Cosmos & Celestia: Building the Next Generation of DeFi with Drop

Transcript

our role here is like first building a lot of Tia liquidity and basically making sure that Tia is the most liquid LST I actually like where Cosmos is uh right now in because a sense urgency and willingness to work together and maybe take steps that are not just incremental but maybe like take more risk what I like personally about cosos and I think many of the others are kind of of the same opinion is like we're building stuff that everyone is going to be applying like across all the chain in two years from now more or less right and uh oh it's a great position to [Music] be cool all right so I'm here with M

aranov of drop hey hey thanks for joining ouch yeah my pleasure come it's very comfy comfortable cuz it's about to get is it getting spicy it's going to get spicy all right spice needed that's it so how's your week been how's for uh it's been uh it's been really good one uh for us we coming into cosm after we just uh announced round thank you guys for supporting us uh for the SE round for drop uh so yeah there lots of conversations that we were're having here obviously for us Cosmo vers is like where we meet a lot of Partners so our partners are defi protocols validators um and uh yeah so lots of

lots of good conversations going I'm super tired which is great that's problem that's yeah that's why I'm here so yeah can't complain and what's the latest withd drop you guys launched a couple of months ago you just announced fundraise lots of good stuff uh yeah so fundraise uh really acceleration from here so for us um like Adam was our first asset and for us it was a way to really uh let's say give it a test to our theory about like how we launch this assets uh how we basically map map out liquidity how we work with the defi Partners uh what are the use cases that uh people are excited about and so on uh I think we launched

in the worst possible time kind of for autum like in the middle of the blood bath so from the testing perspective it was actually perfect time because you don't have this um kind of advantage of oh everyone is excited about your this asset and like whatever you do uh like you're going to be successful just because the asset is is so so exciting right now so for us actually like from the product perspective that was really really good testing ground uh because yeah we didn't have anything that was kind of making product good without without good good product let's say um so that was great uh and yeah I think we now have this kind of template that we can apply to the other asss and uh yeah this is uh what's coming basically uh so later today I think we're going to

launch uh tier tested um and uh there are a few other SS count but I I'll talk about here a little bit uh so I think there's a lot things that are going on around celesa right now uh there are the unlocks that are going to happen in a few days so there's just way more liquidity that is going to change hands uh around it's just a good moment like for for everyone like to start using def and there are also many new launches uh in Def for Celestia and now we see certain projects that really focus on TIA as a defi asset so Austria for instance they're uh launching their their first rollup called flare and this is going to be kind of tier focused um

tier focused rollup there are also uh other uh other launches in the ecosystem that kind of treat Tia as a primary asset so if you compare it to maybe like half a year ago when like first Tia based DS launching that was not the case it was kind of a bit of vacuum and therefore like for the users there was not much to do they were kind of collecting points and such uh but now yeah you can actually do something with with his assets and like our whole thesis is like make liquid useful LSS and uh yeah now it's it's actually becoming reality so pretty excited about that another thing actually about Tia is that uh there were no interchain accounts on Celestia before the latest Lem grass upgrade and that meant that uh basically for everyone launching um

launching tier based lsts they needed to do some kind of a let's say tradeoff because basically some sort of a multi based setup was the only way to go and now with interchain accounts you could use uh like in our case smart contracts that operate accounts on on Celestia oper taking transactions there so this setup is uh is way more kind of crypto Crypton native and trustless uh so yeah we were also waiting for the lemon gross upgrade and we got a lot of flack I think from that was the that was kind of the fud around Milky Way was we're using this multi I was uh uh yeah that was actually kind of funny because any like there was no no opportunity for any LST to launch uh any other like architecture so I I don't think it's uh it's fair to

say like okay like if you think that milky waste product was not secure like don't use it like I don't I don't know the kind of the whole uh the whole he kind of heated discussion about it I think uh there is like multis are not ideal if you have an opportunity to to like build a product without using multi you should totally do that uh but it's also it's a trade-off let's say so we were not ready to use multi uh but yeah it's something that users can choose this as well right um yeah so it's basically our testl is ready launched this uh basically as we speak uh ping the Twitter announcements and such so depending on when when the podcast goes live it's probably going to

