BUILDING THE AEZ with Youssef Amrani of AADAO

Transcript

welcome to the interrupt today my guest is Yousef amrani he is the co-founder of atom accelerator Dow and it a grant Focus da for the cosmos Hub in today's conversation we will discuss AA DA's res and its mandate we'll look back on 9 months of existence and the impressive work done by the Dow in this short amount of time we'll also talk about the research and other initiatives aad has funded we'll discuss prop 848 and what it means for the future of Hub economics we'll talk about the new funding proposal for AA da for 2024 that is currently up on the cosmos Hub forum for discussion and we'll talk about the future of the Hub in the face of new shiny lir ones and narratives I'm also

dying to find out why he thinks Adam will be in the top five but not without Sweat and Tears so before we get started make sure to hit the like button and subscribe to get notified when new episodes drop every week and remember that none of what the we discuss here on the interrupt is investment advice and if you enjoy this content please consider sing with us we're vading on AOS Quicksilver osmosis and Juno just look for interop in the active set my guest Yousef amrani is coming up next right here on the [Music] [Music] interop I'm here with youf arni youf hey

thanks for joining me hey SE thank you so much for having me so I've known you for a little while and you know you you got involved in Cosmos like I think when when when I first encountered you it was like yeah this guy he's just like a new guy in Cosmos he kind of came out of nowhere um and uh and you were uh part of the Adam 2.0 white paper author so you know I'd love to get your backstory and how you came uh into crypto and you know specifically how you got involved in Cosmos and you know with the co-authoring the atom 2.0 white paper yeah sure well thanks for having me um so crypto U my my journey in crypto was very uh traditional meaning that uh I started with Bitcoin in 2016 2017 like a

lot of people in the space um and then I discovered ethereum which you know I thought was uh you could do much more with ethereum with smart contract it opened the design Space by orders of magnitude and that's where I found Cosmos which if Bitcoin is the first generation then it is the second generation and I see Cosmos as the third generation so third generation is in addition to Smart contracts you're also adding uh onchain governance and interoperability and I think that those two the combination of those thing those two things gives a very powerful narrative and it also allows for

the rise of political economies and even better it's a it's a web of political economies because all those change that we see in Cosmos plus 70 chains right now they are interconnected via IBC uh they have their own onent governance so they can also do cross-chain governance so like the the the the speed uh the the the level of iteration that you can do with oning governance and interrupt is just mindboggling and you know the how the community reacts how vibrant the various communities are in Cosmos is uh is a beauty and it's something that doesn't make me want to go explore or ecosystem because you have pretty much

everything in Cosmos yeah I mean I I Echo that sentiment you I came in the cosmos and like yeah I mean I first interviewed Jay and Ethan on on epicenter in like 2016 and they were First floating around some of these ideas back then and I remember being at uh at Devcon in in k and sunny gave a talk about app chains and it was like he gave a talk about app chains in like a very small room it was sort of like something that he had organized like on the side right and there's maybe like 20 25 people there and it it just I I think that those ideas the the ideas of app chains and inoperability were the seed for the modular narrative and for modular blockchains right where you want to you

want to break things up uh whereas previously we had everything on the same chain Cosmos said let's break up applications so that they are sovereign and then we're going to create composability by allowing introp ability with these really strong intop ability Primitives and then what's happening now with with modular and I think it's the sort of log logical step for blockchains is let's also break apart applications into different layers into different modular components in the same way that internet infrastructure and web two application infrastructure has modularise and it's it's a sort of like a logical step in software development to specialize uh every component of the application all the way up to you know right now I think a lot of that modularization is happening at more of the infrastructure

layer but soon we'll see all also that modularization happening at the application layer so you know it's it's it's it's really cool to see like this these this this Vision really playing out and these ideas now you know being adopted in COs in in uh in ethereum and and and and like basically every every blockchain ecosystem um you know how did you get involved with the the white paper like the Adam 2.0 white paper and uh I guess you know what are the what are the big lessons that you know you took away from that from that whole uh that whole episode yeah so so first I before talking about atom 2.0 I want to

emphasize why I was so vocal about atom even you know months before even a year before we started atom 2.0 was that I like the the belief that I have it's that I had back then and I still do have this belief it's a core belief that if you want Cosmos any any successful ecosystem if you want that ecosystem to be successful you need the native token to be strong uh that's the case with e that's the case with Solana that's the case with Avalanche it's the case with all those ecosystem you cannot have it's otherwise so I understand the EOS of Cosmos which is uh strong decentralization uh doesn't necessarily

lead uh need a strong token but at the same time if you if you have an ecosystem without a leader that becomes uh potentially the source of trouble because people when they ask about something when they ask about an ecosystem they want to understand what is the underlying asset what is what does it do right and so that's I we just went from there and I I still think today that we have huge missed opportunities at the cosmos level I'm not talking about the cosmos Hub at the cosmos level because atom uh was not able uh to reinvent itself so that's where I started from uh so how I got involved

with atom 2.0 is I was just very vocal about atom and explaining that we needed to fix it uh and I started working on a small initiative on myself uh Gathering people um to uh do work in group and that's how to fix atom economics via onchain governance after proper research and that's where I met with Zaki uh who was doing the same thing on his own and then we said you know why why don't we just join forces uh and uh you know build that working group and that's how uh I ended up working on on the white paper so on the white paper uh you know it caused a lot of trauma uh it fractured the community uh some of

the reasons are there behind why we started a was that trauma that uh that deep fracture that happened uh that can be seen as uh a curse of ancient governance but anent govern governance once again is you know double faed it so it can be a blessing if you know how to use it it is a superpower but for the best and for the worst and so on atom 2.0 it was back then we said for the worst but if you look at what came after uh a lot of things started to get together to all the pieces started together together right after atom 2.0

