sunnya97.com

Thoughts on Emeris, Gravity Dex, and Interchain Security

November 30, 2021

The discussion centers on the importance of Atom as the base money in the Cosmos ecosystem, emphasizing shared security and the need for better project incentives.

Summary

In the discussion, we dive into the concept of using Atom as the base currency within the Cosmos ecosystem, emphasizing its role in transactions, particularly in NFT marketplaces, and how it could provide a competitive edge against stablecoins like UST. The conversation highlights the ongoing tension between different liquidity pools in the Osmosis community and the importance of ensuring Atom remains a primary trading pair. We also explore the emerging idea of shared security within Cosmos, reflecting on how it could alleviate concerns for new projects seeking a robust validator set and security system. I share my thoughts on the architecture of this shared security model, emphasizing its potential benefits for both the Cosmos Hub and the broader ecosystem. We touch on the narrative challenges faced by Cosmos in comparison to other blockchain projects, acknowledging how marketing missteps have affected public perception while recognizing the significant number of successful projects built on the Cosmos SDK that underscore its value. Overall, the conversation encapsulates the need for a strategic focus on Atom and the importance of cohesive community efforts to enhance the ecosystem’s appeal.

Key Takeaways

  • Atom is positioned to be the base money of the Cosmos ecosystem, with significant potential for use in pricing and transactions, particularly in NFT marketplaces.
  • The development of shared security in the Cosmos ecosystem is crucial for attracting projects that currently avoid building on Cosmos due to security concerns.
  • The underperformance of Atom compared to other tokens affects perceptions of the Cosmos ecosystem, despite many successful projects built using the Cosmos SDK.
  • A focus on improving user experience and integration of Atom in various custody and on-ramp systems is necessary to encourage broader adoption.
  • Past marketing efforts have misaligned with actual value drivers in the Cosmos ecosystem, leading to a lack of momentum and interest in Atom and its associated projects.

Detailed Analysis

In this video, the discussion revolves around the concept of base money within the Cosmos ecosystem, particularly focusing on the role of the Atom token. One of the key themes is the potential for Atom to serve as a foundational currency for various transactions within the ecosystem, including NFT marketplaces and liquidity pools. The speakers emphasize the importance of aligning incentives across various projects to foster a more cohesive and valuable Cosmos ecosystem. The conversation also touches on shared security and how it can address some of the barriers that developers face when considering building on Cosmos.

These ideas are particularly relevant as the blockchain space continues to evolve. The push for a stable base currency like Atom resonates with broader trends in cryptocurrency, where stablecoins like USDT and USDC have gained traction in the Ethereum ecosystem. The contrast drawn between Atom and other tokens like UST highlights ongoing challenges in establishing a stable and widely accepted currency within Cosmos. As projects look for reliable solutions to build on, Atom’s potential to be that core currency speaks to the need for a unified approach in the increasingly fragmented blockchain landscape.

The implications of this dialogue are significant. If Atom can effectively position itself as the base currency for Cosmos, it could enhance the usability of products built within this ecosystem. Shared security, as mentioned, is crucial for attracting new projects and reducing the friction associated with building on Cosmos. By addressing the challenges that deter developers, such as the complexity of finding validator sets, Cosmos could unlock a new wave of innovation and growth.

However, there are limitations to this vision. The speakers rightly point out the confusion surrounding shared security and the lack of interest from some projects. The narrative around Cosmos has also suffered due to Atom's underperformance in the market, which can create a perception problem for potential developers and investors. The focus on the wrong initiatives, such as the gravity decks, has left the ecosystem struggling to communicate its value effectively. This misalignment of marketing and execution can hinder Cosmos from realizing its full potential.

This video is particularly useful for developers and project founders considering building on Cosmos, as well as investors looking to understand the dynamics of the ecosystem. By gaining insights into the discussions around base money and shared security, they can better navigate the landscape and make informed decisions. Additionally, those interested in the broader implications of cryptocurrency trends will find value in the exploration of how Cosmos positions itself against other blockchain ecosystems. Understanding these themes could provide a competitive edge in a rapidly changing market.

