Why Osmosis could be the interchain DEX | Sunny Aggarwal & Derek Hsue

Transcript

this episode is brought to you by pair swap the leading aggregator to find best prices across various decks you'll hear more about them later in the show [Music] all right everyone we have a big crew today for another episode of empire i'm sitting down with co-host of empire santiago we're also joined by two guests today uh one is derek the co-founder of reverie also the co-host of one of my favorite podcasts in crypto if you're listening this you're like what is that what does this crypto podcast listen to this is what i listen to it's called i pledge allegiance it's an amazing podcast you guys should check it out uh the other guest is sunny agarwal co-founder of osmosis uh and truly just one of the brightest minds in the space so derek sunny and per usual santi

welcome to the show guys thanks for having us i think a good place to start uh we're going to be talking about do idx just have their announcements i want to get your guys's take on on app chains we're going to go really deep into governance uh sunny i want to get your kind of longer term vision for what you're building because i think it's really interesting as it relates to competing with some of the c5 folks so sonny i think i'd kick it over to you um we are seven months into the bear what are some of your lessons learned especially as you watch everything that's happening in c5 unfold as it is yeah i mean so definitely this shows like partially the need for defy and like you know we if we're just building centralized banks on top of like you know uh

decentralized money that doesn't really solve like the fundamental problems for why crypto was created in the first place and you know uh the lack of transparency and stuff especially into like some of the centralized lenders mirrors a lot of lack of transparency in like a lot of the banking system in 2008 and you have a system where people are sort of borrowing uh doing like a lot of short-term borrowing and using it to create like long-term uh investments right whether it's in things like steath staked eath which is effectively like a you know a bond with an unknown maturity uh on eth and so that you know that's this

sort of like long long term somewhat risky bet uh you had like entities like three euros capital basically borrowing short term and then like putting it into like long-term venture capital investment you know personally i think the whole concept of like how ethereum like launched proof of stake without with like without the ability to withdraw for like a completely unknown period of time always seemed very whack to me like uh i think there was just a lot of pressure to like nominally say that they had shipped proof of stake uh but actually that like that that over like pressure that kind of led them to like launch something that i think and not uh maybe there just wasn't

enough communication around like the risks associated with it the lack of liquidity and the lack of ability to get yeah okay that's interesting derek what do you think because you guys at reverie you're in a really interesting seat where you probably have the deepest access and knowledge of the on the governance side of things um and you guys are seeing a lot of what's happening with different projects and a lot of what's happening with their founders and their building team saying holy [ __ ] okay now we're seven months into this bear let us reflect and let's reflect together so what do you think are some of the lessons learned in your minds yeah i mean i think uh it's not too different from a lot of the questions that your traditional non-crypto and equity based businesses are asking which is

like what are our priorities thinking from first principles like how much burden do we have what are the one or two most important things that actually matter for the next for the next two years or whatever however long this bear market takes and i think uh the added element with protocols that i've heard across the board is just rethinking like emissions spend and really where that goes because i think in a again in the past few months we've seen a lot of uh protocols think about like their current emission schemes they're overpaying for liquidity they're realizing that a lot of the the main customers that they're targeting are are leaving they're potentially blowing

up and there's much longer term uh maybe more conservative ways to to deploy those pieces of capital so i think that's an interesting conversation that we're we're hearing across the board with a lot of different projects right now so would that be things like liquidity mining and maybe like these ve tokenomics like those kind of things that were almost used as it's almost like the marketing spend of crypto of of d5 in 2020 and 2021 now we're kind of taking a step back saying all right we just spent 350 mil liquidity mining or any of those users still around yeah exactly i think the liquidity emissions and as a whole i think they could probably be reduced and they

should also just be thought done in a more thoughtful manner in terms of targeting specific users for specific durations and time periods and yeah you touched on the ve staking model i think there was a period of probably like three to six months from from late 2021 to early 2022 when the ve staking model was was super popular and it was like every i feel it felt like to me every protocol was at least having that discussion um i think like it's again it's easy to look back in hindsight but it feels like a lot of those discussions were sort of done with more with a more short-term mindset so i think yeah and i've definitely noticed