be live by then for a few days try I'll try to release it around that so it's relevant um so yeah to unlocks are on November 10th I think is that right I thought it was earlier I thought it was October 31st but don't quote you know that that's actually couldn't be plus or minus few days so that's that's like you say it's going to unlock a lot of liquidity lot of liquidity will change hands it's an it's an opportunity also for liquid staking protocols that uh now all of these you know the VCS uh the angels that invested in Celestia um Can liquid stake their assets and utilize them in defi it also means that a lot of funds that bought you know in the seed and series a might want to I mean a lot

of them have OT seed out of positions but those the people now holding um those assets um will maybe will will want to to divest those and sell them um yeah you know how do you think that this is going to affect the market and like your position as a liquor saking protocol for Celestia I think it's it's great for us uh for sure and as I said like that's one of the factors but it also come in with the with a factor of there's just like more more to do with these Assets Now um so yeah I think we'll see like pretty quick uh increase in uh in liquid state Tia and uh yeah happy of course to work with any DT DT

users that want to use it in drop um and uh yeah for uh for I think like for the funds that were holding to it's also um like the only option that they had was basically just just a stake right so this is why on TIA we saw like 70% Plus St rate um and uh we actually we were tracking the unlock or uning uning transactions for celesti in the last few weeks I think it's now maybe around uh 50 plus million tier that is like waiting for the unlock so like then oneing has started already so I think we'll see um yeah like probably in total like 100 plus million tier kind of

floating around uh at around the unlock time and uh yeah expect a large portion of it to to land with the liquid station protocols so yeah it's like looks like like millions of tier can uh can go into uh into liquid saking protocols into defi uh around around the time so it's going to be pretty yeah I think I think the Tia unlock is going to be one that like a lot of people are going to be watching and how that's going to affect the price but also like how these assets are changing your hands how much utilization in liquid staking will uh how much liquid staking utilization will will result from from the unlock yeah um yeah so like thinking about you know drop as a

liquid staking you know Hub um you how how do you see how do you see the future of drop uh as a cross chain protocol and I asked this in the context of a question that I've been asking a lot these days uh either here on this podcast or through panels is you know Crosset applications are still quite rare true croset applications and liquidity flows between ecosystems um with the exception maybe of like Salon Eve are still reasonably low um you know how how much like what what is your vision for for drop kind of in this um in

this in this particular place where you're you're able to provide you know Tia atom liquidity Cosmos asset to other ecosystem yeah uh that's a great question I think um like talking talking about like many different assets and I'll kind of go deeper into the Tia situation but like regardless of the asset um I think now uh from the user perspective like in terms of just the ux of staking uh I think this kind of fragmentation of the ecosystem is pretty much invisible already so when you st drop uh you can say okay like I have this asset on this chain I want to stick with with drop and uh and that's it like

you don't have to think about oh my autom is on Moses I have to bridge it first blah blah blah it doesn't really matter uh so I think from the from the US perspective that's uh not a not a huge problem and uh I think that's where like what we're building is quite unique because I don't think there are many more cross chain smart contracts uh in the first place and um yeah that's like a pretty unique kind of pioneering thing say on the on the blockchain level in general uh but I think there is still some uh let's say liquidity fragmentation that that exists in the market and uh if you think about um kind of liquidity in the context of the ecosystems it's still pretty much

kind of blockchain but blockchain and it's pretty much defined by the fact that when protocol protocols look at like the liquidity available for them if you think about Stak sorry Landing protocols for instance they typically would be looking at what exists on the deck on the same chain uh and it's kind of pretty much universally applied with some some uh some maybe exceptions like NS for is a good example so they're kind of looking oh here is the neutral liquidity here's a small liquidity and they're actually not a truly cross chain protocol again like there maybe like five of us uh kind of cross chain protocols but I think the changes come in here because uh actually the here at

cos so we had a few conversations with people who are building uh protocols that are um like looking at the liquidity in the holistic uh from the holistic perspective so that you could kind use them to to basically like use liquidity from any deex for instance for your liquidations and such yeah so I think this is really coming uh I I think for Tia specifically we have a slightly different Theory and um uh just because how the the whole modular ecosystem is going to evolve um so I think for Tia it's going to be more of kind of roll up by rollup uh and we see our role here is like first building a lot of uh Tia liquidity and basically making sure that

