ZkPodcast: Catch up with Zaki Manian from Tendermint

Transcript

welcome to zero knowledge a podcast where we explore the latest in blockchain technology and the decentralized web the show is hosted by me Anna and me Fredrik [Music] this week we catch up with Zook Eman Yin we talk about Silicon Valley's love of defy mixing ideology and pragmatism in the cosmos live POS system the winds of 2019 and what's on the horizon so this week we are sitting with Zakheim onion

welcome to the show Zeki yeah great to be here big fan we also have Frederick hello hello Zakia's head of research at Enderman and I would say is an active member of the Kosmos ecosystem but he's also involved in a lot of other ecosystems and I hope that in this interview we get to kind of dig into yeah what you're working on what you're looking at what you're interested in yeah I've always been sort of like polymath contributor in the space and so you know we I would happy to talk about everything cosmos included but you know hopefully this will just be a fun discussion of kind of close out the year cool so I've known you for some time actually

I think we must have met at least over a year ago I've seen you at conferences and yet I realize when having you on the show I don't actually know that much about your background story like where you come from so tell me a little bit about like what what got you into this what were you doing before yeah okay let's let's let's do a little bit of my story so I come from like a serial entrepreneur Silicon Valley family so my my father came from India in 67 he was a professor then he worked for the government for a little while and then he started doing startups in like my

parent's garage the year I was born so I just sort of always been around like new stuff you know I some of my dad's bigger successes whereas he built the first digital gene sequencing company he's done so he was very successful he has been very successful with with doing startups and so you know I'd startups VCE all of this stuff is like very familiar to me around it so who I grew up in Silicon Valley went to the University of Pennsylvania because I wanted to get like far far away from that experience something new opposite coasts totally different scene yeah totally different place totally different scene did it do anything technical really like or traditionally technical in college I did major the

University of Pennsylvania has called history of science which is basically you study the history of scientific topics but you could also take random technical classes in basically an order that you made up and all that basically got me good at is reading papers and teaching myself things which is then basically the theme for the rest of my life so then after I graduated from Penn my dad had been spending a lot of time doing startups in India and so I actually went and I lived in India and I helped up my dad with a bunch of different things and I decided to teach myself how to program so I talked myself out a program um and then I was essentially product manager on one of my dad's companies for unlike their core

product for almost seven years almost seven years so for seven years I was doing like lasers like fluorescence measurement by ology firmware FPGAs like all of that kind of stuff that's a pretty long time to be at one place and in start-up world yeah it was a really long time actually the technology is still around my dad is still bothering me for tech support because there's a certain amount of that stack that I'm the only person on earth who knows how it works but yeah so that was a long time and I was getting really bored in sort of 2012 I was kind of trying to figure out you know something new to get into I was kind of looking for a hobby and I started to realize that like I had

this insight which was I write terrible code like I kind of had it like appreciated after like six seven years of being a full-time software developer so like everything I build was terrible but then I realized that the entire world runs on software written by people who are on the whole less skilled denying and so the whole world is fill up and like runs on terrible software and so I got really interested in what what what's going to be imported in a world built out of terrible software and so that got me to cryptography and distributed systems and I started learning about those things in 2013 after the Snowden revelations I found in the civil liberties organization and

through that civil liberties organization I met a lot of the people in like the bay area cryptography scene who also were working many of them who were working on Bitcoin so that I learned what Bitcoin was pretty much like my main goal for the like 2013 to sort of 2017 2018 was to learn enough cryptography that I would have like know everything somebody with a PhD knew and cryptography with but like not actually getting a PhD and so I read like one paper a night basically for like that entire period of time along the way I co-founded skew chain which was a enterprise blockchain startup I met Jay I used to talk to vitalik and black like

like vittala kid is so like ask you chain we had a conference in our office called crypto economic on so back in the hole in the old days of like 2014-2015 there were no telegram groups so we had a Google Group and it had like vittala glad Nick Szabo bunch of other people on it and we said have a conference for the Google group and so like a whole bunch of us got together it was where Jay and Ethan first met each other and founded decided to go off and found temperament it's where victaulic first learned about BFT it's it was like it sort of lad started thinking about proof of stake like it turned out to be like a highly influential event in all of our lives so

yeah so kind of like went through a whole bunch of stuff helped got real frustrated with sharda ik research in 2017 helped was like helping out on Definity z cash cosmos a lot of these things helped out a little bit of as i surrounded the crowd tail I've been friends with all these people they like there was just us like small little community and palter people especially people who didn't work on Bitcoin so we all knew each other and all of that sort of mushroomed over the course of 2017-2018 into what I currently do and what do you currently do so like 2018 I didn't 2018 in the first quarter of 2019

