Why Cosmos Should Embrace EVM and Bitcoin DeFi with Valentin Pletnev of Quasar

Transcript

if you want to start in Cosmos congratulations you pick the right TCH deck figure out liquidity that's like the thing there is this thing which is like liquidity dependent core Cosmos which is struggling everyone knows that but then there's also this Cosmos Tech non liquidity constraint Cosmos and that's thriving what is the so that that transition from going from Cosmos to ethereum yeah it is a new playing field but it's a bigger playing field and the willingness to work together is pretty high I remember two years ago in C ver people was said like oh you can't connect IBC to ethereum like it doesn't work now it [Music] works I'm here with valo how you doing

from prar hi what's up welcome to my hotel room beautiful I like the wood on the walls it's a great room um so what's happening yeah we're in Dubai callers 2024 I think everyone's here can tell Vibes are a little bit different I wouldn't say bad but more focused on the core again I feel like we've kind of scraped all of the Just nonsense Ex side and we're back to like core I feel like the panels are more foundational it's more about the actual essence of Cosmos and Inter chain yeah so it's kind of refreshing to S to me I feel like the you know the uptate coming and yeah just kind of enjoying the 45 gazillion thousand degrees of Dubai I was talking to toito last night and I I was telling yeah like The Vibes are different yeah

he he said something which I thought really made sense he said like this is this is the the therapy session for the cosmos ecosystem like the last two years I think a lot of Cs were um you know the markets were different and I think people were still very enthusiastic uh kind of coming off the last cycle and still quite hopeful and and so midene was like just it was super hyped and then last year in Istanbul was still very good right like people were I think good spirits and now it really feels like you said right it's like kind of the bearbones um stripp away a lot of a lot of stuff [Music] and uh yeah I I I I think like people are kind of

just um coming off of that high and now realizing like okay now we have this this great Tech we have this great ecosystem of people yeah uh what do we do with it now yeah I mean also I feel like you know when you look at the Turkish Community especially like they they're like one of the biggest adopters of crypto right so even in the bar Market you had so many people in Turkey from turkey at the conference duai has obviously written more with people that did out like chase money or kind of go for that so it this feels like the core Cosmos kind of conference right now it's just core Cosmos but I also think that this is the first time we see like the different tracks that they have the evm track and the BTC F and I think you know maybe the tide guys is changing when it

comes to like there is this thing this which is like liquidity dependent core Cosmos which is struggling everyone knows that but then there's also this Cosmos Tech non liquidity constraint Cosmos and that's thriving right I mean that's Babylon that's upcoming bar chain that's Union um that's Celestia there's so many of those and I feel like you can really see that they're taking over bigger parts of the conference so yeah let's see how we navigate Thor chain too by the way not forget th they do incredible Polaris as well I feel like is a great example of Osmosis figuring out a way to do like the coroso side but now also not be theity constraint on that side yeah time to changing it's uh you know we're not the only ones expanding what do you feel is the the next step for Cosmos like I mean in in

in a year or two years yeah you know if if Cosmo R continues which I think I think it will uh what's the what do you think will will be kind of the main thing we'll be talking about next year yeah it's a good question I think um IBC is starting to really become almost an inability standard obviously we are kind of like on the cross of that really happening like Union isn't fully life it's still on testet but I remember two years ago in C ver people said like oh you can't connect to IBC to ethereum like it doesn't work now it works right so I think that if anything Cosmos export is going to be IBC at the very least just absolute inability of every chain everywhere um I honestly think

that the bit Bitcoin ecosystem is going to be another very big one it's going to change all of Cosmos we know we had Terra obviously which was like this bouth that use the tech and like provide liquidity to the entire ecosystem I almost think Bitcoin can be that and babyon where essentially all of the CA and de greedy constraints might be fixable with BTC denomination simply because Bitcoin not being evm not being any ecosystem is like very prone to be well adjusted to just being part of like cosm adjusting to bitcoin if that makes sense issue with Bon right I think that's going to be another big Cosmos like going way yeah I think so I mean Sunny has been speing exactly from the rooft for like four years that he wants to be uh wants us to be Bitcoin

