**A** (00:09):
Welcome to the founders of Web3 Series, buy outlier Ventures, and me, your host, Jamie Burke. Together, we're going to meet the entrepreneurs, their backers, and the leading policy makers that are shaping Web3. Together, we're going to try to define what is Web3, explore its nuances, and understand the mission and purpose of that drive its founders. If you enjoy what you hear, please do subscribe, rate and share your feedback to help us reach as many people as possible with the important mission that is Web three. Today, I'm really happy to welcome Sunny Agarwal, lead researcher at Tendermint, or was the lead researcher at Tendermint, contributor to Cosmos, Cosmos Hub, and now founder of Seeker. Welcome to the show.
**B** (00:59):
Hey, thanks for having me on.
**A** (01:01):
To give some context, the Cosmos Network is a decentralized network of independent, scalable and interoperable blockchains. The Cosmos Network is also built around Tendermint Core, which is the linkage to Tendermint, the company. And effectively, that is a solution that packages the networking consensus layers of a blockchain. You then got Tendermint, Inc. Which is the software development company, which is your previous employer, and that is contracted by the Interchange foundation to develop the Cosmos Network, in particular, the Cosmos Software Development Kit SDK. Did I get that right?
**B** (01:37):
As a summary, yeah. So many names, and some of them tend to be reused in some pieces. Like Tenderman is this consensus protocol, but it's also the software and it's a company. But yeah, you nailed it right on the head.
**A** (01:50):
All right, great. Now, obviously, we'll go into a little bit about how all of these various organizations comprise the ecosystem and how they're evolving a little bit later. But you're also a co host of Epicenter, so I'm a little bit nervous, to be honest with you. You're kind of a pro. I'm just starting out of this, so maybe you can help me along.
**B** (02:10):
I listened to a couple of your episodes already, and they're just great.
**A** (02:14):
All right, okay, thank you. I appreciate that. You kind of got to say that. So the reasons why I want you on the show, a number of them. So you're not technically a founder at Tendermint or Cosmos. Cosmos Network. That was obviously Jay and Ethan, but you were one of the kind of first hires, the initial core team, and you've been heavily involved in most of the network's developments. I think if you look at Cosmos as representative of the wider blockchain movement and how these protocols are formed and then evolve or devolve to the community, I think that is a really interesting perspective that from a founder's perspective, it hasn't really been that well covered. And I guess in many ways you are the community guy, right? You're at the core of the community and provide that kind of interface. And I also think, you know, when I kind of listen to your stuff, whether it's panels that you've done or the podcast, you're very good at simplifying complexities and helping people understand blockchains through useful, sometimes kind of historical analogies. I'm sure we're going to get a few of those really great sound bites throughout the podcast. You've also run a number of initiatives both at Consensus for Ethereum and then Berkeley about Onboarding developers. And again, I think that's a really big theme for where we are as an industry right now. So I really want to pick your brains about how we onboard the 99% of developers into blockchain. So if I just quickly try to summarize your background. You did an undergraduate in electrical engineering computer Science at Berkeley 2015. As I said, you spent some time at Consensus as an ethereum Developer Intern 2017, and you helped kind of train enrollees of the Consensus Academy and you did a number of fixes around ontology. You then were a course designer lecturer back at Berkeley, or I guess that was kind of during that same period where you co designed and taught the cryptocurrency Cacao to over 200 students now I think since fall 2016 and did a number of other things there. And then of course you've kind of contributed a lot by way of blockchain at Berkeley and the circulation of various white papers and helping students develop proof of concept. So very hands on, right at the edge of onboarding people into this new space, some of which maybe are new to development more generally. You then joined tenement in June 2017 as a research scientist and you worked on everything from crypto economics through to the technicalities, fault tolerant system design and the Cosmos SDK. And I believe we tried to keep these podcast quite timeless. But you have left literally yesterday or last week Tendermint and have got onto Filmseeker, which is a blockchain infrastructure company. I think it does a number of things, but in particular for Cosmos Hub, your top five validator. Again, I think that's a really representative, this evolution of how teams work together and then start to spin out. Did I miss anything in that? I tried to keep it as tight as possible.
