Optimistic Cross-Chain Bridging with Pranay Mohan of Nomad

Transcript

welcome to the intera the show that's all about understanding the the decentralized economic networks that make up the interchain today I'm with PR Mohan who is CEO of nomad and um yeah thanks for coming on I know it's early uh in your neck of the woods so thanks for making the exception and and coming on and up um at at a time that's not ideal but yeah no worries thanks for having me SE and it's actually like it's almost 9:00 a.m. which is probably like a normal time for most people but being a night owl it's just hard for me to uh get going super early so backstory for the viewers is we supposed to hop on earlier and I was like hold up I got a slan of coffee before I jump

on yeah and and uh and like I I sent you a message as I was waking up asking you hey can you come on earlier like you were going to bed and I was just like waking up having coffee so yeah yeah so let's uh let's get right into it um you know tell us tell me a bit about your background and where you came from yeah I think you were you were working at cello before and you've got um some uh some like you worked at IBM previously and and uh am I am I right yeah that's right um I think I've told the story a couple times um on previous shows but like a quick quick rundown of how I uh got into this into this strange field we're all in is um I'm my

background is actually as a chemical engineer um I went to UT Austin in Texas Texas being a big oil State kind of funnels a lot of people into petrochemicals and oil and gas and so that was what I cut my teeth on I I worked in a Refinery and then in 2013 I was working at Fredo as a research and development engineer and my project was standardizing the thickness of a potato chips slice because the exciting work yeah yeah thrilling um basically like trying to save Humanity one potato chip slice at a time yeah but like the context was there's this thing that happens in the slicer where if if the potato rotates while it's being sliced it gets feathered

which means one end of the slice is thin and then the other end is fat so there kind of an exaggeration but it kind of looks like a yeah it looks like a triangle and then the problem is when you when you throw that in the fryer one side gets real burnt and then the other side gets like a soggy doesn't fry well enough and so at the scale that Frito slices potatoes this is a big problem because that's like millions of dollars of um just Revenue lost to write and so yeah my job was to standardize each slice and I was already I was already like how like it's that Arrested Development thing like you might be wondering how I end up right like I was already feeling like H how am I doing this professionally and don't get me

wrong I love the people there but it was just it was strange um that was exactly when the Snowden leaks happened um I think in summer of 2013 um and that had a profound effect on me because the like jux toos of what I was doing with this like also quite young man that basically had given up his life essentially to let the world know and whistleblow about digital rights and that like the Delta between where I was and what this person was doing and what the Liberties they were standing up for kind of that was the driving force for me to say okay I can't just like stay in my Lane I have to think about what I can do here um and so that that cascaded a lot of things um I switched into Tech like you mentioned I

worked at IBM for a little bit um and then in 2016 joined Snapchat was there for about two years kind of found myself in the same boat as slicing potato chips except now I was putting dog faces on people it's like new job same type of enwei um it seems that often people young people get funneled into doing these things that are lucrative but maybe don't really speak to their heart or have you know meaningful impact on the world and so yet again found myself feeling like what am I doing here um took a sabatical and then uh fell into the crypto Rabbit Hole um I had a good friend and Mentor Ed Roman that was hosting a conference called hack Summit

and there I met some really brilliant people in crypto and I was just like okay this is the Rebel Alliance these are the people really smart people that are doing cool stuff and so uh jumped in had first uh worked at Mina for about a year uh worked at C for about two years and then most recently uh co-founded Nomad and uh excited to get into the guts of interrupt now yeah that's uh that's a great story and I think like for a lot of people I think a lot of people in the space have a similar story I mean I wasn't cutting potatoes but but or or putting uh you know putting uh dog dog faces on on people uh but but but I I certainly sort of resonates with me this this idea that you know at some

point you you wake up and you realize like hey is this thing that I'm doing in my case um building responsive email newsletters uh for e-commerce uh really U really putting a dent in the world so exactly there's this statement I don't know who the quote is attributed to but uh the greatest minds of my generation were spent building spam filters right yeah kind of like that yeah well yeah let's let's get right into the into the the Crux of this I mean um you know I I think all of us are uh at least you know people who who I gravitate around in the in the cosmos ecosystem and I think you we have a lot

of overlap there U are are really quite passionate about this thesis uh of the interchain and of like application specific blockchains or domain specific blockchains you know I think the narrative is sort of Shifting there but uh interoperating having the ability to interoperate and um um having this world of like multiple ecosystems interoperating what's the biggest challenge for you like in with this thesis um perhaps uh in in Opp in J opposition to the single chain thesis um which was once held I think quite strongly by ethereum is still quite strongly held by Bitcoin and and other ecosystems like salana for instance yeah

that I mean I think that's a fantastic ftic first question to jump into it because it begs the whole question like what exactly are we building here um and I'm going to go with like a an esoteric reference there's this book called Zen In The Art of Motorcycle Maintenance um and it talks about how you define things is often based on how you define the interface of it so like when you say something is an engine that's because you're drawing a box around it and saying okay the engine does not include like the intake valve I'm not I'm not an auto automotive engineer or anything so all my metaphors here might be busted but my point being that if we say this is the boundary this is the chain this is the execution environment then that's

what we're looking at that's fundamentally the building block or construct that we begin with and that's how this whole Space started it started out with an individual chain Bitcoin blockchain and then ethereum which was supposed to be the world computer and was just one execution environment like secured by miners wasn't really anything outside of it but then people realized okay this this one chain cannot handle the amount of demand for Block space the fundamental commodity that people care about here is block space which is another way of saying people want the ability to have censorship resistant computers at their fingertips they want to be able to say I want to use this app and have nobody in the world be able to stop me and the way

to represent that is block space right um and so the demand for Block space exceeded the supply that was available so Capital formation VC money everything flowed into funnel into funding these uh really high quality layer one chains that that we all take for granted today the polygon Salas uh polka dots Avalanches of the world they're all they all came up because people needed to use chains and there wasn't enough um block space in ethereum itself to do so at a at a good price point uh but now we ended up at this place where because our initial interface was drawn around the chain we have all of these separate chains and I think like Cosmos was one of the few projects very early on that

