**A** (00:00):
You guys mentioned you follow Runetorching a lot. And as I mentioned before, they've been hacked multiple times. Is this a bridge security thing? Is this an improper code thing? What are the issues here and how do we kind of solve them?
**B** (00:13):
It's funny that I feel like. It's kind of weird that I feel. In crypto, we spend a lot of time thinking about economic security bugs, but really most of the things tend to be just coding bugs. Right. So the Thor chain hack was. Yeah, just there was a code bug. So, I mean, the nice thing about IBC is that the one. The protocol has been like, it's been. It's been formally verified, and then on the implementation, you know, it's nice that we have this, like, one standard implementation that has a lot of eyes on it and a lot of people are sort of using and.
**A** (00:53):
Sa. Hello, everyone. My name is Ben, and as usual, I am the host of today's podcast. Today we have Sunny Agarwal, the co founder of Osmosis Labs. Welcome to the show, Sunny.
**B** (01:36):
Thanks for having me on, Ben.
**A** (01:37):
Yeah, really glad to have you here. So before we get started, why don't you tell us a little bit about yourself?
**B** (01:43):
Sure, yeah. So, yeah. Okay. Thanks for having us on because Coingecko is one of the first supporters of Osmosis and has been working with us very early on. So excited to be here. Yeah. So about myself, I've been in the crypto space since about 2015 when I was a student at Berkeley. I helped teach this Blockchain at Berkeley course, start this Blockchain at Berkeley program here, and teach courses on bitcoin and crypto. Summer of 2017, I was working at Consensus for a little bit, interning there. Wasn't the biggest fan. But what I wanted to do was I got really interested in Proof of Stake, and I was like, wow, proof of stake. This is so cool. And what I did was I read through all the Proof of Stake papers I could find, and the one that I really liked was Tendermint, because I was like, wow, this Tendermint consensus protocol. Proof of Stake is so simple and easy to understand. And so then what I did was I reached out to the Tendermint team. I dropped my other internship, and I was like, hey, can I work with you guys somehow? What can I do? I'm just a student right now. So then they actually, when I reached out to them, then they explained to me this whole cosmos vision. And I didn't realize at the time that the Tendermint team was the same as the Cosmos team. And so then I reached out to them and then they explained this Cosmos thing to me and I was like, whoa, this is so cool. This actually solves a lot of the concerns that I had with Ethereum. And so basically I started working with them that summer and really enjoyed it. And come that fall, I dropped out of UC Berkeley to work on Cosmos full time. And so I kind of worked on Cosmos for like three and a half years or so and, you know, helped launch, you know, helped build Tendermint Cosmos SDK, launched the Cosmos Hub blockchain. And then I left the core development team about a year and a half ago and, you know, basically, you know, I spent all this time working on the core protocol, building this core functionality. Then it's like, okay, now I want to go build an application that makes use of this core protocols. And that's sort of how Osmosis was born.
**A** (04:16):
Yeah. So obviously there are a lot of hints here already that Osmosis is on the Cosmos ecosystem. So what is Osmosis?
**B** (04:26):
Yeah, so Osmosis is a Dex built on the Cosmos ecosystem. But one thing to know about Cosmos that maybe people coming from other ecosystems might not be aware of is that Cosmos isn't a blockchain. Cosmos is a network of blockchains. Cosmos is a. It was an idea of how the blockchain ecosystem should look. And the idea was, hey, instead of having one at the time, there was only really Ethereum. And everyone's like, hey, everyone's just going to build apps on top of Ethereum. Our view was that, like, no, wait, that's not going to scale. Both technically, like actual scalability, but also social scalability, where the governance of this thing is not going to work. As there's more and more stakeholders, the governance of it is going to grind to a halt and the iteration is going to slow down. And so we saw a world in which every application will be on its own blockchain. So we can imagine something like MakerDAO would be on its own blockchain, Compound will be on its own blockchain. Uniswap would be on its own blockchain. And so Osmosis kind of was the first instantiation of that, where it's like, well, if Uniswap's not going to go build their own blockchain, then maybe we'll do it ourselves. So what we did was that we took the idea of like, hey, let's take an AMM system, but that's using the tools that the Cosmos core development team put out. Such as Tendermint, Cosmos SDK and ibc, which is inter blockchain communication, which is an important one. But we were able to use these tools to launch our own blockchain called Osmosis. It is a sovereign blockchain, it has its own staking system and everything. But by using the inter blockchain communication protocol, ibc, it's sort of like a IBC is just sort of a very highly, highly secure bridge protocol where instead of having, you know, multi sigs or like, you know, custodians between to bridge the blockchains, both blockchains have like a light client of the other blockchain. And so there's no trust assumptions there. It's, you know, it's, it's basically as trustless as you can get a bridge to be. And so by using this light client, this IBC protocol, we're able to bring in tokens from other blockchains and just be this like trading hub and focus on like built. And what that allows us to do is what I like to say in a way is like osmosis and application specific blockchains are this like bet on vertical integration. So if you have a dex on another blockchain, they will often in uniswap they can have their own, they can control their smart contract and they can control their front end ui, but we can control the app and the front end, but we also control the blockchain itself. And our team actually Osmosis, our team also maintains Kepler, which is the main wallet for Cosmos. So we have this full user stack from wallet all the way down to the blockchain. And that means if we ever want to do something like add new cryptography, which is one of the big things that we do, we can do that because we can go work on it at the wallet and the blockchain level and we're just able to iterate and ship much faster.