I did what we called watch which was I was basically responsible for me getting the cosmos up to watch so that touched everything in the organization are you a product were you like a project manager there or was it like a wall so I invented incentivize test notes I did all most of the core regulatory work to actually get the thing up and running I figured out basically how to QA like this distributed system so I built this whole mechanism I created the validator market but like okay but what is your likes so there's Jay and Ethan who are the founders of the 10 Derman company they founders

tendered a they founded cosmos it founded cosmos when did you join 10 Derman like were you you sort of mentioned that you were there at the beginning when they met but like were you an early person in it ok so I was there when they met but I already had my own startup okay when I when Jay first showed me tender mint I was like this is really cool it's gonna take five years before anyone really uses this and I was right so I was the first person to donate to the inner chain foundations crowd fund and like to entertain foundation but I was also just like busy with a bunch of other stuff I only really started getting full time involved in cosmos like Fabio so while I was doing all of this I was technically

a part-time employee of 10 Dermot okay because I was also running a thing called the trusted IOT alliance I also created a validator business I do a lot of things like this is a theme sounds like this and so I actually only became full-time at Enderman after wash okay which was like a year ago March 29th less than a year ago yeah holy moly it's only been really it's March 2019 13th lucky daddy understood so you were always related to it always sort of connected to the group but only really focused on it like in the last what is it eight months yeah cool how does it feel

it's it's a fun it's a fun journey like you know a lot of people frequently asked like why I picked cosmos in in 2018 as like the project I wanted to focus on certainly I had a there was a certain amount of economic alignment there but that wasn't the only factor in that decision every other you know you name or blockchain project that existed back then most of them were trying to convince me to like pay most attention to their thing I wanted to prove that a certain set of things could be done and I felt like I got to prove that in 2019 there a lot of people especially a lot of my like Bitcoin core dev friends used to say things like decentralized proof

of State Network starts for impossible and I'm like no I think that's possible I can do it they used to you know like a permissionless PF key network was just assumed to be impossible it was just assumed that they would halt and turns out they don't and it's been oh it's like it's a lot of this is like a fun journey for me I do think that there's like a transition in where the journey I'm in sort of like my first journey was like learn enough about this stuff to be an expert then put all that expertise to work doing things that had never been done before now I'm basically primarily a manager okay like I just like I manage people I do or what I spend a lot of my time like dealing with like strategy

budgeting HR and only occasionally pop into like pop up at conferences and get talks and or like contribute to research and stuff like that but these are not this is probably not going to be like where I make most of my contribution in the future most of my contribution in the future is just going to be like dealing with all of the organizational overhead of weird blockchain things are you feeling awesome about this are you feeling discouraged the organizational stuff can be very draining so it's it's a it's necessary yeah like it's necessary to like scale all of this and to get to the next level to do all of this organization thing I'm also like very like enthused about like the level

of personal growth that this requires it's it's continuously challenging but I like I like the nature of this I like that we have real things and like real stakes to like actually deal with now that this isn't just all like a little theoretical exercise that we are just that like we used to sit around J's kitchen table and talk about it like it's real it's global it like there's real scale and real stakes there's geopolitical significance and so like we actually have to deal with all this stuff what other so other than cosmos though you are involved in some other projects right like I've heard something are you connected to the NIR guys or so right

now I'm mostly just friendly with the near people okay we don't have any sort of actual relationship occlusion hasn't jumped in and run a validator on their network anything yet I find I find near to be an interesting experiment it's sort of like an interesting counterfactual experiment and that's mostly how I think about here I think of them as a counterfactual experiment I think they're an interesting experiment in basically just taking all of the good ideas in the space and trying to put them all together in one thing and see if the were here is this like what they're an experiment in is tender mint is not a traditional Silicon Valley startup parody is not a traditional