Tia is the most liquid LST uh in general but also given rollups uh kind of the driving seat in terms of how it is implemented in the context of of their rollup so that once it's bridged to the rollup that's like the ls that they own in terms of uh maybe like branding in terms of the commercial setup uh how the how the revenue is managed and uh in terms of uh how the governance is um is implemented there as well so I think like for us long-term vision for uh how d basically thrives is that uh there's like a liquidity hub for for DTI uh and then there's like a custom implementation of uh of this LST in the in any particular rollup uh and I think

that kind of speaks to the whole ethers of the of the modular ecosystem um I think like my sense of of celesa community in general is that they don't really want to see um like one single huge kind of LST which is managed by um by the Dow which is not uh let's say which is not a Celestia da uh so I think that's the elegant solution for how you put uh the uh Sovereign rollups really in a situation where they manage uh what's going on with the LSS on the rollup so that they kind of Masters of their Destiny they can uh manage the kind of value capture they can share this rewards with the community and such I think like this is really the direction where where it's going for Tia

in particular uh and uh yeah maybe for the rollup system in general but uh uh yeah there's also I think maybe different kind of cont concept of liquidity management that initi for instance is building so uh yeah I can easily see how it's going to be like a separate story for tier and for initia and from our perspective in general we kind of think of with ecosystem by ecosystem they're all really different and uh uh our our idea is that you like you need to respect uh like how they want to really build their ecosystems there is I don't think there kind of one kind of LSD solution that works exactly the same and works well for for different ecosystems um so yeah I think

that's like from my perspective that's how how it could be sold for uh for initia for um our I think it's more like there should be a um kind of autom autom defy that uh that lands uh kind of somewhere uh but also uh maybe there will be kind of a few different uh let's say a few different D5 focused uh projects that uh that kind of specialize in in something slightly different so um if this kind of cross let's say cross chain liquidity Solutions are coming then it makes very easy to kind of navigate AO liquidity across this this few ecosystems um yeah so I think I I

don't think it's like one story for for all these assets really what about restating you celester reaking Celestia raking so it's going to happen uh that's for sure um I think that uh like uh we we really uh have like a SW partner here uh in Milky Way uh so they obviously like super focused on on RIS taking uh like DTI you will be able to use it as collateral uh in in Milky Way RIS taking uh I think there's also going to be like an interesting design space for like how you build lrts on top of that so that's sounds that I don't know like not many people talk about so far but if you look at the e theor space

that's kind of LRT designs is is really where people now competing competing the most let's say they have different solutions for how you like St St in uh St in different types of points if you apply this like to um to the interchain E like modular ecosystem then or you could um uh stake with drop you get like DTI you can then use it as collateral Milky Way all of a sudden you have now droplets and uh milk points you can stack them it's becoming like really interesting and then like who knows what what kind of varities are going to evolve on top of that so yeah I think it's uh it's becoming like a pretty interesting game in ter in terms of U let's say like first step is going to be

oh like how we optimize towards these different incentive companes and then the second step should be oh like let's let's find the demand for like avss and such so um yeah I think it's kind of to be seen to be honest like uh with ethereum it's also an open question I think in terms of like how many avss are actually going to be there and what kind of Revenue they will provide uh for Tia same thing um yeah I wouldn't be really how to say I wouldn't be doing any projections in this in this regard I think it's kind of too early to say um I think like maybe like for for some investor it's a good bet but to make um yeah we'll see we we're we're happy like

to support this as a part of the general D ecosystem watching this closely of course like we'll see how this evolves um yeah I don't know uh it's a it's very uncertain like from from my perspective how is going to go what one of the things that that drop has been of pushing is this idea that liquid stake tokens should have utility in Defi and part of your early launch and user onboarding has been encouraging users to liquidate your sets and then utilize them in Defi and aort noas and other protocols can you talk about the expansion of that work and you know how how fast can you onboard new protocols and what are some