**A** (08:04):
Based on what you shared, there are a lot of similarities that I can already gather from other existing ecosystems and apps. So the first thing that comes to mind is obviously when you think of Cosmos, some people equate it to lay zero the underlying technology and everything, which is quite similar to Polkadot. I'm not sure what the key differences are, but maybe if you could leverage a little on what separates Cosmos from Polkadot. And I guess the other point is also because Osmosis is a cross chain dex, it's also kind of like Rune and Renvm, maybe you could share a little bit more on the differences there too. That'd be great.
**B** (08:46):
So, yeah, Cosmos and Polkadot very similar visions in a lot of ways. I would say sort of one of the main differentiators between them is how we approach security of cross chain, where. So in Cosmos, by default, every blockchain is sovereign. So, you know, we have this one blockchain that we have called the Cosmos Hub, which by the way, on Coingecko it's labeled wrong. It says Cosmos. It should really be called Cosmos Hub.
**A** (09:19):
We'll correct that, thank you.
**B** (09:23):
But yeah, so the Cosmos Hub blockchain, that is one blockchain and it has a very important role. But I'll get to that in a bit. Osmosis has its own staking token and our own sovereign security. On Polkadot, every chain uses shared security with the Polkadot relay chain. If you're building a parachain on Polkadot, you have to use the Polkadot validators. You don't have your own validators. Now that's the default for Polkadot In Cosmos, we're actually going to have shared security as well, but it's more of an opt in system. And that's sort of where their Cosmos Hub comes in, where it's going to be this blockchain secured by this token called atoms, which is very high value. And it can basically a new chain that's launching, it can choose do I want to be a sovereign chain or do I want to be a shared security chain. But to the application layer, to the IBC protocol, it all looks the same. And so we separate out this like application composability from, you know, we don't force a specific security system on top of it.
**A** (10:36):
Voluntary.
**B** (10:37):
Yeah. And so in a really, you know, the Polkadot model is actually not that different from Sharding. It's the same. I think Polkadot and Eth 2.0 are actually more in the same family than Cosmos is as a layer zero. Now. So now to your question about Thorchain. Right. So, you know, Thorchain is actually, you know, very, very similar vision to Osmosis. They are also built on Cosmos as well. They built using the tool stack Thorchain, I guess. I think we were very inspired by a lot of the stuff that they did. A lot of stuff that we built with Osmosis was heavily inspired by them. I think they seem to be very bitcoiners coming into the defi ecosystem and sometimes it shows with how they design things. Some of their mechanism designs and, you know, we just thought that like, you know, okay, they have this like whole incentive pendulum thing. Which was interesting, but like, you know, I think that. So we, we created something called Super Fluid Staking, which if you want, we can talk about that later. But like it's. It's an alternative security system than the Incentive Pendulum. The other big thing is Thorchain decided to. Another thing is our AMM designs are very different. They use like a. You know, they created their own model of AMMs. We're kind of exploring a different design space. Our current AMMS right now that we have is very inspired by Balancer, but I'm not sure that's the right design choice. So we might be backtracking from that and exploring a different design space. But. So the AMM design is different. But I think one big difference is that Thorchain decided to focus on their own bridge protocol called Bifrost that they use to connect to different chains. And that means that their team is building both the decks as well as all of these bridges. With osmosis, we kind of decided instead of building our own bridges, we're going to only use ibc. So we're going to talk IBC with other chains and then if we want to talk to a chain that doesn't support IBC yet, we're going to have to use an adapter chain for that. So that way our team, we can focus all of our energy just on building the Dex and Defi platform and then let other people provide the bridging services for us.