realized that this this interface this boundary that we drew was more a result of like uh like the technology being emergent rather than the right way of drawing the boundary in fact if we can standardize the connective tissue across These Chains we can draw the boundary around more of them right this was the concept around the interchain that like maybe people don't even need to know which blockchain they're interacting with because everything is connected so seamlessly that it's all feels like one system that was designed uh in concert um but to coming back to your question of what is the biggest problem getting to this Vision fundamentally the the problem is that the place the chains and

the ecosystems that have gained the most traction uh are extremely heterogeneous uh and what I mean by this is the cosmo is this is fairly homogeneous in the sense that everybody builds using the cosmos SDK everybody has IBC kind of as the standard protocol for interrupt that can be used everybody has this very efficient go light client that functions well in the context of IBC and so it's it's like not as hard the threshold for being able to communicate between these chains is not as high whereas if you look at the evm world where there has been the most liquidity in developer adoption because of solidity and evm becoming the linga Franca there is there are not standards

every route ethereum to Avalanche has a different bridge ethereum to polygon has a different Bridge Avalanche to polygon has a bunch of third party Bridges and they're all dealing with the fact that the assets are wrapped differently and so you get this trade-off between where does like where do economies organically emerge um and how do we effectively connect them without having like a more centralized planning uh potential or ability there so that's the key trade-off in my opinion that is preventing us from get getting to the getting to Paradise yeah I think that the the centralized planning aspect is one that's often I think overlooked with with regards to the complexity of of um of

bridging different chains and um I think what what an interesting point you made is this idea of of um um homogeneity in within ecosystems and heterogenity outside of the of those ecosystems as they relate to each other and the complexities in bridging those ecosystems and it it's all just attempts to create more block space uh but we are confronted with the with this idea that well with the reality at least as technology currently exists today and the trade-offs that we're not willing to make is that um in order to scale block space um you have to scale it horizontally if you

want to maintain a a high level of decentralization and and bridging is being able to interoperate assets between these EOS systems is so key to maintaining um a high level of decentralization and like different ecosystems might have different ways of going about that and different ways to measure that but that is the that's really the thing that everyone is trying to achieve um and so I you know I was I was sort of mentioning ear how you we have like application specific blockchains or domain specific blockchains um I wonder if like my my thinking is sort of shifted recently around around this idea where in the interchain we used to we used to talk a

lot about application specific blockchains I don't think that that narrative will continue to be so accurate I think domain specific or ecosystem specific or Community specific um will be starts is starting to make more sense and so I wonder if if you look at if you look at the broad blockchain ecosystem you know uh and I actually I've heard you talk about this on the crypto CTO podcast where you you talked about the evm salana and po polka dot ecosystems as being sort of the three uh main pillars um you you left out salana and I'm curious to know why uh you left out salana in this context but do you see these as separate things

semantically you know do you see these as SE as separate things that are meant to be treated as three different ecosystems where the underlying chains themselves exist at a different level of of abstraction or should we be looking at the ecosystem from the perspective that all evm chains all Cosmos layer ones all polka dot uh whatever parach chains exist on the same playing field and that bridging should um should exist between all of these sort of equal playing field chains do you see what I'm saying it's like should we look at these three ecosystems that connect to each other or should all the chain would of be on the same playing field yeah I think that's a really good question and it's a bit of a spoiler alert is like

that is what we're trying to do with Nomad so I won't I won't go into shill mode just yet but like to your point the reason I said like the evm cosmos and polka dot ecosystems are like the three big federations is precisely to your point I think those are the ones that have unlocked um horizontal scalability better than the other ecosystems solanos thesis is still vertical scalability that you basically you ignore the ability of people to run full nodes you focus on the Nakamoto coefficient and getting a ton of validator securing the network and make it like super easy for developers to build blazing fast apps that is a valid thesis but that thesis does not include other Solana chains

that can interoperate right it is a verticalized stack where it's um I think the Sal people have like composability X in their name because a lot of a lot of the idea there is you have synchronously composable applications rather than asynchronously composable ones via these like interoperability boundaries and that's why I kind of excluded salana as like one of the three major federations not a knock on salana but just a different thesis on how to build but they definitely have a ton of money and a ton of developer traction as well um I think it would be remiss to not me mentioned the two others that I think are starting to emerge and potentially another one um uh Celestia Avalanche and polygon so Celestia I think is one of

the more interesting projects because it takes a very radical approach to kind of how blockchains are constructed um and I'm Meandering my way to your question but um the other two are like Avalanche subnets and then polygon has like polygon Edge which is another framework for building different um app specific chains uh but to your point around whether these things are self-contained or whether all of them can be compared Apples to Apples um it really depends on the quality of uh interfaces between them if the interfaces are standardized then it should become more apples to apples and if the core primitive fundamentally is block space then what

we're trying to do is we need to the developers will be the ones that decide if it is very easy to build a like whatever you want to call it cross chain interchain Omni chain app across polygon Cosmos and Avalanche and Celestia and compose all of that block space in a way that feels seamless then we will we will have arrived but I think the reason it doesn't feel that way right now is because each of these clusters as Celestia calls them is idiosyncratic in its own ways and this is a good thing because it's kind of like it's nation states right it's nation states that have decided okay we have a bunch of states or regions that have that are

fundamentally full of people speaking the same language they might disagree on little things or have domain specific differences but this whole thing is a unit in which Commerce is easier to do but then as soon as you get out of the nation state then the the laws the languages the Moors kind of change and so while it's not impossible to do Commerce there's naturally a bit more friction because you have decided that the local values take precedence over the global values and that is a very good thing like like globalism has its benefits it allows more uh Market activity to be Unleashed but the downside is it centralizes it it centralizes failure yet again if if the global system fails then everything