of the bound like the barriers to onboarding protocols maybe outside the defi ecosystem of Cosmos but you know in salana like how do we how do we get drop uh D assets in salana in ethereum e M chains yeah uh I think we we're definitely going to get them there uh it's uh it's more or less known process let's say um from our perspective it's just it should be like as I said like ecosystem by ecosystem because you want to line up a few things together uh you need to have partners that like together they create a compiling use case uh so like the I guess the minimal viable solution is that uh you need to set up some Dex equity you need Oracle solution

and then you need a protocol that actually like creates something exciting on top of that so I know in case of ethereal that could be for instance oh Pendle Pendle is like super interesting for that um yeah maybe uh if you think about like injectives of the world or like other ecosystem kind of kind of same path so you need to find something exciting uh how these assets are bringing something new for these ecosystems and um yeah and then otherwise I think it's kind of in known uh more less known problem really what I think is uh kind of makes it easier is this yeah like if you if you can reuse kind of Dex liquidity cross the chain I'm kind ofing myself but it's a uh it's an important problem to solve uh I think the other one is just um how you and

maybe it's actually where it should have started is how you work with the communities because it's kind of on the technical level it's like ecosystem by ecosystem but you also need to get the community excited I think uh in our experience like the best way to work with the communities is through the projects really because um I think they they tend to have like very passionate following uh they they just cool people that like it's fun to work with them and you can create something uh something new they're always looking for like something fun to do so yeah I think like working through the NFC communities or like maybe some other projects that like have big presence in this community and then actually like figuring out something together with them I think

that's like the best path because you can do this kind of web two way you can go like okay like here's here's our protocol like do some BD the on board some Capital blah blah blah but I think if you do this like Community First that's way way more fun but it's it's more natural like you get you get people that actually excited to to work with you um yeah so I think like the community aspect of uh of it is really really important so like when we think about the Z system it's like uh it's it's more like Community First approach when you think okay how do we actually like work with with NI and salana excited about exactly yeah yeah like they maybe maybe they don't care which

is totally fine as well uh but yeah I think you should talk to people first and uh see like at the end of the day like we should have um we should have people who are excited about these assets uh right and U they can be excited about for for multiple reasons uh but yeah at the end of the day yeah Community First Community First I would say yeah wow so what's your maybe taking a step back here and talking about you know the cosmos community and and cosm this your it's a second one yeah I only went to Istanbul I missed all the fun in the in Colombia in yeah it's a bummer so uh but I mean this this has been fun too I've really enjoyed this this Cosmo burst what's your sense of where Cosmos

is at right now I've asked everybody here this question you know where are we in the cosmos life cycle yeah I think Cosmos I I actually like where Cosmos is uh right now in because a sense uh sense some urgency and uh willingness to work together and maybe uh do let's say maybe take steps that are not just incremental but maybe like take more risk uh in terms of how we how we move the ecosystem uh further because uh yeah I think it was just kind of bit slow uh last year in general and now like my sense is that everyone feels urgency about like specifically let's say kind

of the part of the ecosystem around Cosmos Hub that okay like let's change something uh so now we see things starting to move uh that's actually pretty good uh I think it would be would be bad if there was this kind of sense of okay like things are going well like we're not going to change much I feel the opposite which is cool um uh so there's that uh uh I think like in terms of the quality of projects that are building in Cosmos it's uh it's absolutely incredible and I think Cosmos still attracts people who are who want to me cool stuff and what what I like personally about Cosmos and I think many

of the others are kind of of the same opinion is like we're building stuff that everyone is going to be applying like across all the blockchain in two years from now more or less right and uh oh it's a great position to be so so um and I think that's that Still Remains so there is this kind of delta in terms of the vision uh that that is still here um yeah so my kind of emotional feeling about it is that there is a lot of kind of energy accumulating right now and it kind of waits for some kind of a trigger event uh to to actually kind of release all this energy into into something you so yeah I think I think think that's pretty cool I think it also works with like a lot more activity in in celestial