but on on atom 2.0 so I think that division uh was spot on uh if you look right now at everything that is happening was somehow predicted in the white paper so shared security obviously liquid staking uh that is made now uh a big success very promising narrative with stride Quicksilver uh persistence I think that the cosmos has been uh one of the Pioneer in liquid saking much more flexibility if you look at the liquid saking module by elusion and Zaki uh it's a it's it's a beautiful thing um so I think that the the direction was right

uh wanting to position atom as uh the interchain money I think also was the right guess um now what didn't go well I would say was mostly the methodology and how we tried to do things and you know I'll cover a bit more when we start talking about a and the new uh research from blockworks binary and rmit but I think that the approach where we you know did it in uh between closed doors when you know we we I don't want to say kept it secret it was just part of the process where we did some

work and we were super excited about it and we really thought that the proposal would pass uh and now it seems it was not the right way to do it and I understand so uh doing it between closed doors uh not in an open fashion um I think was we didn't do it taking into consideration the fact that atom was one of the most decentralized if not the most decentralized layer layer one in the entire crypto space and as such uh they're just things that you cannot do and you know there was so much

excitement around 2.0 and nothing was nothing happened for years so when we came up with that white paper we thought like there is zero chance that this thing is not going to pass right zero chance because nothing happened for two years and people were expecting something uh people were fantasizing on this uh and so and then the the second mistake that we did was that we we didn't slice anything we tried to it was like All or Nothing a massive white paper of 2 30 pages very complex to understand because it was quite a sophisticated document no summary uh and I think that we should have sliced that paper in multiple parts

and just do it piece by piece on the government side and I think that we would have likely uh had better outcomes and then there is the the the minting uh also that was a big a big problem uh because you know if you want to meil to Mint $50 million in in in you know in a few years without having uh the governance infrastructure to make sure that you have a contab in place Dows in place Etc was maybe a bit too ambitious and a bit premature but again it was a signning proposal there was no code commit there was no funding committed uh but yeah the rest is history basically yeah Ian we're not going to

get into into into this too much here because you know we've covered this extensively in the podcast I just wanted to hear it from you and understand if there was anything you know sort of uh any new information here but it seems like um you know the lessons that you've learned or that you've expressed here are the same that I you know that I've talked here on the podcast you know quite a few times like you know breaking things up doing things in doing things in public and you know those lessons I think have have been applied to in a lot of ways to to how AA operates and the research that's being done done there so yeah maybe like let's let's shift gears to AA da like what is this organization I I you know and what is this mandate and um and I think more importantly and

this is something that I think a lot of people find interesting is that you know it is in fact a DA and you guys have set up the legal structure in a way that um it can be uh it is governed by uh by by a DA so I'm curious like also if you get into into the details about the legal structure and how you've managed to sort of effectively do ify a proper legal structure yeah so on on the legal structure we are actually about to set it up it's it's 80% done and why it took so much time was because our we started doing thinking about our scope for the second year and it kept changing and because the scope was changing so there was the requirements

for the legal structure uh so now all the legal documents are are ready we just need to do some some proof reading but it's going to be uh a structure in the gy uh jurisdiction uh we're going to use uh a professional trustee uh that is U mitigating uh our legal risk that is providing a Legal Shield to uh all the members of the Dow so all the members will be hosted on and protected by by this legal structure and the professional trustee is basically as acting as a last as a first uh step as a first filter that protects uh all the all the members I think that

Dow what we want to do with with with with with from a from a from a governance perspective is try to modernize it as as much as possible and it you know like we we have some severe limitations and the legal structure is is able basically to provide us with the uh real representation in real life because that's that's that's a big problem for for Dows is you have an existence on chain but off chain you're nobody so that's the reason why like if someone wants to talk to you you need to have a legal structure to do that so that's the reason behind the legal structure now in terms of like how the

legal structure operates it is basically uh very aligned with our own structure within the Dow on chain so next year we're migrating to da da and all those and then we I think we're going to have a chance to talk about it uh for talking about the future of a but be organized as uh subcommittees or subd Dows and those subcommittees are also present in the legal structure so that we make sure that there is no gap between offchain uh structure the offchain governance and the onchain governance I think this is absolutely key to avoid uh you know U misunderstandings between the different different team members yeah and I think if executed well also acts as a

framework for other Dows and like other uh organizations similar to AA that are operating on behalf of a blockchain or on behalf of a layer one so yeah it are you guys planning on publishing any of uh like of the uh the sort of like legal work and the legal structure that went into this legal yeah I mean we we would love to our goal was to publish that with uh our second proposal uh to to renew us to renew our mandate uh but we want to make sure that we have all the paperwork ready uh it's a lot of paperwork and we need to once again proof read that but yeah the goal is absolutely to share uh pretty much everything I mean we have uh uh with its

onchain governance uh we've always been extremely transparent with the committee that's I think one of the thing that makes uh people love a is that we've been very forthcoming and transparent we have nothing to hide our wets are public so yeah we we intend to share that because it's also a public good of sharing those information for any uh upcoming doubt no that's cool I mean that's a great example I think for like other ecosystems that uh that might want to do something similar and it's like it's I think it's super cool right I mean it's cool that you have a legal structure that manages that that is in fact managed by Dow that protects like that that creates protections like limited liability for the Dow members and that also allows you to like uh attract other

members of the Dow as well and like hire people and like have them be sort of protected yeah and then and so so there's the protection aspect but there's also a very practical aspect which is and that's something that we're U working toward is let's say that you are a d employee and you're a full-time employee like myself for example well what happens if you want to take a mortgage well you should be able to take a mortgage I mean one friction for Dows is well people say well you know what I'd rather work for binance or for Kraken a centralized exchange because I have an employment of letter I have a letter of employment I have I I can go to the bank I can take a loan and those things were not able without you can't do that with legal structure so that's

uh our like phase two of the legal structure so phase one is just to provide the legal liability protection and then phase two is really like to become uh This legal structure become a service uh for the DI employees where they can ask for different kind of paperwork uh to help them in their day-to-day we think this is absolutely critical to bridge the gap between uh working offchain and and working onchain cool so H how what what's the Mandate of AA da and you know I think it's obvious that the Hub you know has provided financing for the da and we'll talk about you the proposal that you that is that is by the time this released uh will be up uh on on the

