it's like maybe the, I mean like if you look at the people who worked on the Cosmos Hub back in the days in Berlin, it's like a team of OGs and it's unimaginable where the journey could have gone. Like with Ismail primarily from Celestia, you. Because all of the OG projects that we know in the Cosmos today were like Hub primarily. So you would like finger point back to the loss of talents, right?
**B** (54:37):
Yeah, I think the company blowing up, I think after that was like, I don't know, Adam was kind of doomed from then on, I guess what I mean. Or it's like it's more like the set of opportunities and paths that it could take was heavily limited.
**A** (54:53):
Yeah, yeah, I think, I think that's a, that's a very good conclusion. But yeah, like you mentioned it, the Cosmos. I think maybe there's also one of the reason why the Interchange is so powerful right now because we have so many strong teams working on independent projects and the Cosmos. I think that's also a way to look at it. I don't think that we would have like that many promising chains in the Cosmos with. Without so much talent, you know, working the interchain. So yeah. Now the last topic of today, Osmosis. Obviously you launched Osmosis in 2021 with a lot of buzz. Like everyone was hanging out on Osmosis during these days. It came like to life in the summer of 2021. I also remember I was like super excited about. It was like actually the first bigger airdrop in the Cosmos. So yeah, maybe you can reflect on this strong development that Osmosis experienced that run up to become the AMM in the interchange. We have seen some AMMs coming and going, but Osmosis state the sheriff in town, to put it like this. Then you experience the super harsh bear market. So yeah, how did you experience all of this and where is Osmosis heading now?
**B** (56:16):
Yeah, so I mean I think we had like a lot of competition. A lot of people tried to take a shot at Osmosis over the, over the years. I think it's just a matter of like, you know, we played a couple of cards, right. I think our UX was pretty good. So big shout out to Josh for like leading a lot of that. I think like the way we use liquidity incentives, I know for a long time people were very like, bearish on like, oh, why are we spending so much on incentives? The thing is that's what kept Osmosis dominant until we could ship concentrated liquidity. And once we were able to ship contra liquidity incentives have gone down. Right now Osmosis makes more in revenue than we pay in incentives. So it's like, okay, osmosis is profitable now. And yes, we paid a lot in incentives to get there, but that kept our market share until we were able to ship something that doesn't require incentives, which was concentrated liquidity. The. And then, you know, I think it's just a matter of like, you know, you have to do a good job of like keeping up with the market. You know, we saw like TIA what was going to be big. Like, you know, we saw that like, you know, three, like a few months before and we're like, okay, let's make sure that like tia, like we are the decks for tia, we need to win that market. And so, you know, we, we did a lot, we worked with the, the team. We like, we, we helped like incubate Milky Way has like, we're like, okay, like, we need the LSD for Celestia needs to be on Osmosis. And that's how we get more TIA onto Osmosis as well. So, you know that that's something we did. Yeah. And so, you know, and obviously the big one was at the last bull market we saw that UST and Luna was going to grow. And so we kind of like, we weren't early into Luna and USD, but we were like before it really got crazy big, right? And so we went and like, okay, we like had to, we petitioned Terra to activate IBC basically. And we're like, hey, you need to do this. And so we got them to do it and it worked great for us. Until it didn't. Right. And the Terra crash kind of damaged Osmosis pretty hard. The way the market structure was set up, that everything was paired with osmo. Everyone who was running from Luna and ust, they sold into OSMO and then into Dollars. And so, yeah, OSMO took a huge hit after that basically. But as ecosystem Cosmos kind of got a lot of. Once again, like I said, all the developers stuck around from Terra, right? And so A lot of those developers started building on top of Osmosis because after Terra collapsed, Osmosis was like the biggest Cosmos network by, like, by, by ecosystem. Right. So like we got Mars and Levana and all, all these sorts of like projects to continue building in Cosmos. Skip was a, like an Xterra project, right. We like got them to become an osmosis core dev team. Like so, you know, we kind of. The Terror crash while it similar to the AIB thing, right. It was a tragedy, but it also like bootstrapped a lot of the ecosystem. The Terra crash also bootstrapped a lot of the Cosmos ecosystem today. And so, yeah, that's where we kind of are. We made it to the bear market. It was getting tough there for a while, to be honest, but I think the Celestia launch definitely brought some vitality back into Cosmos. DYDX moving showed the strength of the. The stack USDC helps and I think, yeah, you know, I, I don't think we're reading the rest on our laurels, right. I think like Solana recovery was amazing. Like, I think Cosmos still has a ways to go and I think, like I said, I think if I had to bet at all, I'm going to bet on Bitcoin.
**A** (1:00:10):
Right.