sort of those those conversations slowing down on the on the ve staking side as well um yeah i think it can be useful in certain cases um but i i think again it's not useful like ve staking and sort of incentivizing staking just for the sake of of staking if there's if it's not doing anything else um if you're going to be in a prolonged bear market it's just sort of wasteful yeah sunny how do you guys think about customer acquisition because one thing that's always struck me is really difficult derek you said it's not that different from what traditional companies are doing one of the biggest differences in my mind from like traditional web 2 customer acquisition versus crypto is it's really really really hard to design an efficient and

kind of predictable acquisition model when your tax spend and your revenue are denominated in volatile assets right so sunny how do you guys think about that yeah um so i mean yeah i mean i i definitely agree with derrick on like the old ve token model we were never big fans of it i you know it letting your pro your protocol incentives are one of the most important things your protocol has and like having it be dictated by like sort of short-term bribery is seems like not the best thing to do for long-term like strategic plan like you know growth but going forward i think we're really going to be moving uh incentives towards sort of more protocol owned liquidity style things where you know cur

we've already been sort of you know i suppose when incentives go towards these like two-week bonds we want people to add liquidity but we don't want like this mercenary liquidity that comes in and out we want liquidity that's sort of like somewhat sticky and so we actually put the most of our incentives towards like hey you have to bond your lp shares for for two weeks um but we want to move towards like hey the osmosis community pool is actually spending all this money on incentives um but you know even two weeks after two weeks and go away we should actually be spending you know the money on acquiring other assets so that it one diversifies the protocol treasury and then two it can use that as a sort of

protocol owned liquidity um yeah that's really interesting um one thing that dictates the marketing spend obviously is like what type of users it is and i want to come back to that near the end of this conversation about kind of the road map and what kind of users you're trying to optimize for and how you guys end up competing against c5 but one thing that just happened last week that i thought was really interesting i want to get both of your take on this is dydx announced on wednesday that they're migrating from starknet which is just a roll up on ethereum to their own chain built on the cosmos sdk um i'm assuming you guys have known this for a while uh derek i'm not sure if you were actively involved in that in that decision i'm not sure if you guys actually closely work with dydx

but can you just tell me like how this type of decision gets made maybe derek i'd throw it to you like how do you decide to build on your own app chain verse another l1 verse another chain on cosmos like how does this type of big decision get made yeah so i guess i'd caveat all of this with saying i wasn't directly involved in this decision at all it was entirely dydx trading's decision um so i i mean i would presume that again like based off of dydx's historical focus it's been building a scalable usable good product experience for derivatives i think everything else is downstream of

that that's what antonio's always been talking about product product product um and i think so sort of backing out what goes into building a a really good derivatives exchange and for for them i think it's like scalability i think that's super important i think it's full decentralization right now dydx v3 is um and they'll say this like it's there's certain parts of the protocol that are quite centralized um it's the order book the execution and and they're using stark net which is which is great but does potentially have some some limitations so i think from their perspective i don't know like the the sort of specific detailed technical

and protocol level trade-offs in terms of like all of them but i think those are the the high level factors that they they thought about and um i think sunny can can probably talk a bit more about like specifically just like why it might make sense and what are some of the trade-offs to building your own app chain versus building on another l2 yeah you know so i mean i've been in touch with uh antonio and uh about about this you know cosmos chain for a number of months now um and you know yeah and that was sort of the one of the main things was you know they wanted to figure out how they can get still this the ux that they have in their current sort of starkware based implementation but actually have it be

more decentralized because the the current implementation you know starkware still runs on a single single operator mode and i actually think that single operator mode single operator roll-ups are like extremely dangerous for like the crypto space and like you know should be heavily pushed back against um but then you know they also have like you know their yeah like their order books and stuff were you know single operator and stuff and so they needed a way of like building a decentralized system that has a lot of those benefits um they you know so so so why like single why are single operator uh roll ups like such so problematic you know so

roll-up systems give you safety by design right that's the whole point of them that you know you don't have to trust the roll-up operator for for correctness of the of the of the execution the roll-up system is what gives you safety but it doesn't give you liveness nor censorship and front-running resistance um and if you care about liveness and mev resistance you need to have some sort of decentralized uh consensus protocol that your roll-up is running on and you know whether that's you know most likely probably going to be tendermint for a lot of these roll-up roll-ups um but so if if you're gonna have to build this sort of like decentralized uh