maximalist I think thorchain is obviously in a good position for that as well but I think you know I think anything that's core Cosmos needs to figure out liity really fast and I think it's happening right I mean the rui merger into Thor chain is already like you know sudden you move out of liquidity constraint of core Cosmos to like expand it everything that people hyped about right now is not constrained by cost of liquidity so I think in one to two years we either won't have protocols that are just constrained cost of liquidity or we won't talk about them that much because everyone has kind of used this site where it's like you know business in the front uh party in the back business in front it's going to be like outside liquidity in the front C tag in the back I think it's going to be

our VI in one to two years yeah so what's going on with Czar yeah lot of things obviously you know the expansion of vbm was quite a topic of discussion I think one thing I realized is a lot of teams are thinking about it but a lot of teams are not you know analysing it like that because they kind of want to ease more into it which I very much respect I think from our perspective you know anyone that knows me like kind of trying not to be like no just kind of straight to the point and I think a lot of people misunderstood expansion with dropping Cosmos which is not the case our VA WS are still Al um but it's more that you just have to have an acknowledgement of where the liquidity is it's it's a very there's not like a political question

it's not like like it's just there isn't a market here that if we fill it up is big enough for like our Ambitions right now tech-wise C was actually I think also in a very interesting spot for abs ification as a word especially with badon um we obviously all know that cosos tokens if they don't have a market maker they're not listed on sex you know magma called us down only technology right token down technology which is oversized security spending for the chain it's Ain topic a lot of Val as an ecosystem doing really important work but I think that with things like Babalon coming in we might get rid of kind of that oversized expense for security in the ear days which I think is kind of ruting Cal so in our case we

set inflation to zero um we fig out the details right now but we have points for evm right now and the goal is that that is earn the points for the evm migration so that that's kind of the idea just put the spending onto like a little bit ahead of time figure out right now what happen what's happening with the chain we launched the LRT with symbiotic I think we're around 2 2 and a half 3 million TBL working on some Integrations which we can make it a topic to how evm compares to Cosmos because we are walking through that right now um but also everyone at Falls us knows that LTS are not our final Vision it's all about lsas um anyone that reads the white paper can see that that is not a six- month thing so really for us right now we're in the facee where we figure out

where is the right ecosystem to start building foundation for it there's so many pieces of like the Lego block design to get to an actual say that we are now in the conversations about like okay where do we attach ecosystem wi where do we build a cohes ecosystem specific wall that you know essentially solves the issues for the ecosystem with attracting liquidity and also deploying it and also solves the target group need of like having a passive product because at this point you know shared security is like the perfect example everyone's trying to go for stakers all opportunities take a lot of time to acquire like defi takes a lot of time it's not passive anymore we've matured as an industry so what's happening with twer we're looking to which ecosystem we

want to attach in the middle of that and solve that problem yeah so what what is the so that that transition from going from Cosmos to ethereum you know like as a team with your cosm cosm wasm developers and having to adapt to like this other programming Paradigm which I think a lot of people like building with rust might might think is uh like an inferior experience to building much more lowlevel programming you have to reason about like all these sort of security issues that you don't have with rust yeah what's up and like yeah I mean I think you know we grateful that we had deaths that knew both languages but it's like it's obviously massive shift it's it's kind of like you know scr starting from scratch to some degree I think that when we say evm there's also I think old

VMS that use rust or CMM where it isn't that big of a change but you know it's still substantial I would say on the programming side you know obvious a very big kind of disruption of the language but on the BD side or generally business side it's so different I think that you know we have this scarcity problem in in C which isn't to anyone's fault it's like there's not enough bread on the table so you know fighting for scraps um I don't think that's a personality issue it's just Terror collapse I think we just never really fully recovered from that on evm side you can feels like an abundance mindset um you either get very clear specifications of you need you know ex one TBL for us to integrate you which I've never heard a specific thing

