Where Mitosis Fits in the Modular Thesis

Transcript

welcome back to the rollup High Roller Community as always nothing on the rollup is to be construed as Financial advice we are just an Educators in the defi space toss us a quick like give us a share a repost send it to a friend who may want to watch this and finally give us a sub or a follow it means the world to help support credibly neutral educational content in def5 we're here to educate Empower and enrich you and let's jump in GM boys and girls welcome to the rollup we are here pregaming eth Denver with Jake Kim and Andy of course we're psyched we're stoked we're going to be talking about modular liquidity and Jake Kim's story uh through Kepler

through terara we're gonna get into uh some of the nitty-gritty there and then ultimately landing at mitosis the modular liquidity layer that is underpinning interoperability protocols such as hyperlane before we kick it over to Jake and uh get his origin story Andy GM sir we're going to put liquidity under the liquidity layer so that the the that the three liquidity layers have liquidity to have more liquidity welcome Jake I would love to learn more about your story and um how you got here and what what kind of wakes you up in the morning yeah um hi guys uh my name is

Jake founder of mitosis um yeah uh I've been a builder for my entire career of crypto like and early 2019 I came up with the concept of liquid staking tokens um during the hackathon um the reason why we chose Cosmos uh uh was like ethereum back then was not like was not a proof of stake blockchain and the only up and running like proof of stake blockchain was Cosmos um so during that period like reformulated ideas like ening accounts but like eventually the ideas were pretty like Visionary so like we decided to

like uh like pivot uh and and like during the pivot like I we kind of found out like there wasn't like a proper infrastructure that like supports IBC transaction natively and from a wallet perspective so we decided to build the infrastructure first instead of like building um like applications and that's how we got to start wallet called Kepler and Josh Tony and me uh and a few of my other friends were building Kepler wallet and we uh maintained about like six months integrating new chains and then um after that like Doan from Tera now he is in

prison but um he came to uh me and he said uh he wants to acquire our entire team and he said he uh he has an idea of building like a lending protocol that leverages like liquid staking token and that's the moment where where uh our team got split into half uh me and my co-founder uh Ryan uh he's now building something called exponents on bar chain uh right away uh and we decided to go to Anchor and um and built the whole protol from the bottom and then after launching anchor I created my independent team to build

like other stuff some Tera but eventually Tera debacle happened and um yeah after that uh I took a long break and doing some research and just like thinking about like what to do next and what will be the next big thing and as a cosmos like uh people person uh I was big believer of app chain and in the end I I thought about like there's going to be like like thousand chains now we call like thousand rollups and it was very pretty big from from the start but I think the connectivity is uh is going to be Paramount than ever and I want to kind of build something that is kind of

related on that side so I did some like um research stuff on like CK snarks and like trying to kind of unified all these kind of stuff um inability uh but we uh eventually found is that like like the vision of uh building a unified actually creates more fragmentation in terms of uh like trying to kind of like like having like unified intop solution is like nearly impossible and this is wasn't the game that I wanted to kind of be involved in so I did more research and then I found uh um team called hyperlane and their Vision was uh building a permissionless

and modular interop where like it's everything's like permissionless and customizable and I really like the team and we uh tried to find uh where to like contribute for the starters and then we built something called cosm Wason version of hyperlane and like now it's being used in like the bridging Tia but for the initial Vision it was like uh I wanted to kind of bring a Gateway between ethereum ecosystem and Cosmos but now it's being used in uh like bridging Tia so yeah uh after deploying that like um um like I I found I tried to like

kind of um thought thinking about like what to do next and it seems like even though there's like a interoperable like modular and permissionless interoperability powered by hyperlane it was nearly impossible when it comes to like moving liquidity because in case of liquidity there should be some kind of like liquidity layer that is backing interoperability so there's like two layers of ter actual like um like bridging liquidity so uh like we talked with uh Hyper Team and we decided to uh bring uh a modular liquidity layer powered by hyperlane and that's how how it got started

yes yeah cool man the um the the Nexus bridge that you talk about it definitely does uh it at least is part of the initial vision of getting IBC and evm or ethereum and C was connected that's been like my main use to get like that arbitrum ntia over to Neutron then stake with stride or stake in in the in the validators and that stuff so definitely been an easy and good experience using that uh hyperlane Bridge with mitosis underneath um that's quite the story as well with the um anchor and Terror that's that's

