S3 Finale: Does The AppChain Thesis Hold up?

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to the real finale of this season of bell curve this is the episode with just Mile and I went miles and I will be recap the the big themes of the Season miles uh it's been a fun season man this has been this has been a ton of fun for me learned a lot learned a lot it has it has it's

been fun you know definitely not uneventful um but you know in terms of things that we uh may have thought might have happened and a lot of things that we had no idea what would happen as we saw this week but you know building goes on it does it does well you know we're it feels a little funny to be talking about this as you know we you know we're recording this on March 12th of 23 and we just had usdc depeg and all this crazy stuff but you know I think what what's important here is just uh to focus on what actually happened during during this season and uh you know I think one of the one of the kind of unique things that happened during the season towards

the tail end which forced us to kind of retailer our last two episodes was I think we did see the app chain thesis validated in a pretty big way in that it actually kind of migrated off of Just Cosmos uh and we saw it you know go into ethereum uh we already were kind of planning on talking about that this season with the ethereum and Cosmos sort of collision course but this was validated in a much more explicit way with a lot with the sort of Rebrand of optimism to the super chain and then we also saw seeds of the app chain thesis sort of playing out on or Bitcoin and Cosmos kind of coming together so we kind of had it validate it for us about halfway through the season yeah got a little lucky there

um but at the same time I think that there were a lot of folks building towards this Vision in ethereum when we started I don't think this was an idea that came out of nowhere um but hearing a few of the biggest projects come out and really through product announcements right um giving us some concrete information on what you know they're building towards and hearing that it's much closer to a future of app specific environments you know rather than these basically just L ones that are being recreated at the roll-up level

um which didn't make a lot of sense to either of us and it you know that that is a lot of big reason of why we did this show um and to hear that optimism is building towards this you know we we brought on the slush guys with common um they're building towards you know app specific l3s on starknet um we brought on Sovereign Labs who's building you know Sovereign Roll-Ups that are going to be up specific on Celestia I think just hearing kind of these common themes across all different sorts of stacks and in the ecosystems um we didn't even touch on polygon and you know Avalanche and polka dot but they've

been building towards us as well and so yeah we I think I think it was in in many ways you know great to hear a lot of the biggest projects come out and be really vocal about this and and you know sort of validate what we've been talking about but in a very different way yeah yeah absolutely so what we're gonna do I think uh during this episode is basically just rehash some of the themes that you and I laid out at the beginning of this season and that we explored in more depth as we were going through the various episodes that the seven episodes that we we recorded together this season so maybe just starting off with I think the probably one of the most important ones that we laid out at the beginning and we asked basically everyone this

entire season was this idea of the spectrum right so that kind of full stack app chain over here on the left then there's the roll app that set up like a kind of layer three roll app solution on ethereum and then in the middle like a more modular roll-up architecture like Celestia and you and I were approaching this from the perspective of a product maximalist right so what uh kind of trade-offs do you have to make from the perspective of an app team Builder right if you own everything the entire full stack over here all the way on the left or if you surrender say consensus or data availability or settlement or something over here on that kind of roll app layer so you know let's just start at a high level like what did you sort of uh did you kind of change your mind about

anything after our interviews this season like what are your kind of thoughts from a from a product standpoint on that on that spec yeah I think I think one of my most direct questions that I think we gave a few times was what are things that a you know independent validator set can do for your product that a sequencer set could not um and I'm not sure if we got the most direct answer that you know we we would have liked all season um but my gut just based off of everything we heard from folks is that it's not from a from the BD perspective of the app chain it's not that much harder to stand up

your own independent validator set than it is to stand up your own independence you know distributed sequencer set and I don't think the hardware costs of a sequencer set are that much different than independent validator set I think that if you're going to stand up your own sequencer set or validator set you might as well do it with your own validator set because I just don't think the differences are that are are that big I think the big difference is that if you're standing up a sequencer um if we're if you're setting up a roll-up you're it's much easier to basically secure that sequencer set or your environment with