Silicon Valley startup not only is it not in the Saudi Valley but it's not structured like one you know Tasos all of these the theory and foundation all of these things are not like they were their founders are basically ideologues they're like are committed to this like vision of decentralization and autonomy and there's actually a lot of like overhead that I deal with on a day to day basis from trying to reconcile the needs of building a technology on like something that's consistent with our values and ideology so now you have experiments like near which like largely don't care about any of that stuff like there they're just like we are gonna take capital and turn it into code and

we are people who who code really fast who are good at getting to MVP who can pick up and understand everything in the space really fast what do you think it's gonna work their code is very cowboy like this is the main piece of feedback that I give a lot of projects in the space is what we learned in the process of launching the cosmos hub is that you have to be very slick like like optimizing for speed and features is probably a way not to like succeed like you have to spend a lot more time making your code understand while making the system understand while building the

tooling so that people can figure out what's going on in the system and like what's going wrong when it goes wrong to like actually get people to feel like they are members and own the system if your system is just like this giant as fast as you can code it opaque process you aren't going to build this like organic community of people who like are invested in and understand your technology I think this is a great point that SF is changing so much in SF is becoming the center of blockchain tech but what I worry about with that is I mean you've been in in startup we're all do you know what investors do to companies and it's not nice it's like it does it usually doesn't work out well

and if you have investor pressure and then in an environment like this you know I feel like decentralization is the first thing to go out the window I mean vision and ideology is the first thing to go out the window I think decentralization is definitely a weak point in a lot of the it's kind of it's sort of this interesting point of view which is like like every one of their investors wants them wants decentralization but you have to realize that you to think of this from the point of view of an investor an acid alligator like what's going on in San Francisco which is if you want to take a bet on decentralized focused

projects you can buy you know Bitcoin eath Zack Adams etc and get exposure to that world so but what if all these ideologues are going to be eventually just out competed by a bunch of like nimble tech startup like more traditional tech startups with a bunch of people in one room just banging out code all day because that's the part of the point right where as you were just saying that I mean to have a successful community you actually have to have the community engaged the community has to build tools the community has to like contribute to the space for them to feel engaged if there's one company doing

everything then there isn't a community yep we kind of pretender meant very much took like a community and like her cosmos as always like really emphasized kind of a community first approach to how we build stuff as much as possible and that means we go a lot slower but that should work out in the long run you know I think these experiments around much more traditional Silicon Valley style companies are going to be interesting and I'm hoping at least they can build stuff I can use I guess if they stay open source like a lot of this stuff will be shareable you'll at least be able to use some of the research or some of the tricks that they put in in

it you know like the near people know that I'm like the minute the stuff actually works I'm gonna fork them to use my fisherman design because they don't want to use my fisherman design for some reason is that because that's the question so you're you're sort of friendly with them but you also advise them you give them are you like I just I'm just like hanging out talking talking shop okay you guys work clothes right I they told us you are in the same office there's if you want to understand what what San Francisco is like right now yeah so the tenement has we have our main office in the Bay Area's in Berkeley but we also have a we work on second in

Mission it's on Second Street is also near protocol one Street over is Kota and Solana and then Oasis is like four blocks north and then sello is the weird one in there like in the mention of Bart right away in the mission what about but there's also like the chia office where's that in proximity to what you're describing same gym neighborhood so those yeah those that's like kind of the landscape of the non Bitcoin Silicon Valley or not San Francisco blockchain scene I guess yeah and its alway concentrated in like a couple of walls

so you all know each other and go to the same cafes we all I mean we all know each other we all hang out in each other's offices we're all like you know every single one of those who are doing on incentivize test that right now yeah clearly there is some influence that spread throughout these groups and they're all sort of game of stakes style test nets yeah they're even calling it that often yeah they're using some variant of gamers dicks which game of stakes for anyone listening was I think first pine it was first pioneered by the cosmos launch right yep the cosmos hub did you who made that up who named that me you did did you name it yeah it's a good

question I have to go back through like I just lack logs figure out if I named it okay you might have named it maybe not it's a good yeah I mean sunny was really the one who was like pushing the like ste a case take versus s ta ke stake name and that that was there for a while and then we were like we were like okay we need to like this is not gonna it's not gonna resonate well if we go it's like to inside baseball to go with like red meat speak let's let's go back to that San Francisco topic though so I think what Frederick you were just outlining was like the dangers of sort