like that in Cosmos and also you hear like more willingness to work together I think because the tech load is also smaller if you want to integrate between Cosmos chains you know you have Sovereign chains so you kind of need to figure that out it's a bigger load on evm at least on mainnet or for that matter also the l2s same chain easier to do more willingness to do it so I would say it is a new playing field but it's a bigger playing field and the winning to work together is pretty high so you're saying the willingness from like so evm ethereum projects to work with projects that are outside of that EVN system is fine yeah I I wouldn't say it's you know it's not perfect like you do have kind of this big club and you ain't in it energy to

some degree but it's still it's very M mocracy based which is good you know so like if you have growth trajectory you know they're not discriminating they're like okay now if there tvl there tvl let's work together now to be fair there's like very deep layers of evm politics I think we've all seen the A and Morel stuff there's like a lot of stuff Brewing there so you kind of need to make sure that you know you can't work with everyone like the winess work is high but once you pick different teams it's like it blocks other paths you could take it's not that I mean I guess it's similar in Cosmos to some degree as well you know do go with AST astropod or sosus but yeah it's very interesting yeah and what have you found is the um the kind of recept

to like generally you know the cosmos ecosystem I think like you if I look back on the last couple years there's been from well particularly the evm ecosystem a lot of respect for Cosmos ecosystem the tag the vision uh you know so modular and app chain Theses so came from that ecosystem now when you're approaching uh folks in in ethereum or in the evm world and you're building on Cosmos like how do they sort of receive you as as a cosmonaut yeah yeah it's very fair I I think it's like there's two sides of this uh question so the first is like there is this overarching kind of

positive Association of like yeah Cosmos has a bunch of gigar brains right like I mean so many things have been pioneered in Cosmos so there's certainly like a respect on like the thesis side of things when it comes to like the defi word slash kind of liid side of things they just see that the numbers are very small right so I think that uh the Twitter feuds and beefs that we keep happing are not great for our outside perception outside of Cosmos um so there's like kind of this the perception of like the ecosystem having like this toxity to some degree and then there's the perception of like the gigabrain tech Pros that like actually keep coming up with the next Paradigm in conses like it happened so many times at this point Pro mistake IC

uh up chain thesis right so you know you have to navigate you're still a new kid on the Block and I would say that you know we won't lose the Cal branding for a while and I'm okay with that again it's really like search for liquidity not like a you know um yeah you know evbm like changing the mask like it's a search for liquidity and I I can see some teams struggling to enter that big Club but C was perceived I would say net positive yeah yeah and like what do you think is the biggest sort of lever that teams in Cosmos can p on [Music] to you attract liquidity from other ecosystems because like you said I mean

that's that's really the the biggest issue I think that c has now is is liquidity yeah um yeah what does that look like I mean like if you if you had to S of provide a road map like a set of things like here are here are the top five things that team should do or maybe three or whatever try to attract liquidity from outside yeah I would say number one which is kind of the overarching for the top three probably is like look at these products that I call Cal adhes I I had a post about this which is the Celestia the union the barer the babalons of the world because you have the tech compatibility but you don't have the liquidity constraints so like if you are

building CES in your if you're in defy that is right look in that direction because you still keep the core Cosmos you're still compatible on Tech but they bringing liquidity from the outside then the second one which is in line with that is like BTC F I think BTC f is huge simply because the benchmarks basically zero right like you're starting from it's a new ecosystem yeah of the biggest chain Now is it going to be perfect no there's a lot of finicky Tech solutions to make BTC 5 work which aren't as clean as ebm like no one needs to Sugar Code that but I think that inevitably it will become a trustless thing it will become like a real ecosystem and Cosmos is really well POS position for that so I think thinking about BTC Solutions and BTC products there honestly I used to

say user experience for so many years but at this point I don't even think that's it we have really good user experience I think you know yeah like not to say we should stop with getting better at it but that's not the issue anymore I think um yeah I think Chain's thinking about how to transition into becoming an app chain is probably going to be a new matter like the oversized security spending in the beginning really is like a blessing occurs right the blessing is you can have a lot of tokens staked and locked which is always good you want to keep Supply down to some degree and have people long-term aligned but on the other flip side you have an outside security spending I think for validators to it's probably better for everyone if projects have lower security spending at