an existing you know layer one token than it is to secure an independent validator set with your with new native staking token I think that most Roll-Ups will either plug into a single sequencer or a shared sequencer Network that in that shared sequencer Network will secure itself through you know a third token it won't be the token of your roll up it won't it might be the token of that shared sequencer network but I have a sense it's more likely going to be the token of the L1 like if um

or a mix uh and and I think that that's where it comes down to so I think that if you're going to go the roll-up route I don't think I think the the what you're you're opting for is for your network to be secured by you know a a third token basically not the token of the sequencer set not the token of your roll-up but of the L1 itself um that's just you know where I see the puck is going with with eigen layer and and um also what we see you know out of some of the cosmos area so I don't think that there's that much of a difference I do think that you know you can get more out of for your product

if you had your own independent validator set then you could do if you had your own infinite sequencer set if that makes sense and for exactly what that is I think it would be good for it listeners if you're interested in going back and getting some of that detail I think it's probably best to to kind of hear from from Dave OHA and sunny I think Sunny with the episode and that was the kickoff of the Season that he got kind of deep into the Weeds on and those are both the founders of Osmosis obviously yeah and uh I would just I would just add there Aiden from the last episode um from stride which is you know a relatively new uh full stack you know Sovereign app chain and Cosmos

they have a hundred validators in their active set but they have a thousand validators right they were in their test net asking to be active set validators um so the demand is there I'm not saying that demand is scalable to thousands of options I'm saying it's there today um but at the same time stride is now moving to you know being secured by the hubs validator set right they're not and they're not doing that because it they of a lack of validators wanting to validate their chain or the cost that those validators they're doing that because by moving to the hub's validator set they inherit the security

of a major market cap token which is billions of dollars of security versus their current security which is in the tens of millions of dollars and that's the harder part it's not finding the people to run the hardware it's not even paying the people to run the hardware it's the value of that security of the what is securing your chain basically I think that's the challenging part yeah I agree So within that and one thing that I also think is is important to take this particular moment in time you know I think when we recorded this series we were at call it Peak modular scaling uh terms of consensus because obviously you

know ethereum's roadmap they're the clear winner let's call it in the generalized L1 sort of ecosystem I think there's a lot of consensus around both ethereum as an asset in an ecosystem but also as their their roadmap their roadmap kind of making sense and they embraced kind of the modular approach to scaling that being said um there probably are some it's just it's just very early but there definitely are some benefits right to owning your own security budget you know later down the line um and we just we just don't know what those what those are so it might be tough to again maybe it's not the BD work or the cost of getting those validators for you but maybe the hard thing right is kind of the cold start problem not having the economic value to

secure your network in the beginning but you could imagine over a greater span of time if you have the ability to do that to you know wait a little bit lower wait a little bit longer right in terms of building that up and owning it yourself there might be benefits down the line but you know I think it's a little too early to you know really talk about what those are yeah I think there's some really uh interesting experience experiments out there um that are looking at okay if we can split up the security of our Chain by saying we're going to have one token secure X percent of our chain and another token secure y percent of our chain and maybe you start off by having you know E3 staking secure most

of your chain or all of it but over time move towards you know more and more of your chain being secured by your own staking token um and this is something that we're doing with with mesh security as well where you can basically decide you know how much of your tenderment power or how much of you know your your chain security you're going to afford to another chain staking token and how much you're going to afford to those that will restake to your chain um and you could you know potentially have a situation where over time you you basically own your you know start with a small percentage of your chain that

you're securing with your own token but move towards owning your entire security budget and having that control but only doing so when you know you're you're coin is out of market cap they can you know responsibly secure that chain yeah I think that's I think that's right let's talk about um another big concept that we kind of continuously referred to throughout the course of the Season which was this idea of aggregation Theory or maybe said a little bit differently is the proximity to the the customer the consumer the user having an enormous amount of Leverage I think in general uh Sunny kind of laid that out again in the beginning of the first the first season first episode of the season and then

again we Dove really deep into it with Sam Hart and and Zaki during the that second episode for me I got I got pretty red pilled about this about this idea it makes an enormous amount of sense to me that if you have access to users that's going to be an enormous amount of of Leverage that frankly we haven't had a lot of in crypto yet I think a really interesting experiment that's going to play out and probably you know put this in the Forefront of people's minds is base and coinbase moving a whole bunch of their users onto their own Layer Two so overall I think it's good and the you know I think this also kind of played into when we were talking about in the Mev episode right and I think people are kind of waking up to the the influence that wallets are going to have on the

