**A** (00:00):
Foreign welcome back this Nation back to the ECC Experience episodes. On this episode we're bringing in Sunny Agrawal from the Cosmos ecosystem did a fantastic talk at ECC about Cosmos. If you want to dive down more Sunny is as bullish on Cosmos as I am on Ethereum, which means to say that he is quite bullish, but his vision for Cosmos is a little bit antagonistic to Ethereum and you can get a little bit of sense for that in his talk at ecc. But but I am very interested in the Cosmos ecosystem, which of all crypto theses that's out there, I think that's one does actually hold weight, which is rare to find in the crypto world. Sunny has been around for a very long time. He's been very committed to this vision and so I just pick his brain on the Cosmos thesis and how ECC always has this Cosmos presence. So I hope you enjoy this in person episode with Sonny Agarwald. We usually do our full prerecorded ads for these podcasts, but instead I'm just going to speed run through them right now. And we're going to start with Rocket Pool. Rocket Pool is Ethereum's decentralized validator network where you deposit eth and you get reath in return and you can take that re into defi and if you run a node you let other people deposit their eth into your node and you get to charge them 15% for staking rewards as payment for your node operating services. And then you can take that eth and use the Across Bridge to join over $2.3 billion in the arbitrum ecosystem. Across of course is the fastest, cheapest and most secure cross chain bridge and one of the safest ways to bridge your hard earned assets in the world of crypto. And of course Arbitrum is where you want to be. With over 35,000 contracts and 1 million unique addresses, Arbitrum is leading the way into the age of rollups. You know how I know these numbers? Because I watched Arbitrum's talk at ecc, which you should also go watch, but not before you're done watching this. But when you do watch that video, make sure it's on a privacy first browser, which is why you should be using Brave and it blocks all the browser ads. It's got a native web3 wallet and it puts the user first the web3 way. You know what else puts the user first? Ledger hardware wallets and the Ledger Live ecosystem. I know Ledger is a great product because I have literally nine of them and I have 99% of my crypto assets on my ledger wallets and the ledger live ecosystem is all you really need when it comes to living a bankless life such as buying with fiat swapping and staking. But for the rest of you that are sitting on stablecoins because the market is scary right now, make sure you're using a decentralized bankless stablecoin that may I suggest Dai from MakerDao, the most tried and tested stablecoin in existence. But with Maker, you don't have to hide your stables. On the Ethereum layer one Maker is building DAI portals so you can mint DAI natively across all the layer 2s so you can make sure that your assets don't go down another 90%. But you still get to go do all the defi things across the L2 verse. And so I hope you use all of these sponsors on your quest for going bankless. And now I bring you my in person conversation with Sonny Agrawal. All right, Sunny. Hey, we're in ETC at Paris. You've been to a few of these before. Are you excited?
**B** (02:51):
Yeah, I think this is my fourth one. I think ETC is always my favorite conference of the year.
**A** (02:55):
Yeah, four out of five. Wow, that's almost all of them.
**B** (02:58):
I missed the COVID one.
**A** (03:00):
That's a good one.
**B** (03:02):
My parents were like telling me that like, hey, don't you know you shouldn't go. This is Covid thing. I'm like, no, no, it's all in like Italy. Nothing has happened in Paris. And then like they convinced me to skip it and then like half the people got it. So I'm like, okay, that was good.
**A** (03:15):
What about ECC do you like so much?
**B** (03:18):
I don't know, it just feels like way more community oriented and stuff. Like, you know, devcon is cool and stuff, but it feels a little bit institutional. Y if the EF is an institution, I don't know but like this just feels like the energy here is just very different. I also really like the old venue. I don't know if you were at the early ones, but they had this like huge courtyard and like there was always for some reason right around etc, there was always like governance drama that used to happen the first two times and like, you know, there's always this like, it felt like we were in this like big courtyard, you know, like the agora and we're all just like talking and arguing about governance. It always felt really cool to me.
