LSDFi yield opportunities with Neutron

Transcript

[Music] GM GM welcome to the bull market uh is this a trap is it a bare Market champagne is this time different I don't know man so ail you said uh you don't really trade anymore so you're very much in the bare Market mindset which I think I think we've all been in like the last going on at least like a year probably closer to two three years now uh closer to two years right so so that bare Market mindset is very much a builder's mindset um and coming from the modular ecosystem over at Cosmos we started to seeing see a lot more like

interop emerge out of the woodwork between between uh evm and and Cosmos um there are even some project working on IBC that connects evm and and Cosmos now so diving right into this this uh narrative around the modular modularity right and the modular building and the mod the the modular ecosystem as we know it in the world of app chains like what is what is the current state that you see out there on Cosmos and ethereum interoperability yeah that's a really good question I think

um I think there's there's a few layers to it um the I mean technically the two already are are connected and interoperable Via like Solutions like axlr and Wormhole um I think the the rsic teeth bridge is which you know we we launched with with Lio I think like last month in September to bring R Keith into the cosmos ecosystem um is a good example of that because we're you know we're actively working with like AEL Wormhole and Lido in order to basically um extend the bridge function functionality to include like Russian governor so that lios um you know like Dow small contracts on ethereum would be able to control the bridge contracts on neutron as well um so this is like

something that's like today already kind of the case um but but you're right in that like the more um so like the more perhaps like long-term vision of like you know IBC to ethereum IBC to everywhere basically is still very much like being worked on there's like a lot of technical complexities around the like non-standard IBC implementations um because like Cosmos you have this flexibility of basically baking IBC which relies on that client which are you know like basically we verify the other chains State let's say like their their next blocks directly in in the in in our blockchains in order to ensure that the bridge is secure before any message gets um executed that's something that's like tremendous from a

security perspective but it's also like extremely resource um intensive basically and so that's not something that's easy to run in a simple small contract in a constrained environment like like DVM for example and so there's definitely challenges but there's also a number of teams like suin and others that are working on like you know proof of consensus like life clients that have like Z like clients that basically do most of the computation of chain and then submit a proof that it was done like properly on ethereum and and and and else right so you have I think a first wave of projects like Union composable polymer and a few others that are working on um like creating hubs that would serve as an intermediary between most custos chains and ethereum

but also but already have these kind of um you know like IC connections on on both sides which I think is like a really great first step um but then I think the end game is really like Point too connection between you know between ethereum and any other chain basically um with something like like IBC so I think it's it's going to be interesting to see how this roll rolls out but I I do think that like um I think ter like who is it is it no um I don't think it's tun is um he's um from um I ler I think who has this like very nice like phrase of like oh um you know ethereum is the the largest Cosmos chain um I think that's a super interesting way to to to

frame it basically because I think that that's where we're headed very cool that that is a really it's a very Mo modular way to think about it um because there are so many chains and the interoperability comes from the the rest of this like inter blockchain communication protocol and that is the Hub that connects all of these Spokes and you can almost think of ethereum as a spoke that connects to the rest of these these Cosmos app chains through the interoperability Solutions of of IBC and the rest of the cosmos Hub so I I I think that's a really uh really uh vibrant picture picture to paint of

ethereum as the largest Cosmos chain I think that's that's a fun way to look at it um so I I'd like to dig a bit deeper into uh the partnership that you have with Axel and Wormhole and how that integration works for bringing staked eth over to Cosmos um we recently did a video on axar and squid squid router handles the sequential transactions and axillar handles the cross chain bridging part of that and for anyone who hasn't watched that I suggest go check it out um so you mentioned you also work with axar I imagine for the for the cross chain nature of some of those of the transfer between ethereum and

Cosmos kind of could you unpack a little bit what that integration means for each of the components like what does Axel do whates Wormhole do and what does neutron do yeah for sure so I mean the current state of the bridge is that um it mostly relies on on Axel as well as a few s like custom Smart contracts on the ethereum and neonite to ensure like a better ux by making sure that you can basically one click into getting the final denomination on the neutral Network and then Bridge into anywhere else over over IBC um but the so like the more maybe not endgame but like what we're moving forward with is a solution that I think fits the the picture of like sing Dows a lot more egy you know

you have all of the kind like internate native entities in ethereum like like Le is a good example of that right it's it's a dow it's a It's Kind like an entity that issues you know tokens that represent like State assets um but really like any like def or any other kind like like even blockchains right are sort of like um like somewhat Sovereign like communities that have their own kind of like assets right and so the kind of current status quo is that to reach new networks like these um entities basically um give up sovereignty over like control or sovereignty over these assets um to the the bridge providers and that's great because now you can expand your

your um your your assets reach and distribute it but the issue then becomes that you accumulate technical debt you accumulate they basically get vendor lock in whereby if you want to migrate liquidity to another provider that's not an option anymore because you would have to like deploy swap contracts and there's basically you know once once that happens it locks in kind like the trajectory for the future and your Dow basically loses a lot of control so one like the the the reason that like that's kind of like the reason why we build this solution for for L and the way it's going to work and the way it's going to solve the problem is basically instead of relying on the bridge um on on the bridge dominations themselves what it does is that it doesn't actually Bridge tokens via Axel or Wormhole it Bridges data that gets aggregated on both sides