**B** (05:26):
Yeah, no, that was really great. I was an intern at Consensus, so I was there only for, like, you know, two or three months. And I kind of dropped off halfway through my internship just because while I was at Consensus back then, they were like, really much more focused on, like, application layer stuff. And I just really wanted to learn proof of, like, do more protocol layer stuff. But while I was at Consensus, I just got super into proof of stake. And so I just kind of slacked off on my job at Consensus, but instead spent the entire time reading, like, every proof of stake white paper I could find. And that's sort of how I found out about Tendermint. I'm like, oh, I want to go work on this. This sounds really cool. So I was doing my internship at Consensus after my sophomore year, and then I dropped out of my internship at Consensus, start working on Tendermint. And then come September, I was just so into it that I dropped out of Berkeley as well to keep working on Tendermint. Right.
**A** (06:23):
So, okay, so that's interesting. So this is, I guess, was that driven by an urgency in you that you kind of felt that you couldn't waste more time, if that's the right word, in kind of going through academia, you just wanted to get straight into the space?
**B** (06:37):
Yeah, basically. I mean, I tried to do both. And then literally the day before classes, the syllabus for, like, one of my courses came out. I don't know if you know Nicholas Weaver, he's like a professor at Berkeley who, like, he has some. Yeah, he has some weird hot takes on crypto. But for his course, the syllabus came out and one of the midterms conflicted with DEVCON 3, I think it was at the time. And I wrote an email to him being like, hey, I'm giving a talk here at devcon. Can I move this midterm around? And I don't know if it was because it was a crypto event or not, but he's like, no. And I'm like, fine, I'm just going to drop your course. And then I'm like, wait a second, this is going to keep happening. Let me just drop all my courses. Let me just focus on what I'm doing.
**A** (07:23):
But then you went back to Berkeley. Right, and helped them develop their course around Blockchain. So what was it that took you back there? Why did you think that was an important thing to do?
**B** (07:32):
Yeah, so I was one of the co founders of this organization called Blockchain at Berkeley, and I did that while I was still a student there. So what Berkeley does is they have this really cool program where anyone can sort of teach. Any students can teach a class. You just have to go find a faculty member to sponsor your, you know, like, back your class. But, you know, you're teaching four credit classes. Me and two friends. So Max Fang and Philip Hayes, we sort of went to Dawn Song, who is. You know, she runs the Oasis Protocol now, and we asked her, like, to back this. And we started this class at Berkeley just to teach people about bitcoin and to be quite honest, mostly to teach ourselves about bitcoin. Because for me, the way I learn is by teaching. Because if you got a lecture on something next week, you better learn it this week.
**A** (08:20):
That's why I do the podcast, by the way. It forces me to learn the discipline.
**B** (08:24):
Yeah, same here. Epicenter. It's like, you know, once a week, got to learn something new. And it's, of course, it's like, just across the space, not just, like, so pigeonholed on one field or one topic. Yeah. So we started that course, and a lot of people took it, really liked it, and we're like, hey, let's do something bigger with this. You know, instead of just having people take this course and then, like, go on and do, you know, go take the next, like, AI or machine learning course next. Like, let's see how we can retain these people. And so we created this organization called Blockchain at Berkeley, where we started to do a couple of things. One, the organization kind of took over that course, and then we had. So we had the education department, and then we had R and D and consulting. You know, a lot of college students are really trying to build up the resumes. We're like, hey, at that time, it's like, you know, peak 2016, 2017, like, all these companies are out there, like, wanting to get their hands on Blockchain. And so we're like, well, you know, we know a thing or two. How can we help them? And so we started that helping, and that organization grew pretty big. And then even after I dropped out, I still continue to live in the city of Berkeley. Like I said, I dropped out the day before classes started, so I already was living in my frat house and stuff at the time. So I continued doing that, and I was still really involved with Blockchain at Berkeley, you know, even up to. Even up till, like, today. Like, I still help out with, like, mentoring and stuff for any students who are interested in talking about stuff.