Forum but are there other organizations that also are providing funding to the Dow now um yeah just sort of giving a broad overview of like the Mandate and the funding yeah sure so uh the Mandate I would say the at the highest abstraction level was for a to become the very first 100% aligned Cosmos Hub organization so what do I mean that by 100% line uh well we're we're fully funded uh by by uh The Hub and as such we're owned by The Hub so uh if the Hub is not happy with our services they can put a proposal up uh say we want to

discontinue a and we just return return the fund that's uh and I think that's something that is severely underrated for uh uh a token that is worth a few billion dollars not having uh one organization that is really aligned is is was an almost an anomaly that we contributed to fix so now yes we are 100% aligned uh what what do we do so we basically uh are a grand program uh so we only do grants that was at least for the first mandate because things are about to change uh in the second mandate so we're uh focusing on ecosystem

initiatives and uh and public goods and one of the reason why we exist and again that's looking back at the context uh is prior to us the only way to ask for money when it comes to atom was to the public governance and we identified uh major bot necks with this way of doing um you know I remember a few governance proposals asking for two three 5,000 atom to do very small initiatives and it just didn't make sense you we needed an alternative source of funding that can Channel some of the the some of the the

the funding proposals and we think that small for example small to medium initiative funding initiatives should be CH channeled to a dedicated structure and that dedicated structure is long term if you think about it public governance is like a parliament on onchain public so would you go to the you know the the Canadian Parliament and ask for $1,000 of course not that those are that doesn't make sense and so what we noticed was just that we're still very early and uh we identified a gap which is we don't have a grand program why don't we don't have a grand program we should have one osmosis has one and we we we did that and and it is uh it is

successful um the other thing the other reason for um it was well after all this drama around at we keep coming back to atom 2.0 but I just like say 30 seconds about that is I think the best way back then after in the aftermath of 2.0 to re reunite the the community that fractured Community was around building something that is more objective right so I said forget about the drama forget about just like let's let's focus on building and will we want to make sure we wanted to make sure that we were preventing an exodus from developers right after because it was a real danger after at

2.0 no Direction no no funding for for Grants so we said okay why don't we do this grant program that's going to be consensual where we take some of the liquidity and we send it back to to the developers to make sure that they stay involved and I think it's about unlocking the the the the the collective intelligence of the Hub moving moving from just a a passive staking token to a token where you can do some actual building and and build some bridges between the the community yeah absolutely I think like adom accelerator as a bridge builder uh is is it's one of like its un most

underrated functions you know beyond you know funding and everything is like acting and this was this was brought up like lots of times I think uh um you know with regards to the ICF and how uh like in the last you know several years I've had countless people reach out to me and ask hey can you put me in touch with the ICF because like the ICF has this brand right it is the most uh well-known I think organization in the interchain and Cosmos and if you type Cosmos in Google like you'll probably fall on the interchain uh Foundation website only the interchain foundation was not the right like interlocutor for most of these requests because people want to have they they they want an entry point to the ecosystem where uh they can get introductions they can get

introductions to developers to Dev shops to validators to projects that they might want to work with and I think it like a aou taking a role is potentially like a connector for you know not only people within the ecosystem but people coming from the outside that are looking for uh an entry point into the ecosystem is like a highly valuable function that is very underrated and I think like other ecosystems have like if you go to Avalanche or you know whatever like you have avalan LS if you go to near you can go to the near foundation and like they have BD people that are just like dedicated to doing that and that's that's something that's missing and I hope that aou takes a more stronger role in facilitating well it is so one quick thing I think you're spot on and to be honest that's always been my vision

especially like let's say the second part of the Mandate it BEC it became crystal clear that we would want to become for the Hub what a CS or you those or each Foundation are for their respective not we don't have the uh the the you know the ambition to do it for the entire Cosmos but at least for the Hub be that entry point be that connector for the hub for inbounds and also for for for outbounds to to be honest yeah cool well um let's talk about uh let's let's get into the grants right and so the work that a has been doing for the last uh well for for the

last year uh since uh it was founded I think it was in like January so it hasn't even been a year right much less than a year it has we we received the funding on February 10 we opened application around March 15 we closed application on September 5th so that we can process the existing backlog and get prepared for so we really gave grant for for six months and we've been around for about nine months wow and like I mean people should check out this impact report that you guys have written because you know for an organization that's 9 months old and has a team of I think like 10ish people um you you've like produced a ton and done like a lot um in terms of deliverable so um yeah

maybe maybe talk about uh you what what what is the work that you've done over the last year what are like the main things that that a has accomplished and delivered for um for for the cosmos community and like specifically for the Hub 100% so I'll start by what what were our objectives in the first mandate uh those first nine months so we we had two meta objectives one was to fix or meaningfully contributing to fix the atom economics so for that we uh did the exact opposite of atom 2.0 and that was done on purpose which is uh be as consensual as inclusive as possible do

research in the open do a public uh discourse and a public consultation so we run an RFP an RFP is a request for proposal where uh you publish high level specs and then you uh call for people to to apply so we got 13 application uh 31 so block Works research um binary Builders and uh rmit uh an Australian team of uh blockchain researchers uh they've been doing great work so far we just wanted to be to make sure there is a bottom up approach and not a top down approach like we had with with atom 2.0 we also wanted to make sure that the the