of startup Valley like funding structures yeah and just like the lack of ideology I think it like some of the conversations that I have go back to like you know I I talked to some of these teams and and talk about what they're building or what they want to build and they go yeah and we're gonna have a meta masking we're gonna have this infrastructure thing and I say have you thought about the centralization risk of everyone running this browser plug-in talking to one server and they go well yeah but that's what people wants it's like that's what we're gonna give them it's like yeah but it's not decentralized and they go well people don't care about decentralization so we're just gonna like it's a better product UXO we're just gonna do this and I can feel that I resonate with that I also think the same thing sometimes but

at the end of the day like I have the freedom to break away from that and try to do something else where an investor pressured person will just go no we have to ship something that that like will get user accounts that'll have daily active users and whatever thing we can do to get to daily active users is what we're gonna do even if it means centralizing everything server so like there's definitely that vibe it's certainly not exclusive to the San Francisco it happens in Berlin and everywhere else as well but more there than anywhere I feel like I have a question about like so I want to stay on this SS topic from totally it's totally

interesting because I think like so I'm based in Berlin and Frederick's based in Europe roughly and in Berlin often and like I am a creature of the SFC right yeah I know all of the VC is and all of the funds I go to all other events I speak at half of them like all their investor coverage is like this is very much my world so like if you hadn't know about this world I can tell you about this world yeah so what I was what I'm saying is like SF for me is a place I visit I get to see it a little bit I meet people from there coming over to Berlin going like oh my god it's so nice here that's the feedback I get but I am curious like sf the mentality of SF do

do you see like is D Phi and the D Phi products that are kind of becoming very popular are those coming out of SF are those coming more out of like New York where do you see those those kind of projects emerging I mean makers in Europe great so there's actually some all those things are becoming what like there certainly seems to be some sort of gravitational pull pulling D Phi towards so I actually think there's like I feel like there's two sides to this story on one hand there are a lot of D Phi centric investors in the Silicon Valley there are a lot of investors who's like

sort of explicit investment thesis is like D Phi is the future of global financial services and if you kind of like sort of like them zoom all the way out to like why venture capitalist got interested in crypto currencies in the first place it did feel it like is a very much Silicon Valley money suddenly realizing that they might have a wedge to compete against the dominance of New York in the sort of Finance and like New York's control of the financial sector because every tech company wants to be a bank but it's never been like every tech companies also done no for as the answer

whenever they want to become a bank out of Silicon Valley for a long time and so like actually tinkering with money has been a thing that like sort of Silicon Valley was like sort of locked out of and it's like why I think cryptocurrencies are inherently interesting to them unlike almost like a hundred year time scale of trying to like wedge this this power that the New York banks grabbed in the nineteen like in the white the beginning of the 20th century and try and like take it like take a piece of it for themselves so there is a really dynamic around that it is a real thing and I would say we talk more we like the conversation around why the conversation in investor circles

here is just like revolves around defy to an extraordinary extent there's a company that started recently I can't remember the name now but this start out of YC and they're only like what they're doing is providing credit cards to startups and yeah so they basically just started by providing credit cards to other companies in their YC batch yep and they're now massively successful and I saw like a billboard of theirs last time I was there and like they've grown unreasonably fast because it like why is it hard to get a credit card like if that's not a thing that I've ever experienced but it's it's apparently a

thing I don't know why like the the u.s. is like the country of credit cards as well so I don't know why it's why it's so hard to get this is how you do X Bent's management in the u.s. startup so like we we had a tenorman and i hopefully this is probably not gonna like get us hacked but leaves airbase for a lot of our expense management which like let's the finance team sort of dole out very constrained credit card numbers that are like this can spend this many dollars per month to specific functions and then you can like track expenses really effectively since it's mostly that like the backend of credit of like conventional credit cards don't support like startup and small business

workflow as well um that a bunch of the budget companies jumped on the opportunity for like what you want to be able to do is like see all the expenses for your startup flowing in through all the spending that your employees or do we be able to slice it dice it categorize it but figure out oh we're spending too much i'm like superhuman accounts and be like we should stop doing it i guess the reason you're mentioning that frederick is this idea of like being the bank again or like being that taking that role very i wanna i want to sort of dig into that idea of like the VCS who would have gone into crypto early obviously like vc the world of VC is you can spread ideology but mainly it's make money right so the