Transcript

Speakers: A, B
**A** (0:09): Yes. So talk a little bit more about that base money idea. Obviously you already gave some examples. For example, transactions should be paid or settled using or for example in that case using Atom on NFT marketplaces. You price things in atomic. What do you mostly refer to that when you say that, you know, Atom should be the base money of the interchange? Do you mean that for example IBC traffic should be routed through the hub mostly and also paid an extra fee for that service? Is this one of the use cases or maybe you can give some examples here? **B** (0:47): Yeah, so okay, Yes, I think NFTs being priced in atoms is actually very important. I think you know, Agoric is launching their stablecoin pretty soon and that is like going to be primarily atom backed which I think is like you know, great because you, you deposit, it's like kind of like a maker like system and you, but you deposit atoms as collateral and you get back this like run stable coin. So I think that's a good, that's a good thing. And osmosis, right? Like atoms being like, you know, currently there's more liquidity in the OSMO pools than the atom pools. And you know, there's a lot of, you know, there's been a lot of pressure within the OSMO or this has been this big debate within the osmosis community of whether osmosis should be like giving so much incentives to these atom based pools versus moving more of the incentives only into the OSMO pools and UST pools. And you know, I feel like the Cosmos hub could be doing more to like make sure that the osmosis community is incentive aligned to make atoms that base pair rather than something like UST and, and like, and osmo because like, you know, I, I'll say that, you know, I, I, we've been working pretty closely with like the Terra team on and they are very like, you know, they have it as a mission of theirs to make sure UST becomes the base money of the entire Cosmos ecosystem. And they've been working with us on designing incentive programs and for giving Luna. **A** (2:24): To. **B** (2:27): Working with different projects within the ecosystem to have them pair their assets against ust. And it's like that sort of business development. But I don't know, I like to think of these as Dao to Dao business development. Development. It's rather than B2B, it's like D2D but doing this kind of work to make sure that everyone in the ecosystem is gung ho about atoms and wants to price things in atoms and also making sure that there's reasons to do this where part of the reason is things are priced in eth is it's one of the easiest things for people to get their hands on and use. And currently in the Cosmos ecosystem atoms are that. But I think that we need to keep that system going, make sure that there's more custody solutions for atoms, make sure that atoms are more integrated into on ramp systems and just making sure that atoms are the easiest thing to use and thus they become anyone who's building a product in Cosmos if they want to provide the best. What you need to do is make it that anyone who's building a product in the Cosmos ecosystem, in order for them to provide the best UX to their users, they should want to use atoms right like that. I think that, that once you can solve that. Right now it seems very much that the atom community is trying to like pressure projects into like using atoms and like shaming them. If like oh you're not, why aren't you using atoms for this? But it's like no, you should make it. So it's like a no brainer for projects to want to use atoms. **A** (4:11): I see. Yeah, I, I can definitely see how UST could become the predominant stablecoin of the Cosmos ecosystem similar to what USDT and now maybe more and more USDC is for the broader crypto and especially Ethereum ecosystem. But I think still Atom is in a very good spot here to remained that you see for example all these airdrops. I mean obviously now a lot of new projects airdrop their coins to OSMO LPS and holders and stickers but I think still the majority of the airdrops gets to atom holders. Right. That's also how osmosis launched in the first place, how I became a OSMO holder and on day one through this airdrop which was really nice. So yeah, this is interesting. Let's talk a little bit about the shared security thing. I think last time we talked we're still like the term interchange security per se was pretty new. I think you were one of the ones who kind of like phrased this term. So what can you say? The informal team led by Ethan, the co founder of Cosmos, they released an article two days ago I think basically saying oh yeah, we're going hard now on interchange security is coming. Here's some demos, how it's going to be looking like, you know, validators can basically choose and individually negotiate with projects to kind of like secure their chain as well. So what are your thoughts on the current Maybe first of all on the architecture, how Interchange security is designed. And then the second question, how do you view Atom's role in that whole thing? And do you think it's going to accrue enough value to make Atom as the heart of the interchange? **B** (5:53): Yeah, I love the work that the informal and ICF teams have been doing on this. Right. Like, I think so, you know, the architecture wise. I mean, I think this is great because so I was the one who came up with a lot of this architecture back when I was still at Tendermint. And you know, obviously, you know, we've been iterating on it with a lot of people and. Yeah. So, you know, I think that this shared security design is like, I like this, I personally like this way better than like, you know, what's