Crossing the Chasm: Introduction to Cross-Chain DeFi

Transcript

hey i'm uh i'm seb uh i'm the founder of interop ventures we're an early stage vendor venture fund uh investing in uh the interchain ecosystem and protocols and primitives and um i'm glad there's such a big turnout here at htc for this con this talk on interchain defy i'm also the host of a couple podcasts you may have heard of epicenter is i think the one a lot of people how many people in here listen to epicenter yeah got some episode fans here and uh some other ones like the interop which i launched uh earlier this year uh which is similar to epicenter but a little bit more focused on interchange uh projects and you know looking at so that that stack and a fun uh fun project i do with my friends over at zengo called zen

crypto show which is really you know podcasts for your mom and uh you're annoying relatives who send you messages on whatsapp every time the eth price goes up um so uh also um interop entrance is presenting nebulous summit here on on friday it's a inner chain and cosmos conference um it's going to be great about 50 speakers 300 attendees and uh we're super excited to be launching this here in paris this year at hcc um anybody come in the nebula hey um unfortunately we're sold out uh and over capacity but next year we'll get maybe a venue like this so you know maybe you're this guy maybe uh you know you got your eath bags and

you're wondering like why why do i need to wonder you know and like care about what's happening on other chains and why cosmos and this this talk is really for you know those of you who um haven't wandered across cross the chasm over to the inner chain and uh and you know started using things like fmos um osmosis etc for for all of you here who already use cosmos you know enjoy the air conditioning but you know you don't have to be this guy and you can certainly you know start leveraging some of the d5 primitives and some of the d5 apps over on the on the interchange and today this talk is going to be telling you how you can do that and like specifically which bridges you can use to start exploring the inner chain

before i do that though i just want to maybe have a little bit of a primer on what is cosmos and what is the inner chain and you know i'm going to use those two terms interchangeably like cosmos network and inner chain are sort of you know overlapping in many ways so it can be a little bit confusing but just bear with me here you know the inner chain uh comes from this idea of an application specific blockchain model so the idea of app chains was you know very much pioneered by a lot of the folks that were working early on on the cosmos sdk and the technology stack there and another one of the core primitives here is interoperability this idea that application chains should have interoperability primitives built in and this is really the

sort of like core thing that we need if we want to have composability between apps uh that that are in fact sovereign and independent so you know if you compare that to the you know more like monolithic chain um monolithic chain model where every application exists on the same shared security uh and and and virtual machine infrastructure app chains have this complexity where they're not on the same infrastructure so we're gonna have to have an interoperability protocol that allows us to to interact um sovereignty is also one of the core primitives here and what i mean by that is that every application chain is sovereign and that it has its own security model its own validator pool for now since the cosmos hub which is sort of the main

one of the main zones in the cosmos ecosystem we'll enable shared security sometime this year which means that applications will be able to launch and bootstrap their security using the cosmos the cosmos hub if you're familiar with how polka dot works it's sort of similar where you have sort of a main chain ensuring security for other chains as well another core primitive that uh it's been really interesting to see sort of play out like all these theories about on-chain governance actually play out in practice is governance chains in the in the cosmos ecosystem can enable governance and that enables communities to decide on important updates and upgrades and changes to the protocol and things like community spend and treasury expenditure and so you know it's it's always interesting to see that

actually play out and there's been some really interesting sort of political and also like um philosophical like debates around like how uh unchained governance should be managed and you know applications chains are scalable and it's no wonder that a lot of the ethereum ecosystem i think is also moving towards this more horizontal scaling um horizontally scaled architecture um because they because uh horizontal scaling horizontally deployed chains scale excuse me um and so you know with the cosmos sdk and tournament consensus we can arrive at thousands of transactions per second and applications are not competing for throughput with other chains so that's

in a nutshell some of the core primitives of cosmos and if you if you start you know uh believing in these you'll be on your way to becoming a true cosmonaut at the core of every cosmos chain is the cosmos sdk so it is a framework that allows you to develop proof-of-stake modulus chains there's a series of modules there that allows you to build uh your custom chain for your custom application uh things like i mean account authentication token transfer object capabilities fee distribution etc is about a dozen modules of course we have tendermint core pbft algorithm at the core of it which allows the chain to be validated and the cosmos sdk is used by a number of product projects