the beginning figure out that they're actually onto something then transition to being independent rators don't have to make 50 small bets and hope one works out there's going to be 10 that are all high quality I think that's better for everyone in the ecosystem um um but yeah really like if you want to start in Cosmos congratulations you picked the right TCH stack figure out liquidity that's like the thing Cosmos tokens once they're listed uh on like you know on on a decks it's very hard to get them sex listed really really hard I mean there's like literally a k alsoo atom Thor chain and even th chain is already cosos that he said right and the cash was because the AI metal was so huge but otherwise unless you're really like a staple core

thing it's really hard um to do that so you need to kind of really figure out how do you make the token not the downfall of a good product CU I think we see that a lot in Cosmos um so I'd say those are like the four or five yeah yeah and like you you mentioned um you mentioned inflation and I think that's my my feeling is that in the next couple years I we're all res SE people are talking about this already and we've seen examples of chains um going from like full Sovereign app chain with their validator set to becoming an ABS or becoming a roll up um is that something you guys are thinking about and like what's the what's the calculus that change should be making you know deciding whether or not they

should yeah it's a good question I mean I say like downgrade their security but more more efficient with their it's Dow Independence I would say um because you can probably acquire the same amount of security for Less spending if you turn into an ABS but it's definitely losing uh Independence sovereignty sovereignty exactly yeah I would say it's a good question and you know we don't need to hide around that I think we are experiencing what of Cosmos teams were experiencing uh initially our design with the interchain vaults you know that was a tech Flex like we had the first you know contracts on quaza that had no deployment anywhere else and started executing on osmosis but it was very finicky where it was too complicated to run through IBC back then so inevitably for a user experience standpoint we realized okay this is

technically cool but it is user experience- wise not stable enough so once we PR to The Outpost model obviously that's when you have like the crisis of okay what's the purpose of the chain now in the long vision of quaza the chain is vital because it is the actual Co cor processor of taking the strategies from offchain onchain so when we think about like a 5year vision of a uh lsas everywhere the chain is very vital for that but now we're in this scap right now and in this scab my main concern was make it sustainable again keep spending low on the chain and transform it into being able to be a entry into other ecosystems because right now I think there's the car lacks liquidity but so many other ecosystems

have liquidity and lack actual products and projects to work with and so given that the chain in the ideation of the strategy CU Network becomes a core thing of our vision right now setting it up to basically see look is it going to be a roll up is it going to be an ABS like where is the ecosystem line we're looking for is what we're do right now so do I have an answer as of right now what it will be no but I can tell you anything's on the table and that was the design Choice with the token D listing and the 0% inflation that we are back on the drawing board to be able to decide anything so now we can really sit down and see okay what is this ecosystem offering what are the opportunities for the product of quaza in that ecosystem

go through the entire list and not have you know situation of well we are Cosmos we evm or well you have a token out we don't have a to like not having this kind of situation happening and it's going to take time like BD is not a fast thing but I can already notice in conversations that all of these choices have made us a more attractive partner to talk to we did this conference uh like this little mini Side Event in Singapore um and the the name of the panel was liquidity Wars yeah and uh one of the things that was brought up I mean we talked for like you know 45 minutes but uh rousi from movement brought up this idea that like you just mentioned like there there are these ecosystems that have lots of liquidity but have no product yeah like cardano is one example

right where there's like maybe three deck listings and it's all sex liquidity and I mean there's you know whatever 12 billion dollar of liquidity how much yeah it's it's absurd actually it's probably more or something yeah uh I mean there's like tons of liquidity there yeah and um it's just not being utilized yeah and so which is AB it sounds bizarre right yeah with with proper bridging and proper um and and sort of like connection proper connections to other ecosystems that you know F 12 is more like $200 billion of liquidity uh you know could flow into other ecosystems actually be useful 100% yeah I mean Noble was like kind of a

good example of that right like thank God for Noble the cctp USC into the system like we don't have the most competitive yield which is why you know a lot of it's going to do by the X and such um but like that's what we're talking about right being able to connect to kadano and I mean there's so many l2s that have so much raised capital and so much kind of attention right like the most sacred resource in crypto is like distribution attention and they have that and they have almost kind of no teams to work with and I think I don't think there's going to be an exodus of C projects like that wouldn't be the right move but I think try to figure out problems for these ecosystems and solving them for them could be beneficial for both parties