fails with it and this reminds me of a lot of what Bucky talks about which is local economies that compose from the ground up to create a more sustainable global system whereas if you try and build it top down globally then the local folks don't have don't have a say in it which I think is quite oppressive I don't know if that answered your question we started getting philosophy I think I I think this this vision of the space is like is pretty pretty accurate and like I you paint a pretty um promising vision for the space I mean I I love to get into some of the you know these Phil philosophical uh questions around crypto and I think like

we could spend the the whole hour talking about it but I I really want to get into some of the technical aspects here because I'm I've been trying to wrap my head around um Nomad but also I think just bridging in general and and I I hope that this will be one of many episodes that I do about bridging uh I'd like to come to a you know come to be at a spa a place where I I sort of fully understand all of the different bridging technologies that how um how they work what are the tradeoffs and so um so this is like you know might my first step into that Journey um so yeah let's let's maybe just dive into to you know the technical aspects

and I think maybe a good place to start is to describe the architecture um and the The Nomad documentation I think is is like it's actually quite good and you know um there's some like nice illustrations there that show the different components um so I invite our listeners to go and check that out if you're more of a visual person um but yeah can you describe the the different architecture stakeholders and um how they interact with each other totally um I I think it would I imagine a lot of the folks watching or kind of tuned into the show are folks that are primarily in the

cosmoverse cosmonauts um and so I think it might be helpful to start there by looking at IBC if that's okay and then move into kind of nomad's um security model yeah one of my questions was how does nomad compare to IBC so that's a great place to start all right I'm front running the questions already so um yeah I think so I've said this before kind of a lowkey IBC Maxi because I really like the idea of um having trustless Bridges and trustless interrupt between chains um and IBC is a um is a system that you could call like a header relay or light client construction where the way it

works is when you have a cosmos Hub sending to Tera Tera is actually running a light client of Cosmos Hub as a go module in the Tera blockchain right and uh that way when you get a message going from Hub to Tera you can trustless verify that that that state was updated in Cosmos Hub and so you can then take some action on it in Tera that's fundamentally all bridging is you're saying I did something here and then you're sending that message that that something happened and then you say cool I believe that that something happened I'm going to do something else here um yeah and Seb I saw that you pulled up The Nomad docs um I think we can it's

it's a bit dense so I will uh give you the link we can drop it in the show notes um but we can look at the pictures later if it would be useful um of of course yeah so so coming back to IBC the the reason this is trustless is because when you run that light client as long as the validators of the two chains are behaving honestly then the state in that like client is something that you can trust that you can then authenticate messages using a miracle path against the the state route and the like client but the challenge with this design is again coming back to heterogeneity versus homogeneity in a heterogeneous environment it is very tough to deploy

efficient light clients everywhere because the light clients are are coupled with the consensus of the other chain in order to be able to accept each block header that the receiving chain needs to know something about the consensus of the sending chain um and so it's very hard it's not um the technical term is this makes less extensible meaning it's harder to deploy across a variety of environments which is why we haven't seen a ton of like client adoption across the evm world so in in lie of that being available the the kind of prevailing other model of cross-chain coms is uh externally verified systems the like client systems are what we call natively verified systems because they

only require the native validator set of the two chains but these externally verified systems they say okay these validators and and chains don't know how to speak to each other directly I will be the broker of that communication um yeah and Wormhole is one example of this what are other other examples of of bridges that work in this in this way yeah so other examples include axlr um the different uh canonical Bridges like the Avalanche Bridge or the polygon POS Bridge um multi-chain sign apps uh they all use some form of either validator Bridge or MPC which fundamentally the security model there is we have to trust somebody in the external world to tell

us that something happened on chain a so what we will do is we will increase that number of people so there's less of a chance that those people do something bad right if I trust one person far more likely that they'll they'll do something bad than if I trust a 100 you know and then the validator bridg is often uh and then the other one obviously in the cosmo Cosmo versus the gravity Bridge right gravity Bridge has been kind of one the flagship Bridges talked about in amongst cosmonauts for a while but the validator bridges say instead of it being a fixed set we're going to use a blockchain another blockchain and be able to rotate the validator set but fundamentally the the trust assumption here is that M of n actors will be honest and therefore I can trust the

messages trust the state that I'm authenticating my messages against on the receiving chain what Nomad says is let's try something different from both of these we accept that we can't get the perfect security of a like client construction because it's just not realistic to some degree to expect it to roll out quickly and there's a market need now which is why we're seeing all of these externally verified Solutions but we don't we don't we don't appreciate the security guarantee of those or um maybe put another way we think it can be done we think we can offer a different tradeoff um and the key thing and I mean the security guarantees I think like

the the amount of bridge hacks that we've seen in the last just in the last year uh really is is a testament to those security guarantees being perhaps um underestimated by the by the users totally totally but I want to also say that like some of the teams that have dealt with the hacks are actually like quite strong teams and it's it's not a reflection of their caliber but rather how no of course not yeah yeah how nent the space is and um and so given how nent it is I think we have an opportunity to Pioneer this new verification model which essentially says instead of trusting M of n what we will do is we will just have one one party the updator that is able to apply

a digital signature and ATT test to some state route on the sending chain being valid so that the destination chain can act on it but instead of immediately being able to act on it like settling that that State Route immediately we wait some amount of time time in the context of an ethereum to XYZ chain Corridor that time is parameterized as 30 minutes and in that 30 minutes we open it up to a set of Watchers that don't participate in the sending of messages but are just responsible for maintaining liveness and saying hey I'm observing what's going on if everything looks Gucci then we're not going to do anything but as soon as I notice something funky I will submit a fraud