research is is open from day one not like like as we as we as the researcher find things to talk about they just publish it they don't wait for for the entire research to be ready to publish it uh we've done multiple uh Twitter spaces uh at cosmoverse uh you were there in the a room hosted by by uh a we had it was the AZ room was like amazing it was like always full of great people great conversations like really engaging yeah yeah yeah yeah and shout out to bendy who was there uh with Reena for the entire time so yeah that's that's the first thing and I'm very

happy with look I we cannot control the the outcome right like that's that's just the nature of things that's the nature of ancient governance what we can control like we have an obligation of uh having the means but we don't have an obligation of on the results St themselves because we don't control the result so the means are there we put them and um you know I'm super excited because uh as we speak the very first module research module uh which is by binary builders it's called the atom alignment treasury uh has been posted on the forum for discussion as a signal proposal meaning it's going to be it's going to go on Shain um you know very

soon potentially by the end of the year um and we also what we did at is to commit on okay we do the research side we fund the research anything that pass governance we commit to funding it uh so that we manage the full life cycle and we make it as practical as possible it's just it's not just yes we do the research and then you know go to public governance no we're committed to the entire process and that's what we intend to do the second thing the second objective of a when we started was basically to just give trust again and give confidence against to the builders and so sometimes we're uh accused of not having uh you know a very uh focused strategy on what do we want to fund and

what do we we don't want to fund and I would tell you that was done on purpose it was not an accident why because we just wanted to assess the the the general appeti of the of the the builders in the hub before taking you know Direction in year two so in year two we be much more intentional in how we allocate research but in year one it was just about putting food on the table of developers because if you don't put that food they're just going to leave to other ecosystem to ones that are much more welcoming and have much more liquid so those way do two things assess the general appetite serve the general appetite and fix the atom tokenomics now uh maybe I can take a few more minutes

to talk about more in a more granular way about our our achievements so I talked about yeah absolutely yeah yeah so I talked about theonomics we also uh pushed really hard on that Narrative of uh atom as money and we pushed on atom as a gas token because I think that know people say that gas token doesn't really matter it's a it's very little I think it's a very powerful narrative that's the eat narrative has started with eat as gas token basically uh so we've been involved uh with multiple grants with wallet providers the first one of them being uh leap uh the second one being uh

Mystic lab so Mystic lab is U the uh building uh a version of Cosmos snaps so we made sure with the with the Mystic Labs that they were that atom was used as the default gas token so whenever you have atom in your in your wallet it will just take it and pay for the gas for any transactions uh with leap uh we're doing uh a few similar things where you have an A View where you can uh use your your atom your rewards from tokens swap them into into atom so whatever we could push for atom with wallets uh we did so that's I think a big area on the atom

economic zone which is the second vertical in which I think we had a pretty significant impact uh so we The Hub deployed its very first protocol on liquidity that happened a few months ago uh when stride joined the E so they requested 450,000 atom to be put on on astroport on the neutron side uh as uh double side equity on the atom pool uh they needed a custodian uh and they came to us and of course we said yes uh it was not part it's not a grant right like it's has nothing to do with a grant program but we still did it because we felt there was uh there was strong need

for that so we're still custody this uh this money today so that's one thing that we did for for for a the second thing that we did for a uh which I think people are starting to to be aware now is uh when Neutron join joined a uh the original proposal uh said that the unclaimed air drop any unclaimed air drop would go back to the neutron Dow instead of the atom committee pool we reached out to Neutron stakeholders we talk with them and say hey why don't you send that incl air drop to the atom committee pool instead that was 42 million tokens that today Worth close to $22 million so that's we didn't take anything on that we did it for free because just because

we're aligned with atom uh that's not something that the ICF would have done no one could have done that except us because we were representing the the the atom Community uh so that's the atom economic zone we on the atom economic zone we also uh launched uh uh what we call an a accelerator with Neutron and and lash which is a leading VC in in Asia uh so I think you know like we we'll talk we'll have plenty of time to talk about a but a cannot be just words it needs to be actions right it needs to take shape to be concrete uh and so this accelerator is a first step in the right direction

how do you how do you showcase EAS you have to it has to be collaboration that that's the only way to build a is to to have those entities coordinate together for uh desired outcome so we did that uh on the event site and the media site um we did a lot uh for example cosmoverse last year it was tragic that the Hub was the main sponsor had zero representation at Cosmo vers 2022 in medin not nothing not even a Twitter space uh and this year we said wait you know what is going to be the main sponsor but we'll do it the right way we will do the proper organization and we will have a real

representation for the Hub which was around the a uh uh room uh I did a keynote representing the Hub uh and and a and multiple uh we were the sponsor of the opening uh ceremony where we we give a small speech uh and all of that has a lot of value um on events and media side once again uh we uh did the very first uh hackaton the very first hackaton in the history of the cosmos Hub it never had its own hackaton and we did it around the E to surf on that narrative and push that narrative uh so I think the winners are about to be to be announced or were just announced a few days ago um we showcased uh Neutron and

stride um so media side again uh block works we we sponsored uh block works I think it's very important for the Hub to align with strong media Brands uh and because the Hub had no representation it was not able to do that but once we started it was very easy for you know media to come reach out to us or for us to reach out to them to outbound and say Hey The Hub would like to SP so we came up with that uh Bas basic framework for media and events where we say it's not about a it's about the Hub so if you look at how we did it for verse we said the main sponsor is the cosmos Hub via

right so it's like everyone is at its own place it's not about us it's about the it's about the Hub uh so that's on the media side on shared security uh shared security is something that is absolutely critical for the the long-term success of the Hub like the whole Narrative of a started as thir security as a as an anchor Point as a shelling point and so we invested in two uh critical initiative so the first one is mesh mesh security like if we agree that security is one of the main modes of the cosmos Hub that we can't afford to miss on something very promising uh such as mes security so we invested uh with a few teams aach AEL uh research are ongoing I think the implementation

phase is going to be somewhere in q1 Q2 of 2024 and uh so that's a given uh we also help uh decentralize the the the set of contributors for IC itself replicated secur so we gave a grant to crypto crew validators to develop a a framework called the IC kick stack service where they it is a One-Stop shop for test Nets around replicated security so that helped a lot uh informal system and also ICF we made sure that there was proper collaboration which between the three parties and that helped offload

basically informal system because now there is a new contributor in town helping specifically with testes so that's on shared security uh we also uh started making revenues on behalf of the Hub to generate revenues so that Mystic lab Grant on Cosmos snap uh we announced a few months ago that 33% a third of the the IBC swap fees would go straight to the atom committee pool not to us not to our multi to the at community pool and that's something that we want to explore uh much more in in the coming future and we made a few other deals uh in the past few weeks if you look at batch six and batch seven where uh uh some tokens some

