USDC on Cosmos with Jelena Djuric of Noble

Transcript

foreign CEO and co-founder of noble noble recently launched their main net at the end of March in a really highly anticipated launch and of course Noble brings usdc to Cosmos and that whole ecosystem is something I've been particularly hoping would happen for a long time and happy that it's finally happening uh Noble also has really interesting governance since it is a you know a chain that brings in institutional assets and so we're going to be talking about that and also some of the cool token issuance uh modules that they've built I'm also dying to find out why yelona thinks that current forms of liberalism are actually conservative

before we get started make sure to hit the like button hit the notification Bell And subscribe to get notified when I go live every week and remember that none of what we discuss here on the interop is investment advice you should always do your own research and if you enjoyed this content please consider staking with us we're live on fmos Quicksilver osmosis and Juno we're outside validator set for Juno so please delegate to us so we can get in the validator set and one last thing nebular Summit is coming to Paris this summer we announced the dates it's happening on July 24th and 25th and early bird tickets are on sale I still have a few early bird tickets available you could buy those at nebular.builders my guest Yelena is coming up next right here [Music]

hello hello hi Seb how are you I'm good I'm good thanks for joining me uh how are you doing well uh you know it's uh summer almost and the birds are chirping I don't know if you can actually hear them I have my window open so if they're too loud let me know yeah we'll tell the Bruce to shut up yeah yeah no it's definitely uh it definitely feels like uh like summer is is upon us I mean I'm also in Canada right now and it's like you know 50 degrees and there's still snow but it just feels like you want to walk out

with a t-shirt um but we're not here to talk about whether we're here to talk about uh Noble and uh you know congratulations on recently uh launching mainnet it's like a huge accomplishment and uh I'm sure you guys are all very happy um what was that like what was it like uh finally finally reaching this milestone yeah I mean you know it takes a village to raise a blockchain I guess uh so it's been really amazing just to see like the level of coordination and uh kind of enthusiasm and just um you know we have this 20 uh validator permission Set uh before we uh transition to Interchange security and so having that kind of intern solution be you know properly uh kind of arranged

and making sure the validators got kind of understood like why we were moving from shared security to this permission set um you know getting them actually kind of running uh the noble uh software Etc was you know a lot of honestly coordination work at the end of the day I feel like blockchains are just like a shelling point for coordination and like that's what Noble is trying to do everywhere from you know everything from the actual kind of operations of the chain to you know getting kind of native assets kind of issued on chain so yeah I mean it was amazing but I think at the end of the day like it's really just about the entire kind of set and and you know the validators and of course Strange Love labs and their role in kind of uh you know making this happen so you

know it felt great um to see that we could actually coordinate for once and do something positive and productive so yeah I mean I'm obviously very happy so uh it's been it's been good yeah and you know the I think the you know people have also been people are also pretty excited about it you know you guys did this this airdrop uh this friendship bracelet airdrop maybe we could talk about that a little bit um but yeah there's like a lot of enthusiasm about Noble and I think like a lot of people including myself have been quite anxious and hopeful that this would happen that usdc would finally come to Cosmos um but before we get into that like yeah tell us a bit about your background like

I know you've got uh a background in politics I feel like in Canada I think I've heard you talk about that before and you obviously worked at informal and some other blockchain uh outfits so yeah give us a brief history of how you got to you know launch your own chain yeah totally um yeah I mean I can go kind of further back in time even before but BC before crypto um so you know when uh before before kind of working full-time this space uh I uh had a political economic background I mean I still do um so worked for a number of uh ngos non-profits International organizations within the you know un sphere um also worked for actually a us-based

organization in the Democracy building you know I got my degree from University of Toronto in the field in the field of political economics so I've always been you know extremely uh passionate and motivated by the idea of kind of mass coordination and the things that are possible when you know a lot of people from all over the from different parts of the world kind of who don't know each other come together to do something amazing whether that's administered humanitarian Aid or whether that's you know to support a democracy building process or or something like this and so yeah I kind of left um more that International kind of focus to kind of come back home um you know got to work for an advocacy organization volunteered on multiple

political campaigns across the political Spectrum I'm not partisan I'm actually very very you know non-partisan and that's like a very core to who I am but um yeah I pretty much discovered um um you know uh Bitcoin and and then later on ethereum while I was in university in in Toronto um it was one of those situations of just you know staying up till the early hours of the morning with your friends just kind of talking about it and not really having a clue as to how this would evolve but was always extremely you know um obviously intrigued by and fascinated by it by by of course the original Bitcoin white paper but then later on ethereum and then yeah eventually I realized uh

in 2017 that you can actually get a job in the space uh because that was also kind of important to me you know how do you actually have a job in in in this field that is so new and emerging and like what is like what are the legitimate organizations that and like the interesting projects like what are you know um where should I effectively get a job right and so that led me to dfinity um so it was there really early on the the internet computer uh I could say a lot about that experience but at the end of the day it was just really uh also being surrounded by the smartest people in in in you know in in the field of distributed systems and cryptography was really just uh inspiring and humbling and then I left um Divinity was briefly at cello

um as well helped uh to run their incentivized public test snack got to meet a lot of the early validator Community uh and then joined informal uh and then I was informal for the past almost yeah I guess almost three years but really more like two two and a half to two and three quarters um and then yeah left informal to work on Noble full time so still in the cosmos ecosystem and I don't think uh there's probably anywhere better to be from like a building kind of perspective and also from like a yeah just getting to see things kind of come to life I think Cosmos is like the best place to be yeah I would agree uh on on that I feel like