proof and prevent that message from being processed um and right now the Watchers are permissioned make no bones about it like if the current way Nomad is set up the Watchers are permissioned the contracts and they have the ability to deterministically prove fraud on the home but the replica or the receiving chain needs to trust the Watchers to only say hey don't listen to these messages uh because they're fraudulent uh when when fraud is actually happening and so the current kind of trade-off of the setup is of course there's a mild latency for the fraud proofs and then the second thing is it it shifts the risk of like a safety failure into more of a liveness failure if you have like Watchers that are being adversarial and

so part of the system is we're going to add mechanisms that like prevent against adversarial Watchers and that way you get closer to this idea of a oneof End security model as long as there is one honest Watcher that is watching the system maintaining liveness and able to confirm fraud proofs on CH then the system will be protected so the Watcher so there like there are there's the onchain components and that's the the contracts that exists on the home chain and the replica chain right yes yeah so onchain is uh just the contracts there's two sets of contracts in in the context of the token Bridge the way Nomad is architected is

there's a home contract which you can kind of think of as like an outbox basically what you're doing is you're saying hey these are all the males that I want to dispatch to these recipient chains right and then for each for ethereum say we want to send a polygon Avalanche and osmosis right each of those chains will have an ethereum inbox so that like polygon can say ah I got a message from ethereum I can I will wait a little bit now to see if a watcher says anything is funky and if they don't now I can now I can take this message open open the letter and be able to do something with it right okay so so so those are the onchain components so you have the so this outbox and this inbox and every chain that has say like a

channel uh that's able to exchange messages would have both of these contracts as each chain needs to be able to put things in the outbox and the Inbox and then there are the Watchers are are offchain actors who are looking at the transactions that are happening in the contract and submitting Pro fraud proofs um if they think that there fraudulent activity um happening what what is the incentive mechanism for the Watchers and um and also I one question I I'm just thinking of is the um this 30 minutes does that imply a 30 minute uh time to finality uh in a sense yes um so the the

so every Crossing and I'll work back to the two questions around finality and The Watcher incentives around finality um every cross chain every time you're leaving a security boundary of a chain and moving to another security boundary you have asynchrony uh and that just means there's going to be some time before the expected action takes place and in IBC that asynchrony is a function of two things the finality of each chain so all Cosmos chains have instant finality thanks to the tendermint consensus mechanism they use so maybe you wait 6 seconds or something like

that for the block to be confirmed and then whatever interval the relayer is sending the messages right so the relayer intervals is the other component of the of the latency in Nomad you have both of these things you have the finality of the underlying chain The Nomad relayer which is very very similar to the IBC relayer it's a trustless relayer um and then the dispute window which is 30 minutes so can kind of think of it as whatever the finality of a um IBC might be plus an extra settlement delay in order for those fraud proofs to happen so that that whole those three things combined is the time to finality um okay and how does that translate in a like let's I like to look at things from

a users perspective um if if you were executing a sort of cross-chain transaction um and let's say like moving I know like liquidity from uh one contract to say another contract on on a different chain um I don't know what's like what's a good example here maybe you've got some better ones than I do but like let's say you're moving your liquidity position uh from a on evm over to a on polygon or Avalanche um what what what would that look like for the user and does it also limit uh certain types of use cases where you need fast finality for

transactions that's a I think that's a really interesting question um coming to the liquidity use case right now what if you're in the context of of the token Bridge people have largely deployed apps as discrete kind of like a has gone and deployed a um V1 or V2 I forget V2 I believe on different chains and each a deployment is is the same deployment they're not connected to each other but rather you use the token bridge to move assets between the chains in the future those a deployments will all know about each other they will be natively connected as I think some teams have

called this like Omni chain apps right so like whatever you want to call it the apps won't really care what chain they live on they'll live on all the chains in terms of how you move liquidity I think there are different architectures but you could basically keep all of your liquidity potentially on one chain and then just have like virtualized pointers to where yield should happen or borrowing should happen on different chains so um I think that use case is very fascinating and um maybe Alpha leak we working with some teams on exploring that so uh I think we'll we'll see some cool stuff there um to your point around you had a second Point around this topic which is I I think I was asking about the incentivization for the the Watchers and

the other participants with the updator relayer processor oh yeah but before that I think we want to talk about does it preclude some use cases that like oh yeah yeah yeah so um coming back to the nation state metaphor uh I think this is kind of like um international travel right like I ideally all the things you want to do are where you always live right you go to the grocery store in the city you live in sometimes you need to you need to go to the next neighboring state or region in order to see a family member and even more rare you will go uh over an ocean to another country in order to maybe do business or go for a vacation

but that doesn't make up the bulk of your travel right the bulk of your activity is happening locally it's quite wasteful to fly from France to China to do your groceries right why not just import your whatever like you're trying to whatever food or ingredients you're trying to get from China just import it to France and go to your local grocery store right and so in that VIN when you do go travel to another Nation you want it to be safe you care more about like the security rather than the speed of which you get there if I gave you uh two options you can either take a 10-hour flight and get their 99.69% alive right or safe whatever you however you want to call it or I can

shoot you out of a rocket and like you will get there but sometimes 10% of the time there's there's a failure case I think most people would take the first one and so that's how we're looking at this where a lot of the economic activity that will go across security boundaries will be extremely high value and care about security more than instantaneous settlement I might be wrong there might be a lot of use cases like gaming or nfts that need like instant settlement right and in those cases then you you might be willing to bear that security risk if speed is something you care about so I think that's more the market will tell us what will happen but our thesis is that that latency will not matter because what

you're trying to do is far more important than like 15 or 30 minutes what what's the like I'm trying to get a picture of what the future of cross chain apps looks like and I I haven't really gotten a good answer yet from anyone may maybe you can help uh clear this up for me but you know it feels like at least now there's a certain amount of latency when one wants to move assets from one chain to another or perhaps even uh as these uh Technologies as these bridging