reason for getting into any blockchain company is I imagine to somehow make some sort of gain a financial gain when you deal when they're dealing with these like very ideological companies do you have you felt like pushback from VC's in the valley or not push back but like complaints no I would actually say that the VCS in this community are fairly actually aligned on ideology with us are pretty ideological but you mean like VCS like blockchain VC well specifically what is happening like one of the biggest things that has happened over like the course of 2019 is basically non blockchain BC's investing in ball chain

are gone and there are like probably like 10 or 15 blockchain specific firms that now are overwhelmingly Dom that are basically the only people you raise money from whereas like during the boom everybody was sort of throwing money into it but during like various but right before 2017 it was like almost every firm kind of dabbled and watching now all of these because of the fact that you're holding like non-traditional assets like tokens there's so much specialist knowledge associated with this and most firms are spinning up specific like separate

either vehicles like a 16 Z crypto yeah that lag specifically target and you know theoretically have the knowledge base to invest in crypto close I also think like a 16 Z cryptos startup school is like a pretty interesting like I think you were gonna see more and more of the Silicon Valley playbook applied to the projects that are coming out of like a lot of the what assuming stuff like sneer Solana code uh you know sello etc like you know get out there and succeed in 2020 you're gonna see a lot

of silicon about more Silicon Valley playbook around how do you build ecosystems around them start like landing on in the same thing do you think that's do you think that's good what's your opinion on that like you grew up this is it's interesting to hear you like you're from that world you grew up really a creature of this world yeah so I wonder what's your toy what's your opinion of it like are you cynical about it are you excited do you think it's the right way like so I think a bunch of things have gotten harder it's become like all of this has actually made it really hard to get for instance a good token distribution because prior to 2017 or like early like

prior to like late 2017 early 2018 holding a token was not really part of an asset allocation it was like ideologues held totems and like missionaries held tokens and now more and more tokens are held by funds that are just acid alligators at the end of the day and so you know you're never going to be able to recreate the phenomenon of people who are as sort of bought in ideologically into the project as people were in the you know eath fundraiser days or even the cosmos fundraiser days I think that I think that is all is honestly making a lot of

things frankly a lot harder with the like the B C's coming into this space but you know there's a lot less legal risk for like a founder to like go out and like raise money from a bunch of traditional DC's rather than weirds stuff but you know I think a lot of these funds actually probably have a lot of appetite for investing in weirder stuff and what's what I think is sort of interesting is like we also black founders with the level of operational organizational regulatory skill to actually deliver anything that weird to market um so it's gonna be interesting to see like where does that come from

um I'm also kind of hoping for like a resurgence of like anonymously started founded projects I think that's the counterpoint to I mean I completely agree that most blockchain projects aren't started by people who actually can run a company basically but I kind of hope that that rather than leading to it becoming a world where there are super strong founders and there are like where the project is is just associated with one company and it's like this company's products that it goes in the opposite direction and name should we just go more completely anonymous kind of way I

now I feel like the critique of 20/20 of me is gonna be like Zeki is too good at what he does it was like accumulating too much power you sure you want us to keep that on the air I have a question going back to the defy idea they're like defy we talked a little bit about like its origin point and like how it's being funded how its sought after on a funding front but like let's talk a little bit about like the concepts of defy and some of the ideas that are coming out in that space because I think that there's I mean recently there's been a lot of kind of

interesting research in into how some of the defy products that sit on top of these networks could potentially hurt the networks themselves I don't know if you saw torrents recent piece on like derivative markets or post like posts taking markets actually potentially hurting the security of a POS system I don't know if I've worded that exactly correctly but yeah I'm curious to hear what you think of all of that given your role given where you sit like the idea of what cosmos was for that like existed in my mind back in 2016 was like what we now call defy okay like this is like what I thought it was for but I also

think that there's like there's a lot of challenges around governance basically would define that like we still haven't really dug into I think you know this recent article I think like yesterday or the day before sort of calling out the governance vulnerabilities that existed within the maker contracts for instance I would say that in my mind every single existing stable coin has a regulatory surface area that is incompatible with widespread adoption so these things work when no one uses them but if someone start if people actually started to use them at scale in the West the regulatory pressure on them