really the the the core of the Space is really um I feel like it's happening here um you know and I would include you know I would include ethereum in that I mean but I feel like those two ecosystems are really you know the ecosystems that have a strong focus on um Community developers and um and and Building Things sort of from scratch or from the ground up and and those are the two ecosystems in which you know I felt most at home uh in my in my long crypto Journey um but uh yeah just touching a little bit on your on your political background

and this kind of touches that what I mentioned was your your sort of contrarian view in the intro you you you you said to me that you think that modern forms of liberalism are actually conservative I'm dying to know what that means and uh yeah this is a topic we could rant on for a while yeah I mean this is something that I've been thinking about probably since 2016 or so um I think like the kind of American election of Donald Trump and kind of Bernie Sanders losing the dot you know the democracy product kind of nominee uh vote I think really spurred a lot of uh this this belief and I should I should just preface like what I'm about to say

with which which is that this is not unique um I think a lot a lot more people are coming around to this kind of idea but you know I come from the world of like more Classical liberalism and and definitely like more of like early 20th century liberalism a lot of my mentors you know we're we're in the era of Canadian politics when we had Pierre Trudeau and we had Universal Health Care and we had um you know all of these kind of fundamental um you know kind of um you know policies and programs get pushed to kind of you know enable a more kind of free liberal Society right and you know obviously on the social side as well things like you know uh LGBT rights Etc and then you know you kind of get to this point of like 19 like you know late

80s like early 90s you know the Soviet Union Falls you have this like end of History thing happening and I think like um pretty much since then until very much the present it's we've kind of accelerated uh backwards uh from like the liberal perspective where a lot of like fundamental liberal kind of tenants like you know freedom of speech privacy you know even I would argue like on the kind of Social Democratic side like you know uh you know paying for kind of services you know like like Public Health Care et cetera have just kind of fallen off and so you kind of have a situation where Modern liberalism is actually regressing and almost becoming quite conservative and then you have a lot of

conservatives that are trying to tout like certain policies like let's say freedom of speech or privacy to their advantage which on you know on paper are actually quite liberal beliefs but then of course they're like couched within like you know uh other sort of non-liberal and very conservative beliefs so you have this like nishmash of like liberal illiberal on either side and I think it just makes everything very confusing and I think that's why you know centrism is actually the way to go right now but anyways that's my contrarian thought it's actually not that contrarian I think a lot of people understand that yeah current kind of political narratives are highly highly really regressive on both sides but I would argue on the liberal side it's maybe

even worse because these like fundamental beliefs we've just sort of kind of you know disregarded it and maybe I'm just like talking too much with the old guard because this is like where the idea comes from like again like these like my mentors that like actually were part of like you know putting together these like massive liberal agendas that feel very dissuaded by kind of what's happening but I don't know I think there's something to be to learn from like our our kind of wise peers and kind of understand like I think we've kind of gone backwards in a lot of sense so I don't know if that's my contrarian View I don't know if that resonates but it resonates with me a ton and uh I don't want to be like armchair political scientist here but uh but this this is something I I you know

I I could chat with you about for an entire podcast I think um and and certainly you know I'll give you maybe some some personal experience here um between being say in the U.S and in Canada and being in Europe when I'm in Europe or you know people know I live in France so in France I feel like this what you're describing hasn't really come about yet you know in European politics we still have the you know the quote-unquote classic traditional conservatives in in liberals there are people on the extremes but I think still and this might change it might actually shift

in the coming years but we still have this classic you know two polls of a political spectrum that are aligned with tradition their respective Traditional Values when I come here though uh I I so I don't live here but I I'm aware of that political kind of situation and so I need to adapt my my behavior and the things I say because you know because culturally there are just things here that that uh like just our opinions that are you can't you can't express right um uh lest you get uh scolded and maybe maybe canceled so

that's been really interesting um I I was speaking with a friend a couple of weeks ago and saying that you know this political divide and there's lots of theories about why we have such a divided political um environment and you know social media probably pays like social media algorithms probably play some role in that and foreign interference probably plays some role in that you know over like several years but in order for things to come like being in the center right now is just is like anybody who's in the center I feel is like Canon fodder because things have swung so far to one extreme that when they start when they swing back the other way they're going to swing back so hard that the people in the center are

gonna the people in the center are gonna get are going to get massacred and so you you you you have these centrists that just like get canceled all the time and it's just going to take a bunch of people that get canceled until finally maybe the pedalism kind of stops you know um yeah that's kind of 100 one of the ways I see it but but anyway um beyond that um yeah I mean I I think I think in crypto there there is a little bit more of a you know people tend to have a little bit more of you know nuanced views I think than than say other sectors in Tech or at least geographically you know

like in San Francisco or like you know the American West um but yeah let's let's let's go back to Noble here uh what's the what's the Genesis of the project like you know you were at informal and I think you were leading a lot of the initial conversations with circle and the stakeholder and some of the stakeholders there you know how did this project come to be in you know what was the role of strange love and inclusion and and these other organizations that have been um contributing to the project you know on a technical uh from a technical perspective but also from the design perspective et cetera definitely um so you know I guess I should kind of preface what I'm about to say with you

know circles uh intention to natively issue uscc and Cosmos is something that's been a thing for uh multiple years um I remember myself Zachy um maybe Sam Hart was part of this a couple others were on a call with their team about two years ago or so when IBC went live and they were kind of trying to wrap their heads around IBC and you know how could again the issue you know uscc it never really um panned out because we never really had an organization to uh coordinate that discussion and to really like take up the mantle and say okay we're gonna support you we're gonna you know do all of the education and kind of onboarding around the cosmos architecture IBC