Technologies become uh more mature being able to control assets um between chains so having an like the basically the cross chain accounts um use case but across these different e ecosystems so being able to control an evm contract from a cosmos address or something like that um but yeah what what is that going to look like concretely [Music] um will these latencies Disappear With time as we make different make make tradeoffs with regard regards to security over uh over latency and what kinds of applications

can emerge here because you I I I I tend to want to compare things to the internet and just the speed at which information travels through networks and um and I I tend to think that we'll arrive at a point where this will be the case also with crypto but maybe we'll all have made these concessions that centralization perhaps is like a tradeoff that or decentralization is a tradeoff that we're willing to make over speed and things like that yeah it's a it's a fascinating question if I told you I had the answer you should kick me off the show right now because I don't none of us do and that's the really fun

part about being on a frontier is we are all co-creating it in real time um and so but to your last point I'm extremely bull that the technology will always get better right like technology is is fundamentally a result of a story that we tell ourselves and as long as that story is an optimistic one pun intended uh then technology will continue to get better and track according to the vision that we've set out so I don't think that we'll have to sacrifice decentralization to improve the user experience but I think we the reason we are staking that ground around security right now is because at this stage of connectivity

between the chains where like routinely six figure or sorry not six figure nine fig hacks and exploits happen like we shouldn't be thinking about like sacrificing Security in order to optimize the user experience because security is the ultimate user experience if people do not are not able to fundamentally know that their assets are secure that their value is secure this technology will not get past where it is where it's just like Deens with high risk tolerance willing to ape right like that is not if that is the set of users that feel comfortable using these systems then we will not get to that future where we can then have enough

market reach have enough kind of mind share enough Buy in from people across the world to be able to make those optimizations on technology so we need to start with security first and then get to all the other things but to your question about what what do interchain apps cross chain apps what do they look like um I tend to think of it less from like a novelty standpoint and more around how does the friction go away because to your metaphor about the internet it kind of the internet kind of emerged in a similar way where there was like these different interets like Berkeley had KET and uh like the US government had arpanet and there were a bunch of other Nets that were all like little interet across the US um and then

over time they started blending together to create the internet um that anybody can connect from anywhere and talk with anybody else that's living in not only in different part of the country but different part of the world but fundamentally what they were doing did not change very much like in the early days of the internet it was like some researcher or academic sending an email uh to to another academic researcher right saying yo or GM right it's it's like that that's that's what they were doing what we're doing now hasn't fundamentally changed except some some 15-year-old is putting a dog filter on them on their face and then sending it to some other 15-year-old living in a random different country right and so the the scale and the reach at which

these things can be done and the Fidelity at which they happen has like increased orders of magnitude but the fundamental need of sending information packets of information between two geographically distant entities that's still exactly the same thing and so what what's going to happen is sorry again I'm going into prediction mode what I think will happen is um what we've done for information historically we're doing for value now and so really what we're getting at is how can we reduce the friction for people to do things compose their value and engage with others that have value across the world without needing to spend an arm and a leg or wait forever and that's I think the key

breakthrough is that if we have all of this block space that is that is combined with standardized connective tissue that is secure and then becomes fast and becomes cheap then people will be able to do some really cool things and manage their entire Financial lives on the interchain but also be able to interact with people they've never interacted with before and with this wide like amount and supply of block space Maybe we get into things where like there'll be an increased financialization of normal aspects of life right like if I see somebody this is kind of a weird example but if I see somebody with like a jacket that I like uh I can maybe make a bid for that

jacket in real time from my phone because I can send them a message to their address and like have an offer there and be able to facilitate that transaction kind of strange but you get my point which is that when the friction of sending and receiving value gets like Rock Bottom like goes to zero then we're going to have all sorts of weird ways of constructing of doing Commerce and that's not necessarily for the good right if we increasingly financialized everything I think that takes us to a more kind of like soulless realm if we're not thoughtful about it but that that's where we're trending it's like I can't make a prediction about like what a v9 will look like but I can tell you that like there will be some really crazy things when you can send value at

lightning speeds from from anywhere to anywhere yeah and for anything for it's turn you know with crypto like everything becomes liquid at least everything that's digital becomes liquid um yes yes you know first first and foremost like before anything else and then you know things in real life can also um start to gain that that property um just before we go on because I also want to talk about the Nomad the developer product so the SDK and and all those things C can we just uh um come back to this idea the to this incentivization question um how are the

offchain participants incentivized to um to watch the home chain and submit Pro fraud proofs and um yeah and who who or what sets uh the the cost of that incentivization or the yeah I I think there's a bond or something yeah yep um do you want to pull up that picture again uh the the like black diagram with with that with the agents yeah so um this is a really helpful diagram uh this is in our docs and it it shows the four agents in the system um the four agents in like kind of order of operations are

the updater the relayer the processor and The Watcher and in normal operations the updator is that one party that I was telling you all about where it's their job to apply their digital signature on the state route on the home and then that way it can be accepted on a replica the relayer is so the updator is a permissioned party in the smart contract because it's you can kind of think of them as the sequencer if you're familiar with optimistic rollups there's like one sequencer the updator is kind of like the sequencer for the cross chain comes the relayer it can be any number of Rel layers because they're trustless they don't have to be

permissioned but their job is to just take that signed State Route throw it over the wire and get it landed on whatever replica that they care about relaying to the processor similarly can be anybody right it's the processor is just a name for the person that says cool we got a new up we got a new updated state route that has been relayed to a replica now we got to take this Merkel path the raw message and prove inclusion that could even be the end user but it's it's another trustless role and then the Watcher is is that role that we've talked about that in normal operations ideally doesn't do anything they just kind of like stand there they're kind of like the referee and most of the time hopefully all the

time they don't have to call fouls they're just like okay things are fine but then if something does happen they can blow their whistle and say all right we need to we need to stop things for a minute and see what's going on and so the question is um each of these parties needs to be incentivized in some way and right now there are no protocol incentives in Nomad we launched about three months ago and our first and foremost goal is safety just making sure that that system can run in production uh with High slas um high security and make sure people can transfer value and build applications on top but over time what we're going to do is bake in protocol incentives but also like allow users to be able to basically pay fees to each of