would be not regulatory pressure that they would be easily able to manage and I think like Libra I just like walked right into that what because they were like yeah you know we're fine with something like you know we're fine with a bunch of these crazy experiments working existing on a regular regulatory scale if like a thousand people use them but like if you want to deploy them to 2 billion people we have questions I think there's a bunch of interesting really challenges here which is like you know a lot of the Defy development is in the Bay Area right now but obviously the Defy users are not gonna be here and I think I think that's like one of the

things that's cool about soullow is at least they kind of seem to I understand that like sure you have like tech and protocol development in San Francisco and there's advantages to that but why you kind of gotta go to the global South if you want to go find your d-file user base defied most we doesn't solve problems for America what do you think about the idea that defy could actually threaten some of the security models though what I would say is this is not a surprise to anyone who's who's been working on protocol development here for a while I think the question has always been how much do you fight this so

we like for instance it's not an accident that like the core recommendations of of torrents paper which is variable reward rates that really that like track some sort of metric like I'm out staked and like are gonna be good things if you want to like a approach a target of a like have a target amount of security we so like we built down in the cosmos hug protocol you know more than a year ago and so you know we we thought vesser's coming I think if you don't sort of embrace in protocol the financialization of staking and you're the

financialization of your security model what happens is that this advantages like loosely regulated big centralized players who will do this anyways on top of their platforms you know we're seeing like a bigger deal to me than to runes paper is finance opening up the cosmos of validator and like cotton finance opening up a bunch of like zero fee validators a bunch of these networks I also think that they're gonna start securitizing the security model in some way shape or form pretty quickly so the question is is do you do these things in protocol and you

have like all of the hooks inside of the protocol to like financial eyes your security model and like connect your security model directly with defy or do you try to make that difficult and avoid it and I think that I think if you try to fight it you actually encourage centralization because the securitisation and the financialization of your security model happen the other thing that's true and that Turing would very much agree with is the security model for proof of work also ends up being financialized and very much the same thing through like hash rate futures and stuff like that have already exist you know and why Jeremy Rubin is working on like on chained hash rate futures for Bitcoin friends but that

isn't I mean the proof of work version I mean maybe you can help me understand like why is the proof of stake version seemingly more threatening then that proof of work version that you just described is because it's easier is it because it's fast like to me it's like if the problems always been there then it should always be designed in and yet the way I'm understanding this this kind of article even though people have hinted at it in the past it's still kind of like news to people ok so I'm going to say something that is somewhat controversial I think the biggest thing that people should be concerned about is specifically the etherium 2.00 proof of state law okay which is the etherion prove the theorem 2.0 proof of

stake model is fixed reward rate fixed like no on change like pooling or or delegation no mechanism for doing stinking derivatives built into the system etc and now you have and you have an ecosystem where defy is already thriving and this seems to itself to be like a particular Nexus of challenge and like a particular area to be concerned about I knew the emergence of defy interacting with the proof of stake security model for something like cosmos to be something like many year in the futures

like to be what most likely to be a real problem like sticking participation is pretty high I don't imagine it to like collapse anytime soon and a lot of the criticism of proof of stake sort of assumes that there's this like infinitely liquid counterparty that you can take a bet against that like you know I can win you know 400 million dollars of atoms to someone tomorrow on an overnight market and distres like no one is going to take the other side at that theft there because like infinite liquidity doesn't exist proof of stake mostly works as markets get larger and more liquid as they get more complex as risk gets more subdivided we could get into a situation

where potentially it could be unexpected to see like security suddenly collapse and that should be a thing that we should all worry about it's not like a near-term problem for proof of stake Pervis take generally yeah but you just mentioned this so we kind of one of the things that we definitely wanted to touch on in this episode was a little bit like of a look forward look back yep clearly if you kind of say 2019 what what are the winds of 2019 was one big win is I think we kind of really showed in 2019 that like reasonably decentralized hundreds of validator validator sets work and like

exist and can I keep a system functioning and can I cord it in eight enough and like we had him like generate enough surplus in these systems so I could pay people to operate nodes which i think is like one of the other like big wins I think the other big win of of 2019 is without a doubt all of the zero knowledge proof work and then like specifically like roll-ups and like both the optimistic and the zero knowledge variance of robots are like knowing that BFT like works in like this like ad-hoc setting knowing that like validators can action will actually like do this work and like exist and knowing that what and