Etc and then you know we're gonna be your counterparty to help you guys natively issue uh the asset right and so that never existed I think a couple years ago kind of the call I just referenced um that was coordinated mainly by the entertain Foundation but really the ICF um you know for one reason or another just really never took up that role of kind of supporting Circle in this way um I should say other foundations actually do take on that role you know you have like obviously ethereum Foundation salon and Foundation Etc um they they very much do take on that role but the ICF has a very different mandate and so there was really never an organization to kind of take take them through the process and so you know fast forward a couple years

um and I'm working on um interchange security um having a path to making the future useful you know at that time uh informal really kind of uh started to publicize its work around energy Security in February of last year um and I think there was a lot of like kind of fun and misunderstanding and you know there's this like Blue Kirby account that would constantly you know kind of uh spread you know spread kind of fun around energy and security but really it became my mission informal's mission to make it a useful feature right and have real projects leverage the future and so that's the perspective of where I came from uh when I started to think about how we can do Native asset issuance

um but it took a couple other people kind of to be in the mix for it to be a reality so um you know at that time you know let's say April May or so uh of last year um you at UST broke uh you know blew up right so we kind of had a big Reckoning and this existential threat of like no native stable coins in Cosmos and I think that's really what kind of like motivated us to think even like more deeply about how we can have native assets being issued in in in in the cosmos ecosystem and so I started working with Zaki um who is still uh very very critical to the project and he's a strategic advisor to Noble uh and so him and I started to think okay well how could we actually um you know have kind of native UCC issued in Cosmos

we felt that to be kind of the the most important kind of main kind of reliable stable we should go after um I should mention that at the same time dydx they had also uh you know um communicated their intention to to launch before in Cosmos and they would also need native usdc so Zach and myself put together this proposal we got some feedback from a couple others um we eventually went to Circle we went to dydx we chatted with uh you know Sunny from osmosis and and others to say hey how about you have this like net new app chain it's the only only purpose is to do Native asset issuance and to serve as somewhat of a router for these native assets coming into Cosmos um that is also secured by by the cosmos Hub right and so it won't need to have a

native token we want you to have you know recruit a new validator set with a high degree of Economic Security we can simply um you know launch as a consumer chain and it could be all very straightforward and and you know there was a lot of back and forth a lot of feedback um and eventually you know we realized this was just a way to do it and so we that's when the circle partnership really kicked off in the summer of last year and Strange Love uh was brought on board to be the main engineering partner uh for what would become Noble uh and obviously they have a lot of uh expertise and and all things Cosmos and so they're just a really amazing um kind of partner in all of this and so I

essentially kind of manage the um kind of initiative you know obviously Strange Love I manage the engineering side of things and then at Cosmo verse we kind of we announced you know native UCC is coming to Cosmos Circle themselves had announced that native UCC was coming to other uh other other ecosystems and so we were kind of one part of the announcement although I would argue I think there was like just like a lot like a lot of excitement on the cosmos side let's say you know relative to to all others but you know there's just like so much activity and so much demand for this type of thing and so anyways that was really great but at that time we we didn't yet announce Noble as like the brand or as like the um you know as the as the name for this project and that obviously came like you

know recently and so there was a lot to be done to make sure that a lot like it the the kind of the launch was de-risked um that we were doing everything like in uh methodically and and you know it was all very you know it took a lot of coordinating across many different stakeholders to kind of get us to this point yeah I'm sure and and and of course you know we haven't mentioned the role of circle here uh as well and you know before we get into some of the more technical aspects here what is it like working with circle and what what do you think they're they're long-term goals they were recently on the uh I think it was on bankless and

you know there there was some kind of speculation I guess on the part of one of the hosts that like Circle could essentially become a fed-like um uh institution now that might be that that might be stretching it a little bit but you know being a an issuer of U.S dollars on a blockchain and certainly like the largest issuer of US Dollars on blockchain um and now you know issuing Euro euros and other assets uh what do you think their long-term goal is and you know how does noble and what you guys are building sort of play into that yeah I mean um first of all like they

very much are a private company like with their own strategic kind of mandate and they have like a lot of stakeholders that you know don't include the US federal government necessarily so I think like whenever there's these types of conversations like I think it's always fair to kind of bring up these kind of ideas but at the end of the day there also just is like the objective reality today and I think that's important to kind of consider and so I think like at the end of the day their number one priorities how do we most efficiently get cash like deposited somewhere represented as a crypto asset on the blockchain right and in this case um obviously they have US dollars as like their main kind of uh kind of

on-ramp to having this digital representation of the US dollar but of course there's opportunities to have like other version you know other types of stable coins that can really um you know uh help to enable a lot of like really interesting applications and businesses like built on top of these tables which I think maybe people don't um you know always consider like going back to the kind of usdc uh product um you know it's just a fact Beyond usdc just considering the US dollar that I think something like 60 of the US dollar is actually circulating outside of the US so it just kind of like you know goes to show you that it's like like a currency that is actually obviously very useful

um you know for like many you know types of jurisdictions and geographies and I think a lot of that is actually in uh the global you know the global South and and in kind of more developing countries I think there's obviously um you know a case to be made for how those and you know those jurisdictions obviously uh become more self-sustaining and don't necessarily rely on the US dollar but I think until we get to that point there is this like you know there's this like great need and and I do really think that that's important to consider um you know when when my family fled like uh the for me Yugoslavia and you had like 200 inflation and you had like a you know a Civil War about to happen like what was the currency that you know they wanted to kind of swap into you