**A** (03:58):
So I've noticed definitely a trend of like just more and More Cosmos stuff going around in both like people's minds, but also in development overall. How would you and Cosmos obviously kind of in my mind, the Ethereum's other half, I've been told that, and I'm trying to learn a little bit more about this myself, is that the long term conclusion of Ethereum and Cosmos is super, super similar. So maybe for the bankless listeners that they mostly hear about Ethereum stuff, can you kind of give them the high level rundown on Cosmos and overall where the Cosmos ecosystem is currently?
**B** (04:34):
Yeah, sure. So Cosmos sort of is this idea that the future is application specific blockchains and that the a single chain is not going to, you know, be it. And like I think every sort of blockchain ecosystem is coming around to that. Right. Like, you know, Ethereum has also shifted more towards this more roll up centric view. On Avalanche you have subnets. Maybe Solana is maybe the only stickler right now who still thinks that a single chain could work. But I think one of the views is that what makes it a little bit different still than maybe the roll up view is today, at least for now, all the rollups are very much like generalized EVMs and you just have the sort of same internal ecosystems that they're still relatively isolated. Optimism and Arbitram are like, yes, they share security from the same system, but I wouldn't really consider them the same ecosystem. The ability to interact between them is not, arguably is less seamless than maybe between other L1s just because of some of the latencies on the bridges. What the view of Cosmos is that hey, instead of having these generalized VMs and have SushiSwap go redeploy on every single spot, it's like, no, we're going to build one chain. So osmosis, which is what I build, it's a Dex app chain. It's like we're not deploying osmosis on every chain.
**A** (06:02):
We're not deploying.
**B** (06:02):
We build one app chain that connects to everything else, but then we put all of our liquidity and so we concentrate our liquidity in one place. We concentrate our UX flows in one place and then use these like bridges, ibc, which is this like very trustless bridging system that's based off of light client proofs whenever possible and then whenever not then we use more traditional bridges as well. And then when you have your own app chain, you kind of get a lot more flexibility to do things you couldn't. When you're building on, you know, I call it building on someone else's chain, right? Like you're kind of stuck with the design constraints that they laid out for you. And basically we're seeing this big shift right now where a lot of applications are choosing to move into like their own app chain. So you know, the one I caught a lot of headlines was dydx. They wanted a lot of customizability around like how, how they do their. Because what they're doing is they're running an order book in the mempool and only submitting settled trades on chain. That's like a really cool architectural design. But they needed to have their own custom chain to do that kind of thing. Another big one is just that like you know, you can keep, you know, Anatoly had a good tweet a couple of weeks ago. He's like the only value of L1 tokens is the MEV that they can capture. And it's like, well, okay, as an application developer, why am I giving the value that my protocol is creating and giving it into someone else's token when instead that MEV capture or that fee capture can be going to as protocol revenue for our dapp? So that's kind of a couple of the reasons we see the shift towards app chains.
**A** (07:50):
So the, the image that I have in my head is like we have these generalized layer twos which are large and flat, right? You can come like settle on them and like set up shop. But then on the application specific chains you have these like large verticals that are highly optimized for their one thing. And so there's a spectrum here of like how flat and generalized you want to be versus like how vertical and specific you want to be?
**B** (08:12):
Yeah.
**A** (08:13):
Do you think that like the long term conclusion of this multi chain world is that we find some balance in the middle of these two things or maybe we find more chains that are on the polar ends and less in the middle. Do you have an attitude towards that?