Mev ecosystem and the order flow auctions that take place in an earlier part of the valley chain but I'm not sure what to say other than I I do think that more demand based styles of investing and and kind of proximity to the consumer is going to be a much bigger part in crypto moving forward I think I think Cosmos have been talked about that for a while and they've been exactly right I would say that uniswap is making a really interesting almost counter argument to the cosmos approach with their wallet um and I and I do see these these super apps either being you know app specific chains that start with one killer app and then expand horizontally within their own app specific chain

or maybe an app that builds a wallet um and captures the user with a combination of their brand and wallet like uniswap and then Aggregates you know either or Aggregates or you know acquires you know um in some way it gives the users access to to more and more products you know horizontally um and you know I get the sense that uniswap at this point probably is not going to build its own chain I could be wrong um but they're moving very aggressively towards the wallet being the you know the single

point of of interaction with the user and I think that that's one approach I think that you know with osmosis and other app chains that is where you are you know the the application is almost synonymous with the wallet with Kepler um and they're pulling as many other you know sort of use cases into their app chain as possible without diluting the quality of the block space and also going to the users where they are with their own wallets right I think at the end of the day osmosis is is moving into like metamask it's moving into other wallets

um and they don't necessarily think of you know the user relationship with the wallet they think of it with the app um whereas uniswap I think is admitted that the user relationship is with the wallet that's why they're gonna go and compete with um you know metamasks they're going to compete with the coinbase they're going to compete with openc on the wallet front um so yeah I think whether the super app is an app chain with a ton of different products that live on the same chain or whether the super app is a wallet that connects to lots of different apps is still TBD

um I think that is you know probably one of those questions that's impossible to answer after the season but we heard a lot of really interesting perspectives that helped us think about it yeah I agree with that it's still you know metamask is obviously the dominant wallet today but there are again uh coinbase you know they've got their CB wallet which with the uh with the launch of Base could be pretty interesting together it's very early days for the unit swap wallet one other thing just metamask and Argent I think are together because metamask and Argent are in Phantom maybe are wallet providers right their their main product is a wallet and they're offering access agnostically to

this app store of of different you know products right where everybody else that we've been talking about whether it's coinbase or uniswap um you know open C right they all started with an app and they're moving to the wallet which I think is an interesting distinction you know it will be it will be interesting to see if the winning wallets end up being these apps I also think that account abstraction will impact this whole landscape significantly I think we'll have you know coinbase's wallet as a service announcement this week give kind of a sneak peek into this right where you know this whole idea of a wallet provider is very TBD if it'll be

around um because each application could just be you know your own account on that application that you're using you know whatever sort of verification process you want whatever sort of existing application infrastructure or wallet infrastructure you want I just I think that this is all you know it's still very early but um I would I would pay attention to I think account abstraction is one piece of this you know option thesis question that we didn't really get into yeah you know what else in terms of what do you think you know I used to think of blockchain.com I actually think they are one of the largest wallet providers I think of them Morris yeah yeah yeah if you hit their if you hit their website

they I remember they used to advertise themselves more like this but the world's most popular crypto wallet over 86 million while it's created I think of them more as kind of an exchange to be honest uh and more of like OTC and and kind of an extender of credit but I I definitely remember they they used to advertise themselves that way a lot yeah yeah I mean we we talked about it on the um the optimism episode we talked about uh BNB a little bit but we didn't talk about crypto.com and you know Crow right uh Crow is a pretty I think one of the largest Cosmos app chains um we didn't talk about okx which Ultra has a Cosmos app chain