Equity uh from the project that we granted uh like astrol for example uh will be sent to to the community pool so that's an area that we absolutely want to explore uh next year so yeah I took uh sometime but uh those are a few things where we helped no I mean that it the uh the amount of work that you that has gone into this grant uh into this grant funding I think um is pretty tremendous given you know again like the just how young the organization is and how many people on the team um you know I want to I want to talk a little bit about you know the um the the research side of things because that's I think the the

work that has potentially like the most impact like the most tangible impact um on the future of the Hub and like adom utility so and and specifically you know there's there's there's like two areas I think is uh one is you know atom utility and the other um would be uh like the this treasury alignment work that binary Builders has been has been doing um can you summarize these uh these research uh areas and you know what are the what are the outcomes of this work so far yeah sure so I would say it's in a good place and the main reason why I'm saying that is we it seems that the three teams were

able to align on a simple yet powerful concept and it's not easy to find consensus in blockchain and that consensus we want to push for uh is atom is money uh and I know that people a lot of people you know would say no it's not money Etc but that is the narrative that we're trying to pursue and I think that there is uh there is some you know some real uh legitim so it's atom as money but also atom as uh as interchange security provider and so it starts with the security and then it expand to to to the money so the research uh the twe teams on U binary so binary is working

on three different modules so the first one is called the atom alignment Treasury and what basically it allows you to do is uh for the for the the community pool the atom community pool to deploy liquidity within the a in a trustless way and that is I think gamechanging because that that that solves the trust issue so I I'll just give you an example the the prop uh 800 where uh is helping as a custodian of that 450,000 atom which is a lot of money we are custo this coding this money uh with uh binary Builders work on the atam

elment treasury won't need anymore to do those kind of intervention it would just go straight from the committee pool the Vier set voting yes or no and the money just happening all in the in in the background uh one other thing that um this autom treasury is going to low which is absolutely beautiful is to use the tokens of consumer chains like the neutron airdrop right now of 42 million to basically have the Hub vote on Neutron proposals in on their D and that's that that's absolutely mindboggling because it allows for cross chain Covenant that's like people don't

realize that yet and so if you end up in a situation where let's say we have five six eight consumer chains and each time the Hub owns some Equity within those projects then that means that the Hub every time can vote so uh that money like you that money would be sitting not on the community pool it would be sitting on what we call the atom alignment Treasury and uh the the voters would vote so let's say that uh the the voters the atom voters do 70 yes 70% yes 30% no on a neutral proposal that that waiting would be respected within the nutron governance and some same with with other tokens uh cool yeah the so

the other thing that binary is working on it's called the the bare Market strategic Reserve uh that research is not uh on the form yet it's going to be posted fairly soon I guess maybe going early 2024 which is basically some uh some basic trading capabilities for the Hub meaning that when atom price goes very a lot up in a in a bull market you sell some atom right and then when atom goes down a lot you buy back some atom with that money that you you made so you always have uh some stable coin reserves and I think that a dow I mean if we want to be serious about managing a dow uh we have to do treasury management so it's

just basic treasury management so that when there's a bare Market you don't you don't get completely decimated and that everyone lives you have a solid reserve of stable coin to keep building and I think that's that is about the long-term sustainability of a dow uh the third one is called the drip which is a developer uh incentivization uh developer Revenue Inc incentivization program which is about aligning the core the core contributors of the Hub on the growth of atom and give them give them a proper a proper pay basically to make sure that they're aligned to investing Etc give them a constant token allocation atom so that they keep working long term uh so that's uh that's

binary uh block works is working more on the fiscal side and on the monetary side uh block Works basically is saying that we are overpaying for security they've done some bmark research around Solana around e Etc and they found out that the h overpays security by a lot and I mean we we we all know that and so he's uh they're basically suggesting to move from a a dynamic inflation model to more static more predictable uh inflation model and I think that's critical because if you want to attract uh investors uh you need some sort of uh

predictability on on the inflation side and that's that's that's a non-negotiable and you know I hope uh it's going to happen his uh effort capital is also working and blockworks are also working on what we call a liquid staking tax uh liquid staking is inevitable uh like you would say you know alcohol and cigarettes like you just can't stop you just can't stop it but what if we could make revenues using liquid staking and then use those revenues uh to be sent to the community pool and do some more po like if you have that liid saking tax there are two things you can do with it you can burn it and kick start a new narrative around

atom as hard money because you would be able if you burn it you'll be able to also reduce inflation or you can use it to send it to the community pool and reinvest in the e e tokens by taking more alignment uh in in the E tokens and be become a bank for the entire uh easy funding a strong funding organization so those are uh the ideas of of block work and B and AR and binary and then the last team uh which is rmit is working exclusively on governance uh the governance side so two kind of governance the governance within the a the governance within replicated

security environment and then governance within the Hub itself so on they just published a paper uh super interesting paper 25 Pages yesterday actually uh I read twed on my account you can also look at the cosmos H PR it's also reded on our Twitter account uh so what does it says it says that um for IC to be successful uh we need to account for all those use cases within replicated security so we we need to make sure that we have periodic reviews of IC contracts because those those needs evolve right so when we first did the when we first join orted uh Neutron

