Hello everyone. Thank you guys all for coming. As mentioned, my name is Sunny Aggarwal. I work on a project called Osmosis, which is a Dex app chain. It is a Dex built as its own app chain. We list over 50 assets from different blockchains, including Avax. But today I'm not going to be really wearing my Osmosis hat. I'm really going to be wearing my Cosmos hat or my Cosmos shirt, rather, I guess. But so you might be wondering, why is this Cosmos guy coming to speak at Avalanche Summit? I've actually had people all day coming and asking me, like, what are you doing at Avalanche Summit? And you know, I actually think, honestly, I think the real reason is I think Goon has a soft spot for Cosmos because Jay, who is the founder of Cosmos, is actually Goon's student at Cornell. And so. But I think you can actually will see that there's. They kind of Cosmos and Avalanche really come from a very common intellectual lineage, I feel. And, you know, last week someone was asking me, like, if I wasn't working on Cosmos, what ecosystem would I be working in? And I said, like, honestly, like, out of all the live existing ecosystems, probably Avalanche, mostly because, like, I think the similarities and intellectual ideas are so similar and common between the two. And so kind of what I want to kind of go into in today's talk is exploring some of these, like, what are the things that make the Avalanche and Cosmos ecosystem similar? And then some of the areas where they kind of diverge in thought. So just to start with, before we even go into talking about blockchains or anything, we'll start with some pseudo anthropology of history of human civilization. So, you know, we start off with this idea of, you know, in the beginning there was these villages and kingdoms and they were these like isolated systems that, you know, you had a little bit of trade going on, but like, not very much. And what happened over time was we realized, okay, to, you know, we want this economic integration because that just helps everyone. And the way to do that was we went around building these things called empires. We realized that, okay, by putting everything through a single political system, we'll be able to achieve mass scale economic integration and get all of these benefits. You can have people in Greece trading with people in Persia. If it's all under one system, you have common standards and measures and everything. But at the end of the day, empires also come with a lot of drawbacks as well. Basically, what we did in the last hundred years is we move 100, 150 years is we moved to this world of nation and city states. The real innovation of humanity in these last 150 years has been we realized we can create large scale economic integration without large scale political integration. And we've done this through a number of social technologies. Examples include free trade zones, institutions like, you know, you have the un, the World bank, the imf, you know, these institutions that are not political organizations or don't actually have. It's not people like, oh, these are one world governments. They're really not right. But there are coordination systems where sovereign countries can come and coordinate together. We have the Internet, obviously, with the power of the Internet, you can do economic relations with people on the other side of the world very easily. And a very underappreciated one is containerization. And I don't mean Docker, I mean these shipping containers that you go to at the shipping ports. So this is like these were invented around the, around the 70s. And what happened was by standardizing on these shipping containers, basically every port in the world handles these shipping containers. Every ship, like cargo ship in the world handles these shipping containers. And by this process of standardization, we've effectively made it so any port in the world can trade goods with any other port in the world. And that's a very powerful thing. Which, there'll be an analogy coming to that soon. Okay, so this is economic political evolution. Let's look at this how blockchain evolution came about. In the beginning, we had these Generation 1 blockchains, these app chains, we'll call them. And you had Bitcoin for payments, you had Namecoin for DNS, you had Saya for storage. And what's really cool is bitcoin was the original app chain, right? And app chains come with a lot of benefits. I think Antonio put it really best where it's like, okay, DYDX is shifting from being built on Ethereum into building their own app chain. And there's a lot of reasons why a lot of it comes down to the power of vertical integration. So this is the model that Apple has taken over the years where it's like, by building a fully vertically integrated system, you'll be able to achieve efficiencies, UX flows, performance benefits that you just would not be able to achieve with a fragmented stack. And this is a little bit old because now Apple has also started building its own chips as well. So components are also part of the Apple stack now. And so this is sort of the approach that we follow with app chains, right? Like instead of just building the decks for osmosis, Instead of just building the Dex, we build the Dex, the front end, but we build the blockchain itself. And that gives us the ability to do all sorts of cool things. Such as? The point of this talk is not to go into what are the cool things you can do with app chains, because I'm sure there's a lot of talks throughout the conference talking about all the cool