these agents so that this becomes a sustainable model that's kind of the economy can support itself but right now I think most cross-chain systems are subsidizing it in one way or the other because we are in a state where most of it's a it's a land grab right now everybody is trying to basically capture market share and so if you focus on a sustainable economy before there's market share then everybody else who's like taking the VC money and paying for everything will get a head start and and basically like win right so I don't think any any um Bridge system or interoperability system in the space has fully figured out incentives that's the first caveat but particularly with regards to the Watcher I think the

interesting thing with the Watcher is um this concept of the verifiers Dilemma or or this idea of like if in the ideal World there is no fraud then how does the Watcher get incentivized because the Watcher's whole incentive is if there's fraud they report that they slash the updator and they take their bond but everybody else wants the updator to be honest we want them to be the good guy but the Watcher kind of has an incentive for them to be the bad guy because that's how they get paid right so we have to create systems that even without slashing and collecting that bond that Watcher can get paid and part of that is maybe there will be like the user drips a little bit

of their cross-chain message fees and that gets added to the Watcher pot that they can cash out over time or you can basically um have these like challenge games where you you pretend like there's fraud in order to incentivize The Watcher to stay vigilant um if there is and they report it accurately they can get some cash out of it right and so these are things that the governance and the ecosystem and the community behind the protocol needs to decide at what extent do we want to incentivize The Watcher and how can we do so in a way that's sustainable but fundamentally what we feel is that um if there are n Watchers we want the amount of compute that each of these Watchers has to do to

be abysmally low and also kind of align incentives with application Builders so if you are building an application on Nomad you can run your own Watcher and for you spending 50 bucks a month on a uh Amazon AWS like ec2 instance to run a watcher is like peanuts compared to you building a successful app and having millions of dollars flow through your app like the $50 is a cost of doing business so we think there's ways you can have soft incentive alignment but also ensure that a lot of people can run a watcher for cheap such that the overhead of securing the system is way lower than requiring like hundreds of validators to be able to to to always actively sign messages and maintain

State and maintain an entire blockchain we really feel like the overhead comes from throwing a chain in the middle not necessar expecting people to check for fraud yeah the the okay that that makes sense so I think that what I'm starting to the picture I'm starting to drop here is that Nomad um has the benefit of being simple at least the design the design feels very simple um there the this attack Vector that we see in bridges that act as an inter a liquid

liquidity intermediary between chains uh doesn't exist um the trust model is fairly Bas is very simple how it however the the tradeoff is um is the speed at which transactions finalize and and the Reliance on on offchain actors um can they censor transactions can can the relayer uh effectively take the system offline by not relaying transactions it's the same as an IBC relayer right so

like it's they can they can have a liveness failure if they're just even if they're they're being good they can have outage and basically what will happen is that State Route will not be sent across a chain because nobody's posting a transaction on the destination but anybody can pop up and say cool the updater signed a state route now we can relay it over and so we imagine that this is a role that I think Cosmos ecosystem has like been kicking the tires on this as well which is how do you have relayer incentives because right now I think um a lot of validators in the cosmos ecosystem they run a relayer out of like service to the ecosystem and like that's I mean that's one reason like I love Cosmos is that

there is this very much like you know like this is going to grow the pot for everybody and we're willing to do this but as a as if you if you like what we're doing like you know uh throw some more delegations at us right and and so that works for now while we're in the early Innings of growing this thing but if we do want it to be more like economically incentivized in a brass tax type of way even CA will need to figure out how to do IBC relayer incentivization and we're kind of in the same boat with our relay yeah okay I I'd like to come to the uh yeah focus on the product a little bit uh because there's there's an SDK and the documentation talks about this idea of cross chain apps um what

kinds of things can we build using Nomad other than just a like Beyond bridging there's there is a bridge now there's The Nomad Bridge which is the sort of knotical um app that you guys have built um what what else can we do with this and what's the SDK what does the SDK uh make possible yeah I'm super happy you ask this question because I think this is the this is the thing we're most excited about um and yeah like so everybody everybody has their own word for what like a cross chain app looks like like we call them zaps cuz it's like that XK CD comic like there are 13 standards and I disagree with all of them I have

introduced the 14th right so we call them zaps we think zaps are fun to say so we want people to build zaps on uh different chains using the Nomad SDK um fundamentally what the SDK offers is a very easy way to say hey inq this message send this message to another chain and then once that message gets received do something with it that's like that is the like building block that we are offering and just making that making sure that that message passing channel is has high availability high security low cost and a really good developer experience that's kind of our Focus um and I'm excited for this because frankly I think people are going

to build some really cool things that uh like we're not even aware of um or we we can't even predict like one of the teams uh building on it is um I don't know it's out in the open but uh well I won't say who it is but somebody's building a like a cross chain uh tuwop so twap is the time weighted average price um I think it's like a it's a way to basically have an onchain Oracle and the way it works is based on uh Unis swop trades you can kind of get a sense of price discovery on chain you can see what is the rough like uh trading price for an asset pair and then you can over time smooth it out using the time weighted average uh and have that an

oracle for a price if you need like a rough Oracle price that doesn't rely on an external Oracle uh but right now that's all kind of localized on one chain but what if you could take the twap on ethereum and be able to move that t- WAP over to different chains so that people could then be able to use that t elsewhere to as a building block and so that's that's something that one Dev team is building on top of nomad um other things include like being able to like do cross margining like cross train margining where you uh um you you like escro some assets and then you issue a loan on another chain right and so really I don't know what the full slew of things people will build are going to be but the things that people

have gravitated to on Nomad are like being able to bake in Native interchain Messaging into their protocol and particularly teams that um have have built uh good protocols secure protocols they've been running for a while they've had a tough time kind of evaluating how did they go cross chain and when they find Nomad they're kind of relieved because there's there's finally like an offering that focuses more on security and really tells them like look these are the trade-offs uh we have an SDK play with it and see if this adds value to what you're offering to users and once they start playing with it and and start grocking the the interfaces and the system I think they get really excited about the possibilities of how can they bake this into the deepest