**A** (09:47):
Very cool. And so it's an interesting topic in terms of how do you win Mindshare? So obviously, without all the price action that was happening in 2017, maybe that won't happen again. Maybe with everything that's going on in TikTok right now, there's going to be a whole new wave. But how do you win mindshare? Because obviously you've got a lot of very bright technical people. They could be applying that to any number of different domains, I guess, whether it's quantum, whether it's machine learning. How do you win mindshare? What is it that seems to cut through with developers that are looking for where to develop their career and apply their brains?
**B** (10:28):
Yeah, it's definitely a hard challenge, especially at such a large school like Berkeley where there's so many things people could be doing. To be honest, the price action definitely brought a lot of people along back in those days. Another thing that I think was kind of really important at Berkeley, where this, like, student organization at Berkeley was probably like one of the. That came up much earlier. Like, it actually started back in like 2014. And I feel like, I think maybe Berkeley and MIT are sort of the only two that were doing sort of crypto stuff this early on. Mit, I feel, was doing it a lot. Like, you know, they were really into the technology side. But I think what's interesting about Berkeley is Berkeley. You know, as you might know, it's a very political school, right? Like, the students at Berkeley tend to have, like a lot of political, you know, ideology and stuff that they're really passionate about. And so that was actually, I think a lot of the early members of Blockchain Berkeley were actually driven more so by that side of things. And, you know, if you remember back in like 2016, there was like a lot, you know, it was along with the US Presidential election, there was a lot of like, political stuff actually happening on the Berkeley campus at the time, especially with regards to things like free speech and stuff like that. And so I think that just sort of definitely helped instead that. And so we kind of really did try to focus on that early on. And then when we wanted to expand beyond that, then we started kind of figuring out what are students looking to do where, you know, if they want to. A lot of students were looking for, like, the opportunity to do sort of consulting style work. And so we were able to build out something where they can do consulting but still learn about a new technology at the same time. Where it was like, you know, there's other consulting clubs on campus where like, you know, they would go do web design for like, these companies. And like, we're like, well, you know, you could do that or you could like get some consulting work under your belt, but also like be learning something much cooler alongside that.
**A** (12:23):
Yeah, I mean it's interesting because again, you've that kind of political origin or perhaps the hook is the political possibilities or looking at blockchains as political systems. And again, I know you've used a lot of analogies where you say compare Ethereum to an empire and what you're doing with Cosmos. Actually I forget the direct comparison.
**B** (12:44):
I call it the world of nation states.
**A** (12:46):
Yes, there you go, that's it. I know you've talked about things like shared security in the context of being like NATO. So from your perspective, the thing that kind of motivates you is it in that context. If you look at the mission of say interchain, I mean just to quote it, it says we believe that open source cryptographic consensus driven economic networks hold the key to an anti fragile global economic system and equal opportunity for all. I'm sure that's not necessarily exactly representative of your perspective, but can you work in blockchain and not have a political ideology? Can you look at it purely as a technology? Is that possible?
**B** (13:24):
Yeah, I think so. I actually am in the middle of. I just finished writing up a blog post, sort of, I'll publish it pretty soon, but I kind of talk about sort of the three or maybe four narratives of the blockchain space. And so it start, the three main ones are what I would say sound money, web3 and open finance or defi. And then I kind of think there might be a fourth one called Open Law which is like sort of still in its very infancy right now. And I think the sound money one might be the one where you have, maybe it's the most political of the all, but I think all of them do at least have some notion of decentralization. Web3 is not necessarily about political decentralization, but it's about decentralizing the control of the large Internet giants. Or DeFi is about decentralizing control of large financial institutions. It's not necessarily always having to be decentralizing government, but there usually does have to be some form of decentralizing some large entrenched actor.
**A** (14:38):
Yeah. Now I mean, I guess one of the beauties of something like Cosmos is that it does allow you to cater to a spectrum of sovereignties, you know. So on the one hand I know you talk about there being zones more linked to this cypherpunk type mentality and others that could be specific for China and fully functional and integrating into what they're trying to do with the government backed currency. So compared to if it was one protocol with one set of belief systems, one set of governance, then I guess it gets a bit more binary to just kind of untangle the Cosmos ecosystem a little bit more. As we mentioned, this all in Bits, Inc. Which is effectively Tendermint Inc. You have Cosmos Hub, you have Tendermint Core. Could you just talk about the constituent parts, how they interact and I guess how they've evolved from the genesis to what they're becoming now? Of course, in that context, in general terms, the role of a founder that creates that and how things might. Might devolve outwards.