**A** (13:10):
Yeah, I mean, it's great that you made a segue into bridging bridges, because I think a key component of all chained access is obviously bridging. People need to bridge assets in and out. And I think one of the recent developments in the Osmosis ecosystem is that there has been some challenges regarding the bridging of assets from chains like Ethereum, for example. Could you please elaborate on this issue and share how the community has attempted to address this?
**B** (13:42):
Yeah, sure. So when you. So one thing to start off with is when you have a asset that comes via two different paths or two different bridges, these have. These tokens that are bridge are not fungible with each other because they have fundamentally differing security properties. Right. And this is true even in IBC where if I send a token via IBC from, let's say I send atoms from Cosmos Hub to Osmosis directly, that's not going to be the same as me sending atoms to Terra to Osmosis because the first one, its security is only dependent on Osmosis and Cosmos Hub, while the second one has its security dependent on osmosis, Cosmos, hub and Terra. So these are not fungible with each other. So traditionally with IBC we prefer to do the maximize trust minimal route. So we do the direct route. So if you have atoms on Terra, what we do for people is we ask them to send it back to the causal sub and then to osteosis. So we unwind all the paths. Now the problem with the bridges with ibc there's a clear shelling point where on what, what we should use. It's the direct path with the bridges because we made the decision of not building a bridge on osmosis directly and instead using a different and external parties bridge. That now opens the question of well, which one? We don't have a shelling point on which one to use now. And so because of that there's been a couple of, there have been multiple projects that have been like sort of very interested in being the bridge provider for osmosis to Ethereum and other EVM chains. And I think that this like bridge war is really going to accelerate in the next coming months. And I think one thing I'll say is eventually everything is going to use IBC because it's the most trustless protocol. These bridges are only like temporary hacks until everything uses the proper trustless bridges. But you know, people seem to think that there's value in these bridges and so a lot of people are competing for it. And osmosis is sort of one of the first like, you know, because we're this like interchange decks. I think a lot of people see this as the first battle in the bridge wars. And so there's a lot of teams that are like sort of very heavily trying to push what, you know, osmosis to use their bridge. Now here's one thing, why don't we use multiple bridges, right? So once again they're not fungible with each other. But isn't that okay? Why can't we just have like different versions of ETH on osmosis via different bridges? With osmosis, you know, our goal is we are going to replace centralized exchanges. That's than our mission from day one. And to do that we have to beat the UX of centralized exchanges and the, if you go to central, if you go to Coinbase, you don't, you know, you have bitcoin, eth, litecoin, atom, dogecoin. You don't have like 10 different types of eth all with like different A, E, B, C, E. Normal users will be so confused and we need to make it simple. For them. And that's why we need to say, okay, I don't want a new user coming into crypto for the first time to come to osmosis and be like, why are there 10 types of eth here? My friend just told me to buy eth. I don't know what any of this other stuff is. So to make that simple for people, we need to pick one and show it in the front end with the proper ux. The other thing as well is it's about liquidity. We where if we have 10 different types of eth from different bridges on the front end, like, the liquidity will be fragmented. And how AMMs work is that if you fragment the liquidity, you get higher slippage and worse pricing for everyone. And that's not something I don't think anybody wants. So, yeah, so that's sort of why we had to pick one. And so what we did was we are running this sort of Bake off right now, where right now basically there's four main providers. I think a couple other people submitted as well, but there's sort of four people who have like, submitted proposals on why they think they should be. You know, it's like a bachelorette kind of thing where like, you know, everyone's competing and we have to decide who we want to give the roses to. But yeah, so currently it's sort of mainly between Axelar, Gravity Bridge, Wormhole and Nomad. So that's sort of the process that we're going through right now is running this Bake off process and picking one.
**A** (18:45):
I mean, from my perspective, the way I would use analogy to describe the whole situation is kind of like, okay, we are trying to decide which border control agent we want to get, because having too many travel visas into the system just confuses everyone and is very bureaucratic and introduces a lot of issues. So I guess now everyone's just trying to find that singular travel visa. Right. Would that be an accurate way to describe the situation?