protocol levels right like things that are not just superficial like moving assets quickly back and forth but really how do you take advantage of the fact that you can now communicate with a drastically different region of the metaverse deeply at the protocol there okay no that's that's that clears up for me there's one thing I I I still don't quite understand though is um let let's let's imagine uh you're you know like you've got a a um a St table coin contract okay like let's say usdc and you want to be able to use Nomad to move usdc uh AC cross

chain does what what's the implication do you have to build um any additional infrastructure on top of nomad to be able to do that or does nomad uh support that natively um yeah like what what what uh so when you when you send a message through Nomad basically what enables that token to be minted on another chain is that another contract that you're building with the SDK or is that something that's native to Nomad yeah yeah I think this is um this is a product of our positioning not being as crisp as it should be frankly um because Nomad is both the like the message

passing layer that we've been talking about the agents the SDK but it's also the name of the token bridge and the key thing to separate is the token Bridge is a zap it is a very simple the application that allows you to do that message passing between to move the tokens yeah exactly so like the iPhone is also the iPhone is the terminal on which you can use dog filters but it's also there's also a phone app right and so Nomad is the is the iPhone the platform and Nomad token bridge is the phone app and so when you want to be able to use um cross chain assets like Bridge assets you can compose that token

Bridge app with whatever app that you're building and even cooler um earlier this week uh the connects team announced their amarok uh Network upgrade which is their first upgrade and it natively uses uh Nomad message passing to rebalance liquidity for routers um and we're we're like we're friends with the connect team big fans of what they're doing but that is also a zap and that why this is really cool for other people building zaps is uh while The Nomad channels have that latency that we've been discussing and the token Bridge also has to experience that latency because it's locking and minting assets on the other side the connects layer can be blazing

fast because what it's doing is it's more of a liquidity Network you can sell assets on one side and buy it on the other side so I not only anticipate people using the Nomad token bridge for like settlement layer bridging locking and minting I think they will also use connects for instant liquidity so when you want to move liquidity onto another chain into any representational asset not just the Nomad asset but whatever the any swap asset or the seller asset you can use um connects to be able to do that so we see connect as like a key building block and like one of the flagship applications that uses nomad okay that that clears up so there's there's Nomad um the message passing technology The Nomad bridge is an

applications that an application that allows people to move tokens from one chain to uh to another and as a cross chain um application developer so let's take like a as an example um I can also use Nomad to build extra cross chain functionality for my app by using the SDK and deploying um those deploying my my app effectively cross Chain by uh deploying the the the the zap contract on the different evm chains uh that Nomad supports Bingo uh we're trying to hire developer relations folks based on your description Seb I'm like are you looking

are you looking for open world right now uh yeah um no but I mean I've I've done a lot of this kind of like uh you know simplifying technology in my career that was that was a perfect that's a perfect description and that's exactly what we're building okay so I I you know I was talking with um I was having a chat the other day with Adrien Brink um and he he said something which like I I haven't had a chance to really dig into it yet but you know he said once we have like once ethereum moves to proof of stake and we have instant finality and deterministic

finality then ethereum can become EV uh IBC compatible and we no longer need bridging uh I I don't want to put words in his mouth but I believe that's that was like what what he said um and so yeah I'd like you to maybe expand on this and talk about the complexity of um using IBC across the cosmos ecosystem but also across the evm ecosystem and is this possible and I guess the broader question here is is is bridging technology uh like Nomad and and other bridging technology like Wormhole and these other types of designs um a

stepping stone or like sort of a patch um to uh take us over into like an another era where we we're not going to need those anymore and we're just going to be able to rely on very simple um message relaying and and Crossing message verification to some degree I think so um and maybe to First shed my interpretation or some color on my interpretation of what Adrian was saying um we're obviously playing a little bit of telephone here but I like Adrien and Chris and AWA I think are like have been in the space for a while Chris was I think one of their early designers and contributors to IBC so they've seen this for a long time and I think that's

that's a very interesting point which is that once ethereum is able to support fast finality and you can build a efficient light client that can use the IBC protocol because IBC fundamentally is just a a set of standards and interface uh of um header relay construction and and right now it's kind of limited to the set of chains that have that support the go module um and also use tender there's still some coupling with tender though once IBC can be extended to All U pbft consensus mechanisms which I think uh e two will be then they can talk to each other using a light client based construction

but I think this overlooks two things which is in the distant future this is a beautiful reality right but in the near to medium-term Future who is building those efficient solidity like lines right we were good were quite good friends with nosis team and I think nosis chain also has this vision of being able to support these trustless Bridges once they kind of um nosis chain which is formerly known as XI moves to being more of um following in the eth2 model of having a beacon chain and all thatb but it's going to take a lot of time and who's going to put the investment into building out this efficient light client and adding support for the other consensus mechanisms it took about four five years

for IBC to really come come live for this one implementation I think saying it's going to happen soon is a bit of a stretch and then the second big thing here is what are the costs going to look like right like part of the challenge with maintaining these like client systems is you constantly have to keep the state fresh and somebody has to be paying those costs for proof of work it's obviously quite High and um I think our team uh has previously worked on tbtc and knows the like the real costs of maintaining uh client State and so I think that won't be trivial either so what it comes down to is like will there be a need for other channels that make

different tradeoffs if header relays and IBC are secure fast and expensive then will people want to use externally verified systems that are fast cheap and insecure or will they want to use Nomad and optimistic systems which are secure cheap and a little bit slower so I think there it really depends as we were talking about earlier about the use cases involved some people will want will want to fly uh across uh the ocean in first class we think a lot of people will want to fly in economy or in kind of business class and then we think some people want to be shot out of a shot out of a cannon right and so it it's up to the developers what they want but in in