there's a that was a wild time but we won't dive into that too too much I think generally what's people are most excited about is really kind of understanding what problem uh mitosis solves and really how it works under the hood so maybe you could take us through that um with some practical examples and a little bit of of a technical explanation as to how it kind of works yeah sure um so mitosis is a cross chain liquidity protocol for moderate blockchains uh built with Decor ethos of permission list and customization and um for more detailed explanation like for rollups newly

created chains um interop and seamless uh liquidity transfer is a feature that EV like every team must have and the permission structure and gated inity kind of limits uh the whole modular blockchains to proliferate and what mitosis offers is a seamless liquidity transfer for rollups in newly created chains and for liquidity providers to kind of Ure the freedom of capital efficiency where it maximizes maximizes the potential usage through the Dera of acid layer in mitosis um yeah I want to take a quick tangent um and before we keep going into some of

the technicals of how it works right now like there's also okay so look at my to and this is a practice or an example of something that happens in biology in cells then you have osmosis that happens it's again it's a it's a it's a function that happens in everyone's like body I'm curious why did you guys CH choose the name mitosis does that have the the function that it that it has in the human body of splitting cells is that similar to the way that you guys have your mechanism built in in terms of liquidity uh you know the like the honest answer

for that is that we chose mitosis because the word was kind of like um like smooth and that was the like one reason but it it like after some time of period uh we kind of find out like it's actually something that is uh explaining what we're trying to do uh in the the case of like uh when you think of like um Crossing liquidity yeah like nowadays like people are using like liquidity protocols to move liquidity but from a liquidity provider's perspective uh when you provide liquidity into this protocol that liquidity is kind of static it's uh

it's just sticking around into the protocol and exchange of um like providing the liquidity uh liquidity providers gets like Prada of the usage uh like fees generating from the um protocol but like our main thought of starting mitosis is that what if we make this kind of uh having more usage uh in terms of just not like um you know like just creating like a revenue from a crossing bridge is a very good uh way to kind of uh incentivize people to kind of provide liquidity but how about we make this liquidity composable with uh

crushing defi or or or like provide like collateral for increasing the cryptoeconomic security of Crossing messages um so that when the liquidity kind of scales the security also kind of scales at the same time so that's like uh the way how it do it is like something kind of like a cell cellular division happening and we we call our ourselves like derivative layer and like this derivative layer kind of like kind of similar to how cell division works so that's how like we came up with the name and it's like like we we we internally had um several discussions of like

changing the name but we sticked to mitosis in the end yeah I I I think it is applicable because you can think of like when our cells recreate like they copy the same chromosomes the same DNA and then basically duplicate it that's almost what's happening with mitosis liquidity when you deposit into the bridge you're duplicating that liquidity on another chain so that it's it's available to use on the destination chain yeah and then also on the actual mitosis chain itself right because you can then take your your like your uh mitosis assets which we can kind of dive into as well and then ideally I think and and I'm curious to hear is if if the thought is to be able to build out like

a robust defi ecosystem on the mitosis chain so all the cross chain LPS who are obviously incentivized to do this because they get the the bridge yields and the fees they can also take those uh assets those derivative assets and then participate in either the mitosis chain or in any other kind of rollup ecosystem as well yeah that is right so one of the like core differentiator uh with existing Solutions is that um the liquidity protocols liquidity is actually um kind of contributing to all these other l2s but in the same time it's actually competing with existing defi Solutions uh which means is that since the liquidity uh in liquidity

Protocols are static it can't be utilized in other defi um if there's a like fat liquidity it it kind of makes seamless asset transfer EAS easily but in the same time it's that liquidity is not using in in layer TOS or roll rollups in our apption like defi so what we kind of solved this is a creating a n dtive layer and which is always redeemable into one to one and that can be utilized into defi or if you pull over to the mitosis you can um provide the cryptoeconomic security uh in uh in Cross chain messages uh and in the same time uh having like a