um yeah so yeah stay stay wary of these you know centralized exchanges just basically making themselves obsolete because that was their mission from the beginning that's definitely interesting um let's move on to something that you and I talked about a lot and I think Zaki directly asked this question at the last at the end of the second episode of the season but I want to talk about this idea of the minimum viable stack so well you know one of the only sdks that kind of has product Market fit or escape velocity is the the cosmos SDK and that's sort of an SDK with building of full stack app chains in mind right you've got tendermint as a form of consensus kind of out of the box

consensus you've got IBC that's an enormous part of that as well so that's that kind of interchange communication one of the things that I think we were kind of interested in getting an understanding of this season and for me this remains one of the biggest questions is what are what is the minimum viable stack kind of look like for let's say a modular sort of roll up and then what are the what are the network effects going to be that accrue to the most successful kind of SDK that gets built and I think that you know I'm very interested in getting that question answered we sort of dug into it a little bit um the episode with with Coleman but I think that that was still an unanswered question for me at least at

this point I think so um I think this is probably the most um I think everybody who is writing off the cosmo stack you know now that everybody has caught up on the app chain vision and saying that you know ethereum will out execute and out distribute I think you know they have a lot of valid points but I also think that a lot of people are underestimating you know the network effects of IBC and of the shared you know stack in terms of the SDK um I think that there's a chance that all these efforts will be you know to make a competing stack will

be fragmented to the point that none of them are quite have those you know Network effects that the SDK does right now and I think it's basically like if you're going to do the full stack which Cosmos SDK did then you need a consensus and networking engine out of the box which tendermint gives you um but for these other Stacks you don't need that so the Min the MVP of you know an app chain stack is much smaller as you go across that Spectrum right um I think the what you need at the very least though is interoperability and execution um and you need I think we're seeing with

with optimism we're talking you know it's a lot about shared sequencers um to be able to recreate the benefits of IBC and interchange accounts within you know across Roll-Ups it's shared our PCS um we've we've heard a little bit about that um which which again I think a lot of these things are creating wallet Gardens a little bit within each other versus something as generalized as IPC um and then I think which you know still I'm digging into but the use of zks with with Sovereign Roll-Ups um and The Sovereign SDK stack I think it's it's is interesting and getting

closer to what IPC can recreate but yeah I think that this one is going to be really hard to answer um and really hard it's it's really hard to compare um until there is you know another competitor out there to the cosmos SDK stack I think that nothing has come close at this point the op stack and I think Sovereign Labs could be you know two of the first slush SDK you know there's there's all these components where you need you know a lot of Mind share you need um a lot of applications that are interacting with each other to really

battle test the and and prove out demand for the interoperability tools that will eventually come um so yeah this one's been tough because it was hard to say what the minimum viable stack is and if there is a competitor to the cosmos SDK you know before there is any competitor to it from an app chain stack you know respective yeah I agree with that it was it was interesting going that episode with Preston and Coleman to get into the the business model a little bit of of the SDK which was definitely something that I wasn't super familiar with and obviously the vast the whole point kind of is that it's open source and available for any of the developers that want to build but there are kind of there's a white glove

you know kind of service offering and a whole bunch of other stuff that you can actually charge for which I thought was pretty cool I always love to understand how people make money oh there's a lot there I think that we also underestimate um you know a lot of the things in the background like the like a block Explorer you know if the Mint scan by Cosmo station has been fantastic um in supporting basically every single new IVC chain that that pops up but that does that is very very hard to recreate you know that is an enormous validator in the cosmos Network that has a lot of incentives to to build and sustain something like that um anything like that for a new network

is going to have to be a public good basically um and those things are really important you know whether it's that or whether it's you know validator or sequencer monitoring tools like all these things that we fund out of the osmosis grants program that are specifically for either the sdks further met or for to help validators um that you know it takes a lot of people that want this service to you know rationalize it to be funded as a public good um I think that a lot of these networks will begin to realize just you know how many folks they need helping them in order to stand these things up yeah public goods

that's that's something we dug into uh last season actually at our our season of governance we had a great uh episode with um Nick from from ens and dad that was interesting to hear his thoughts on public goods funding I want to talk to you a little bit about MLB Mev I mean the Mev episode was a personal favorite of mine actually I loved all the episodes this season but I thought that one we really dug into some pretty creative and interesting ideas I do think this one of the one of the big differences for Mev when it comes to Cosmos one of the things that I was interested in going into it is there's a there's a product aspect of Mev which is you kind of laid out in that episode the three Perfect Solutions right for what