know the US dollar obviously and so again like it's just to say there is a reality right now uh it's not to say that this is like the perfect uh you know outcome but I think again like circles filling this very real um need for a um you know reliable stable coin and the way I think they've designed the CR the product is also just really brilliant and almost like some like really simple and straightforward and so yeah I mean it's it's been really great to kind of learn from um you know learn from them and and kind of understand how they work and it's just been a really great partnership and and I think like another thing that is really exciting from like my perspective and from like like Noble's perspective

is typically you know there's like have Circle typically issues uh you UCC on other layer ones or how they used to they would kind of have like a one-off kind of agreement with like a one-time sort of fee and they would like you know do the work and typically work with like a foundation uh um but for for us it's been a much more of a longer term kind of partnership where we've kind of gone through the process of again like onboarding onto like the cost of stock thinking about you know even like like the minutia of things that we understand but other entities don't like cause the cosmos SDK versus Cosmos I'm understanding like trade-offs and and things like this and so again like you know there's there's I think a lot to be learned and I think um it's it's

just ultimately from our perspective been a very positive experience so you know it's definitely going to be interesting to see how a lot of this plays out so let's let's get into into some of the technical bits um what is the so so you guys are working with uh uh you you guys have developed or in coordination with osmosis this token factory model um that I guess is is responsible for issuing and burning tokens and implementing usdc's token design spec um which is expected that they Implement on ethereum and and other chains I'll

link to that in the show notes can you describe how this works and what is the process by which usdc gets issued and burned and you know sort of who is responsible for making those decisions and interacting with the contract I mean you know I guess it's it's safe to assume this isn't an on-chain governance vote there are people involved that you know it's like issue these assets at some point so yeah talk about how how that module works and how it interacts say with like you know people in the real world making these decisions definitely um so I I can talk a little bit about

token Factory and then um you know we talk more specifically around the uscc issuance piece so um so token Factory was uh designed and uh originated with the osmosis team so there's a lot of kind of gratitude and uh you know um kind of uh work that that was done by osmosis to um you know even make something like this possible and I know that uh the token Factory module will also be leveraged by like many other projects um to to do all sorts lots of kind of asset issuance and so again we're leveraging it from you know from the perspective of being able to work with these larger entities institutions like Circle to really um you know have a seamless kind of way

of of issuing their asset so uh token Factory like what is it so it is a cosmos SDK module uh it has a very similar kind of function to how a smart contract uh would kind of be deployed on something like ethereum in terms of minting burning blacklisting things like this um there are various param authorities within the token Factory module that can be configured kind of um as it relates to the needs of the issuer so you have like uh various kind of controls like like a master Mentor so the master Mentor kind of oversees a lot of uh you know the minting of of the asset you also have like you can delegate the authority to also mentors that are like a sub

authority of the master Mentor if I recall correctly um you have the controller of the contract you have the owner of the contract you have like various um authorities that sort of enable kind of uh like a pretty robust way to to sort of uh you know have this asset be issued on chain um we actually have a um audit that was completed by Oak security for the token Factory module for uscc specifically um it's a public audit report so you know there was interesting finding there where that you know in the initial sort of design we had kind of overlapping uh addresses or or kind of uh yeah we have

overlapping addresses in various kind of authorities and then we had to like delineate that even further to have like even more sort of call them checks and balances between the different authorities um as just like an example of like a real world old kind of thing like you don't necessarily want the owner of the contract to be also a mentor because you kind of want to make sure that those authorities are delegated in a lot more of a yeah robust kind of secure way and so again um you know how those authorities were set and like what the kind of logic is there um you know it's definitely a big part of the exercise but I guess like the thing to take away is that uh you know token Factory again like simulates something that you would already see

um like like on ethereum like like on a smart Contracting kind of um uh layer and and that's really what um we kind of sought to replicate and also it was a way to obviously make like um Circle comfortable with the process right like they don't necessarily want to change their internal kind of um you know process to like fit you know um kind of this one kind of architecture they would prefer to be to leverage something that like like that they already understand like like a like a smart Contracting capability and so yeah that's kind of what why obviously we decided to use token Factory and and I should say that that module can be kind of replicated for the needs of different asset issuers so you might not

necessarily need the same sort of checks and balances and pram authorities um as you do currently with the circle module as you would for like another another asset for example block listing maybe the assured isn't a saline block listing for whatever reason and so that could be removed um so these These are you know kind of straightforward ways that you can kind of customize and and arrange uh the module to fit for the issuer's needs and so what it's like can you describe the actual minting and burning process so like when usdc when when Circle decides like we're gonna mint a bunch of usdc does that happen sort of in a batch or does that happen when institutions uh you know deposit liquidity into

[Music] um into a circle like are they acting also as a market maker or or you know the circle only interact with sort of institutional market makers which then deposit that usdc on platforms or can like retail investors also like from so from this perspective our Circle acting more like a Federal Reserve Bank where they're only Act only interacting with institutions or can retail also a direct there and then yeah what's that process look like like is there someone sort of at circle's office like signing a multi-sig and say okay here we're going to issue like a billion dollars in usdc on Cosmos yeah really really good question um so there's something called thing called uh which is uh only

available to kind of businesses and institutions and so not not retail right and so Noble will be supporting the circle account uh so you know let's say you're like an exchange or some sort of like a like Market maker a large institution a fund uh it doesn't you know really matter you could mint uscc directly on Noble uh so in that sense Noble almost acts as like a deposit address by using Circle account and so Circle account obviously has um you know the ability you know for you to you know bring in actual money like US Dollars like cash uh two Circle count that gets minted

um on Noble as usdc and then from there it gets ibc'd out to um you know wherever you know kind of the the user wants to take it to um and so you know I do imagine it'll be in kind of large kind of batches it you know definitely in the beginnings uh or probably you know know for the foreseeable future in terms of those initial mints but I think the really interesting thing is once that kind of lands on chain and it's not available obviously for like retail and like the the general public uh all of a sudden you know you're gonna get a lot of uh kind of activity and and ideally interchange activity where uscc let's say on osmosis is then like you know taken to you know like injective or