composable like cross-chain defi ecosystem in mitosis so in the end mitosis will have uh um like series of applic defi applications where uh when it comes to like um like execute a cross chain transfer or cross chain like defi transaction you can also use mitosis chain as a uh one kind of root gotcha okay that makes sense so the derivative assets will be more or less used on other rollups in um ecosystems but mitosis is kind of there also as a um yeah like you said as a route and I think one of the interesting parts of

what you said was the security part um curious how mitosis differentiates here in particular um notably because I think a lot of these like cross chain uh Bridges or cross chain messaging protocols they don't necessarily like uh grow or or uh like they're not equally aligned when it comes to scaling with the amount of like Capital that is in the in the LPS um but I think that mitosis is as you kind of hinted to is able to expand upon that a bit um yeah but like how is mitosis creating a better more secure H protocol that that scales with uh the amount of

liquidity yeah um so one of the existing like interop Solutions you can say is that what they kind of advertise is that how uh secure setup they have and how they're like decentralized or like we have like trusted partner or something like that but what mitosis kind of offer here is that uh a calculable cryptoeconomic aligned vision of uh way to kind of explain uh the security uh is secured by a number of assets where uh when when the tvl of the Cross chain liquidity layer grows the security

security also kind of grows accordingly where uh we can say the security can is scalable and the way how we do it is by creating a something called mitosis ISM and ISM stands for uh uh interchain security modules and powered by hyperlane um so we can basically customize the setting of of of like interoperability like settings and the amount of assets that we handle can be uh uh contributing to the uh to the uh mitosis ISM where uh the violators of the mitosis network uh

handles as a delegated manner where the security security uh can we can say that the security is aligned with the tvl of the liquidity that we handle in mitosis gotcha okay so basically the the typical uh um there's like a typical way that uh there is incentivization for like Bad actors or kind of um potential exploits so not only does mitosis avoid that um uh at least you know theoretically obviously uh uh mitosis is relatively new still but um from from technologically speaking technically

speaking um mitosis is able to kind of evade the the core issue of um you know traditional messaging protocols and also scale with with tvl growth using these isms from um from hypin which is I've heard of those before I think Rob has as well um definitely definitely a a really interesting technology the kind of follow-up question on this liquidity uh and security question is like are you guys able to integrate at all with like anything um that's going on in in the reaking world like is there a world where you can utilize extra Economic Security from ethereum via uh some some sort of Ian layer ABS or like

yeah yeah um so so yeah that's a very Qui question uh we first thought about like having our own AVS uh but in order to have like our own AVS we need to kind of like as a cosmos chain uh we need to kind of like talk to every operators of uh in AAR ecosystem and which is a very doable thing for us but instead of doing that there's like a team called ethos uh but I'm I'm not sure like if uh we're allowed to kind of like say things in this podcast but you know uh we're internally talking with them

about like collaborating and what they bring is like uh bringing the restake ethereum security to Cosmos chains um uh in a manner of uh mesh security and we're thinking of like instead of having our own AVS deployed um using like external Solutions um to kind of uh have restake e security backing our cross messaging and mitosis chain security as well gotcha gotcha so the goal is basically to I mean the the goal is to be extremely uh secure but you don't necessarily need your own ABS you think

that you know something like range or or mesh um you can use which is interesting um rob you uh I'm about out of questions um I mean there's probably plenty to talk about still yeah I'd love to um differentiate from some of the existing Bridge Solutions and and talk about why you guys are different from from the ones that are kind of like the traditional Bridges so when I think of bridges there's three thing there's three architectures that come to mind um you've got the um you've got the like lock and mint sort of thing where it's essentially a multisig right you send

them in a multisig this is like the multi-chain setup that is centralized and and tends to get haed then you've got the the burn and mint Bridge which is a little bit better because you're burning the tokens you're not just locking them and then you're minting them on the other side I think there are still Bridge Solutions intact that use that architecture and then most recently and I think most effectively from what we've seen so far are these intent-based Bridges these ones that uh you submit your intent and then there's a relayer that fills your order on the destination chain so does mitosis can do you consider mitosis part of any of these three

architectures if not what is this uh fourth architecture that that mitosis uses um I I think from a concept perspective we are nothing uh like very new uh cuz like um it's it's something where you deposit liquidity from a liquidity providers and then lock from the uh Source chain and unlock from the destination chain so we already have uh teams that are kind of s in the similar architecture um and definitely I think intent based architectures are really good uh but this is not like like uh