stuff you can do with subnets. Oh, I guess I leaked it, right? Subnets, app chains, really similar concepts, but yeah. So these are some of the cool things you can do. So great. We had this generation one, but back in the generation one of blockchains, these were very isolated systems. I couldn't use Bitcoin to pay for a name on namecoin and have that DNS point to something stored on sia, right? And so to solve this problem, along comes the Ethereum empire, right where they said, okay, we're going to build one unified political system, one blockchain, and we're going to get all this amazing composability here, right? And that's what led this, like, composability led to this, like money Legos and this like huge boom in innovation that we saw in crypto. But at the same time, this system comes with its drawbacks. Like empires, what do they do? They, you know, they tax the citizens. Right. And what does Ethereum do? It forces you to pay your transaction fees in eth. Right. This is a. You know, in my opinion, one of the biggest UX hurdles in all of crypto is that you have to pay your transaction fees in the currency of the empire. Right? And also you lose a lot of scalability, not just from a technical scalability sense. Right? I know everyone always talks about technical scalability, but also social scalability. Right. When you have a system where you have 10,000 things built on top of a single system, the rate of innovation of the base layer kind of has to grind to a halt. Otherwise you keep running into situations like this where you can't break anything built on top. And so my take is, and seems like the take of the Avalanche community is that these empire systems were good for bootstrapping innovation. But the end goal is we're going to move towards this generation three of blockchains, where the goal is, effectively, you're going to try to get the best of both worlds. You want these app chains that have their own sovereignty, their own customizability, but in a way that allows them to all compose with each other. In Cosmos, we have this IBC protocol. In Avalanche, you guys have your own bridge protocol, and we get this composability across systems. This is effectively what we've been building. I don't think my videos are working. I had a cool diagram of the Cosmos ecosystem. It looked really cool, but no videos, I guess. So, okay, so we're moving towards this world of what happened? Okay, we're moving to this world of like, many blockchains all interconnected with each other. But in this world now, we do have this question of what is the relationship between these different blockchains going to be. And so to examine that, I want to look into some more political philosophy. So I'm sure everyone has probably at some point in their life seen this political compass. Has anyone not seen it? Okay, good. So, yeah, you know, you have your libertarian axis, authoritarian. Then you have economic left, economic right. It was a few years ago, I think, maybe like two or three years ago at this point, I saw this meme on Twitter where someone put network topologies on the political compass graph. And it's kind of like a little bit of a joke, but it actually has just stuck with me for a long time. And it actually has framed a lot of my thinking around how to design systems. And so how, ok, we're building this network of many blockchains. How do we want this system to be architected? How do we want the topology to look? Well, for me, the tagline for the Cosmos ecosystem is that we call it the Internet of blockchains. And I think the place besides political analogies, which I really love, the other place I really like to look for inspiration is the design of the original Internet. And so one of my favorite quotes, I think it might be my pinned tweet right now, is from David Clark. He was one of the early Internet pioneers, but he basically had this quote, we reject kings, presidents and voting. We believe in rough consensus and running code. Right. I think we need to be pushing back against these authoritarian design systems. We need to push for what I call mesh design systems. You have, and now you have two different designs for how meshes can work. You have this left system which is very every node is equal. You have direct relationships between every node. And this is kind of what we've built with blockchains. We're building systems where you have consensus systems amongst everyone. And this kind of works to make these consensus systems. We've built different kinds of protocols. We have, you know, in computer science we have these things called BFT protocols. In political science, we have these systems called democracy. The problem with these systems, for the most Part is that they're not highly scalable. You know, consensus protocol, like Tendermint, you require this like N squared communication. I know Avalanche kind of avoids that. We'll get to that in a little bit. But in democracy, true, true democracy needs N squared communication as well. Everyone needs to be able to see everyone. And so this is a picture from Oppenzollern, which is a Swiss canton where they do open air democracy four times a year. Everyone goes and raises their hand to vote. And in this system, democracy works. Pure, pure democracy works because you have N squared communication channel, which is line of sight. So, but the problem is these systems are not infinitely scalable, which is why we've ended up in this world where, okay, we have many blockchains, right? And yeah, this protocol called IBC to