Quasar or like another kind of uh you know on a Dax or an amm or D5 protocol or wherever it might be and then you kind of get this like entertain activity kind of like emerging and I think that's um the really exciting part and so you know Noble in this sense almost just acts as like a landing spot for kind of Institutions and larger entities so that you know um there can be kind of yeah it's a landing spot to the larger inner chain um it's funny you know I was part of the atom 2.0 group and I've been very involved kind of around the cosmos Hub and in some sense like we're trying to kind of also fulfill this like Mandate of like being this like entry Point there's like gateway to the larger

interchange which I think is a lot of what Adam and the cosmos Hub is supposed to be uh but just in a different way right like our kind of um you know our kind of port in the port city has like one kind of uh you know um type of kind of uh let's say uh yeah we're just like one port in larger Port City but I think like what we're trying to facilitate is maybe look a little bit more unique than like the cosmos Hub or like Adam and so anyways like that to me is like really what Noble is meant to be like again like landing spot um and I hope and hopefully like the way I've described like the circle account and like the kind of um you know onboarding for these like larger entities kind of like make sense

like in a practical sense um yeah I don't know do you have any questions on that yeah no that okay that clears it up a little bit uh I guess I'm curious you know with regards to circles involvement um from the perspective of asset issuance I I understand that they are um the asset issuance is coming solely from from circle like noble doesn't have a noble doesn't really have um uh doesn't it doesn't participate in that in that process um so so that

uh clears up you know the role of circle in issuing assets or leveraging Noble as a platform on which they can issue assets um the second thing I'm interested in is governance of the noble chain and that's like a different uh layer of governance right uh and so that that entails you know up updating the chain maintaining the chain changing parameters to the chain I believe there is a separate um set of governance rules that that make this possible um can you describe how that works and who are the participants and I think

right now it's a multi-sig but is that something that's meant to change in the future or will it remain fairly uh closed right with you know this sort of seven or or so validators or is there or companies that are that are managing uh the governance I've sort of uh I've sort of you know answered part of the question or provided some context here but maybe um just describing it from from a from a Global Perspective how that governance works definitely um so I guess there's like a few really important things to note so firstly the issuance of uhcc or any other asset is completely distinct from the governance of the chain itself so you know similar to when

again like Circle issues on ethereum you know they're not like the validators uh in in in the context of like each 2.0 they're just uh you know obviously verifying like uh like they're verifying uh blocks they're they're producing blocks they're making sure that that uh there there is a sort of uh kind of uh network security but they're not going into the kind of contract and and messing around with it or having like any influence over it it's the same thing in in with Noble so the kind of the module uh that Circle leverages to issue usdc uh has uh absolutely nothing to do with the governance of the chain Beyond just guaranteeing uptime making sure there's again like uh kind of proof

of stake security uh and really it's at the end of the day it's just about like infrastructure provision and and making sure that it's it's live so just to be very clear the validators or even um what we call the noble maintenance multi-sig which which I can talk to but in a second has absolutely nothing to do with uh the concerns of the issuer and sort of their authorities and and their sort of uh you know management of their keys or or the management of the contract uh and things like this so those are completely separate concerns and I think um it's really important to know because I think it's also very different than how some bridges work and and we're very much like looking at Noble in a different light

um so that's important so okay but then how does what what does government governance mean in the context of noble uh what are the validators actually what are they responsible for so right now we have this proof Authority chain which is a permissioned uh chain of 20 validators and they um are uh responsible for you know um obviously validating the noble chain there is no um Native token uh on Noble and we don't really uh expect there to be one in the kind of immediate kind of foreseeable future there's like no plans for that and so really their incentive to sort of kind of uh stay in the set is uh in in return for future on-chain revenue for of uscc and then in the

future other assets and so um it's still uh tenorrent based consensus there's still you know um you you can get tombstoned for for certain misbehaviors so it's actually you you know you could argue even like stricter in terms of like kind of uh penalties for misbehavior than like something like on the cosmos Hub where it's you're slashed with your kind of economic stake um and so that's uh pretty important on on kind of the token side of things and then this this multi-sig um that that you kind of mentioned so the role of multi-sig uh is very uh specific so it's designed to pretty much enable uh emergency upgrades of of the noble chain

if there's anything that goes wrong uh this could be a compromised IPC Channel this could be uh any sort of like security concern um that you know requires a sort of hard upgrade very quickly where you can't necessarily rely on you know kind of standard kind of like one two week kind of like Cosmos governance uh process uh I should note that you know the multisig can initiate obviously this upgrade and and have that be accepted kind of immediately by the validators but at any point the validators could stop running the chain right um they you know for whatever reason and so at the same time the multi-sig is always ultimately beholden to uh the violators themselves

even though there is this like way of Expediting a chain upgrade um you know they are still hold into the valuator set and so when we eventually leverage interchange security uh of course uh this multi-sig will be beholden to the cosmotub validators um right now it's this permission set but again it's just an interim solution okay so just just clarify that point so right now it's a multi-sig like this five of seven multi-sig and the the members of them almost they are listed on the um on your GitHub so it's like noble inclusion Strangelove figment binary Holdings Cosmo station and everstake but then in the future that multi-sig would be uh