consensus system you still need decentralized operators it's unclear how much benefit you really get from having using a roll-up style system as opposed to you know if you're already building you have to build up a decentralized validator set anyways then you might as well you know part of the problem with you know building roll-ups is um hard i'll say you know it's like there's you have to be able to construct fraud proofs or validity proofs for your entire uh state machine and today like you know you know things are getting better and better you know part of our view is you know we think that like zk style stuff is going to be is going to win out

over optimistic style stuff and you know when we started building osmosis and stuff like you know zk roll ups i i think that zk roll ups and like i think validity proofs are going to be what's going to like win out in in in the long term and so spending all a lot of energy designing our state machine to be able to like generate fraud proofs when i think that's a paradigm that's going to be like go by the wayside in a couple within a couple of years seemed like just not not the right use of energy and so our view with like how security models of blockchains are going to evolve is eventually you know right now we're just like okay we're just building our own sovereign state machine it's not

relying on anything else but this just gives us the freedom to like iterate much faster and like you know develop and you know not have to worry about oh we have to write in like you know cairo and stuff is getting better and better and more user-friendly but it's still not as easy to write in as like you know the classic sdk is written in go and it's like you know we can use this entire ecosystem of developer tools and testing frameworks and all this sort of stuff that you don't get in like something like cairo today and then you know a couple years down the road once like validity-proof systems are ready then you know that's when we can like and as well as our protocol is a little bit more stable um then that's when we can you know i think everything

will start to shift towards this validity proof system but i also just don't think security is going to be this like sort of hub and spoke model where it comes you know everything comes from ethereum and then it's like you know everything relies on one security system i think you actually have many security systems and they all are gonna be sort of like um doing shared security with each other where you know you're going to have validators on different chains that are going to basically agree to being slashed on a network of chains if they do a a byzantine fault on any of them so you know because you look at a lot of these chains like the the amount of overlap on the entity of the validator sets is like very high right the you know probably like over 50 percent of the

validators on you know all cosmos chains are the same probably all the same with on like you know i think a lot of most of the lido validators are also like uh cause like early cosmos sub validators and so what we're gonna end up happening is saying like hey okay look if i do some byzantine fault on osmosis i would also end up getting slashed on the cosmos hub and on ethereum and on pokedot and so it's gonna be this sort of like mesh security and uh you're gonna be able to prove this stuff using the validity proofs that we're gonna get from like um zero knowledge systems it's a really interesting thesis asante i actually might toss it to you i don't know if you have a take on this uh just because you're doing so much angel investing on and talking to founders who

are making these kind of decisions on a daily basis do you think that we'll start to see apps start on this kind of shared on these shared security chains and then almost move to their own sovereign chains as they start to grow and decentralize the network i don't know if you have a take on that uh it's a really good question i don't have a perfect answer for it other than i think founders at this point um don't have the bandwidth and or are saying at some point we may consider doing that but at the moment it's very compelling just to just use the shared security model for now and then and then i guess the the interesting and attractive part of it is that if you ever want to do it then it perhaps is easier when you're when you're interacting with cosmos ecosystem but i'll post it over

to sunny or derek if you guys have the room take yeah i think like a lot of applications you know it depends on what people are trying to do what how much control what layer of the stack they're trying to innovate at right so some something like osmosis you know our goal was to innovate very much at the protocol layer you know we've been working on a lot of like privacy stuff anti-front-running stuff a lot of like ux stuff uh around like how like keys and stuff work and so to do a lot of that stuff we actually have to be able to go to like change how the like account model of the blockchain works or one of the things we do is on osmosis we actually allow people to pay transaction fees and any token they want

and that's not something we could do if we were building on someone else's l1 or for our anti-front-running stuff we have to we use something called threshold encryption which is like baked in we have to go we have to go modify and bake it into the consensus protocol and so for that you know there and you know someone like dydx they're actually doing a lot of like interesting things at that layer as well right so they're like having a system where all their validators are running order books and like gossiping between each other and then only set the running order books in the mempool and then only settling uh ex settled uh transactions on chain and so it's like you know if you're trying to do interesting stuff and innovating at the mempool layer that's like you know you kind of need to have your own chain to