like having like a much broader like zero knowledge proof toolkit and my to a lesser extent you know all these other like robot based toolkits I think these are like clearly the big wins of the year so what's next what do you think's what like I like the way you've just described this this sort of year looking back well what do you see coming up for 2020 then what do you look forward to so what we're seeing in the cosmos ecosystem is like we maybe have good enough solutions or any technical scalability in a lot of ways I actually think most of the big problems is that like our ecosystem is facing or around regulatory and liquidity and I am

curious to see what will happen like one answer to the regulatory scenario is just like all of the innovation moves to Asia like all of the user base is just in Asia and it's just like too difficult to do anything you know in the West or in the US especially Europe seems to be a little bit more friendly or we can actually find some sort of paths doing stuff in the US and then the liquidity question also is going to be really interesting to see is it like is something like inter ledger or something else that like basically makes like exchanges more like api's going to be dominant is it gonna be something like IBC which is like a heavier protocol but like may appeal to

a bunch of chains or is it going to be or or is it just going to be like finance and coinbase and like coin lists keep dominating the liquidity conversation so like you know I have spent a lot of time in the like the bowels of these technical systems but like now that we've started to see some like daylight on the wheel technical limitations I'm starting to see a lot more of these like sort of broader limitations on on on adoption becoming more significant like I would really like to design a stable coin like from a regulatory point of view would actually be able to sustain a million users I think it's possible so there there's a

massive amount of regulatory challenge for sure I mean I'd my app would be that I mean I think you know if we look towards the past and like try to extrapolate like part of the V the role a VC plays is help a company create a company not just like you know the sort of founders are creating a product but it's really the VCS that are creating the company and they're solving these regulatory problems to some degree for the company maybe that's a model to go forward that that you know we kind of try to find some structure in which to relieve the founders from this you know pressure because it is a massive task so overcome III think there's a lot of knowledge

that's sort of embedded in a lot of the founders that hasn't really about like how do you even think about all of these things but like also the regulatory landscape changes frequently so it's not like a strategy that worked three years ago it's like you can just take it off the shelf and do the same thing most of these things end up being like one offs I like that idea that you just presented Frederick this idea that like the VCS would I said I've never thought of VC as being like the company builder like the I know that they they will offer support there's sort of a joke that like if you talk to a VC the last thing they're gonna say is just let me know how I can help you like this is often thrown around but like

true help is in this in this context it is that legal regulatory side and they definitely come from a place like they have more access to really good lawyers and maybe even some of those lobbyists so it would be interesting to see if that evolves I would say that we have gotten some good help or some reasoning from you know the investor community and this year do you think that do do they fill that role do that like do you see VCS actually like taking that on in the valley um oh so VC's have been really helpful like they have some really good tooling in terms of setting up the tax structures um like like because tender

mint was like not created by VCS and stuff like that like nothing about the way we do our handle our Treasury is tax optimized in the slightest way shape or form so they have a lot they've done a lot of good work on that front they haven't and they definitely are helpful in like general company building stuff like hiring HR you know that kind of stuff like the specific knowledge about how to navigate the regulatory landscape I've yet to see a VC who has a really good take though I think obviously I think Union Square Ventures has been really taking a lead on putting a lot of

their portfolio companies through like the SE say he's a like reg a plus process but like to mix to mixed results I guess it's like mixed results in 2099 about it without a doubt like not only do we need not only do we need what a regulatory strategy for getting these things into the hands of more people but like like it has to function in a way where there's like liquidity and like the number goes up otherwise no one is going to care looking forward do you think about UX do you think about like is that is that your definition of you actually be like high liquidity and or do you think of it more in the product side my take right now right this minute is that the regulatory and liquidity

challenges are harder than the you extra ten and if we built a product that had like a very like it's possible on top of the cosmos SDK like people like true story have done it build like very mainstream feeling applications on top of like the technologies that we have now on top of the college of says decay on top of said straight cetera it's like very possible to do this but you need the right team it takes about a year but it's like it's not what it was in 2015 where this was just like impossible to do what I what I think is gonna is what is a real challenge for all of these