there was a set of circumstances and those circumstances might evolve over time right uh like the the one token might go up by a lot the other one and then how do you do to align you have to revise right and so what they suggesting is to have a dedicated governance body that do those periodic reviews directly on the Hub but also on the neutron side or potentially have a DA which is composed of representative from The Hub and representative for from Neutron stri Etc that negotiate on behalf of their respective uh layer ones uh that's one and then on the other one on the other side which which is the the the the governance side of the Hub in general uh

is uh well they want to do a benchmark on a itself and say hey how how can we uh use a DA framework to create uh more Dows how do you what are those oversight mechanism do you need an oversight uh subow for example uh because if we end up with three four subd Dows like a you're going to need some basic oversight like right now we are doing oversight ourselves we have our own oversight committee uh and we're trying to be as transparent as possible but in an ideal word you would want that oversight to be performed directly uh via the Hub itself uh so yeah those are the three uh areas around uh uh fixing

atom to economics and governance and in terms of timeline I think that like we discussed we're doing the opposite of atum 2.0 it's much more it's less risky there is less governance risk because we we're doing Peace by piece but the downside is it's going to take more time right so we think that it's going to take potentially three to six months to pass all those modules there's seven different modules two modules around governance five modules around fiscal policy monetary policy inflation Etc and if we can do that within six months that would be amazing it doesn't mean that everything is going to pass it's spending governance but if we can pass a few the most important one um it's going to be a net positive for the cosmos Hub that that's that's amazing I mean I

mean I think that there's so much research work here I mean like thanks for giving that summary I'll have to do I mean I've been meaning to get you know David from block R research on and and gnome from binary and now that this rmit resarch has come out I think it would be useful to do a podcast which e each of these organizations and like drill down into the research um I'd like to talk but because it's it's it's sort of you know very topical right now the the prop 848 right so block Works uh publish this uh this research essentially and you know David also talked about this uh at cosmoverse essentially saying that like the Hub was paying way too much for security compared to other ecosystems

and as a result there was a proposal that went up uh on the Hub I mean first on the Forum then on the Hub uh uh suggesting to adjust the parameter to adjust the uh the atom inflation and so therefore the rewards that validators uh would would get for uh for for for validating um the on the Hub so like currently as we're recording this the that proposal um ends the voting period ends in about a day uh so probably as this will release and it's currently like pretty 50/50 like not all votes are in but um there's a chance that it might pass and there's a chance that it might not pass and so I'm I'm curious like I don't want to ask you about your opinion

about this I know you like to stay um pretty neutral when it comes to these things but in the event that it doesn't pass uh what because I mean if it passes we know what the outcome is right the outcome is that that parameter would change and validators would would um would get less rewards uh for for validating the chain however the Hub would be I think in a long-term uh better financial situation if if it doesn't pass then what's what's the next step like what's the outcome like does this resource does this research just get tabled are there other uh discussions or like other ways forward here to uh improve the the the economics for the Hub yeah I mean the first thing I would like

to say on this is is and that's just my personal opinion and I already voiced it to to a few people is I would have liked for this proposal to not see Delight to be honest because I mean this is blockchain this is open source everyone is of course welcome to contribute in any capacity he or she wants that's that that's a given that's blockchain now what I think is damageable is that we uh you know spearheaded the process we invested resources we communicated a lot Etc and so I would have liked for the the the the the toonomic side to to stay within the realm of uh of block Works um U binary and rmit um just to avoid

confusion uh because we they did a lot of prep work in terms of comps right they've been doing that for weeks uh and then this inflation proposal comes in which is not coming from block Works to be to be we have to be clear about that uh and so like it just adds confusion and you know I thought it was a bad idea um because it it brought some confusion uh and it seems it's it's not it's likely not going to pass now I don't think it's a big problem uh honestly U because what what blockworks is suggesting and if it passes will end up

in a much lower inflation is just a different a different uh framework so that's also one of the reason why block Works was not opposed to the to the to the to the inflation change because it didn't uh uh it didn't prevent them for keeping the work right uh so that that's not going to change like if they can't do it like if if the proposal is refused uh they will still be able to continue their work which is to come up with a framework around predicting able inflation uh with a static inflation uh coming to a certain level I think the goal is to bring inflation to 3% but that would be done in a more Progressive

uh approach so it's not a big deal uh I mean it's for me to be honest it's mostly in terms of objects it's because we you know we we communicate on that we said okay toomics are change are coming and then we start the process with potentially a rejection so it's not ideal as a start but it's not going to prevent uh those three teams from from completing their their work so that would be my my my take on I don't know if it answers your your your questions but that is my my take you do do you think that the that the Hub over I mean do you agree with this um with with this idea that the Hub is overpaying for

security or is that that cost uh providing the Hub with you know potentially like more users staking their atom uh so better security in on the whole as as there are more staked atom uh yeah I think we're absolutely overpaying for security and you know I I don't want to say is it a major showstopper I don't know uh but I think it's not good to have 20% inflation like it's just like it's just common sense if you look at other l1s the level of initiation is at least half smaller uh and their security they're doing fine with the security

right so so it's this this argument that uh uh the the bonded ratio it's it's a an artificial number who said that we need uh two3 of stake token to make sure the Hub is secure that that's just a random number that was signed a few years ago and things have changed since like we have liquid saking and this High inflation is all also preventing defi from taking off and that's a problem you you need defi I mean like if you look at Cosmos before the Tera collapse was the second strongest in terms of tvl after ethereum uh and so and and atom has a role to play in def5 so the fact that