about 60 chains in the inner chain today if you want to go further if you want to like build custom functionality you can of course build your own modules and certainly teams are doing that and up you know bringing that uh that code upstream um to be to be added in sort of the core set of modules but there's also cosmosm which is another cosmos sdk module that allows you to build smart contracts uh using webassembly uh currently um currently contracts are written in rust and we see a number of chains implementing cosmosm um and implementing in in different ways so if you take juno for instance which you know looks a lot like ethereum in the sense that is it is a permissionless

blockchain where you can deploy smart contracts juno allows anyone to deploy a cosmos smart contract without anybody's permission other chains are choosing them to go a more permissioned route and saying contracts that are deployed on our chain have to go through governance first or some sort of white listing and finally of course ibc which is the intra blockchain communication protocol it is a trust minimized token bridging protocol that allows chains to send messages across um you know across the boundaries of their security uh users have to trust the chain that they're sending tokens to not the bridge so it's sort of analogous to you know going from manhattan to new jersey you don't have to trust the bridge but what happens in new jersey sort of that's your problem

and with planned upgrades like interchange accounts and entertaining queries you know you're going to be able to we're going to be able to do more profound interactions so for instance controlling accounts on different chains and even querying other chains data directly so that's that's the protocols in the nutshell now if you want to start using cosmos today if you want to start sort of leveraging some of the d5 protocols there you're going to need three things you're going to need you know the recipe here is like you need a pinch of your favorite wallet you need a dash of your favorite bridge and you're going to need like a sprinkle of a d gen d5 protocol and you know the the the wallet by sentence that that most cosmonauts use

and is sort of the canonical wallet in the in the interchange ecosystem is kepler kepler is an amazing wallet it's great user experience uh you know if you're if you're like me and you sort of like bang your head against the screen every time you use metamask and that i love metamask but it has its issues um you know you're gonna find that using using kepler is just you know like just pleasant uh you don't get any errors or any like gas feed problems or anything like that works very well you're able to manage all the assets all your interchange assets and they have a mobile app um that also works super well like and you can use it with your ledger nano x um natively and so i i personally like love

being able to take my nana with me and also manage my portfolio wherever i am um they also have this like great dashboard on the desktop where you can have a sort of broad overview of all of the sort of layer one things that you would you know want to do uh with your cosmos assets so stake your tokens claim your rewards and restake them but also manage all the governance proposals and sort of vote on those because you know of course like voting on governance proposals may allow you to get air drops and things like that so the the kepler dashboard is a great place to see all of that in one place and you know you will still have to use

metamask once in a while um because cert certain chains do you certain cosmos chains are evm chains so for instance fmos which we'll talk about in a second um you know you can use atmos with metamask or kepler because it does talk evm and it cosmos sdk um and so therefore you know for some interactions you're going to have to use metamask so once you've got your wallet um well how do we bridge into the interchange how do you take your your your eath bags or your usdc bags or whatever and start bridging those into into cosmos to take advantage of some of the yields and some of the defy opportunities there well the way that most people i think

would and certainly one one way that i would recommend is using osmosis and osmosis is the best best decks in the interchange uh it's it's got a great user experience it uh it has you know somewhat something like 30 tokens listed there and you can use xlr satellite to bridge your ethereum tokens over directly into osmosis so it's like one transaction uh you bridge over into osmosis and you're able to to uh leverage these tokens in liquidity pools and whatnot um because you're using a bridge here trend you know that that bridge transaction can take up to say 30 or 40 minutes because it does need to to

wait until a certain amount of blocks have been added to the chain so axle r is the canonical bridge that cosmos and the cosmos community have sort of put their rubber stamp on saying like this is the bridge that uh we're gonna we're gonna stand behind um so we don't have sort of you know collisions between different assets coming through different bridges but you can use gravity bridge as well uh only with the sort of permissionless version of osmosis which i'll show you in a second you'll notice a little cowboy hat that means you're looking at osmosis frontier which is the permissionless version of osmosis so if you're used to using uniswap and how you have tokenlist they haven't implemented tokenlist yet so this is sort of a