be able to do that now if you're going to instead just you know if you kind of just focus something only on the application there then in that case sometimes it is you know maybe faster to sort of build on an existing chain but then once you get and like use that as an you know something we've been pitching to a lot of projects is like you know being able to you people a lot of people are trying to use osmosis as this sort of like incubator where it's like hey you know we're going to deploy something on osmosis which by the way we do have a smart contracting system now um but deploy here get some product market fit a lot of them are like xterra projects that are like you know need to just like regain their footing so it's like hey come deploy here

get your users back and stuff and then uh you know split off onto your own chain once you are once you're ready and then um that's kind of like the the what i think is going to happen uh going forward even for many more and more ethereum projects i think are going to start to do this as well yeah i'm curious the criticisms that i've heard um from a couple of folks um not all from the same camp is share security model is not going to work in the long term um i'm just i know it's a very open-ended question but i am curious because there are skeptics out there around the security model and then second around how does value actually accrue here in the system and i think they're both intertwined like if value's not accruing

that at some point like doesn't i think that compromises security it was unclear like would value accrue to that to the atom the token um which is like the currency in the system um whereas people just like you know binance and even facebook at one point was trying to like is using tendermint but that doesn't necessarily mean that it's gonna accrue to atoms right so that's the other piece of this so i know it's like two-pronged question so you know i i would say like it is worth noting that like cosmos is a independent thing from atoms and the cosmos hub and you know cosmos is was more of this like open source like idea of a it's a bunch of open source tools and this idea that we can use them to build this network of

interoperating blockchains there's one blockchain in that network called the cosmos hub which i think is very confusing from the nomenclature because you know it doesn't it's not unlike um other systems like polka dot and stuff where like you know the polka dots just relay chain is like baked into the system um the consoles have is not this like central piece of the cosmos ecosystem and like the the success of these two things are sort of like disjoint that's not destroyed but are independent right um so you know osmosis right now is sort of an independent chain built on build on the cosmos network that doesn't really use

the cosmos hub uh right now other than that you know atom is a major token that is listed on osmosis um i think that the constants have what it can do one sort of the vision of the cosmos hub was to be able to provide this sort of like shared security where the atom token is just this like sort of very high market cap asset uh relative you know to a lot of the rest of the constant ecosystem and it will basically be able to um provide that you know this the same shared security system i was saying where like atom validators will agree to get slashed on the cosmos hub if they do misbehaviors on other chains they would

provide that as a security and then uh as a service and then get some sort of revenue for it like an imagine the way i i thought of it i i i think of it as it's like a um it's like a validator union of sorts like a taxi medallion where it's like hey if you want to be able to be this validator and have this opportunity to like provide shared security in all these chains you need to have uh this atom token to be able to do that um because they're because that's going to be who people come to in order to you know when they want shared security and you're going to be able to earn the revenue from like staking and fees and everything across all of these chains that are part of the shared security system

derek i've had a question for you actually on the cosmos side of things uh maybe this is for sunday but derek i'll toss it to you first um right now apps in the cosmos ecosystem are generally focused on like one use case right and they're pretty friendly with other chains could you see a future where each successful i'm not even sure if this question makes sense but each successful app chain begins to build out like their own vast ecosystem of applications to retain users and accrue value and then they start almost competing with other app specific app chains so i'm trying to figure out in my head if that question even makes sense as it comes out but no i i think it it does make sense and it it's a good question and and i i i and i can say i don't know if sonny

sonny will say this but i think yeah there's definitely like the reality of of the cosmos ecosystem is that all these different projects i mean like if they're building their own app chain they are in some ways competing with the the sort of core cosmos hub and and any other option that that users can go through um i don't think they're it's a strange thing because they're both allies and and competitors um i think like osmosis in particular is interesting because it's an on-ramp that the users have to go through to acquire tokens and any tokens in the in

the cosmos and ibc enabled ecosystem so i think that makes it pretty well positioned um but yeah i i think there's a ton of projects out there that are building on it like just like any d5 protocol they won't be satisfied with just winning their own vertical whether it's spot or or lending or or options or derivatives or whatever like like over the five ten years yeah all these protocols will want to become their own banks or their own prime brokers or or however you want to frame it so i think yeah longer term there there will again just like all d5 protocols there will be sort of inevitable overlap and here's there's just an added element