people are not doing anything with their atom they're just leaving it Stak uh is not compatible with The Narrative of atomas money if you want the the the The Narrative of atom money then you need atom to be in Defi and if you want to be atom to be in defi well you want to you need to to lower the yeld there is no there's no middle ground here uh so yeah we're absolutely overpaying for security and we're gonna have we're gonna have to find a way I don't know if it's a make or break deal the fact that the inflation is staying High uh it certainly doesn't help but I think that we can find our way around even with the high inflation it's just not ideal and somehow it could hurt The Narrative of

atom's money yeah so let's let's uh talk about this this funding proposal that by the time this comes out will will be up on the cosmos sub Forum so people go can go uh look at that um yeah what's in the proposal and uh how how do you plan to um uh to utilize this funding in 2024 yeah so the the the our funding proposal it is uh taking into consideration our learnings from the first year and our challenges uh so one big change uh that we're doing for next year if we pass governance obviously is

to move from a a part-time model contributor to a full-time model contributor so right now only 20 25% of our Workforce is full-time and the rest is uh part-time and when I say parttime is not it's not even 50% F sometimes it's like 5 to 10 hours per week which is clearly not enough when you have the level of ambition that a has um and so that's the first thing that we want to do uh so we will migrate from 25% of people full-time to plus 70% fulltime almost everyone is going to be fulltime next year that's the first change uh the second change that we want to bring is uh we want to become a core organization

of the Hub so we started as a as a pilot uh and we want to become a more permanent organization serving the highest interest of the Hub uh but at the same time we don't want to be a constant burden on the cosmos Hub Treasury and community pool and so how how do you address that well the best way to address it is basically to start making revenues to start generating revenues so if I give you the example of uh the neutron clack which is now worth $22 million under the new model we're suggesting we would take uh a 20% take fee on that uh and that would have made

us you know a few million dollars and so we want to become self- sustainable financially so we ask less from the cosmos Hub but the beauty of the thing is yes we ask less but we remain 100% owned by The Hub uh and we want to keep being uh fully funded uh by the cosmos Hub so that's the second change uh that we that we want to do um the Third change the thir change which is also very important is so at the beginning of this interview we talked about um RPS and we talked about open grants and we talked about serice servicing the general a it of the atom Community well

now we know what is the appetite of the commun it's it's they have a big appetite so what we want to do next year is to migrate uh from a model of open grants to a model of rfps and high value grants just because the return on investment is much higher so if I just give you the example of this RFP the only RFP that we did with onto economics if those proposal pass governance the impact on the atom price is in the hundreds if not billions of dollars like if you're able to fix inflation uh the decrease taking tax all those things that very impactful and so we did only one because we're not

equipped uh for that our structure was mostly for open grants uh and now we want to reshuffle a bit the organization so that we uh upscale uh our technical Capac capacities uh so we're gonna hire a few more people a technical product manager one more full-time Dev because right now we only have a part-time Dev and and start doing those RFP those do those deep research where we say okay in collaboration with the community we will do research we will do a short list of what are those items that are project that are absolutely critical for the customer for example develop uh a stable coin that would be exclusively backed by

atom there is some value for that like if you want to position atom as money then atom needs its own stable coin for example that's not that's not a project that you can do with an open Grant with $100,000 that's the project that is much more costly and you need the proper Technical Resources you need the proper um research resources to make it happen and so next year uh we split the grand budget uh in two in two half so one half is going to be for open grants which is what we do right now and the up the other half is going to be for those uh strategic RFP or what I call also high priority grants um and then um the the last thing we're doing for next year the last pillar of our strategy uh last but

not least is to launch uh a growth subow under a and we have tremendous expectations for that I think there is a major consensus right now in Cosmos that uh Cosmos uh lacks visibility uh is not doing great at selling itself at marketing itself it's not doing great at acquiring new users new developers and so we want to address that by launching a special specialized subow uh to drive awareness and and increase distribution uh around atom so this new unit or subow the growth subow uh it will pursue strategic

Outreach that drives valuable acquisition while also acting as a central hub for processing external inquiries and requests whether we're talking about other crypto protocols or web to uh trade five Market participants uh there are a lot of low hangry fruits and uh we need to address them and that goes back to your point at the beginning of the call which was uh well has become a trusted partner uh and people come to us uh asking for BD uh initi Etc and so we said well we give grants but we don't do BD so let's let's let's do acquisition and BD to process those uh inbound uh uh application in a

in a timely manner and in an efficient manner so that is the reason why we're building this proposing to build this new subow with a dedicated team of four to five people do you think that you know AA da should receive funding from other organizations like the ICF that you know have a lot of money and you know I ask you this because I I think that in order for the Hub to like one of the conditions for the Hub to be successful is for the Hub to uh fund like a ton of projects to build on it um like high quality projects but it needs to go out and fund projects to build the the A and I mean partly this is what

what you guys are are doing um but that requires a lot of money and like a lot of resource and I wonder if you know the cosmos Hub treasury uh and also you know the the revenues that you're that you you want to generate are sufficient to build this massive Business Development machine that the cosmos subub needs if it wants to uh to be able to um compete with the likes of polygon and Avalanche and salana and that's just you know th those are just the existing ecosystems now think about you know Celestia and enan Lair and and all of these other you emerging uh modular application Stacks that will attract tons of users because

they have you know there's money uh to be deployed there and also there sort of you know hot narratives uh so you know does does does AAL have enough funding to do that and you should should the ICF start pitching in in your opinion that's a very good question so in terms of BD I I think that two ways to do it and they're not they're complimentary so you can do BD for the Hub itself you can do acquisition for the Hub itself and that's what we want to do with this new growth Dow grow subd and then you can do BD for the entire ecosystem so I think that the entire ecosystem doing BD for the entire ecosystem uh take much more

financial resources that without just doesn't have and even if the Hub wanted to do uh ecosystem wide funding uh for the entire Cosmos uh uh it probably wouldn't have enough money and so the fact that you're mentioning the ICF uh here is is spot on and I've seen multiple parties on Twitter space Etc uh talk directly to uh to the leadership of the ICF to say hey you guys need to to step up uh and I'll just like share my own view on on on on the ICF I think that the ICF has done an amazing job at maintaining and developing the cosmos