would be distributed across the validator so the validators would be essentially multi-sig uh participants and the dip that the the difference there from say a typical Cosmos change that instead of having governance be like onshine governance being um the uh the kind of key to upgrades valid errors decide in a smaller committee which upgrades go like when an upgrade needs to happen essentially so you're sort of like eliminating this governance this on-chain governance which that is a sort of signaling mechanism to validators that the an update an upgrade should go through and just having

validators um be the be the key holders of that upgrade is that is that a correct representation of what's what's about to happen here when that multi-sig expands so the multi-sig um actually in its current form this five out of seven um will still be the multi-sig for uh upgrades when Noble becomes a consumer chain of the cosmos Hub uh it's just that uh like the ultimate Authority still rests with the Hub validators as it currently rests with with the proof of authority validators uh in the sense that they can always override uh the multi-sig that's yeah that's right I mean same with any

chain right with any governance uh process on any chain you know governance could decide hey this upgrade's about to go through or this this you know this repo should be uh used for the next upgrade validators can decide not to do it I mean it's I often say that like governance is always signaling no matter what happens yeah exactly it's it's as great it's just that small subset in this case five out of seven instead of by the entire set with this like public in a more of a public sort of decentralized way okay um and and again like this is just needed because you know the counterparties are obviously kind of larger entities that maybe need more

guarantees you know so for example like if we had something like this uh when Tara collapsed you know it but we it could have been a way that like you know um the sort of a pools which like UST was sort of dominant on and that were like bonded could have like been like kind of retrieved in a quicker way like you know there are these emergency situations that you kind of need to expedite governance is like the point yeah and and I think for a chain like this that has so much well potentially so much liquidity and liquidity that is tied to real world assets and where you know also where there is most certainly regulatory obligations on the issuing

chain I mean I don't know currently what those would be but I mean there are certainly some regulatory obligations that probably will get uh will become uh more um more complex than perhaps even burdensome you you need to have this emergency upgrade mechanism or this mechanism that allows you to stop the chain at least in the current um environment um what what's the role of circle in in this governance because I notice they're not part of the multi-sig I guess you guys are part of the multi-sig but what was the reasoning for not having them also be a part of it because I believe they're they do have some stake in

in Noble the company or the chain um can you describe like what their role is in governance yeah really good question um so it's um quite intentional that Circle isn't part of this multi-sig um there's a couple of reasons one this this is a generic acid issuance chain so this multi-sig would be responsible for chain upgrades or kind of maintenance for you know any asset that comes on on Noble so you know if the kind of logically begs the question if circles part of it then should every other essay issue be part of it and then all of a sudden it's an asset issuer dominated kind of governance process and like that doesn't really help to kind of delineate responsibilities or concerns so that's

like kind of one kind of thing to consider but I guess like more more importantly um you know when we kind of built Noble again we always had like this one or you know as we're building Noble because it's still an ongoing process we have this like one very important objective which is like how do we replicate the issuance process that you have on monolithic kind of homogeneous chains uh like ethereum how do you replicate that in the cosmos kind of app chain context where chains are sovereign and you know you have a not just one layer like layer one you have many layer ones and they're all kind of interoperable with each other but they're also independent and so um you know for like uh this uh you know first Circle

people um it's it's important that we're replicating the same process in Cosmos and so part of that replication is you know again they simply issue the asset they they're not you know they don't want to you know an ethereum validator like they don't run validators they don't do governance like that like they don't like build blockchains right like they have a very specific kind of role and so you know continuing to to make sure that that's consistent across every layer one is really important and so if you know all of a sudden they're part of this like multi-sig it kind of is an inconsistency with how they kind of interact with other ecosystems and so you know it's again it's just like kind of very interesting and almost

um yeah it's just a very interesting process to have to be able to replicate the process again from like a monolithic in a monolithic environment to Cosmos which is the opposite of you know a monolithic environment and so that's why for example they're not part of this uh multi-sig right but there's also other things that we've done to make sure that it's consistent and what would be the process for issuing other assets so let's say you know Project X decides there they would like to issue some assets on Noble um maybe it's a asset-backed Euro coin or or even even

a central bank you know could decide that they want to do something crazy like build a cbdc um and uh and and and uh and you issue it on Noble not that issuing in a noble would be crazy but doing a cbdc I think a little a little bit um crazy but yeah what will be the process for leveraging Noble like is there is that subject to governance or is that purely subject to like you guys sort of is that like more of a BD process um for onboarding those assets yeah yeah um sorry just quickly on the cbdc front

uh it's very much my kind of belief that um I I almost I like I almost trust private companies or at least like you know kind of you know entities to kind of deliver a superior product and I do like Federal governments when it comes to something yeah that's what I thought that's why I was saying it's a bit crazy because I think like cbdc's issues by central banks are just like a stupid idea like I I constantly follow these discussions and I look at the job postings like with the Bank of Canada for example like you know come build out the cbdc and I and I'm like who's gonna join this project like you're not going to find like the talent you need because Talent is you know in in the in kind of uh the you know in the private sector so anyways um I don't really trust that

process but uh another asset coming on board yeah that is like very much what we're excited about um it is definitely a lot more of like a Partnerships kind of BD exercise to make sure that um you know again we're kind of taking them through the the the onboarding process like again why even something like noble needs to exist uh relative to kind of um you know other ecosystems right like like something like a noble would not would not make any sense in ethereum right so why is that like why do you need something like noble well kind of again doing the education um you know and then really you know if and when that kind of understanding is established uh you know taking them through obviously architecture you know