in the, in polkadot and things like that. Right. I think this is the more bottom up mechanism of shared security that makes sense. And so now, you know, now it's just a matter of like executing on it and you know, it's getting, you know, getting this to a point where it's live and in production and like, you know. Yeah, I think right now it's mostly just an execution thing like will that, you know, I guess one thing I'm very happy is I think that, you know, I think the informal team is like probably the right team to execute on this. And so yeah, I think that once the Cosmos Hub delivers on this shared security stuff, I think that will be a big important piece to making sure the Cosmos Hub is vital to the Cosmos ecosystem or at least making it. I think it has positive effects to both Cosmos and the Hub. Right. For Cosmos, one of the biggest issues right now is a lot of people I talk to. There's these concerns of like, hey, we don't want to, we can't build on Cosmos because it's too much work to find our own validator set and find our own security system. And it's like this kind of acts as a showstopper for a lot of people. And the problem is I think a lot of people look inside the Cosmos ecosystem today and say like, hey, no one seems to want shared security. Terra doesn't want shared security. Crypto.com doesn't want shared security. Like who wants shared security? But I think the problem is that that's like survivorship bias. Right? The people building in Cosmos today are the people who don't need shared security because the people who wanted shared security aren't building in Cosmos because there's no shared security. Right? Yeah, it's like it's like you have to look outside the Cosmos ecosystem and see, okay, X and Y project that chose to build on Polkadot, why are they building there instead of Cosmos? Right? That's the question that needs to be asked. Or why is this project building on Solana? Or what, what, what, what, what made them consider something else instead of Cosmos? And I will say probably at least a third of the time it is a lack of shared security. **A** (8:31): Probably, yeah. And I think it's also a little bit kind of like narratives, right? Like for example, in Polkadot and also Cardano's case, you have two Star founders, right? The Ethereum co founders that are leading the both projects. And on Solana's case, you also have sbf. You know, like, you have like huge personalities behind and star people that are involved. I think in Cosmos, everyone is kind of like trying to say, you know, we're all kind of like the same, we have all equal rights and equal, you know, stake in, in this project. And I think especially Ethan and Jay, they kind of like routed a little bit back and said, you know, we're in the background, this is for everyone to use. And I think there's also one thing that maybe, you know, the VCS and the retailers, they're like, this doesn't really sound too interesting to me. I rather go, you know, to watch Charles Hoskinson's five hour live streams every other day. So yeah, yeah, I think this is one thing, I think it's very naive and very basic, but I think this is really one thing. And then the other thing is potentially, like you said, some of the features like what Polkadot had with the parachain auctions. And it's not just they have it because they only have it since two weeks, but they have been marketing this for one year, one and a half years, right? Like, oh, parachains are coming. Parachains are coming. And they have built up this momentum for over a year. So that's. **B** (9:57): And the problem here is it's not like Cosmos didn't try to market things, right? The problem is we were marketing the wrong thing, right? I feel like all of 2021 was spent hyping people up about this gravity decks thing and be like, guys, this is going to be the value driver to atoms. And instead when it launched, it was just a complete flop, right? As was predicted. And it's like. And that's what I was trying to tell people, like, hey. And that's what I was kind of worried about for the Cosmos hub was like, okay, there's currently this also part of the growth this narrative thing about Cosmos right now, A lot of people when you ask them about like, oh, they don't think Cosmos is this big ecosystem because they're like, wow, this native token has been underperforming. Like this Atom thing is like definitely underperforming. Like ABBA and Dots and Sol and all this other stuff. Right? But what people have to realize is that's what I tweeted this the other day where it's like five out of the top 30 crypto projects are built on the Cosmos SDK, right? And if you go through a list of the top 200 market cap assets, consoles has the most after Ethereum. Obviously most of them are on Ethereum, but Cosmos has more projects in the top 200 than Solana, Avalanche, BSC. Like any of these ecosystems there's like, I think like, I don't know, what was it? Maybe 10 to 15 of the projects in the top 200 are based are built on Cosmos. So in a way Cosmos is like, in a lot of ways it sort of was a rejection of the FAT protocol thesis where it's like, hey, instead of all the value accruing to these native tokens, it's. It gives a way for people who are building these applications to build tokens. And these tokens, the application layer tokens are the ones that accrue the value. And I think one of the issues is there's so much attention or so much negative view of the Cosmos ecosystem is caused because of atoms underperforming. And I think that comes primarily from the causes hubs misexecution over the past year. Right. And I think that all a lot of that stems from focusing in on the wrong things.