that only like one team can do and we do have plans to kind of like um onboard like intent based architecture like optimistically kind of um like serve the liquidity from a user perspective but reimburse uh the liquidity from a filler to the filler like optimistically and like these transaction can be done through uh very unique participants uh and which are mostly offchain Solutions and like we are not in the current stage of doing anything like that but we do have definitely plans to kind of like roll out this feature for

users to kind of have um liquidity like almost like nearly instant and and the source of reimbursement happens in the from the liquidity pools that we have where it's more sustainable um than we are seeing in the current market and um yeah yeah okay so then in in that case it it seems like I'm curious if this is the right way to think about this it's like hyperlane is the intent layer because users are submitting their intents on hyperlane and then mitosis the liquidity layer is filling the users on either

side that is correct yes okay cool I think I I think in my understanding that's how I I look at Bridges and how how I'm considering this partnership with you and hyperlane almost like hyperlane is the intent layer and mitosis is the liquidity layer and let's say I'm a liquidity provider and I've got funds on uh I've got funds on uh osmosis I've got funds on Celestia I could provide liquidity from both of those chains and then when someone goes on hyperlane and wants to bridge from Celestia to osmosis they could use my

liquidity that I deposit into mitosis on those chains uh yeah that is correct so the way how it works is basically uh you have your liquidity in any any um chain and whatever the destination is and whatever what the action that you want to kind of um execute it's uh it's done through the mitosis Crossing liquidity um you don't have to wait for like for example like rollups they have like seven days like race period uh you don't have to wait for that uh because there's a liquidity on the destination side um so with that liquidity you can execute this like transactions that you intend like you

you like plan to execute uh so like with the hyperlane interoperable interoperability you can't like like actually like transfer the liquidity like it's it's actually like more of like a message transfer like when it comes to moving liquidity there needs to be a liquidity on both sides and that's where mosis kind of kicks in uh like to execute a seamless trade yeah got it yep that makes sense and then and then if we were to take this one step farther that is the the the unique advantage that mitosis has is because

these L these cross chain LPS are liquid it's not it's not like one of these other liquidity layers where you you deposit your liquidity in and then while it's used for the bridge you can't use it for anything else when your liquidity is in mitosis you can use your l p tokens in in Cross chain lending and defi in all kinds of things yeah so one of thing that I really want to emphasize is that mitosis is not just a like liquidity transfer bridge I think it's mitosis it's more of like a pathway or Gateway for a new like composable ecosystem um which we create like a new

type of asset called like my uh Mi assets on uh every chain and mitosis allows um like a boosted yield layer uh like in in crossan asset transfer and with that Mi asset you can use it to you can choose to use it to the defi applications uh for extra revenue or pull it over to the mitosis chain and contribute it to the crypto comic security and this at the same time you can um like uh put something like a like like we have our like something like uh unique uh but something like a proof of liquidity system where we kind of um

have a composable defi uh ecosystem uh and get like token governance token as a rewards uh and yeah cool and for those who are listening um and watching this and want to get involved in mitosis ecosystem what is the path for them where should they go what should they do to get involved yeah how can they ear yeah so we're we'll be like announcing this detail very soon and we'll be uh releasing a c new campaign called um Expedition uh and what this what that

does is basically um like there's like very huge hype on liquid reaking tokens and and what I definitely want in in the future um days is that I want this liquid recking tokens to travel all these like newly created modular ecosystems like it's it's being used in some l2s but in in the end like like like this LRT should move to newly created rollups um mitosis will Empower that and the way how it does is we'll be creating a multiple pools on all these kind of newly created rollups and chains and people like users can provide

liquidity in many different pools and with that liquidity will be um generating the cross chain um fees and these Mi lrts will generate fees natively and with that M LRT you can like use that M LRT token into like existing defi applications or move to mitosis chain when we launch the chain um so this campaign will be starting by uh very soon uh we'll be announcing this in the Denver week um and after that we'll be collaborating uh with existing LRT teams um in uh be launching this pretty soon yeah

awesome stoked yeah thank you Jake for coming on today and um sharing some insights about the modu blockchain interoperability landscape and how mitosis plans to take shape and carve out a niche for of its own um so thanks for coming on man thank you thank you for having me