Tech stack but that now it needs to step up its game and uh not stop the funding on the cosmos St stack but direct a big part of the funding to the BD part because the tech stack now is mature uh for sure you can keep developing IBC you can keep refining D SDK but I think that the basis is there right and so now what's going to make the difference between Cosmos and other ecosystem like the like arbitrum optimis monum Etc it's just how much money you put in there to drive acquisition and to drive a larger user space and the ICF is not doing that that's a big problem uh and it is the

richest orc by far of the cosmos and the fact that they're still not willing to uh to dedicate funding to Bringing more users is is a problem now uh on us for the growth Dow because we're fully funded for now by the cosmos Hub we can't take that money from the community pool and start doing ecosystem wide BD because that would be that would make sense because we are owned by atom and so we need to do BD on atom we can't uh you know blockchain Cosmos is 70 blockchain so we can't like just put money for dydx and others uh but with we're super open like to get some funding as a grant for

example from from from the ICF and we already had some early talks about that to do ecosystem wide BD with more with more funding while remaining the property of the Hub that that's not something that we want to change I think that's a constant yeah what made the success of a it's it's a very simple narrative it's everything we do we do it for atom no matter what happens will always remain the property of of the Hub and that's not going to change so if if ICF comes to us and say you know what like we give you money but we want to own a part of you that's not going to happen that's we we will remain with the Hub but we're super happy to take funding and do ecosystem wide not BD not just with the atom money it has to to

come from external money that's my tick yeah okay cool um so I mean I think we we should probably wrap up here because we're running a little long but um you know your your your hot take was that you think that uh Adam will will be a top five chain I don't know if you uh if you have a a sort of timeline on this but uh regardless what do you think needs to happen to get there because I just as I just mentioned there's a lot of competition and you know the Hub I think still has a really strong brand Adam has an really strong community of people who like are holding Adam and believe in the token believe in the vision of the Hub

but you know that can all go away really fast and if you look you know you just have to look at ecosystems like like polka dot for instance which up until two or three years ago uh you know had like top M share lots of developers uh you know building in that ecosystem um and I think that that has kind of Fizz fizzled away now and you know the the vision for polka dot and and also the launch of the chain sort of happened around the same time as the Hub so you know what what do we need to do in order to ensure that the Hub doesn't uh s fall into irrelevance and becomes a zombie chain or you know just like

another failed idea that was surpassed by you know new more interesting you know more well capitalized better coordinated better organized ideas so the first thing I would say is the Hub I don't think the Hub can die or fade into re into relevance and there's also like there's almost like a a mystical aspect to it which is that you cannot compress which is atom is the the the an OG token just like BTC and like it and just like BTC and it are still there yes I mean BTC is not doing any any Innovation right it's it's very

it's a it's a rock it's there M coin I mean like I think I think Adam will will always remain its meme coinness uh or retain it but you know we want more than just meem we want people building there we want like this the a idea is to build an economy there and so by if you're saying economy you're saying something that's thriving that's evolving that like you know is generating value that's like actually doing look there are multiple uh uh IDE is the multiple people brilliant people super smart people like having their own uh Vision when I met with sunny from osmosis in cosmoverse and I I had a talk with him uh I was impressed with his vision and he's going from basically

core principles first principles first like what are those Primitives he saying that the Hub has two superpower one is his its vast decentralization the like the largest the the most decentral decentralized value set for an L1 I think it's if not the most maybe the second most that's the superpower and then the second superpower is onchain governance so if we can find a way to use those two Primitives in service of bringing value to atom then we have a top five or even a top three token I'm convinced how to do that around those two perimeters I don't know I don't have the answer but I think that if we go from those first

principles we have a pass to top three token atomas money has to be uh has absolutely to be explored I keep saying but that that's that's my own opinion that atom as gas should be Pur within a but not just AZ within the the entire uh interchange it is a very powerful narrative we need to give utility to atom that means that we need velocity that's why we need to lower the inflation so that atom can be there in defi playing uh you know very strongly with all those competitors that we have we like atomize is a prefer collateral people just want atom right so if people want it you need to put it everywhere you need to put it in defi you need to

put put it on uh Dow treasuries uh you need to put it like as on on Landing protocols you need to incentivize that so like right now and that's why uh protocol on liquidity and the the the the atom alignment treasury is so critical I think for the Hub is because it is a superpower to have a a monetary policy and a fiscal policy as an anent governance body where you direct that liquidity that money from the treasury directly to incentivize right now the Hub is not incentivizing those pools what happens the day we incentivize it you put atom in the hands of everywhere so atom as money I think is the best shot uh for atom in the medium to long term and I would like to keep exploring

uh what is a decentralized governance token look like the sun's Vision so those are the two things uh I would love to keep exploring in the future yeah well uh maybe some Alpha here Sunny's coming on the podcast in like a week or two to talk about this very this very idea so should be interesting and uh yeah I'd love to get some of the other folks doing the research you know on the show as well to dive a little deeper here and um and yeah I mean like look I I've been holding Adam since the token sale and I still believe in in the vision uh I hope uh I hope I'm not proven wrong here uh by by holding these assets uh but yeah I mean like I still believe in the vision for the Hub I still think the Hub uh being highly

decentralized uh having really strong governance um uh having a really strong Community as well I think like that's one of the biggest things going for the Hub is just like the community uh the cosmonauts right like this idea that um this cosm idea and so um I'm I'm still I'm still rooting for the Hub as you are um so I'm I'm uh I'm hopeful that we can we can make all these really good ideas uh come to life yeah 100% great uh Yousef thanks so much for coming on it's been great uh chatting with you and uh I wish you the best in your The Proposal as it goes on chain yeah thank you so much take

care