connect them. Okay. So, yeah, so yeah, we're trying to avoid building these hub and spoke kind of systems. We're trying to build these mesh systems, right? And when it comes to communication, once again, my video doesn't work, but if I had the video there, you could see that the Cosmos network, it doesn't follow this hub and spoke topology for communication. Every chain, when they want to talk to other chains, they have a direct peering protocol that connects everyone to everyone. There's no central point of failure in the communication system, but now there's other systems that we need to do other than just communication. So the next thing I want to think about is economic security. So how do we build a mesh model of economic security? So this is, I think one now where. So everything I've talked about so far I think is very similar between the Avalanche and Cosmos systems. Right? This belief in app chains and subnets and direct communication with them, to make communication work, you don't have to go talk to the P chain to do this sort of communication. It all happens peer to peer between subnets where I think Cosmos kind of double clicks on this mesh model is when it comes to economic security. So what does this mean? So we're going to use this, I don't know, structure of if you have a circle, that's a validator set and the line means it's validating that blockchain. So today we have a world where you have independent blockchains for the most part that are validating their own chain. So Osmosis has its own proof of stake system with its own staking token called osmo. It is used to secure the osmosis blockchain. Axelar has its own proof of stake token called axel. It secures the Axelar Blockchain Axelar, for anyone who doesn't know, is the bridge protocol that we use to connect osmosis to non cosmos chains including avalanche. So we have this idea of like sharded replicated security which is effectively what the avalanche system is going towards today where you know, you have the large set of avalanche stakers and all of them are validating the avalanche P chain. But then every it's subsets of this protocol that go and validate these subnets, right? And this is actually how you build go for a very scalable architecture for like scaling a single, like a single system. But the problem is from my view is I still see this as a very hub and spoke system when it comes to economic security. You're putting all your eggs in the basket of one token, which is the Avax token. What we want to go towards is a model where hey, how can we go past that, right? So what we're working on in the cosmos ecosystem is this model of hey, how can blockchains have their own proof of stake validator set but then also borrow security from another chain? So in this example we might be getting security from Ethereum via eigenlayer, right? So we'd have our own proof of stake token OSMO that's used to secure our chain. But we can also say hey, we want 20% of our voting power to come from eth staking via eigenlayer and what that's effectively doing is just boosting our economic security. And you know, this system could also continue to scale. But what if we go back, we go like, you know, so every chain here has its own native staking token, but then it's also borrowing security from Ethereum. What if we want to take it one step further, right? I call this model, it works, but it's still this empire and colony style system. We're still trying to push towards this world of nation states. In the world of nation states, how does security work today? Today we have these real world security meshes and the biggest one in the world is NATO. NATO is an alliance of many sovereign countries, all who have their own military systems. But they have a mutual defense pact that they all come to each other's aid, right? And the world today has basically been relatively peaceful for the last 80 years thanks to this global network of mesh security systems. And one thing that's interesting to note is that the only four EU countries are not part of NATO. And what that signals is there is a high degree of overlap relationship between economic dependency and military dependency. And so How I imagine the system growing is you take two chains like Axelar and Osmosis. Axlar is the bridge that we use to talk to many other chains, osmosis current. So like I think four or five out of our top 10 assets by liquidity on Osmosis are bridged to us via Axelar. Meanwhile, Osmosis makes up I think like 70, 80% of Axelar's TVL at the moment. It would suck for either of us if the other got hacked. Right? And so what we can do is we can basically take this borrowed security system and run it bidirectionally. And so what will happen is via this like cross stake restaking system, running bidirectionally, you'll effectively have the sum of market cap of axle plus osmo be securing both chains. And let's say we take another step further. We bring Mars into the mix. Mars is a lending app chain built on Cosmos. So okay, very highly integrated with Osmosis because we're using them for our margin trading. So now we can have the market cap of Osmo, Axel and Mars securing all three chains. And so this is how I sort of foresee the Cosmos world growing where instead of relying on a single token to provide security for the entire network, we're going to have this mesh system where many tokens are going to be able to provide security. We've had in the Cosmos ecosystem a lot of the projects are Xterra projects and they felt the pain of what happens when