**B** (15:50):
Yeah, sure. By the way, just to the point you mentioned earlier. Yeah, I guess I never thought of it in that term, but I think one interesting way to think of Cosmos is it's trying to decentralize Ethereum. Ethereum is a larger entrenched actor, which is maybe not, you know, it's been a good actor up until now, but if you don't want the entire blockchain ecosystem to be reliant on, like, this one system, and you want to decentralize that as well and give smaller communities more power, maybe we can come back to that.
**A** (16:23):
Yeah.
**B** (16:23):
Let me answer your question about the ecosystem itself. So it started back in 2014, where J. Kwon, he was interested in consensus protocols. And a lot of people were talking about proof of stake at the time, or not a lot of people, but a few people were, but most of them were kind of putting it, trying to adapt it to the Nakamoto consensus of Bitcoin. What Jay's really big insight was he went back and read all these old consensus protocols from the 80s and 90s and realized that, hey, maybe there's a way we can actually use them today with proof of stake. The problem is that these old consensus protocols were usually only meant to work in a permissioned setting. But what he realized is you can combine the proof of stake system with these old BFT consensus protocols in order to create a permissionless BFT protocol rather than a Nakamoto consensus protocol. And so this insight turned out to be really valuable. And so the other thing, what kind of what was wrong with the old consensus protocols was that they were considered to be not very, you know, performant. Like, they, like, oh, you can maybe get like 10 machines talking on a local network and that's about it. But, you know, quite honestly, all of those reference implementations then were written by, like, PhD students for their theses in, like, Python or something. So what Jay did was he worked with Ethan Buchman, who was. He was working at Monax at the time, or back then it was called. Yeah, back then it was called Modax. Now it's called Hyperledger Burrow. But they started basically collaborating to build a reference implementation in go using modern concurrency and generally just good engineering practices. And it turns out they were able to build a consensus protocol, consensus engine, Tendermint Core, which is the software that can scale to hundreds to thousands of validators, globally distributed. And. And we can actually get some real scale there. And so that's sort of how when they decided to form this company called Tendermint, and now that they have this consensus protocol, they have this hammer. Now they're in search of a nail and they were trying to figure out we have a consensus protocol, what can we use it for? And that's sort of when the Cosmos Vision sort of came out, came about sort of in late 2016 or so, where they had this idea of what the Cosmos Vision is today, of many chains that are all able to talk to each other. And this BFT consensus protocol will be really useful because you have the fast finality. You have finality in one to two seconds. Blockstream wrote their sidechains protocol as well back in similar time period. I don't remember exactly when, maybe 2015 or so, but Bitcoin block headers will take 60 minutes before you can consider them pseudo finalized. And this just doesn't work. And so they realized, hey, we can use this great finality engine we did to make this side chain vision. That Blockchain kind of really originated it, but we can actually make this a reality using this. That's where the Cosmos Vision came about. And we realized to make that Cosmos Vision come about, there were three main tools that we needed. The first was Tendermint Core, which we had already done. Obviously we've been developing it and making it way and way better over the years. But then the other two tools were the Cosmos SDK and ibc. If we want a world where all these chains can sort of. More and more chains are coming about and they're all talking to each other. Well, we need two things, which is one, a toolkit to make it very easy for developers to build these new chains. And two, is a protocol to allow all these chains to send tokens and data and contract calls amongst each other. A sort of TCP IP for blockchains, a standard protocol to allow any two chains to talk to each other. That's what we've been working on since then, where we basically spent most of 2017 and 2018 building the cosmos SDK and making this toolkit. And then we built our own chain called the Cosmos Hub, partially as a sort of dogfooding to like while we're building the Cosmos SDK, we're building the Cosmos Hub and making it better and better. And then we spent basically most of 2019 and 2020 so far developing IBC and hopefully that should be releasing pretty soon and hopefully on the scale of a few months. But that's sort of the roadmap for where we are today. Oh, and so I guess a couple organizations I forgot to mention was when they sort of did the Cosmos idea, they did a public fundraiser or ICO in order to raise funds for the Atom Token, which is a staking token for the Cosmos Hub. And they created a new organization called the Interchain foundation, which is a Swiss foundation. And so ICF is sort of technically the, maybe you could call them the steward of the ecosystem. And then the ICF would contract Tendermint to do a lot of the core development up until now. So now ICF is sort of decentralizing a lot more of its core development to more teams than just Tendermint.