of having your own security and sort of almost yeah competing to to to to make your security your protocol security the the strongest possible and incentivizing others to build on it so it's sort of an added um dynamic so to say and yeah i think there will be interesting second and and third order effects over the long term i don't i don't think we fully understand it yet but it'll be it'll be fun to watch yeah when i saw the cosmos hub launch the their uh oh my god what's the name of it the gravity decks um it was it felt very almost like an amazon moment to me where i was like okay if you're building a store right the best place to build an

online store is on top of amazon but then amazon comes and competes with you but there amazon has all the users so you're still like well [ __ ] i need to be on the amazon store and i do wonder if cosmos had is going to have some of those more of those like some more of those moments right where they're this credibly neutral hub of the cosmos ecosystem but then they launch products and if i'm a dex i'm like yeah i want to be on cosmos but like you just launched a competitive deck so you know it's kind of at odds with each other i don't know it'll be interesting to see play out sonny i'm curious to get your take on that yeah i mean this is kind of why i i mean so this is kind of the claim i made about the cosmos hub when they were

first trying to launch the gravity decks was i was very strongly against it uh as a you know i i have quite a bit of atoms you know i i worked on cosmos hub as well for a number of years and i thought that like by launching the gravity decks the castles hub actually is going to lose that sort of credible neutrality that it had and i in my opinion when they launched gravity decks is when the cosmos hub sort of like lost that position of centrality within the cosmos ecosystem because then they started effectively competing with osmosis and then kind of got out competed as a dex and so you know they've they've removed the decks now from from from the cosmos hub

but and are kind of going back to the shared security sort of um system that you know it was originally designed for but it's like uh i feel like the centrality was a little bit lost at that point all right everyone really excited to share a special update from our friends at paris swap pair swap has been pushing the boundaries of what is possible with d5 for years and they just did it again they just rolled out the first ever nft peer-to-peer mobile trading app on ios that's right they launched an ios app for peer-to-peer nft trading you can buy and sell nfts with any token they have a secure non-custodial wallet you've got a fiat ramp with zero fees at

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unless there's anything else that you guys want to touch on there senator oh i was gonna say like you know i definitely agree with you this idea that like you know i think even like ignoring the cost of like not other than the closest top i do think that like different chains in cosmos definitely will like try to sort of like slowly try to expand their scope in ways right like i mean to be completely honest we're kind of doing this with osmosis as well and it was sort of always the plan but like we started with just this like spot trading but we're working on expanding the scope of osmosis to be more than just that right we're you know how we see it is that as us osmosis as a decentralized exchange

needs to compete with centralized exchanges and we need to offer the sort of same suite of products that centralized exchanges do so that means we're adding you know sometimes the changes have a lot of things right they have spot trading but they also have margin and perps and fiat on-ramps and launch pads and you know a lot of them have nfp markets now too right it's like so like and you see like unisoft did this too right huneswap recently acquired a nft aggregator and they have their sort of own nfd marketplace and i do think that you know you're going to see that these like d5 protocols are also going to sort of begin to expand scope a little bit

similar to how centralized exchanges did i think the difference what what the approach that osmosis is going for is we're kind of sort of building a sort of a tight-knit ecosystem of products so instead of our team you know our dev team trying to go out and build every single one of these ourselves right we actually tried doing this for a little bit we were working on our own lending protocol called isotonic but we realized that like hey you know this so our plate was very full with just things to do we decided okay you know let's go focus in on just the trading engine and the like chain development kind of stuff and then work with other teams to sort of

build out some of these other pieces so that's why we sort of dropped isotonic and instead have been working very closely with the mars team uh to sort of build out you know our vision of like joint vision of what like the best leverage trading system would look like um and you know then eventually mars is gonna break off onto its own chain but like as i think there's this like sort of sphere of influence that like these chains are are trying to build where like for at the end of the day for osmosis as a you know as a pure the goal of osmosis is to drive as much training fees to on our on our on our decks as possible right because that's the ultimate source of revenue uh for it