**B** (19:17):
Yeah, I think that's an interesting analogy. I haven't thought of it that way before, but yeah, I mean, the analogy I usually just gave was, you know, it's like a centralized exchange has to pick a custodian. I think it's in a similar way. I think a decentralized exchange has to pick a decentralized custodian. Which are these bridge operators.
**A** (19:36):
Yep. All right, all right. And on that note, because, you know, you talk a lot about bridges, right? And not to get too technical, but this is slightly technical. Are there any technical differences between Building bridges, connecting to other SDK chains and non SDK chains. And how does this affect matters like security? The reason why I bring this up is because Rune has been hacked several times over the past year or so. And yeah, I'm guessing some people might have concerns there.
**B** (20:11):
Yeah, so I guess that kind of relates to. Maybe we can dive a little bit deeper into what IBC is. So what IBC is is it's a. IBC has two meanings right now and we kind of need to figure out how to differentiate them. One is it's this like we have this interchange standards system which is it's standards on how data going across chains should look. So you know, we have. You can split like it into the transport layer and the application layer. So similar how on the web you have different transport layers. You have tcp, udp, quic, but you have all these application protocols like HTTP for web, SMTP for mail, FTP for file transfer. In ibc we also split it into two layers. We have the transport layer and the application layer and application layer. What we do is we have like These, we have ICS 20 so interchange standard 20 which is for token transfers. We have an ICS for NFT transfers, we have an ICS for cross chain contract calls, we have one for Oracle data across chain. So we have all these different ICSs that these different chains can support. But at the transport layer you can swap out what transport layer you want to use. You could use a centralized bridge, you could use a decentralized protocol. What we focus on mostly is the IBC implementation that we prefer is the one with the trustless light clients now. And so we want two chains to be able to talk to each other. Now the thing is this IBC protocol, the entire thing is a spec. It's a series of specifications. You can find them on GitHub.com cosmosics and they have to be implemented in a framework. The Cosmos SDK is the framework that most Cosmos chains are built on. And there is a IBC module implementation in Go that these chains use and they can allow Tendermint Light clients to talk to each other. Now the thing is we can build IPC implementations and other frameworks as well. So for example, there is work being done on a substrate IBC implementation which allows substrate chains to talk using IBC with each other or with Cosmos SDK chains. There's actually, surprisingly, which I only learned last week, there's IBC implementations for Hyperledger applications as well. And there's like IBC implementations being built in solidity as well. So over time, I think IBC will slowly evolve to take over more and more protocols. And the nice thing about IBC is it is this very highly trustless thing and this bridge thing is just the, you know, so.
**A** (23:26):
Yeah.
**B** (23:26):
So right now. So how do you define what a Cosmos chain is? For me, Cosmos means anything that talks ibc. So once substrate has their IBC implementation, I consider that as part of the cosmos. And so, yeah, that's sort of what I mean by like cosmos versus non talking to Cosmos versus non cosmos is we use IBC to talk to cosmos chains and we use non IBC to talk to. We use something else to talk to non cosmos chips. I don't know if that answered the question or not.
**A** (24:06):
Yeah, it also clarifies what IBC was because I also wanted to ask about that, which is great.
**B** (24:12):
Yeah. So Thorchain's hack was a bridge. It was a code issue. Right. It's funny that I feel like. It's kind of weird that I feel in crypto we spend a lot of time thinking about economic security bugs, but really most of the things tend to be just coding bugs. Right. So the Thor chain hack was. Yeah, just there was a code bug. Same with the wormhole hack. Right. It wasn't like economic failure or byzantine failure. It was just a code bug. And so, you know, when we think about security, I think that code security is as important, or if not more important than like economic security in a lot of times. So I mean, the nice thing about IBC is that the one the protocol has been, it's been formally verified where we can see that, okay, look, there's no edge. So there's a company in the Cosmos ecosystem called Informal Systems. And so it's founded by one of the co founders of Cosmos, Ethan Buckman. And so he. So his company, they actually have formally verified the IBC protocol to show that there's no edge case in which, okay, here's an edge case in the protocol that can be used to steal funds or drain funds. And then on the implementation, it's nice that we have this one standard implementation that has a lot of eyes on it and a lot of people are using and more eyes on something makes bugs shallower. But at the same time, we try our best to do good audit practices in stuff, but you never know, sometimes it might be bugs lurking.