you're system's base token collapses. And that is why it's very important to lean into diversity when it comes to your security systems. I'm going to skip forward a little bit. I don't want to go into the technical aspect of how restaking works because I want to go into something more interesting, ok, Consensus. So please ignore the jarring change in style because this is from a, a different slide deck from the past. But okay, when we're talking about consensus systems, right, I think right now so much of the crypto ecosystem is going towards these very top centric consensus mechanisms. You have these roll up models which are saying, oh, let's all settle on we have to have a single settlement layer. What I'm really interested in is how can we build consensus mechanisms for blockchains that follow mesh systems, right between blockchains. So one option that I think is really interesting is you could do this running tendermint consensus protocols over ibc basically instead of running a consensus protocol where between validators you can run a consensus protocol between chains where every chain is a member, is one node in the system. And you can run, this can work. But the problem here is you actually need a global identity system. In proof of stake systems you use the staking token as the identity system. But in a blockchain, can we come up with something else? And so the question that's been playing keeping me up, not keeping me up, but I've been thinking about for the last three years, ever since I sat next to Goon on a plane once and it's been like plaguing me is like, how can you design consensus protocols using the yellow system, right? And like, I've been really interested in web of trust based systems. I've worked on proof of stake for like the last five years. And like, because I thought it was better than proof of work. And it is, but you know, we did it, good job, mission accomplished, like, what's the next thing, right? And I really think web of trust based consensus protocols is the future. I think that reputation is more evenly distributed in the world than capital, and so it makes for a better basis for decentralized systems than proof of stake does. And so my interest is, how do we do that? There have been a couple attempts so far in the world. Attempt number zero was Ripple. It was fake, it didn't actually work. You know, it didn't do anything. The real attempt at this, in my opinion, was Stellar. So Stellar basically came and saw the Ripple consensus protocol and was like, this is broken, let's see how we can fix it. And they basically designed this system where like, oh, you know, you can set these things called quorum systems and as long as there's enough quorum intersection between everything, you'll come to global consensus. The problem with Stellar's system, which it took me forever to realize, I read the Stellar paper like five times and never got it until it clicked to me. They're making a very strong assumption that every quorum has direct overlap with every other quorum. And the problem is this is not a natural property of trust graphs and social graphs. And so this system will fail to come to consensus because this left one doesn't overlap with the right one, the top one doesn't overlap with the bottom one. And so, you know it's not going to work. You know, what you could do is if you have a better connected system, then, yeah, okay, this will come to consensus. But now you're like placing all these weird assumptions on the social graph. And really how Stellar ended up solving it was, it says, hey, okay, the Stellar foundation is going to run five nodes and we're all going to trust them. And now we're going to come to global consensus. Great. You know, they kind of cheated a little bit, right? I really think that there's a world where we can make this work with socialanch. So social launch is this idea of like, hey, what is Avalanche? Avalanche is this idea of like, oh, let's use a gossip protocol as a consensus system. And the key difference between Avalanche and the past consensus protocols like Stellar. Stellar was using BFT protocols within quorums and they don't allow information to propagate. Right. Like, let's say this area of the graph comes to consensus. The problem is you're never going to get that information over to this area of the graph. But the idea with Avalanche is playing this iterative game that you keep running the consensus protocol until you get to some probabilistic notion that you've come to global consensus. Now you actually have information that can propagate across the network. The thing with Avalanche today is it applies this to a proof of stake setting, right? So you still have a single system and it's using it to scale proof of stake. It's saying, oh, here's a million nodes. And if we all just randomly peer with each other, we can create a system and run this Avalanche consensus protocol that will come to consensus, but it's still a very green system because you still need to know who the global set of participants is and then run a random sampling process on it. The question that I have is, with socialanch, can we basically take natural social graphs or literally import the Facebook friend graph or the Twitter social graph and stuff and run an avalanche style consensus protocol over it and come to global consensus? So I don't know, if I wasn't working on osmosis, this is what I'd be working on right now. If anyone's interested on this, please come reach out. And I think there's a lot of interesting stuff here.