so whether it's like trying to say so that's why we're not trying to build a world where like oh everything needs to be built on the osmosis chain we we just want to have a coalition of many projects that are still using osmosis as their like sort of primary trading venue got it sonny we love analogies on empire the analogy that oftentimes got used in the bull market for when when it was kind of l1 season right was all right avalanche and back then terra and solana this is going to look a lot like the cloud wars right where you have aws and you have microsoft azure and you have google cloud and they'll all be kind of in the background right like we're using this platform called riverside i have no idea if it's on aws or google cloud or azure that was

the analogy that oftentimes got used in the bull market for l ones is comparing them to the cloud wars what would is there an analogy that you think makes sense for what's going on in the cosmos ecosystem today i mean i think this is more like similar to the um not the cloud wars but sort of your googles and facebooks and microsoft's where you know google's like oh let's go try to build a social network and facebook's like oh let's try to build a phone and like you know i think you're gonna have you had these you know our view in cosmos has always been that like value accrues to the application layer not to the protocol layer kind of like a

rejection of the fat protocol thesis i think uh pro applications are what have relationships with the users they have brands they have stickiness and applications will move to whatever protocol fits them best and so the yeah so i think that's probably a better analogy it's like you know you had those like web 2 giant sort of building uh a suite of products and you know and they they do still compete in some vertical some verticals they just decided okay you know what yeah no i mean you know microsoft still built bing but it's like okay we kind of just accepted google is gonna win at that and

like um sort of with that yeah if i can toss in another analogy curious what you think sunny you could almost frame it as greek city states in the sense that they work with each other they trade with each other sometimes they go to battle on the same side against foreign invaders so ultimately they're they're here to increase the the greeks or whatever sphere of influence on the rest of the world but like sometimes they still go to war against each other they still have rivalries so that's one way to think about it small different steady states with um similar interests but also some some conflicts

so then the real question is who's building sparta and who's building feeds right [Laughter] exactly um all right let's get into uh let's get into some governance stuff uh and the reason i want to go with governance is because the cosmos ecosystem probably has the highest concentration of like just like very active governance people i don't know i just like i've never seen an ecosystem that that that has that much activists um and just like that active of governance and so um i think i guess my question to you derek is just like why like why you because you guys are

span different ecosystems looking at governance like why does cosmos have such a strong governance set and maybe maybe i'm just maybe i'm wrong there maybe you disagree with me no i would say your underlying thesis is correct i think the cosmos just the ecosystem has the most active and engaged governance i've seen across all of crypto i think the the reason is it's so intertwined with the core security validators play a large role and like if you're a validator and you're securing the chain but you're not engaged in the protocol if if the users don't know who you are they're not going to

to stake their tokens to to your validator and since your business model is earning a commission the more stake you have the more profitable so if people don't know who you are and you're not active you just won't make as much money and i think that provides an incentive for validators to provide their opinion provide an educated opinion be thoughtful about the choices they are making both from a protocol spend perspective protocol design and really anything that governance falls under i think it it just it it creates this floor of having a a minimum

of like a a few dozen really active governance members in the form of validators and i think that in turn attracts other community members who will share feedback disagree and and go from there i don't think this is a dynamic you see in many other protocols i think just to we work on on a few projects in ethereum and the incentives are very different right if you're a token holder and you delegate to someone else to vote they might never ever vote and it just like doesn't there's no it doesn't matter for either

party the protocol as a whole might suffer because less people are watching it or voting on like a new collateral type to add or whatever but there's no like incentive to to really share your opinion um so i think yeah that's sort of my diagnosis of why there's so much activity in cosmos um i think there's room for improvement as well there's probably some changes that can be made but i'll pause there and i could keep talking about this all day so i sort of say that uh you know the bitcoin um uh of original bitcoin uh genesis block you know in the it had the

timestamp with the uh headline about chancellor uh on bailout second unbreakable second bailout for banks it was like hey like oh it's like about like you know solve these like problems with the financial system um in the genesis file of the cosmos hub uh my validator citgo we took the tagline from the the headline uh that day on the times and it was the times 11 march 2019 brexit vote must be put on hold mps wore in may and i thought it was just so perfect that's amazing that's amazing yeah like bitcoin was supposed to be this like revolution in finance and we really saw that what we're building in