sort of a patch until we have token lists but it is possible to use gravity bridge as well so this is what osmosis looks like um you know you can you can swap your assets uh with a similar interface than what you'd be used to something something like like uniswap uh you can you can pool your assets as well participate in liquidity pools by lping and have a look at all the assets that you that you have in your wallet and so if you have assets on another cosmos sdk chain you can deposit them directly with a ibc and that's one transaction and it happens in about you know two seconds so when you deposit ass let's say you have

atoms over on the cosmos hub and you want to deposit those atoms on osmosis it's one transaction one deposit transaction and those atoms are now on the on the osmosis chain and one of the great things uh that osmosis released early on was super fluid staking and so you know in sort of the you know ethereum uh space where you know you lp your tokens and then you you sort of bond them to to farm yields um you you don't really have the the issue of uh well you it's less of an issue but you know because uh every cosmos chain does have staking as well you know here you'd want to be able to stake your tokens as well uh and so you sort of had

to make the uh you know the trade-off between one or the other and so here you're able to also stake the tokens directly and like get an extra yield on your tokens that are in the lp in the liquidity pool so this is osmosis frontier this is sort of the permissionless version of osmosis where you're gonna be able to trade all the other tokens and all the other bridge tokens uh that um that are uh that are listed the other way to bridge so that's that's sort of the you know the cosmos route moving your tokens in through uh a cosmos chain the other way to bridge is through fmos so if you're not familiar who's familiar with evmos here okay um

well uh so evmos is an evm chain that is uh interoperable and so it is built on the cosmos sdk so think of it as sort of like a bridge chain between um between the edm world and the cosmos world because fmos can execute ethereum smart contracts but it also speaks ibc so it's able to uh transfer tokens uh into the into the cosmos interchange world and so with fmos you're going to be able to use bridges like the seller bridge connext or multi-chain to bridge uh your ethereum assets onto uh the onto fmos and then you know leverage any one of these amms to either swap or participate in

liquidity pools and so i think this is uh you know evmos is still quite uh quite new like it was launched uh earlier this year they had some issues with the launch and they relaunched later uh some sometime around april or may and once once they relaunch you know these projects launch so you know the liquidity is actually still quite low so like by all means bring your liquidity and be one of the first uh to participate in these pools and benefit from being you know the first uh to uh to participate in the liquidity pools on atmos and you know one small like parentheses here you know i i've mosted a an interesting airdrop

and so that's why i was asking how many people know about fmos because if you hold eth there are chances that you are eligible for the atmos rec drop so the atmos wreck drop was this interesting airdrop model that said well instead of just giving our tokens willy-nilly to the community we're going to give our tokens to those who have been hurt the most and so folks who have been you know part of hacks or uh you know were victims of like smart contract exploits or paid like you know large amount of fees early on like on on on uniswap or any of the any of the the popular ethereum dapps those addresses are eligible for an airdrop and the airdrop decay period was meant to start in july

a governance vote was passed two weeks ago i believe or just around the end of july um extending that decay period to the first of uh august so there's about 200 million dollars of free money just sitting there and i've i've heard that most of this is on ethereum addresses and not on cosmis addresses so you know psa for all all you folks here who uh you know may want to claim those tokens and uh either participate in liquidity pools or stake the tokens uh to participate in network security so atmos has um a sort of decaying uh staking reward um curve and since we're quite early in the

development of that of that curve the staking aprs are very very interesting at the moment so you know like last week we were at somewhere around 500 percent it's coming down but the stinking rewards are still you know quite interesting and do consider staking with interop ventures uh if you claim your tokens or if you have fmos tokens and i guess the last um the last sort of bridging protocol that i'd like to mention is thor swap some of you may be familiar with thor swap it's a trustless uh cross chain swapping uh protocol and so here you're swapping assets natively and permissionlessly so you can you know put your ether on one end and like get