Mev should be it's you know protecting the user from harmful forms of Mev there's redirecting funds to the protocol so they're kind of Proto rep module on osmosis and then avoiding centralization so I think one of the the interesting things about Mev when it comes to Cosmos you can have kind of an opinion on how Mev where Mev where and how Mev should be distributed one thing that I really thought very differently about out actually kind of after that episode and even this whole season was I always thought of Meb as a way to capture some of the value that you that you generate from from your pro there's a big economic incentive I kind of now view Mev as it's one of the uh it's an inevitable consequence of the

way these systems are constructed and it's not like you go and launch an app chain to capture a whole bunch of value but instead it's it's always there it's it's more of a byproduct of the way these systems are constructed and then there's a way that makes sense to distribute that value and then there's like a bad kind of dystopian way that you can end up Distributing that value as well so I don't know what did you think about the the discussion on Meb this season um so I think there was and until we brought natash from D flow on and talk to them a little bit I didn't think a lot about the separation of um you know order flow from block space and and how those actually could be two

separate but complementary auctions right um where you capture the order flow from the wallet but at the same time the buyers of that order flow need to bid for the ability to settle it and capture the opportunity by buying the block space right and so then you could have two separate auctions where you have an auction at the wallet level and you have an auction at the Block Space level um kind of led me to believe that you know it to to truly realize this full vision of when people say you know you're moving to your own app chain so you can capture Mev I think to if if you're actually serious about that you would need to own the wallet and the app chain

um telling all of the Mev and I I don't think that's realistic for any app um and so you know I think that that's probably overblown um I think that order flow auctions at the wallet level and basically giving back all Atomic Mev to the user um is going to be a thing but there is still a ton of value to block space auctions um and there's a ton of value to being an app chain and controlling you know how the value of those block space auctions are distributed because you know you're not on some general purpose chain with the you know validators who aren't interested you

know or aligned with you right or the ones that are receiving that value so I think that came away thinking that there's still an enormous amount of value um today in being able to be opinionated about the ordering of your block space etc etc um I do think in a couple years that there will be a delineation between you know order flow auctions coming from the wallet versus block space auctions that app chains can be really opinionated about um it will be interesting to see you know who has the leverage there between the wallets and the apps that's a very good

to take away Natasha was great on that episode and I actually thought the point that he made in closing as well that is probably going to be bigger and bigger is when the SEC and various regulatory bodies start looking at these the way Mev works and these protocols you know what definitions do they have around best execution that are going to inform the way that Mev works as opposed to hey like let's all decide as a community here where this where this mbb flows to you know I think even outside of economic forces and sort of community and social forces there's definitely going to be a regulatory uh component here as well yeah so unfortunately yeah you tend to get involved I think so

um now let's talk a little bit about I mean the last the last two episodes were basically is something that we're getting at at the opening but it was it was a big idea that we wanted to explore in the beginning of you know when we first launched this season which this collision course as we saw between Cosmos and ethereum obviously in a lot of ways the app change these was app chain thesis was validated by not that it needed to be validated by ethereum but uh yeah we're seeing it play out you know in a pretty in a pretty frankly interesting and exciting way on optimism with her their whole rebranding of the super chain I'd be curious be curious what you what you kind of think about this got opinions as well but yeah yeah I think um