the uh kind of uh the cosmos SDK um you know having kind of art team their team you know make you know on engineering product uh kind of make sure everything is built out correctly and then really it's more about go to market than anything um so I mean at this point we've done so much work to get the usdc issuance correct that we have so much experience and knowledge of like what to do that it could be like expedited so obviously you know this process has taken something like eight eight months or so and we're still not live yet right so um this is something that is still coming um uh but you know because it's taken so long you know we've learned a lot so we

can like pretty much like move a lot quicker for other assets and so that leads me to my next question you know what's your business model how does Noble make money and you mentioned earlier that you don't have plans to do a token what could you know I I'm sure you're having I'm sure you've had conversations about doing a token if you were hypothetically to one day maybe perhaps do a token what would be the utility of that token uh in some of the you know thinking that you may have had around this definitely um right now the the kind of business model is

word so first of all um you know validators need to kind of be compensated for for their work so there is um you know kind of Revenue sharing and on-chain kind of Revenue uh from transaction fees um so what are those transaction fees going to look like um we haven't like analyzed everything but what is guaranteed is that they will be extremely low close to zero uh for the first couple months a few months because we want to make sure that uh we are properly kind of achieving our objective of like this migration of liquidity into Cosmos and we want to make sure that's like as seamless as possible so keeping those transaction fees

um you know close to zero is extremely extremely important um and then I guess following that we those would get uh ramped up uh to something like you know less like we again we don't have a number right now but something closer to like 20 cents something like this per transaction regardless of the size and so something like a 20 cents per transaction is obviously extremely uh low comparatively to what you currently have with Bridge assets kind of coming into Cosmos where the flat fee is something like you know ten dollars so there's like a huge range from 20 cents to ten dollars um but we believe that we want to sort of mirror more so kind of transaction fees around like the layer two side of

things around roll ups things like this so we're kind of looking Beyond Cosmos for like a value valuable kind of way to um you know measure this uh or to have like a way to evaluate what it what it would a proper transaction kind of mechanism looks like but um yeah I mean IBC is notoriously low fee so we have flexibility there so it's more like you know making sure kind of you know what is the number that kind of obviously compensates validators supports Noble but then can like get us to this like point where we're not like you know preventing uh you know you know large entities to like issue like you know you could always do a proportion of the amount but like that would kind of potentially be a de-incentivize

um you know large entities from coming in so we'd like never want to do that um anyway so it's like a it's like a balance but it'll be you know I think very very low fee and I think very uh very positive for for the ecosystem and this is dependent and this is something I realized we haven't mentioned yet is and this is important that the the fees that you're charging are for every IBC transfer of usdc assets and what bears keeping in mind here is that Noble implements and you said this earlier you said routing right so like noble is a routing uh Beyond being an

issuance platform it's all it also does routing what that means is that if you're moving usdc from one chain to another it will always go back through Noble such that you're always one hop away from the noble chain this resolves the fungibility issue that we have in Cosmos where for example if you move osmo from you know if you go from osmo to Juno to atom and then back to osmo those osmo will be like Adam IBC osmo I mean like they're they're not they're not being converted back into osmo in order to get your awesome and you'd have to route back the other way

Noble implements this routing mechanism where assets always read through Noble so that that's sort of key to your business model [Music] um yeah maybe talk a little bit about this this this routing module and how it works because I think it it's like a really important yeah um like you know Network design primitive to not have these unfungible assets colliding with each other and like every change should implement this this routing yeah um yeah how does it work actually so like when you do an IVC transfers you're already like one step removed how does the chain know to go back through the initial chain like how does that work

yeah um I mean like yeah you described it really well like right now there's I think a hundred and or so so um bridged versions of axler usdc uh across multiple different uh IPC channels on multiple different uh Cosmos options and so this is very confusing um for it for users I mean not to say that across all of these kind of representations there's like a bunch of like liquidity just like sitting there kind of uh idle but it's just to say that you know even if it's like ten dollars like stuck on some IBC Channel like that's not a good user experience right and that should be like fixed and it you know it's funny it just reminds us like of how early we are I think with

uh you know cross-chain communication more broadly but um so how does it work in the noble context so we're leveraging uh this packet forward middleware that um Strangelove has built so it's a middleware um within IBC that pretty much has a memo so let's say again yeah two like the example you gave I want to take some usdc from osmosis to Juno there would be a memo kind of in that middleware to say that this is usdc that needs to be routed through the canonical um you know place which is in this case Noble um and so it does so but from the user's perspective it's only a one-click

transaction and so ideally every single chain kind of enables this like middleware um so that you can like very easily kind of have this kind of memo be substantiated like on chain um otherwise like from a coordination perspective it could just be a little bit messy to like set up all of the relay channels and things like this but yeah it's within the protocol itself um this is one of the things that Strange Love and specifically Jack has been working on for over a year and and finally um you know it's becoming more widely talked about the other term for it is IBC unwinding so that's kind of like the path that you kind of alluded to like IBC slash like osmo like Adam like whatever like the path might be um you know all of a sudden like because

it's like this long string that is like hard to like you know parse as like the end user almost impossible and then like you know from like a front-end perspective it's like even more more complicated because you have like no idea what's happening under the hood and so like another way of thinking about this is like IVC unwinding so if you unwind the path so that you have like this uh opportunity to kind of go through um uh the origination kind of chain in this case for USC being Noble so that you can preserve the kind of fungibility of that asset um so that's super important yeah and it's really exciting not just for Noble but again like for the entire kind of inner chain yeah and I think this also I mean I I haven't thought about this