**B** (08:24):
Yeah, I think most like, I think generalized VMs are still going to be useful for like the more tail end use cases. So you know, if I'm gonna, if I want to launch, I don't know, an NFT for something, right. I'm not gonna go spin up a whole chain just to launch my nft, right? Maybe I'll go, maybe what will happen is you'll have like chains that are specialized for like NFT issuance. There's one in Cosmos called Stargaze. So they can do cool stuff where like, you know, the validators are required to be running IPFs like endpoints, but so that. And like pinning data and stuff. So like you can still have chains that are optimized for that use case but like, yeah, so there'll be this like tail end of things that will like be on generalized VMs. It just doesn't make sense to like launch your own chain. But then I think like things like, you know, core protocols, like, you know, we're talking about Dexs lending protocols, stablecoins, like these things that really would benefit from having their own chain, I think those are. We're going to start to see like the app chains are going to win out just purely because of like UX reasons and stuff over the generalized ones.
**A** (09:33):
So in the Ethereum ecosystem we generally have a pretty good concept on our roadmap and where we are in the roadmap. Like Vitalik had that like the Verge splurge merge, blah blah, blah, all the urges which I did not correctly label out in time. But, but for people that are super familiar with the Ethereum roadmap, does it make sense to ask what does the Cosmos roadmap look like and where are we in that timeline?
**B** (09:57):
Yeah, so I would say Cosmos itself does not have a singular roadmap. I guess one thing that's very different in Cosmos is we don't have a single dev team.
**A** (10:06):
Right. You said Cosmos is more of an idea.
**B** (10:08):
Cosmos is an idea and a set of open source tools that will help make that achieving that idea easier. So the three main tools I would say are Tendermint Core, which is like the consensus protocol, Cosmos SDK, which is like a toolkit that makes it easy to build your own app chains. And then IBC is just the communication protocol. But these are just like code. There's no central blockchain in the Cosmos system, so there's no dev team behind the Cosmos. It's like our team, for example, is one of the dev teams because we're one of the biggest users of the stack. So we spend a lot of time contributing to that. But then there's like, I don't know, I would say there's probably like somewhere between, how you count it, somewhere between five to ten core dev teams contributing to the stack. It's kind of more similar to how you see like the Eth2 the client development teams. That's kind of more similar. But I guess the difference is in eth2 it's more. Every team is working on a. For the most part it seems it's more like each team owns an entire client implementation from top to bottom. While in Cosmos it's more like we're all contributing to one code base. And because of that it's hard to say here's the roadmap as much as it is, well, here's a huge pool of things that we need to do and then each team picks and chooses what they need to do based off of their requirements. The developments that we need to see from the Cosmos SDK might be different than what a different project needs from the Cosmos SDK. We're all just contributing to this large repo together based off of our own needs.
**A** (11:53):
I think a difference between Cosmos and Ethereum is first you have the Beacon chain as the central coordinator chain of all of Ethereum and also ultimately all the shards and all the layer twos. And then you also kind of have like the central coordination of like the ef. While like they don't coordinate things themselves, they basically pay for that coordination by pushing an outbound. And Cosmos, it seems to be like build the code, make it easy for this thing to construct itself. But it still feels like very bottom up construction. So with that sort of strategy, how do you accelerate that? Because we all want to grow these things as fast as possible to take over the world and replace the financial system. Is there like an acceleration strategy for Cosmos?
**B** (12:32):
Yeah, so I mean, I think our approach has always just been like an application first approach. So like, you know, you know, I guess our roadmap would be like more focused on like how do we.
**A** (12:48):
I guess.
**B** (12:48):
Okay, the main thing that we've been focused on is on the application layer composability. So one thing I like to tell people is that like, look, everyone is starting to think about cross chain communication now. But in Cosmos like ecosystem, we haven't been thinking about it. We've been building it and shipping it over the last three years and we're like on the next step, which is cross chain composability. So other bridges, yeah, sure. You can send tokens between them. With IBC and the framework of cross chain composability we've been working on, you can send NFTs cross chain, you can have an account on one chain, do actions on another chain. So you can have a DAO on one chain, do their token swaps. On osmosis, you can have a. We have a smart contracting system that has been developed called cosmwasm and it's very designed for interchain native, like native, where a contract on one chain can make a function call to a contract on a different chain. And it's the same APIs as calling a contract on the same chain. So it's like our bet is that it seems that a lot of other ecosystems have been focusing more on the, the base security kind of like, you know, shared security fraud proofs. Proofs all which I think are like super great. And I think that like you know, validity proofs and stuff are the future. But it's like there hasn't been enough of a focus on the actual user level composability. How can I as a, how can my contract, my DAO on optimism make use of a contract on Arbitrum? And that's kind of what we've been focusing on Cosmos is how can we get that one of our north stars for osmosis is like we want to make sure the UX of the multi chain is as seamless as the UX of a single chain. And so that's kind of by building that and using that as our focus, I think that's how we're going to get sort of the usage and adoption.