**A** (25:57):
I mean, the nature of defi. Right. Nature of blockchain.
**B** (26:02):
The key is it's simple, right? The simpler you can make something, the better. With the Thor chain bug, it was A complex system because they were running Ethereum full nodes and looking for logs in the like full note. And it's like, it's like, I don't know if you saw like Vitalik's post that he had like yesterday or two days ago about like encapsulated complexity versus non encapsulated complexity. And it, it's basically, it's like, okay, you can have complex systems but like the entire system is all mangled together versus encapsulated complexity where like subparts are like complex but like, you know, they have well abstract, well designed abstractions. That's I guess the important part. And I think ibc, what it is, is it's a very well abstracted protocol where like, okay, we can at least reason about different parts of the protocol separately and like black box certain functionalities and reason about this and then zoom in and reason about the security of this. And I think that's what makes the IBC protocol like have some better security properties is how encapsulated it is.
**A** (27:17):
Again for me, kind of analogy here. Essentially, you know, your computer cables, you kind of reorganize them and make them smooth rather than leaving all jumbled up in a mess right there, right? Yes, I guess, yeah. Okay, I want to retract a bit because you mentioned earlier that Osmosis sees themselves as a competitor to centralized exchanges. Do you see the same for other native Dexs like Uniswap, for example? Because they are quite different in the sense that they are Dexs on particular chains, whereas Osmosis is the chain itself. And how do you plan to compete if so?
**B** (28:01):
Yeah, I think that, you know, I think with other, I think right now other Dexs are kind of competing in a different market than centralized exchanges. You know, Uniswap is really more focused on being. Okay, so if you look at like the list of let's say top 20, 30, 40, 50 assets on CoinGecko, right. Like it's. You'll see actually majority of them are actually on independent blockchains. Right. We like to think that like, oh, look at all these tokens on Ethereum. But like realistically, most of the trading actually happens on if you remove stable coins. Right. Then most trading actually happens between. If you look even in the top 10 assets by market cap.
**A** (28:50):
Yeah, they're mostly all chains.
**B** (28:52):
Yeah, they're all chains. If that's the main market, then I don't think Uniswap is the best suited to serve that market because they're very focused on serving the internal Ethereum market. And it just doesn't feel as neutral as a. Here's a place that's just focused on trading cross ecosystem. And what we're doing is we're building the UX and stuff to make it easy for people to go cross ecosystem. Like, hey, if you want to trade AVA for eth, we can have that happen in one transaction where you just make a transaction on AVA and it shows up in your ETH account. Or we can have it all happen on the osmosis exchange on the osmosis chain and we, we also like can do. Once again, this comes back to the, you know, vertical integration where one, one feature that I really am proud of on osmosis is that, you know, we don't charge transaction fees in osmo. I always thought that. So rewind like, you know, two or three years ago, back when ETH gas fees are much lower, I was trying to show one of my friends who was non crypto. I was trying to teach him about like, I'm like, hey, check out this DAI thing. We can like use it to make payments with each other. And so I made him download an Ethereum wallet and I sent him some DAI and cool. And then he's like, okay, now try sending it back. And he's like, wait, it's not working. And it's like, why not? I'm like, oh, you don't have ETH for transaction fees. And it's like, that is terrible. Ux, I think that is like, that's not the world we can live in. And so with Osmosis, what we actually did was we made it possible for people to pay transaction fees in any token they want. And what it does is we have a minimum fee that's denominated in osmo. But if you pay a transaction fee in any other token, all it does is it uses the DEX to convert to OSMO and then pay the transaction fee. So you never need OSMO to pay the transaction fee. I think that is something that is necessary if you want widespread adoption. And you could not do this on Ethereum. Uniswap doesn't have a way of. We were able to tell our blockchain, hey, accept these other tokens for fees. But Uniswap can't go to Ethereum and say, hey, accept these other tokens for fees. And so that's kind of like one example of the things that we're going to be able to do that I think positions us to be better suited to compete with these centralized exchanges.
**A** (31:34):
Yeah, I was just about to mention you can't do that on centralized exchanges either. You normally have to pick the trading pair. Yeah, so yeah, that's a great feature. I never thought about it that way. I guess the last question I have is, well, not really the last question, but more like you mentioned the OSMO token, right. And I guess we haven't really talked about what role does the OSMO token play. So if you could elaborate a bit on that.