similar to how a multi would work except instead of having um you know like people in the multi you have Bridges themselves right and when a when a bridge like conveys the authentification data you can consider this as like their signature in the multi signature right and so as long as um you know like a number of bridge out of the entire like multi of bridges um are secure and not hacked in at the same time then the the bridge is secure right that what that means is that even if one Bridge stops working or gets exploded it doesn't really have the ability to you know do anything harmful to to the user or their funds um the other very nice property of this is that now kind like the the thing that holds the for example reps to teeth

in this case on ethereum is a contract that is not like is not part of the bridge itself it's it's it's a separate contract that can like um serves as the input into the bridge right it translates the token deposit into some data and so that contract here we can give the ownership of that contract to the Dow that issues the token right so in this case Lio so Lio would be able to control control this part of the bridge once we release this like Bridge aggregation solution they'll also be able to Route governance messages over this solution meaning that it can also own the output contract on the other side right and at this point basically what you've done is you've created a bridge infrastructure that relies on like very Advanced Technologies like

solar and Wormhole and others are putting out um but does not like depend vitally on them right it's resistance to the failure or comp or compromise of any of these Solutions and it can and it retain the sovereignty of like the the token issuer essentially because the token isser can own the what mints and locks the tokens on both sides basically um and that's that solution can basically be generalized to enable um any Dow basically to decide to like to Mint and bring their assets AC cross chain over Neutron AEL and all these things basically got it the The Sovereign of these AB chains is another thing that is fascinating to me because like we we saw like the explosion of l1s

those started to build out Sovereign communities now l2s are a seem to be a little bit less Sovereign in terms of their dependency on ethereum for consensus and now we're seeing like like so many unique Solutions of of tradeoffs that people are are are designing where some some of them are relying on shared sequencers they're relying on certain Technologies and they're doing that by choice to trade off certain uh certain value whether or not it it's true to their focus and I think it's fascinating to to see um like and even even the analogy that you brought up about

ethereum as like the biggest app chain I think is is something to think about like with the sovereignty of ethereum because it still relies on yeah for sure I mean I think you're making a super interesting point right like I mean ethereum is not the largest aping it's the largest Cosmos chain which is like slightly different because ethereum is not an app chain right it's um like ethereum's kind like core value proposition is like this reliable credibly neutral decentralized based layer that you know like whatever happens you can you you can rely on it to stay very similar to what it is today right like maybe not exactly the same like we've seen stuff like the merge that altered kind like the properties of the layer like fair Fairly fundamentally but but but still like from a developers perspective you're building on Solid

Ground kind of um so that's the core value proposition now there's kind like the other end of the spectrum is like Cosmos chains whereby you know the blockchain itself the idea like the obene thesis is oh you can customize the blockchain itself to serve the application right and I think like that's a super powerful pieces that hasn't really fully played out like we've seen um innovation in you know using the base layer to build better applications but I don't think we've seen like nearly the extent of it right I think projects like idx are probably going to sort of like push this forward because like they've been innovating a lot with you know putting the the order book like in the validator memory um and and such so like there's a bunch of like innovations that are happening but I think we can still um like go go go

further but I think like this very fundamentally is like um probably the most interesting feature of of of neutron and Cosmos um when with regards to ethereum right it's like where the differentiation is um if you look at Neutron basically like if you go on ethereum what you get is the sidity Network effects right very important um and then you get composability right you you synchronous composability you can launch an application that like application can integrate very closely with other applications on the network what we're trying to do with Neutron is basically um provide you something that ethereum will never want to do and never be able to to provide you which is like access to you know the the blockchain

itself basically providing services to you EG um when you Deploy on Neutron you get synchronous composability it's also contract platform so you can also integrate with other applications but you also guess cross chain interoperability right the blockchain provides you the infrastructure that you need to connect with you know 60 plus blockchains today um over IBC um own accounts on them execute transactions remotely um query their state remotely as well so that you can your you can build um a protocol that requires being deployed only once but can actually extend and exist across you know like 60 plus different blockchains and the third thing you get is um access access to like application specific infrastructure EG the blockchain itself is designed to expose functions that allow you to build

better applications basically um that that includes like being able to shape the liquidity and Market structure itself via something that like Duality which is kind like a um like a very fascinating project and a great team that um that was basically building um like probably one of the most advanced IND um systems uh in the industry and building it as a as a separate app chain as a sovereign app chain and then there was this proposal recently for Neutron and Duality to merge um and that proposal was approved and so like Neutron is kind of like undergoing the first blockchain merger to my knowledge um right now with the you know the upgrade being slated next month um and