**A** (14:42):
So the Cosmos ecosystem and just like overall Community along with the Ethereum ecosystem and Community have been running in parallel for a really long time. There's a ton of overlap in and especially at ECC I see just like the, it's always when I run into the Cosmos community members the most is at ecc. So like just overall like what would you attribute this like social alignment, like this overlapping Venn diagram that's not completely overlapping but still does overlap between like Ethereum more than any other alternative layer one that I would ever, that I would mention. Like you know, Solana, not really much overlap. Avalanche, not much overlap. Cosmos, a decent amount of overlap. So like what would you attribute this to?
**B** (15:19):
Yeah, I think it's, you know, we were never, you know, everyone else marketed themselves as oh we're the Ethereum killer kind of thing. Right. Like I think that was never our approach with Cosmos. You know, we just had a sort of different vision of the general architecture of blockchains and we just sort of started building it in parallel and you know, collaborating on a lot of like, you know, proof of stake stuff. You know, our team was very early on a lot of the proof of stake stuff along with the like EF and stuff. So we're climbing on that kind of stuff and then you know, just letting, we've kind of just been letting the rest of the ecosystem eventually like you know, pick up on that. And I think that like the stuff that I think basically like I said, we're working on a lot of the application layer composability, I think a lot of the Ethereum ecosystem and working on more of like the core chain level, like integration, I think these things are going to go together. I completely imagine that like all these roll ups are eventually going to integrate, like IBC for example, and then start using the application layer composability protocols that we've been building in order to allow this crushing communication. I do think that application specific roll ups are going to be like, I'm way more bullish on application specific roll ups than like these generalized roll ups today.
**A** (16:33):
Sure. So we've been calling it a bankless, a build market, not a bear market, implying that if we want to get out of the bear market, we have to build our way out of it. So in the next 6 12, 18 months, what are you looking forward to in the Cosmos ecosystem? To build our way out of the bear market.
**B** (16:52):
Yeah, I mean there's a bunch of things that our team is working on. Especially one of the biggest things that sort of what trigger the original purpose of osmosis was we got really interested in MEV kind of stuff and MEV reduction especially, so close friends with the Flashbots team and stuff. But we were like, oh, we don't want to be auctioning off this stuff. We want to be figuring out how to actually reduce it. We spent a lot of time on this design called threshold encryption, which basically is a way of encrypting the mempool and only decrypting and executing transactions after a block has been finalized. So if no one can read transactions in the mempool, no one can front run or sandwich or anything like that. And so this was how we started our. We started actually with that and then we were like, well, this is a feature and not a product. We probably should go build a product around this. And that's sort of like, okay, let's go build a dex. And unfortunately the threshold encryption stuff got just kicked down the road because it's like one of those features that we know takes like, probably will take another like six to nine months of like development work. And then during the bull market we just have to keep focusing on those like faster two to three month wins and just shipping features faster and stuff. And so now with the build market we get a chance to be like, okay, we can focus on some of these longer term initiatives. So for us, threshold encryption and other privacy stuff is one of the reasons I think app chains are cool is we're able to iterate on privacy stuff in a way that you can't on a generalized VM because you're stuck with the cryptographic primitives that the chains give you.
**A** (18:34):
Sunny, thank you so much for joining me at ecc.
**B** (18:36):
Awesome. Thank you. Cheers.