**A** (22:04):
Got you. And I guess so that kind of evolution now of is that being kind of run through grants programs then primarily. Right. So rather than it just being a contract with Tendermint Inc. It's now grants being given out to multiple parties.
**B** (22:23):
Exactly. Yeah. It's more, you know, earlier on it used to be sort of a more of a blank check sort of thing where Tendermint would go off and do whatever it needs and then send a bill for it at the end of the year. But now it's much more sort of objective based where it's like, okay, these are the things that we're going to do. And there's more competition for these grants from the ICF as well because there are many more development companies within the Cosmos ecosystem now. Some that are more foreign by sort of companies that splintered off of Tenderman, but also some that are just from like brand new projects altogether. Like for example, Region, that's a team that sort of started using the Cosmos SDK because they wanted to build their own project with it. But then they just started contributing a lot, a lot more and more to the Cosmos Core development as well. So they've been doing a lot of really good work then also, what's also cool is now there's also some funding coming from the Cosmos Hub governance itself. Because what happens is a percentage of all inflation gets put into what's called the community pool. And the governance of the Cosmos Hub can use the community pool to make payouts, to do sort of different things. And so two of the things that have already been approved was one figment network, which is the name of a validator. They were approved to do a lot of great governance documentation. And then there's another company called confio. They were approved continued development on cosmwasm, which is a smart contracting system that they're developing.
**A** (23:53):
Yeah. And I guess, you know, so really it's kind of introducing a bit of a market economy around the protocol. And we all know the benefits of competition with hindsight. Retrospectively, if you're sat in front of a founder now and they're rolling out a new protocol, likely not going to be a layer one, given where we're at, but some primitive. What lessons are there in the Cosmos journey, it sounds like. I know there's been drama, but where hasn't there been drama? I would say in the blockchain space.
**B** (24:28):
The marks of a mature ecosystem.
**A** (24:30):
Yeah, right, exactly. But, you know, the place that you find yourself in today looks pretty good, but is there anything with hindsight you would recommend to be done differently to.
**B** (24:42):
A founder if they were starting out? Sort of a recommendation I would have to many founders, you know, based on some of the experiences at Tenderman. I think Zaki put it really well. Zakimanian. He had this tweet where he said, for all, I don't want this to come across as if I'm attacking Jay. I've talked to Jay about a lot of these things, and he agrees that some of these were issues. We're on pretty good terms about this. But the way Zaki phrased it was for all of Jay's brilliance in designing decentralized protocols, he failed to sufficiently decentralize tendermint as a company. He got into this position where Jay was the CEO and the largest shareholder and the only board member. And I think this sort of led to some problems where when he becomes a byzantine node, I think maybe back in January, maybe he was having some issues with certain things, and he kind of started acting a bit bizarrely. And that kind of concerned a lot of people, especially given the amount of control he has in the company. And so one thing I would recommend to founders would be, is to really make sure that you don't build yourself into this central point of failure. And so this is something that's great now that is happening where Jay has actually he switched to a CTO role. We have a new CEO and we actually just expanded the board as well. So these are sort of. Tendermint is also sort of learning from its mistakes and improving as well.
**A** (26:22):
This isn't unique to Blockchain. Right. You could make equal arguments about Facebook and the power that Zuckerberg has over that through preferential shares and any other open source communities which are largely benevolent dictatorships.
**B** (26:36):
Right.