atoms on the other and once you have those atoms well you can ibc them into into uh osmosis to swap them participate in in liquidity uh in the liquidity pool or stake them on the atmos on the um cosmos blockchain so in terms of lending like lending is still kind of early on cosmos like folks always ask me like where can i where can i borrow against my assets so there are a couple of protocols that that i want to talk about so kava allows you to do lending they have the stable point it's just it's used a little bit in the bnb and sort of uh binance ecosystem um i don't i don't use kava but i know people who do it's you know

it is a lending protocol that is built using the cosmos sdk uh umi is starting to pick up and you're able to borrow uh usdc and some other assets there for uh by using atoms collateral ave there was a governance vote on the ave dao to launch ave on evmos i believe that's happening soon they're just waiting for some uh technical updates uh for that to be technically feasible and the folks over at agorik are are working on the inter protocol which is essentially make or dao or a very similar sort of cdp model stable point where you'll be able to use your your atoms and and other cosmos assets as collateral to borrow their their stablecoin isd

um just wrapping up here so you know a couple of projects in the french cosmos ecosystem that you know we're really excited about so you know club uh is a uh club is a private investment club that is built on um on the using the cosmos sdk loom network is uh working on monetizing user generated content uh and there's other teams here in france like the guys over at imperator and stake lab that are operating validators and so i don't know if these guys are here but if you are so things that we're excited about so obviously like atmos i think is one of the things that a lot of folks in the cosmos ecosystem are very bullish about um you know they're the first like truly improbable evm on the interchange a lot of anticipation was built around the

around the rec drop and i think the team really uh is like quite solid uh you know these these are folks that were working on cosmos very early on and you know evmos has these interesting token economics that make it interesting for dap developers to build their applications there um so for instance as a dab developer you can um you can set a parameter when you deploy a contract that says okay i want like up to 50 of my uh of the transaction fees when people are using my dap to go you know back to sort of like back to the project so it's a way for our teams to sort of bootstrap some revenue early on we're also very very bullish on quicksilver quicksilver is a an upcoming um d5 primitive that is the liquid

staking zone for all the interchange so if you have tokens uh if you have tokens staked on any of the cosmos chains um in a few months when they launch you'll be able to use the staking shares from from those staked assets move them in the quicksilver and get a staking derivative that you can then use and defy so a very strong team working on this project as well so i would invite you to check that out once they launch if you if you're holding cosmos assets and staking them so you know why why we believe that the whether the cosmos ecosystem is is is a strong opportunity um you know we really believe that improbable modular proof of stake blockchains are the future uh that the

stack will continue to modularize in in such a way that you know block production and all and and block execution uh or transact sorry like smart contract execution and all the application layers will start to modularize and this is the vision that that the cosmos space has been carrying for for many years now you know we're confident that it's still quite early as well uh as you saw earlier you know there's only about um 55 uh 55 million dollars of uh or billion dollars of market cap uh in in the cosmos uh ecosystem at the moment and so there's lots of room to grow as more and more people become interested in this space the cosmos sdk is like actually quite uh quite pleasant to work with and it's

like another another paradigm in terms of building your blockchain and we think that the modularity and sort of the the way that one can set permissions to build their blockchain uh is potentially a catalyst for you know cfi and fintechs to start using the cosmos sdk and start working on more permissioned um more permission setups and then gradually over time start connecting to the interchange a little bit like enterprise started working on um intranets early in the early days of the internet and gradually started moving on to cloud and we think that a lot of the planned upgrades also like shared security um like as i mentioned earlier liquid staking interchange accounts are going to create this sort of cambrian

explosion of interesting design innovation in the d5 space so we think app chains are the future and i think it's best um best exemplified by by these tweets right where you know deploying applications on many different chains and having to you know manage all of the bridges and everything that allows liquidity to flow between these chains are going to become very complicated as more and more change into the space and so application chains uh allow you know protocols to really own the entire space in which they operate and with protocols like ibc it becomes much more easier to move assets across chains so if you're interested in all these topics please you know check out the

interop we release episodes about once every week and if you're working on a cosmos project please come talk to come talk to me after the after the talk or you know send me a message on twitter thank you [Applause] [Music] [Applause] you