and what it will allow is like allow um developers to basically shape the market itself like how do I want to structure the liquidity for this asset um do I like do I want to aggregate multiple types of like curves um do I want to basically you know have triggers that allow me to rebalance the liquidity um so like automatically and trustless without having to rely on on external Keepers um so that's one and then there's other features like the ability to shape Neutron's block production process itself right like Neutron is launching with the like is releasing a new upgrade with the block SDK which is um like the technology that allows you to um basically enable applications to have an impact on how the blocks are

created so that they can recapture their meev and redistribute it to various stakeholders in their protocol so that they can have you know dedicated Lanes in their in that block space to ensure that for example like Oracle updates are executed at the top of the blocks to avoid you know oracle manipulations and such and or that liquidations are executed at the top of the blocks as well same thing to you know protect applications from Bad depth and all of these things basically like I I'll spare you the whole list of feature I think like those two are like two of the like of the ones that I'm personally the most interested in um but but you know the point being that um what we're trying to do at Neutron is basically allow you to deploy one set of small contract that can allow you to build that and that can

leverage Neutron like the the infrastructure the services the blockchain itself provides you with um to build better applications than you would be able to do like more ambitious applications that you would be able to do in ethereum um and to on board like users from anywhere to connect to every other domain right including ethereum um and so in in that regard I think it's it's kind of like how Cosmos and ethereum are complimentary in a way right like ethereum is likely going to remain this like very stable um kind like huge Network that's kind of like in the middle of the industry and then other more flexible networks like um Neutron and the apch and Cosmos basically will serve as like connective tissue between applications that are making like different design Cho is that the tradeoffs on the design trade-offs on

ethereum would not allow to build basically I think you're muted I was I was I was deep in the in the loop of uh of interrup and I I was saying I think it's incredibly powerful to to bring in account abstraction here because by combining account abstraction with this powerful interoperability we achieve almost this this Golden Goose like this like this solution that finally puts uh a I I almost don't want to make it too simple but like a web two front end operating on a web 3 Network and I think that is incredibly powerful because

everyday users the normies like you know Bitcoin pumped 16% or whatever it was the other day like those are people that are not around right now but to reach the millions and the billions of people in the world those are the people that have to understand and use the technology and I think they aren't particularly hung up on on using a blockchain or not it's a matter of the value that such an app provides them so by AB incorporating blockchains underneath the hood you have this interoperability you can layer on account abstraction and and I think finally provide a user experience that uh I think the point you're making on account abstraction is

like super interesting um because like as you said I think like the combination of account extraction and Crush drop ability is really what allows you to eventually get to this experience where with wherever your funds are like whichever wallet you're using um you can access this application in just a few seconds your you know whatever funds you have will be in that application and you'll be able to use it sign with the current wallet that you have you don't have to like pay Bridge fees you don't have to wait for like 20 minutes you don't have to install a new wallet create a new C um all of this and I think like you're right this is like the this is the the sort of like ux whereby you're not thinking about like a chain anymore really you're CH you're thinking about like what application do I want to use

because like what do I want to do and who's going to allow me to do this like best and like fastest and with a better user experience etc etc right um and and so I think like that that's that's exactly the direction that we're trying to to to go towards basically like completely abstracting away the infrastructure layer the blockchain itself and making sure that the applications themselves are as powerful as attractive as easy to on board to as as as possible basically amazing I I realized we're a bit short on time today um so I I don't want to keep you but um in kind of like these closing these closing moments is there anything else that you'd like to share I think I I have so many more questions so I hope we do get a chance to chat again um and talk about cosmism

and the merge of the blockchain um so in these last few moments for for this uh this session is there anything else that you'd like to share with the rollup audience yeah for sure I mean you talked a lot about like modularity um which you know is is is also like a huge and fascinating topic um it's it's one that we're very close with um I think you know like there's one big event that's happening in the like say modularity like the modular kind like segment which is like the the upcoming launch of Celestia um one thing that we're like very actively working on is like Celestia has this like interesting combinations of like layers which whereby it has a base layer but it doesn't have execution on the base layer

itself and so as a result of this you're not able to have two-way uh Bridges between the Celestia base layer and the rollups on top of it and you need to so like at least in the short medium term like in the next few years probably um you'll need to rely on like like third party Bridges and so like we think that Neutron is like a really good place for this because one you have a very very good um like solid secure kind like bridging mechanism between Celestia and neutron IBC right which is probably the the safest kind like bridging mechanism out there currently um and then Neutron itself is also like secured by the entire kind like stake of the cosmos Hub which is one of the largest chains in the industry um and and a fairly like neutral place as well and and so

basically what we're building right now is a technology that will allow you to you know go from your solsa wallet to whatever rollup that you want to be interacting with like whether that's menta eclipse or any of the other like in in very few clicks and to do so securely over you know IDC and iane basically so that's something that's that I find like super exciting basically we're we're happy to be like you know a big part of of Celestia's kind of like early early ecosystem um and you know just like I think we we'll be announcing some of that work like in the next in the next few days but you know you get to here at first I guess Alpha drop right here welcome to the bull market

ail thank you so much this is so much fun and like I said I really do hope we get a chance to chat again yeah likewise um I mean I'm I'm I'm happy to make myself available so anytime just hit me up sweet thanks for having me cheers