**A** (26:36):
They have lots of contributors, but they're still ultimately somebody whose voice swings the community. And clearly there is a requirement for there to be a strong voice that the community can rally around. But of course, as projects evolve, and I think people sometimes forget that entrepreneurs are also people. Right. And they're kind of evolving and maturing and learning as they go as well as the organization. So I definitely don't think this is anything specific to Cosmos or even Blockchain more generally. So when we look at your main competitor, and I don't know if you see it in those terms with Polkadot, I don't know if you see this as a zero sum winner takes all or these different networks can coexist, but you've taken different approaches to rolling out. Cosmos came off the ramps much quicker. The Polkadot. Was that intentional? Was that kind of a design choice compared to say, Polkadot? And what do you think the advantages of that approach of rolling out?
**B** (27:51):
Yeah, I would say one of the differences between the Cosmos team's mindset from the Polkadot team's mindset early on, I think it's changed since then. But early on Cosmos took a much more iterative approach. We're like, okay, first we're building Tendermint and we released that and had people using Tendermint core. Then we're going to build the Cosmos SDK and just release that and have people start building on the Cosmos SDK. Then now we're building ibc, then we'll release that and have people start using that. The Polkadot team wanted to go for a more finished product as their initial product, where they wanted to have the full fledged system with like shared security and cross chain and everything all at once. And that's what they wanted to launch with. And so I think that was sort of one of the main differences. You know, Cosmos, we also want to go towards shared security. Like that's also a goal of ours. But that's like, you know, the next step after ibc. And so this iterative versus all out approach is sort of has been one of the main differences. But I think since then The Polkadot team actually has realized that, you know, maybe this iterative approach does also make sense because, you know, if you look at the Polkadot chain that's launching today, it doesn't actually have parachains or anything like that right now. So I think they've also realized that sort of this iterative approach is the correct one. And I guess the other main difference is we really try to see Cosmos and the Cosmos Hub as two somewhat distinct projects. The Polkadot relay chain is the Polkadot ecosystem. What that means is in Cosmos we take a sovereign first approach where you want to build a blockchain using the Cosmos toolkit, no go use the Cosmos SDK and you can have your own validator set. Then if you don't want to find your validator own validator set, the Cosmos hub will eventually be able to have shared security where if you want to, you can opt in having that. Well, Polkadot by default assumes everyone wants to use Polkadot security and you can go use their toolkit like Substrate to go build a separate chain. But it's not really their core focus per se. And so that I would say is one of the main differences.
**A** (30:27):
From a.
**B** (30:27):
Collaboration versus competitive point of view. I would say that the Cosmos vision is pretty collaborative with the Polkadot one, where the vision of Cosmos is just get as many chains being built and connect them all together using a standard protocol. So there's a company in the cosmos ecosystem called Chorus 1. They're actually in the process of developing an IBC module for Substrate. So that way you can have Cosmos SDK based chains talking to parity substrate based chains. And I'm a. And you know, for me I love Substrate as well. I've developed chains using Substrate and so whether people want to use Cosmos SDK or Substrate, I'm happy with both as long as they're all using IBC and talking to each other. I would say eventually down the road I think the Cosmos Hub is and Polkadot are maybe more competitive because they're basically going to be offering similar features which is this shared security. And so I think those two will start to maybe compete more going down the road. But both of them aren't even at the point yet where they're offering those shared security features.
**A** (31:29):
Yeah, and I was going to say, I mean you can't really talk about market share at the moment because there isn't really a market. Right. It's who's going to, who's going to help grow the industry most effectively. Again, I think that's why it's really interesting to speak to you because of your experience in onboarding developers, maybe to stay at the high level for the purpose of founders on here. That might not be so technical, that might not necessarily fully understand how Cosmos works. Could you just give like a very high level on hubs and zones and how that works?