in one way we kind of see Nomad as a scout for IBC because really what we fundament Al care about is ensuring that there are trust minimized channels that give developers a good interface to build really cool things to make these to make this technology relevant to normal users and end users across the world if the best way to do that is IBC then hell yeah let's get it done but in the meanwhile we want to offer an alternative to multisig yeah I think like that's the biggest uh the biggest benefit here is alternative to multisig and um yeah I mean obviously like a world where IBC or IBC like protocols uh are able to move

liquidity across Mo move assets and and control um accounts between chains um in these different universes right like even across these different ecosystems um would be ideal effectively creating a sort of tcpip uh like protocol that spans the interchain um I think that's what we're all hoping for uh but I don't know I think I think it's gonna be a lot rockier than just like one day like oh yeah everything's IBC and yeah like if we're losing $600 million uh two weeks ago then I think we're getting a little bit ahead of ourselves to start talking about like fully snarked header relays

like it will happen for sure but it'll take some time and in the meanwhile while the market need always outpaces the ability of the market to deliver a technology or a product that's the nature of free markets is that the need manifests first and then people entrepreneurs business folks are able to meet that need and so what the need we're meeting is highly secure channels and interop that is available now and that is not to kind of cap like create capture and prevent more trustless systems from emerging it's to ensure that we retain a future where Trust systems are possible because I am more worried about a system that is trusted captures it and gets Network effects and

we're not able to get out of that uh local Maxima and so we want to pave the way for a global Maxima and that's those are our values at Nomad so I want to talk about the the bridge a little bit and um and the the networks that it supports and so the future here and I think a lot like a lot of people that I that I like I ask for questions on on Twitter and I think everyone's really excited about Nomad um supporting evos um so what what does the bridge currently do now and what is the plan for the future like are we going to arrive on uh Nomad one day and see like 20 different

EVMS and be able to just move assets across all these very seamlessly and what's what's the plan here yeah yeah yeah exactly um so we started off um supporting a few chains yep that's the Nomad guey shout out to our amazing product uh team that has built this um and right now we are on these three chains ethereum Moonbeam and Mila C1 um we're super excited about OS when it launches because um we're going to be like the flagship Bridge deployed there and then we're also adding support rapidly for the other EDM chains that you mentioned so nosis chain Avalanche uh polygon uh BNB the l2s uh phantom um and then also excited really excited

about um neon neon is the evm on salana and they will be launching soon as well and so U exactly to your point being able to support the like 20 2530 EVMS that are all coming online and then at the same time use we recently closed our our funding round and use the new capital that we have to be able to like congratulations on by the way thank you apprciate it yeah it's uh it was a SLO but we made it there um but like take that take that capital and be able to then write contracts targeting different VMS so I'm really keen on on kmm obviously uh and then also like writing substrate pallets or like contracts natively targeting near um and of course we can go on Aurora in the meanwhile but

I think the really cool thing will be to have native Integrations uh but so we haven't talked about that but sort to cut you off here but but the yeah you Nomad will also support non evm chain so they will have Integrations with kmm um say like I aor and like other smart contract uh platforms and will work as seamlessly as if you were just moving between DM chains yes I mean that's the goal uh it would be kind of yeah yeah it will be sweet I'm pretty stoked for it um but it would be hypocritical for me to say it'll take a while to engineer efficient like clients

in other languages and then say oh yeah but then we will deploy smart contracts on every targeting every VM like fundamentally it is like it is hard to write good smart contracts that have good patterns and then get them audited and I think it's a it's a dual whammy of like everything we've written is in solidity right now we have rust uh kind of Competency and experience on the team and we can start expanding it but really these languages and these VMS are idiosyncratic and it's hard to get expertise in all of them so we need to hire and get people on board that know them and then the other big thing coming back to when we were talking about exploits is the uh Wormhole exploit was due to a Smart contract bug that like

even like an amazing team like ceris like missed it because it's just so hard to get everything right and I think a function of that is or that is a function of the fact that the other ecosystems really we're we're we're touching on everything we talked about outside of the evm ecosystem the security standards the best practices and and auditing firms and the different ways you can ensure your contracts are are are bulletproof those things have not matured as much as they have for the for solidity and so part of it is do we feel comfortable even if we are doing our damn best to engineer great contracts to get something like written audited and shipped in production where it'll be just as good as solidity I

don't know yet but like I think with teams like conf around cosmism that are popping up we're going to we're going to get there but like we will also be tracking the maturity of each of these ecosystems yeah no that makes sense um cool well I'm I'm really really pleased with this conversation and so where can folks go to learn more about Nomad and uh can can people start building on Nomad uh where the what's the call to action here yes yes um so um follow Nomad on Twitter it's uh the handle is Nomad XYZ trailing uncore um and then we have a Discord as

well I think that's where most of the community is right now um we're doing a big overhaul of our docs and our SDK to make sure that all of the interfaces are like super clean and easy for developers so uh if you're interested and have some ideas uh if you can answer sebs question question about like what's going to happen in the future uh please hop in our Discord and we're we're we're really eager to geek out with you and and build some zaps and really bring the vision of the interchain future uh sooner than later awesome well thanks PR thanks for uh thanks for being uh on the interop and and uh yeah one one I think the first uh Bridge uh protocol to come on

the podcast I like I I mean there's so much out there to explore in terms of bridging and I think one of my goals would be to try to get as many uh Bridge protocols on um to really get a um a broad understanding of uh all the different Technologies and trade-offs so uh thanks for thanks for kicking this off yeah and thanks for your time and I think you're doing uh a great service um for the community and educating people on all these different protocols and uh this is a very competitive category but I've been just flat out impressed with the quality of entrepreneurs and builders on the other Bridge teams as well so I'm excited for you to bring on

axar and Wormhole because they're good folks and and they'll have a lot of interesting things to share as well yeah certainly all right thanks thanks so much see you man