much but I think that it also increases in complexity when you have cross-chain messaging that isn't token transfers uh and um and also IBC implemented at the cosmosum level so if you have like the CW 20 tokens like that means that tokens need to go back through those contracts and so yeah the fungibility issue only gets more complex as you as IBC becomes uh you know it becomes more complex as well so I'm glad to see this is this is actually um sort of being kick-started here and then and then eventually moving to other

changes as well well you know it's really exciting because in the future you're like you're you're I don't I think because of like what we're trying to accomplish with I BC and like this like fungibility challenge um how we're trying to solve it I think it'll extend to um other ecosystems and so in other ecosystems you're not going to have like different like like you know in Cosmos we have like two or three but like in ethereum you have like 10 versions of bridge ass you know what I mean like there's it's like the bridging kind of ux is like a thing and so it's a mess um so hopefully we'll be able to kind of solve for that in Cosmos and then kind of export that

to other ecosystems and say you know this is how we're thinking about it so anyways we'll see yeah no it's cool um I know you have to hop off uh very soon so I just want to like maybe wrap this up with with a little bit of okay what's the future plans here and then I think one thing also that I I I'm very you know that I'm I'm anticipating and I'm very excited to see is uh dydx arriving uh you're launching their mainnet and the impact that U.S that that will have on usdc demand in Cosmos and I think you guys are like very well positioned there to service a lot of that demand um yeah how do you see

you're the the convergence of these different uh chains being live and offering usdc um you know for Noble and you know dydx being live and all the users and demand that that will create how do you see that you know positively impacting defy in the cosmos ecosystem yeah I mean this is really just uh like DUI DX coming into the ecosystem it's just a catalyst for kind of interchange activity or growth in energy and activity um and so we're really excited to be kind of working with them on their migration uh you know I had mentioned at the beginning of our chat one of the impetuses you know even before I had

kind of met Antonio or like the rest of the dydx team uh you know we just read like the press release oh byux coming to Cosmos and we just kind of jumped on the opportunity to like finally like use this to like get me awcc right and and we did and and I mean we're very close to achieving that and so like we're still very keen to support their migration plans uh you know almost a year later and um there are going to be like more kind of updates and kind of things to share around that front in terms of how we intend to support that but I think like at the end of the day Noble like being this kind of landing spot um you know for a lot of this liquidity into Cosmos and then having that be you know seamlessly almost like you

don't even think about Noble kind of um uh routed to do idx or wherever else it might need to go um you know this is like just the Catalyst I think for D5 and Cosmos in general um you know there's just so so much friction I think on the kind of back end that sometimes the user is aware of sometimes they're not but like these like complicated kind of swapping mechanisms and you know kind of you know bridged to to another bridged version to like you know like into like some sort of D5 pool and then like bridged like you know taken out of that device and then like it's just it becomes so complicated so messy that like let's just keep it simple and let's have IBC being obviously like the

kind of like the the standardized way of actually like doing transfers doing token transfers and all so other types of uh of Standards on top of IBC but then you know from there um having like the routing and having like the kind of um swapping you know take place uh with like as little kind of um in as little steps as possible so yes from the end user perspective it should always be on like a one-click transaction but on the back end it should also always be like a one hop kind of um way of doing token transfers and so you know it's just to kind of reiterate what we're trying to do obviously for the DUI DX contacts but also for every

other cosmosop chain and I think that if we can prove that we can you know kind of facilitate a lot more kind of easier you know kind of more seamless um kind of interchange um kind of activity than anyways it'll it'll just uh be a big positive for the ecosystem in general cool um and any plans to maybe you know leverage um Noble to build say D5 products and like do you think that you could have some you know primitive some some D5 Primitives there that would serve the assets like maybe some stable swaps

between some of the assets there or or is that something that you think would be left you know to the to other players in the ecosystem and you guys are focusing solely on asset issuance that's a really good question very much to be but I think at this point I very much subscribe to like this minimalist Vision that I think again we like saw with the cosmos Hub and uh in many ways uh Noble is also a minimalist chain we're not going to be doing defy anytime soon we're not going to be doing uh anything like this and you may ask like why is that um I commit less from like you know like yes security is very important but I

think at the end of the day it's more about um incentive alignment with um different sort of options and actually making sure that we're like serving kind of their needs um you know more so than seem to be in competition um you know and I think that again this kind of as you can probably imagine like Seth because you've been around the cause was very long like a lot of what I'm kind of describing is also I think part of like what the cosmos Hub is is supposed to be doing and so I think that you know we're here to serve and we're here to to kind of partner and like have Noble be a coordination like Hub uh both like you know from like uh you know interchange activity perspective but also from like a Partnerships um perspective and so

yeah I mean no and anytime soon we do not plan to do any of any of this kind of thing but I mean you know you never know like things could change but I think at the end of the day we just want to maintain kind of incentive alignment and make sure we're like serving kind of ecosystem in a way that uh kind of benefits everybody cool well thanks so much for coming on it's been really great I mean we didn't get to talk about interchange security very much uh I wish we could have but there's this like uh yeah a lot lots to dig in here I think and I feel like The Interchange security topic has been discussed quite a bit so I wanted to get into this kind of government's governance stuff but we can definitely do an update at some point in the future

uh hope to see you at nebula Summit and um yeah thanks for tuning in everyone see you next week thank you Seb