**B** (32:04):
Yeah, sure. So the idea of Cosmos is sort of build your own chain. So if you have an application you want to build, instead of building it as a smart contract on another chain like Ethereum, as you mentioned, I call it the Empire model. We recommend you go off and build it on your own chain where your community sort of owns this chain. You're never subject to weird governance stuff that happens on the other chain. If your code has a bug, your community can decide whether to revert it or not. You don't have to go off and try to convince this massive Ethereum community to do it. And quite honestly, I would say many projects don't actually benefit much from being on Ethereum. I can give an example which is Makerdao. Makerdao doesn't get any security from being on Ethereum because realistically what happens is in Makerdao you get your security either from the security of the MKR token which holds governance, or the security of Eth which controls the operation layer. If you wanted to break Maker, you wouldn't attack eth, you would attack mkr. But so what this means is that if you're using dai, you're actually only getting the security of mkr, but you're paying for the security of ETH in the form of on chain fees and everything. And this is also why I call it the Empire model. You have to pay your fees in someone else's currency.
**A** (33:35):
So the difference is for example, that you have this wide scale economic integration, but you have the political diversity. And I really like that framing.
**B** (33:44):
Yeah, so empires basically try to get economic integration. You allow people in Italy to trade with Persia because you put them all in one political sphere. The idea of Cosmos and of the modern world order is that we can get large scale economic integration without the large scale political integration. We get this through a couple. A lot of technologies made this possible. One is free trade zones, institutions like the UN and the World Bank. And I think one of the most important is containerization. Containerization is this idea like basically in the 70s, if you ever go to the docks, you see all those shipping containers. It's like every shipping container in the world follows the same standards and dimensions. Any ship can pick up this box full of any good in any port in the world and transport it to any, any other port in the world and they know it will be able to be unloaded properly. This containerization of shipping crates is how we see idc. The goal is to build this standard protocol of all messages that are outgoing between chains. They have to at least follow these common standards. So that way we can get all these chains talking to each other. The idea was build maker on your own chain, build augur on your own chain, build 0x on your own chain and then we can connect all these chains and have them start talking to each other using ibc. Where the Cosmos hub comes in is it kind of offers two things. One is let's say two chains. Let's say my chain is built using the Cosmos SDK and it knows tendermint consensus and your chain is built using parity substrate and you know, the whole grandpa babe consensus system. If I want to talk to your chain I would have to you know, add. We call these ICS's interchange standards. So we'd have to, I'd have to upgrade my chain to support the interchange standard to talk to your chain. But now let's say a third chain chain comes along. It's built using Agorax like system with a different consensus protocol. Well now both these chains have to upgrade to support that. And so you don't want to constantly be upgrading your chain to be up to date with so you can connect to everyone else. The idea is the consoles hub can act as this sort of universal translator where you just have to be able to talk to the hub and the hub can talk to everyone else. Sort of like what ISPs do today. Right? Like you don't connect to everyone over the Internet. You have these sort of ISPs that do this sort of hub and spoke sort of connecting and then the other feature it will add, what the main thing it offers is those sort of shared security like features where it's a highly secure chain and it can sort of lease out its security to other new chains that want to borrow it and like be able to bootstrap their security.
**A** (36:56):
Yeah, and we're seeing huge traction. I mean you mentioned Agoric, they're one of our portfolio. But I know several others who have started out building what might be considered a layer one and are very quickly migrating over into say Cosmos. And the reasoning that I've heard beyond even interoperability actually is that for them to achieve the same level of security and network hardening, it would just take too much Money and too much time and distract them from applying it to the use case. And what I found is a lot of infrastructure was built because somebody just wanted to execute on an application and they couldn't. The infrastructure wasn't there and they ended up kind of moving down the stack.
**B** (37:46):
When I was at consensus, there was a lot of stuff I wanted to build and I was just not happy with solidity development, which is one of the reasons I switched I started working on Cosmos where I want this development process to be much easier.
**A** (37:59):
Yeah, if we look at some of the stats in terms of the traction with Tendermint and Cosmos, I think it's 6 billion plus dollars in digital assets secured on the Cosmos blockchain, just under 9,000 GitHub stars on tenement projects, 100 plus projects in the ecosystem now actively working. So as the interface to the community and as we said, I think success isn't market share now, but growing, effectively growing the ecosystem, how are you seeing that success? And I guess in your day to day when you were at Tendermint actively, what does that involve?