rollups uh initiate launching again so yeah uh I really like where space is right now although uh it could be let's say the current state just if you ignore the Dynamics if you just do this kind of what is going on right now that maybe it's uh it doesn't look that great we're like at almost at the token price wise as well we're not not in the best place but Dynamics wise I think like early next year is going to be really interesting yeah what do you think I think so too I think I came into cosmoverse with the expectation that things would be different from last year um that there would be I don't know if I'd

say sense of urgency but but definitely that that there is a renewed Focus L yeah yeah people are focused on you know fixing some of the issues with the Hub resolving some of the drama um and and and and that seems to be the case from people I've talked to and and things I've seen so yeah I feel that's kind of fighting kind of within this bubble and more like let's look outside that's what I wanted to see kind of for Cosmos in general so it's it's kind of happening more of that happening let's say h absolutely so I guess um I don't want to say I'm I'm um I'm still I I

still think that Cosmos is a great ecosystem I still think that Cosmos uh that the stack and the tech and everything that people have been building in this ecosystem is amongst the best uh pieces of technology in crypto um I'm I'm still unsure about the Hub and what the future of the Hub would be I mean I think there's going to be some things announced very shortly regarding that that you know may or may not change my my view on the Hub uh I'm still holding my Adam since 2019 so um okay I haven't I haven't uh I haven't dumped it yet uh but who knows maybe in a couple weeks I'll change my

mind but um for now my Adam is sitting safely on draw uh a cute droplets and everybody out there to you if you have Adam and you want to liquid stake it um check out drop and they'll be enabling Celestia soon so you should also on stake your tia I should do that too yeah time yeah time to time to unstake some Tia um yeah try the testet actually last last time when we did the atom tested we received like 150ish like very detailed feedback forms all the tested which was like absolutely amazing it terms of was very useful so we did like a whole kind of mirror board with all the like positive negative

feedback blah blah and then we just executed on one really good I mean yeah thanks I me it's in part also thank thanks to the fact that Adam has the LSM yeah which not a lot of chains have I don't know why spicy topic it is des bite the topic but that just really improves the whole ux of liquid staking and unlocks liquid and I think I mean unless there's something I'm missing here chains should enable it to unlock this liquidity for their chains and the utility of their liquidity uh yeah now now we have like another round of around LSM so like subject to uh these two upcoming audits as far as I

understand that's a plan now um yeah then uh uh yeah maybe like all these uh concerns are going to be relieved let's say uh yeah I'd love to see see this coming to be honest like I'm not relying on this at all like in in our plans um there is a like I actually had two discussions with like two different teams that were potentially interested in in building something around that uh it's not an unsolvable problem without LSM in fact right because what do you need to do at the end of the day okay like you and stake you don't want to wait for 21 days if you do this just manually what do you what do you do you warrow tier for 21 days you use it in drop like you can start using it right now and then uh in 21 days you can just

close your Deb and that's it you need Lal unless you have someone who's taking the risk on yeah exactly so like in principle what can be done is you kind of automate the whole flow and if the user is happy to pay for like the Lost rewards in 21 days which is like around less than 1% actually for tier um which is I I think is reasonable price to just kind of skip the whole period and start using these assets more productively um then yeah it's just an automation that needs to be built plus to stop thinking about it you have like new set of problems like what does is if the user actually didn't un and such um yeah but in principle that's solvable and uh from our perspective we actually saw a lot of more stti coming when we

activated LSM on the Hub um and uh yeah so maybe we'll put it in the road map or maybe we will work with someone else to do like a similar um similar thing for for Celestia for instance so that uh let's say it's going I I don't think it's going to be allm for Celestia but maybe there's going to be just this kind of automation that just makes it a smoother ux and uh without all this kind of security concern on the on the foundation level for the chain yeah I hope so I think it's it would be great for for other chains to enable it and definitely make liquidity a lot more that was great yeah yeah thank you thank you yeah thanks for your time thanks for

having me cheers [Music] [Music]