teams is they get you build a mainstream product with a mainstream UI now you're like how do I get mainstream distribution and like you're you'll just come back and you're like nobody knows how to do this yet like you know coinbase has 30 million ish users but like how do you distribute something that's other than Bitcoin to those users in a way that they can like understand and interact with the system and like you know get value out of it and you know and you know Brian doesn't go to jail like all of these things are a little bit of unknowns right now so in 2020 what what do you see for like the

validator space like cut like cosmos the cosmos ecosystem that is sort of the I guess would you call it like the longest-running POS system so far or like big one is definitely oh yes like though you know depends on what you mean by POS sure i delegated des this was the first like delegation based system okay with like on chain delegation but not on J and fee distribution and then we at cosmos launched with on J and B distribution I see I see but you know also tasers sort of launched in a very different way than we did to a certain extent because in 2017 I wanted to work

on both growing the tezo's validator community and the cosmos validator community but I ended up only having time really to do cosmos and so like we diversified our validator set really large way to like a large and very diverse validator set and it's like I think it's really cool about our validator subsea like the fact that like new entrants like show up in the system all the time and we're you know increasing the number of validators and cosmos hub tomorrow to 125 this is also not really truly a technical limitation like we could be a bigger number but

like it's hard to pay that many validators I think we're gonna see a lot of I think I think the biggest the other big shift is just like we're gonna see like we're starting to see the maturation of validator market with like finance coming I find it fascinating that the I mean validators are much like miners just sort of financially motivated to a large degree so it makes sense but it's still kind of fascinating to see that they'll ballad a whatever and you know anything that can make money and it makes sense but what worries mean that world a little bit is you have really big validator shops who set up and like control majority stake and like several networks like there's a

few validator shop that holds like massive massive amounts of both tezo's cosmos and polka dot so it's sort of a little bit worrying that there's so much centralization in the power but at the same time like it's not at the limits where it's actually dangerous right now but if we keep seeing centralization on these like big players then you know that can potentially turn dangerous yeah I fully agree with you totally I actually wanted to share something that I've just sort of kicked off there is actually something called the zk validator so myself and will Harborne from diversify we're currently a validator on cosmos and on Kusama yeah I just learned about it from you

I want to throw this your way because I'll tell you what this is all about so we're using the rewards that we get from being a validator to sort champions your own alt research either through initiatives education the goal being bringing more people into the space and promoting kind of privacy across these different networks that we're going to be validating on this is yes still very much an experimental phase we haven't really gone public with it so this might be the first time that people hear about it it would be the first time I'm speaking about it yeah and I and I wondered what you thought about it the idea here would be like it's topic oriented it's not purely sort of trying to differentiate itself on the low

Commission or the you know special security set up it's like actually fund this and then you could potentially help fund zero-knowledge research I think that is a great idea um I think that like well I basically been seeing is that there like three validator business models that are emerging one validator business model is like very much like a white glove service for like token holders um the other one is is like um it's like a combination of like infrastructure plus capital so like you provide infrastructure on a network but they're also like investing or holding

tokens or you see this a lot of like validators that are like on the cosmos hub but also like participating in ICS or like other cosmos networks or like various token creation stuff for other cosmos networks and then you had this whole like what I think is an emerging opportunity to be like validator plus product there's also validator plus exchange which is also gonna be like I think I'm where'd you put where would you put something like sicka in that um I think Sitka hasn't figured out what it wants to be and I think if it doesn't pick one of those models it's not gonna survive do you not you don't see a validator as

a cause sort of validator with purpose as a possibility I think it does work I think purpose is just a different word for product okay you bought it in that new research like the idea of like a research community around a validator um is just a different word for a product and inclusion is definitely kind of going down the product route as well that's your validator you yeah if you kind of look at our github you know we we don't participate on that many networks kind of like this your knowledge about that or we're very selective um we do a little bit of like consulting on a lot of these test nets that people are building but like um you know we you can even look at our github

and see a bunch of like product R&D that's sort of percolating through cool well listen I want to say thank you so much for coming on the shows yeah thank you for having me it was a pleasure to be here pleasure to talk to you I like I said I listened to these episodes all the time and so though I won't listen to my life listening to yourself yourself talk is the worst punishment imaginable well as podcasters we who ended ourselves we get to listen to ourselves a lot you do get a shock that you can survive okay cool yeah well thanks again thank you very much and to our listeners thanks for listening

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