**B** (38:44):
Yeah, so some of the main things that we're looking for is we look at the number of chains like people that are starting to build new Cosmos SDK based chains. That was one of our primary metrics as well as one of the things that we try to focus on is cross collaboration and communication between teams using the Cosmos SDK. One of the whole premises of the Cosmos SDK is it's built using this very modular architecture. So if, let's say the Kava team, they go ahead for their use case, they built an auctions module for their CDP system. Well, you have your own chain that's doing something else, but you happen to also need an auction system. And so you want to be able to borrow that auctions module that Kaver has written and reuse it in your own chain. And so this sort of cross collaboration is also another sort of important piece that we look towards. And so one of the shining examples of this is that cosmwasm project I mentioned, where it was originally started at a hackathon like last year, but now more and more chains in the Cosmos community are starting to use CosmosM. So Terra Enigma is for sort of example, they are using the Cosmos, but then they're adding their own whole like privacy stuff to it. And so it's turning out to be this like really cool piece of completely community originated infrastructure that is becoming this like very key piece throughout the Cosmos ecosystem. So I guess that's another piece that.
**A** (40:32):
We look towards, yeah, I guess, as you say, in the instance of Enigma, and I know several others who believe that in that instance of Cosmos they will have some specialist functionality. But one of the benefits is that that can then be leveraged by the wider Cosmos ecosystem rather than just in their own instance. Obviously that promises for some really great rate of innovation to be coming out from across that ecosystem as a whole. So your next thing is Sika. So is this your first founder initiative?
**B** (41:12):
I founded Sitka about close to two years ago now. So while I was at Tendermint, what happened was, so Tendermint is like a for profit company and so we were considering running validators, but we kind of decided that, you know what, maybe if Tenderant runs validators, it would become too centralized and you just get too much delegation. Instead what we did was we said any employee that wants to go run their own validator, you can go ahead and do so. What this does is it distributes the reputation that Tendermint would get and distribute it over a couple of different validators. A couple of validators came out of this, such as Occlusion, Cryptium Labs, Umbrella, a couple others, and so Sicko was one of them. So I started it with one of my co workers at Tenderman and also my friend from Blockchain at Berkeley. And so we started Sika and we started running it kind of, to be honest, I started it as a way to improve my core development work where it's like if I'm developing infrastructure for the core Internet, I want to also run an ISP company just so I can be a user of my own tools. And so that's sort of how Sitka started. And then, you know, going through it, it just started doing better and better. And, you know, we quickly became one of the largest validators on Cosmos Hub and then we started running on some more chains. So we joined Kaaba and we are also now the second largest validator on Kaaba as well. So it kind of just became a larger and larger thing and so excited to see where it goes next. But yeah, that's sort of the story of seco.
**A** (42:50):
How do you see that space evolving? How do you avoid commodification and how do you maintain margins? How do you see that market forming?
**B** (43:03):
It's going to be a tough one, to be honest. I think it's a really tough market. I think validators really are going to become like heavily commoditized. I think what's going to happen is we're going to see a larger rise of Exchange validators. But really just what's going to have to happen is validators have to differentiate themselves and they have to provide other services or just use validation as a lost leader towards other services. So there's this big movement of staking is DeFi, but running a validator without providing some proprietary or some advantages like integration with the DEFI ecosystem. I think that has to be the future where people can stake with you, but then they can also go use your tokens and when they stake with you, they get some other benefits on some other protocol. Here an example I've seen is initial delegation offerings. It's like an idea I had a little while ago, which is a lot of the people running validators are building other chains as well. For example for Ball is one that they're building their own chain called desmos. But they're also a major validator. They could do something where it's like, hey, instead of doing an ico, but instead put their commission rate as to something maybe higher than usual, let's say 20, 30%. But say like, hey, the longer people delegate to us, you get tokens on this new chain as well. So that's like an interesting example where you do have to have something where it's like you want to make it. So delegators are not just going to like the highest yield you want. You want them to have something else they're going for.
**A** (44:53):
Yeah, that's really interesting idea about how you kind of create stickiness around that. Look, Sunny, it's been great having you on conscious of your time. I really appreciate your candidness and I think it's going to be really interesting for people to understand how the ecosystem's evolving there. I wish you the best luck with Seeker and thanks for coming on to that.
**B** (45:12):
Thank you.
**A** (45:14):
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