yeah so what's the vision for LS says yeah I think if you if you speedrun crypto right now and you're being a little bit cynical about it we are literally copy paste creating Finance like traditional Finance um the biggest WS on evm are multi right um a lot of the yield is going back to cdy realwood assets which don't get reong bullish on real world assets long term but they're also permissioned you we're we're in this phase right now where it's back to get maximum yield in sacrifice of all of the other stuff and I think a lot of people underestimating how fast new fire is matured as an industry like we are a super mature industry if to talk to

someone that's not in finance and try to explain Pendle you will fail tremendously and it's one of the biggest protocols and so the vision for LSA really is like okay if we actually trying to not just replace a financial crcy with a technocracy but we're actually trying to build like a a different Financial system and this isn't a communist speech it's about accessibility for me like the ability for everyone to contribute and be part of it then you need to also acknowledge that a lot of people cannot participate with how complex it is so if you think three four five years from now do I want people to you know go on Black Rock and kind of buy a centralized solution that gives them exposure to crypto no I want people to be able to actually have ownership of defi yields and defi ecosystems but

without having to do anything about it and that's where layer stake assets come in right it's essentially single Delta so just one denomination let's say Eve product it's a liquified vault share so it's liquid Vault share which means a vault really is just a fun to some degree like it's just money together one place doing one thing right so if you think about it that way why is the third of all Global Capital like trillions of dollars in funds it's because of the exact same problem it's been run through 10 times there is not a lot of user research you need to do um so there's threeyear Vision 5ar vision for lsas is I want people to have an app that feels like a savings account pick their favorite asset you know with BTC e Soul whatever it might be click on it get

exposed and essentially earn at the worst staking yield and at the best substantially higher yield without ever having to actively deploy it and then on the flip side what's interesting about this is you give more layers levers back to the protocols to decide if they want to subsidize for directing liquidity where they needed to grow so s spending for growth or do you want to just have the liquidity directed to the high Z destinations to maximize actual revenue for the end user and once you give those levs back to the ecosystems you have quite an attractive transaction where user gets high yield and doesn't have to do anything protal gets power to direct liquidity again and can actually gr more actively and more kind of with intent so

3 to five years that's kind of where sequa cool yeah anything else you're excited about right now I'm really excited about Union launching that's the one thing like IBC everywhere like we need that I I think it's going to be really exciting from a bridging standpoint I'm excited for babon to figure out how to trust this he stake Bitcoin I think that's like a massive unlock the fact that they already have think it's 2% of the entire Bitcoin Supply that's Bonkers uh with the current design speaks for the appetite for Bitcoin to be liquid like to be used in defi so once they figure out how to do trust staking that's going to be insane I'm excited for the upcoming dydx uh upgrades which are going to make them

more compet competitive with Hyper liquid uh I'm excited for bar chain I think it's not a meme that everyone thinks they're going to do well I think they're literally going to do incredibly well um and it's also that they're going to bring Vibes you know I think think Chain's overhyped I think they're unbelievably hyped I'm honestly not sure if it's overhyped and to be fair I am biased I am in the rounds right to be fair so maybe I'm just coping but I think they have a community of multiple years of background that they never had a single destination to deploy into it feels like without even having launched one of the most robust ecosystems in Defi and I think they're like branding

and narrative are still underappreciated in corrupto as a whole they didn't reinvent any wheel but they're so good at that that it doesn't matter like it it it simply doesn't matter so are they overhyped maybe I you know they're very hot right now but I think they're going to do great I think they're going to bring Vibes back to Cosmos like we we need that we want us to just have you know around find out energy just you know shoot the energy so yeah be chain and uh obviously you know for our evm players to play out that's like the most excited it's a it's a lot of work we're on it but I feel like a recogn recognition of kind of rolling dice in a new e system and kind of go there and finding the right ex Sy

of us to partner with like I think a lot of people are going to see that as a really cool thing for them to to look into all right up wordss and on wordss sounds good thank you man appreciate it it's good [Music] [Music]