**B** (32:06):
Yeah, sure. So the OSMO token is primarily the staking and governance token for the platform. So because we are an independent blockchain, we need to secure ourselves. And so to do that, OSMO is the staking token and it governs the platform, controls the upgrades and it's not. I know there's a lot of governance tokens out there that don't really govern much in osmo. It actually has legitimate governance power over the system. There's been a lot of governance proposals that have gone away that the, you know, the core dev team did not want. But, you know, that's okay. That's how governance works. And the other thing is, you know, it's, you know, eventually it will, it will be able to charge fees on all the volumes going through this platform as well as it's also the base pair for most of the osmosis decks. And we are able to like do certain things that make it very. And you know, we're able to do things that sort of help establish it as a good base pair. So, you know, for example, what we've been able to do is some. So we have this cool feature that we just shipped three days ago called superfluid staking. And what that is is it allows you to use the LP shares of. If you have a am. If you're an LP in an OSMO based pool, you can use the LP shares in proof of stake. Because our proof of stake system, yeah, our proof of stake system knows that, hey, this LP share has OSMO underlying it. And so we can say, okay, this is how much this LP share is worth and just refresh it every regular interval and if you do anything malicious, we'll just slash your LP share. And that's really cool because that's like once again, something you can only do on your own blockchain. But it's like, hey, here's this reason. It has this feedback loop where the more OSMO is used as this base pair, it also can help secure the network more as well, which is cool. Another thing that we're able to do is we charge, you know, better fees if for things that are going through OSMO base pool pairs. So that also helps like drive up the sort of money ness of OSMO as this token. But at the same time you know we, we have a lot of pools with other tokens as well. You know you don't have to use osmo. We have a lot of Atom based pair pools as well as UST based pair pools as well.
**A** (34:55):
Yeah, I mean that's really cool because in a way it also helps build liquidity because more people are incentivized to provide LP and not lock up their tokens in some staking network contract. Osmosis is ultimately a Dex network. Do you plan to allow any other apps to be built on the ecosystem eventually or will it just be limited to the core dev team?
**B** (35:18):
Yeah, so we actually, as part of this upgrade that happened three days ago, we were really loud about the superfluid stuff. But the other big thing that actually landed was Cosmos. So cosmosm is the, it's a rust based smart contracting system built for Cosmos. It's probably the second or third most popular smart contracting maybe tied with Solana, but after facility of course. But it's what's used on like Terra. And so whenever you hear about something being built on Terra it's like built on cosmosm but it's also used by secret network and other chains within the Cosmos ecosystem. What we did was we added cosmosm to Osmosis but it is a permissioned Cosmos so governance has to vote to allow a contract to be deployed. And the reason for this is we don't want Osmosis to become a generalized smart contracting platform that's antithetical to the goals of being best Dex app chain. But what we do, you know, so we don't want people to deploy NFTs or Dogecoins. Yeah. But what we do want is if people want to build custom tools and adapters and things that like and complimentary products to the core osmosis protocol. So you know, once again with, when we talk about competing with centralized exchanges, right. Like centralized exchanges offer, you know, they're a suite of products that are packaged into one cohesive thing. Right. And so centralized exchanges for a lot they are spot trading but they also have like margining and perps. They're also information services for a lot of people. They're also a custodian, they're also a fiat on ramp. They're. They have all these things packaged into one place and we want to basically be able to make sure Osmosis as a chain is Also acts like a suite of products like a centralized exchange. But we know that we don't have, we can't maybe build all of them ourselves. And so other teams can come in and add things. So for example, there's a team called Confio building Isotonic which is a lending protocol. But that's, you know, it's going to be integrated into the osmosis exchange. You should be able to do like a, a one click leverage and it will like use the lending protocol to do leverage on osmosis or there's a team that's going to build like an ETF protocol that uses the osmosis dex to like do you know, ETF rebalancing. And so it's like another thing is like, you know, people will be able to products that want to be co located with the decks. They would want to be on this and kind of like almost how in centralized exchanges, not even crypto centralized exchanges, but traditional stock exchanges, people will pay to have their server right next to the exchanges servers. We can imagine something similar where I think this is also a value proposition for OSMO as well. Where it's like okay, you know, I think projects will want to pay to be co located on the osmosis chain so they can have like direct easy access to the, to the Dex itself.