**B** (1:00:10):
I think that the way I said it before, and I'll say it again, like, Cosmos needs to be the app layer for Bitcoin. That's how we win and we just need to keep. I'm doing my part to help on this, right. I helped with Babylon, shifted them towards a product that I think will bring more bitcoin community to Cosmos. I think Thor Chain is doing a really good job. I think there's ways to go still. Right. This sounds silly, but I think this is actually a good idea. I think we should rename cosmwasm to bitwasm. I think it's a subtle branding thing, but I think it'll actually just be like a huge thing. So I don't know. That's one. But repricing a lot, I'm talking Stargaze about repricing a lot of NFTs instead of in stars. Make the default be Bitcoin. I think this is things that we need to make an active effort in Cosmos to rally around Bitcoin and that is how Cosmos is going to become as big as Ethereum. Right? Because we will be the app layer for Bitcoin. We want to be the best dev stack for building things on Bitcoin.
**A** (1:01:23):
Yeah, that's a very interesting and novel way to actually look at it to wrap things up a little bit. So we talked a lot about bitcoin. We talked a lot about slightly about. We talked about the Cosmos ecosystem and about osmosis. Can you like just like draw a picture here like what everything will look like in like say five years, five to 10 years from now with osmosis. Like what does osmosis serve to. Is it like still the decks where everyone in crypto is trading on or will there be much more that we have like applications on top of it that people use without even knowing that osmosis in the back. Will there be also stocks on osmosis for example, tokenized versions like what's going on there? What's with bitcoin? Yeah, Tilia actually. Where's crypto in five to 10 years and where's the interchange? Osmosis?
**B** (1:02:13):
Yeah, I think. Okay, Where's Bitcoin in five to 10 years? Five years. Five, 10 years. It is the new digital gold, right. It has flipped gold and market cap and so it is like the single most high value asset, like singular asset in the world. Osmosis will be. I, I think we want to focus on the decks, right. We want to be. But a Dex has a lot of things like Binance has a lot of functionality. Right. We need to like work on you know. Yes. Not just trading assets but like. Yeah, I think tokenized versions of like real world assets. You know, maybe it's stocks, maybe it's like other things. Right. But in I think that, that that will probably, I imagine will happen in some form. There'll be like figuring out decentralized on ramping. Right. Like today Coinbase and Binance that's where you on ramp via their fiat on ramps or via like Binance P2P end goal for osmosis. We want to build the Robinhood for the rest of the world. As long as you have access to tether or Bitcoin or something like that, you should be able to invest in any asset in the world. That's the end state of what osmosis will be. I think Cosmos will just be one of the dev stacks. I think it is a good dev stack. Will it be the only dev stack? No. Our goal is we want to make sure there's enough interoperability between all of the dev stacks. You can write your web server and go or in node or in Rust, whatever you want. But everything's still interoperable over a set of common standards. I think that's what like we just need finance defi and on the interchain it's not about the Cosmos SDK. It's about the seamless interoperability between all of these chains.
**A** (1:04:10):
Yeah, I think that's a very good way to draw it here, really. Last question of the day. So we talked about osmosis coming strong out of the bear market. What is your top advice for young builders in. In crypto? How to stay persistent when things are getting harsh. So, yeah, like, maybe like two or three sentences. What is your advice for the builders and entrepreneurs in this space?
**B** (1:04:35):
Yeah, you know, I guess have a solid, like, have good co founders that you can, like, rely on and, like, for support. You know, have a end vision in mind of what it is you're building or I thought. But like, you also have to adapt to the market. There's a quote, it's like beef. Be rigid on the vision, flexible on the details. So it's like, you know, what we're building is like, you know, I think you have to be like the end state of what you're trying to get to. But the path that you take will have many winding paths, and you kind of have to flow. As long as you're going directionally in the right direction, you will have to take some winding paths to get there. I told you, right? Originally, Osmosis, we started with privacy stuff, and that's still one of our primary visions. We want to use osmosis as a platform to bring privacy to defi. But it's. We've. We've had to take a few widening paths until we're getting there. We're finally starting our. We just hired a new engineer who's starting work on our privacy work finally. So it takes some time, but yeah.
**A** (1:05:57):
Yeah, I think, yeah, that's a very good one. Actually also know that quote. So, yeah, totally agree on that. With that being said, Sunny, thank you so much for taking your time for. For. For this conversation. It was very insightful. Learned a lot of good stuff about bitcoin. Also very like the hot, hot take that bitcoin might adopt. Adopt proof of stake further down the road. Very excited about Osmosis future and also thank you for the conclusion of the interchain. So, yeah, thank you so much for, for joining this and I hope I will see you on the show very soon.
**B** (1:06:30):
All right, thank you.