I think that we're starting as the beginning stages I think they're they're laying they're laying the foundations again and we're not like base itself is not nap chain you know optimism mean that it's not an app chain I think that there could be a slight Nuance um between the two visions where I think I've heard you know just from what I'm seeing on ethereum it looks like they could be going for something like the l2s are general purpose uh but the l3s are app chains and so you almost launch as an L like within that general purpose environment basically what used to be thought of as an L1 uh you know within L2 and then

eventually you take the users with you to your own L3 um so that might be one Nuance versus having you know very vertical l2s each that are their own app um so that's one two I think that it's unclear whether the interoperability standards are going to be siled within these you know um networks like op the op Network versus the Stark Network right so is the bridge between optimism chains l2s l3s whatever and starknet l2s L3 is going to be more similar to like the jumped from ethereum to Solana or is it going to be more

similar to the jump from you know an L2 to an L2 or or maybe say like a cosmos chain to a cosmos chain I think that's going to take time um so I think you'll see uh interoperability standards within each existing Network you know solidified and then over time maybe you see IVC something like that come in to kind of you know the different role of networks um so yeah I think there's some Nuance that they're taking learnings from from Cosmos and saying you know Morocco build everything from scratch um but we do have a good sense of like

what are the foundations you need to lay down to build a network like this like an internet of Roll-Ups we heard internet of Roll-Ups from you know Celestia we heard internet of blockchains from Cosmos and I forget what the optimism thing is but it's something like you know super chain uh of chains yeah super chain yeah it's I think the the risk not that there has to be I I you know am very supportive of all kind of ecosystems here although we did you know we ended up spending I know you uh with your worker every spend a lot of time in the customer's ecosystem and you know I I really found myself rooting for for Cosmos this season as well just in in

doing this season I think maybe the risk right now is I think Cosmos is known for a long time that their ideas were on track and correct I think the risk now is kind of in being out out executed by ethereum or to tie it back to that that idea that you and I have been talking about being product maximalists I think Cosmos has done a great job of being product maximalist the thing is there's kind of this saying right for at least Founders is first-time Founders think about product second time Founders think about distribution and I do think ethereum's done a little bit better in terms of distribution so yeah I will say on the two biggest risks to Cosmos um being I love Cosmos I think that you know they trip themselves up

sometimes on execution and they don't think about distribution enough um so we'll say on the execution side uh everything happens within governance with Cosmos uh the full stack for every app chain um and it gets very messy and there are a lot of voices and a lot of um I would say you know potentially conflicts of interests um and it's very difficult to do everything within one Forum of governance um on the ethereum side there are governance you know is is fragmented across many layers of the

stack right and so each governance forum is at least with stakeholders that are all within you know focused on that same layer of the stack right you don't have like Ave doesn't have validators arguing with app developers right like osmosis does you have only people that are focused on the app or focused on the governance of that app whereas validators and middleware providers are focused on their specific section right and I think that this is worth talking about because I mentioned that the first episode of the Season like that the execution risk happens through everything being in governance you know in the same governance forum

um on the cosmo side I think that cosmos's second biggest risk is distribution I think that there is a sort of you know disruptor versus incumbent Dynamic here where osmosis or I'm sorry Cosmos does have the right ideas but they have to get to distribution before ethereum realizes that they had those right ideas and and recreates them and executes on them in the same way the startup right would need to basically out get to distribution before the incumbent realizes that they can build the same product and and get or at least something close to the same product right um and so I do think that yeah I think it basically

realizing that distribution is the number one Focus for Cosmos getting retail flow is the number one Focus you know is probably the biggest risk um because I don't know I think that you know it's a very ideological Community still um which is which is great which is the reason that they've continued building you know through every single bear Market if you've thought you know five years seven years um but yeah yeah that's my general takeaway I agree with that I agree with that and you know the good news is people love to root for an underdog not that Cosmos necessarily isn't under but I think there's an enormous amount of consensus around it around ethereum right now and

uh you know the history of crypto and blockchain would say like be wary when enormous amount of consensus forms around something uh because usually it means that there's something else new and exciting that's about to come kick your butt so um and and speaking of speaking of exactly exactly that Dynamic uh let's talk about the that last episode that we did which was again a ton of fun just talking about the way that uh Cosmos and Bitcoin might intersect in the future so you know basically taking the we we spoke to um kind of the Roll kit we got the role kit kind of perspective and then the Babylon chain perspective both sort of different solutions in terms of what the impact on bitcoin block space is going to be but it's basically finding a way to write uh you know read and write onto