**A** (38:56):
So they don't actually, they just, they just buy land. Right. They just hang out there. But they don't actually. I get what you mean. It makes law sense.
**B** (39:07):
Yeah. So it's basically we're building ways for other external developers to contribute to the osmosis product rather than being a generalized platform.
**A** (39:19):
Yeah.
**B** (39:22):
Here's another way actually think of it. Another way we like to think of it is like the app store where you know, to deploy an app to the iOS app store it has to be, it goes through this like review process of Apple to make sure it has quality. We would rather make sure that there's 20 great apps on osmosis rather than 2000 mediocre apps.
**A** (39:46):
Got you. All right. And that brings me to my final question. What are osmosis plans for 2022?
**B** (39:56):
Yeah. So for 2022 I think we have a couple of things that are in the roadmap. I guess maybe the three big ones would be one threshold encryption. So this is something we didn't even talk about. But one of the original purpose of why we got into wanting to build a dex was I got really into front running and MEV and understanding this and I'm like wow, this is terrible. We need to stop this. So what we did was we invented a mechanism called. We created a mechanism in which we use threshold encryption, which is a way of every. All the transactions in the mempool are going to be encrypted and they're only going to be decrypted and executed after a block is finalized. So this makes it so no one can front run because you can't read anyone else's transactions in the mempool. So that's like that was the original. We started building that first and then we're like, this is a feature, not a product. So then we shifted to like, okay, let's build Osmosis as a dex that's going to use that feature. So that's like sort of one of our main things that we're going to be focused on for this year. Another is just improving the AMMs. So as I mentioned, you know, there's a lot of. I think the design space, I think AMMs are very under explored right now still. I think that like the design space is very large and we can do very, very cool things with AMMs that no one has done yet. So we have ideas on this very cool leverage protocol that's I think a fundamentally novel primitive that I've never seen created before. So using AMMs to explore new primitives. And then the third is continuing down on superfluid staking, but creating something called interfluid staking, which is superfluid staking as a service. So our current superfluid staking that we have live today is osmosis has. We're using the OSMO in our LP shares to secure the osmosis chain. But there's going to be other chains that a lot of the other chains in Cosmos have a lot of their tokens on Osmosis in our liquidity pools. Can we do superfluid staking as a service where you know, we, they have lp, osmo, LP shares, superfluid staked on osmo. But we can use that to like as a type of shared security to help secure the other chains as well. So I think those are sort of like the three big verticals that we're going to be focused on.
**A** (42:45):
Right, great. Any last words?
**B** (42:48):
I guess the last thing as well is just. I guess the last thing as well is just connecting to more ecosystems. Right. So you know, we're bridging to EVM right now, but you know, got to bridge through everything else as well.
**A** (43:00):
Yeah, yeah. I mean obviously the goal is interconnectivity for everyone. Right? Yeah. All right, Sunny, anything else you'd like to share or add before I close off the show?
**B** (43:12):
No, I mean, yeah, I just wanted to say once again, thank you guys at Coingecko for being like very early supporters of osmosis in the sense that, you know, one of the things that we, like I mentioned, we want to be. One of the things I mentioned that centralized exchanges do is data integrations. And for osmosis there's a lot of. So one thing that also made osmosis kind of very successful was there was a lot of untapped liquidity demand in the Cosmos ecosystem because it. If you actually look in the top 200 assets by market cap, Cosmos has the most after Ethereum. And that means there's a lot of projects built on Cosmos, but a lot of centralized exchanges had a hard time integrating with Cosmos chains because it's just not what they're used to. They're used to running, integrating ERC 20s and so there's all these high value assets that couldn't get in. And so osmosis was the first time that a lot of them got liquidity and. But you know, how do they. So, you know, we were able to work with the Coingecko team very early on to make sure it's like as soon as you're listed, you're having integration on osmosis. You're also shown on Coingecko and all this kind of stuff. So, you know, their team has been just very. Some other data aggregators have not been as helpful. So thank you guys for being so collaborative.
**A** (44:43):
Glad to hear that. I guess that's about it for today's show, guys. Thank you so much, Sunny for coming on.
**B** (44:50):
Thank you. Thanks for having us.
**C** (44:52):
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