directly onto Bitcoin block space and in the case of Babylon it's kind of a checkpointing system where you get the time stamp and uh that can you can kind of help secure Cosmos genes that way and then there's the the roll kit which is basically using data availability on bitcoin which is uh it has a larger footprint right which could be pros and cons right there it's definitely still Limited in terms of what it can do for performance on the app chain side of things but potentially if Bitcoin were to change its mind and really start inviting all the stuff that that uh you know will improve its kind of security budget then that could be good as well but I did think the mashup of Bitcoin and Cosmos was uh very intellectually interesting one and I

think there's definitely a lot of Merit there yeah I love it for a lot of different reasons right because Bitcoin is what we call like the original app app chain um but I also I would draw the parallel to um Roll-Ups you know are to ethereum as like the uh roll kit is you know the software enroll Sovereign Bitcoin roll up uh through the roll Kip is is the Bitcoin but at the same time you can also just export the security of your network without necessarily using it for settlement um or using it like wait one second though I think that the difference there being is there's no trust minimized bridge for the roll kit on bitcoin right

right right but you're also sending literally all data down to bitcoin yeah yeah that's right you're not just checkpointing you know headers every five hours you're like every single block is being sent down to bitcoin and that's the only source of Truth for your for your chain versus and that's similar to like uh roll up on ethereum that sends everything down to L1 right um and it's not a Perfect Analogy but with Babylon I view that as like you know you're just taking you're supplementing your own security with Bitcoin um whereas eigenlayer restaking like you could use eigenlayer restaking to supplement your security of a cosmos

chain right you're not sending you're not using ethereum as you know a critical function of your of your roll up or of your chain but you are using it to secure your Bridge your your Oracle your you know even Cosmos app chain um I do think that there's that's an interesting like distinction to to Bear because because we do view Bitcoin and ethereum as the two you know main security providers um and you can either use them you know in the Big B sense right or you could just use the little B to to secure to help you know add security to your trade um

so yeah I think that it's still very unclear like how important this is going to be how real it's going to be how accepted it's going to be by the Bitcoin Community um but I love Babylon I think babylon's an awesome project I think that like you are taking you're not trying to change Bitcoin you're just taking what's great about Bitcoin and using it to make something that you know is lacking that right in terms of the um long-range attacks on POS chains just to basically sure up that hole um I think that that's perfect I I'm not quite sure just how much you know ethereum is going to be able to like secure Cosmos chains through eigenlayer

but I do I do see that as being very real I agree and I think the the sorry the point I was trying to to drive home there before is just that there's no there's the we're talking about Big B Bitcoin in the sense that it's Bitcoin the network right being able to read and write data onto Big B Bitcoin network but then there's the little B Bitcoin which is the the asset and I think a critical component that was kind of missing but is potentially interesting is a is a way to transport little B Bitcoin into Cosmo somehow Aiden was kind of talking about this when he was describing the what's the name is that the alliance yeah yeah there's this there's the trustless bridge uh no the way uh the

way you're talking about terror's Alliance Sarah's a lot yeah which is funny right but here hear me out here this is a huge long shot but when he first described it to me my initial reaction was I'm not sure if you know bitcoiners are going to want to stake their Bitcoin and and get yield in in other tokens but you know you have to remember that there were platforms like block fi right that were wildly popular the the people that made block five the platform that it was very successful for a long period of time was the bitcoiners right who wanted to get yield on their Bitcoin and look it's you know it's looking less and less like the the US banking system is going to be a hospitable place for Bitcoin people

want to get yield on their assets this could be if you could find a way to actually export uh Little B Bitcoin into that Eco into the cosmos ecosystem that could be a lot of distribution end users you might find a larger percentage of the bitcoiners than you think would be happy to stake it and get yield and do these things and ordinals are another proof point that these aren't all you know bitcoiners aren't all doomers that you know sit in their bunker you know with with their shotgun in their canned soup like these they love the nfts and um I I think it could be an interesting mashup for sure yeah I think you could see Cosmos chains secured by some portion of Bitcoin some or obviously some portion of their native staking token and then the rest of their network

is secured by Bitcoin it's secured by ethereum and it's secured by all of the chains that they have very close economic ties with right and so you have like a NATO mess security sort of relationship with those chains but you're also supplementing it with two very high market cap low volatility yeah low volatility Assets in those two um yeah so I I couldn't agree more I think there's some interesting ideas raised in in the alliance um uh concept and would also say that you know this is not the first time that Bitcoin has found itself in Cosmos um there was the whole you know lfg thing why do I let go that's true that's

true which did not necessarily help but um didn't go great yes be the one oh you know what you know what uh the reason why I also just love that Bitcoin episode was you just mentioned this but Bitcoin is kind of the original app chain in a lot of ways and that's very that is not generalized blockchain uh block space right that's very app specific block space it was an enormous very opinion very opinionated on the design of that block space and the opinions that were right they had those very specific design choices actually made for app space with very very attractive properties so it's just cool and it also it leads to a an interesting tension which is I Sunny

kind of alluded to this and he called it permissioning but it is kind of interesting to have an app specific blockchain that is also permissionless those are sort of oxymoronic if you take a take a deep look at it because if it's permissionless it means anything can anyone can build any of them they anything they want but the whole idea of app specific space is that you don't have nfts and D5 competing for the same block space so it is that's a pretty interesting interesting tension frankly I think I think we touched on it but I don't think it's I don't think we talked about this the one thing I wish we talked about a little bit more this season um because it is it is a little bit tough to get into um you either make it express like explicitly permissioned where you say

like only things that we accept you know like through whitelisting and governance are allowed to go be deployed on this chain or you can make it you know implicitly permissioned um like we talked about quite a while I think it was the first episode we talked about this where you can make certain designs so that you know certain types of use of your gas you know of your block space incurs higher amounts of gas so it just makes it you know incredibly unwelcome to use it for that purpose or like we saw with Bitcoin a long time ago uh where basically it's saying you know the community will come down on you if you use it for anything other than this purpose um and so you know explicitly permission

versus implicitly permissioned I think that there's a thin line there but I do think that like pure permissionlessness um is at odds with these with the concept of app change yeah well I think this was that that ended up in Bitcoin that was kind of like the op Wars right there's the op return function and that was actually tapro Taproot which was an upgrade that happened which which reduced the uh it increased the flexibility around sort of witness data on the blockchain that opened all this up um but that that was like kind of an uneasy compromise is the way that I would kind of describe what how Bitcoin landed on that and uh it's it's unclear it's unclear I think it I think it has

to sort of play out I actually heard there was you know I'm not sure if you know John Adler he's he's one of the co-founders of Celestia and he's got the fuel fuel Labs uh kind of their evm but he was describing a talk that he gave I didn't listen to the actual talk when he was describing this talk and he gave it one of the devcons about almost making changes in the same way that like Regulators make make changes like to try to tweak incentives in a system and you know and you could describe you know you could look at a lot of the different yeah I think that that's where app chains want to go yeah I don't think they want this whole white listing thing I agree that they want I think that they would much prefer something that is more implicit like

that agreed upon once by the community and so that everything else Beyond it you know is is disincent device or incentivized in that way yeah um yeah I think that that's one of the more interesting Dynamics here it's a cool analogy to use so yeah yeah I think it was an enormously you know fun season I think we we dug into a bunch of really cool ideas and uh yeah buddy thanks for thanks for doing this one this is a fun one to have you as my co-pilot on this was this was a blast I had a blast I had a blast yeah yeah thanks for listening to me ramble um yeah I enjoyed it at least me too buddy me too something sounded smart some

things might sound dumb yeah hey we'll take it if we got a couple smart sending things in there boom that's good yeah it's like golfing right when you hit a good drive only thing you only need one good drive when you're playing golf coming back on the way home you're like hey you might have shot 100 but you're like by that one drive I really smoked it so I think we had a couple good drives this uh this season these are two good putts yeah it's okay all you need it's leaving all right we can call it that was awesome all right cheers thank you [Music]