with cosmos was this like platform for like iterating and experimenting with governance and like sovereign governance systems yeah i mean really all crypto is is just re-networking people um and just moving people around in almost different ways than they've ever been incentivized and moved around before one of my biggest learnings i think from the bull market and now seven months into the bear is that the current kind of token weighted voting system is pretty primitive right needs to evolve right it suffers from like holder concentration from voter apathy um and so i'm just curious like sunny where you think this goes do we move in the direction of incentivizing voter delegation uh but maybe also more like formal structures where the voters

provide particular like subject matter experts with discretion to execute on their responsibilities without actually requiring a vote like where does governance go yeah i think it will become more and more like a liquid democracy style system where you you know currently we have this on in cosmos right now where uh what happens is you delegate to a validator and your you by default inherit your validators vote unless you manually override it or like you if you vote yourself then it will uh take your vote um i think what we're gonna end up seeing is like yeah different different expertise expert matters you

know i'll delegate to someone for how to do protocol incentives but then i'll delegate for someone else for how to like you know decide whether to a smart contract is sufficiently audited to be allowed to be deployed on osmosis or and uh you'll have this like sort of stage allocation thing um one thing i would want to fix actually with how cosmos governance works today is i think that your delegates shouldn't receive all of your vote uh they should receive a portion of your vote and then let's say like you know if you delegate votes then they use 25 percent of your voting power let's say and then if you go vote yourself then it uses 100 of your voting

power so that way it uh it reduced i think right now in cosmos uh governance like the validators are a little bit way over represented in governance and so that will solve that and it will also just give an incentive that even if you agree with what your validators or your delegates says it still is an incentive for you to go vote to yourself because then you could use 100 of your voting power instead of only 25. uh derek i want to ask a question to you that i think either you or larry asked sunny on the podcast and it was such a good question that i'm going to copy it uh which is around crypto governance and speed right typically there's a direct correlation between speed and governance so super super concentrated governance

equals you can move really fast this is what we see at like small startups right super concentrated governance everyone's in a small we work together and you can just build stuff like crazy maybe very decentralized governance like bitcoin uh or or honestly big corporations you move a lot slower so derek i think the question i'd asked to you is does crypto governance help as it stands today help or hurt speed um i i think at the end of the day governance is not the goal right governance is a means to an end of achieving your end goal which for most protocols is winning market share building something that people want to to use

i think most of the time like if your protocols early involving a huge amount of people and in decisions inherently is at odds with efficiency and speed i think there are some decisions where it makes sense to have every token holder have an opinion on such as like i think some of the property rights related governance proposals like like with juno um with end i think it's important that those discussions are are held transparently and and out of the open but i think yeah like the day-to-day things of operating a protocol spending small amounts of funds from the

treasury i think there's no reason it should take weeks for a proposal and for everyone to chime in like you should there should be subject matter experts that that do handle those so i think yeah governance is is slow it's inefficient and it can be it's all it's always going to be a trade-off so it's about figuring out what are the the low-risk things you can make more efficient while um again keeping important discussions around like supply inflation property rights to sort of token holders as a an all-state stakeholders so yeah what do you guys think i don't know who really to ask this question too but just

like the role of a dao um olaf uh where's paulie chain uh olaf from paulie chan was on the podcast he's and we asked him like what's the role of a down he said there's only one role of a tao it's to allocate capital that's the only thing a dao should do and it should basically become the equivalent of like a cfo's office right that basically looks at all the functions and all the initiatives evaluates cost versus potential roi and then uses this analysis to inform like high level budgets staff bring priorities take into account like unit economics determine what moves the project allocate the capital and then let people do the thing uh curious if you guys agree disagree santi i don't know if you have a take on this but uh sonny maybe i'd throw it to you first

i actually think it's almost the opposite where i actually think that dows and governance systems are actually really bad um capital allocators uh you know this is kind of why the australians has now hired uh reverie to basically do the capital allocation because you know it we realized that like i i feel like part of i don't know to me taos seem to [Music] be a especially like short-term like token holder based out governance systems seem to be very bad at like sort of long-term reciprocity of things where you know one of the things that we've always been

pushing osmosis for is to be more open to this kind of stuff where like you know uh we can you know we've done this where like in osmosis they've we've given a loan from the community pool uh to another uh cosmos project called stargaze so that they could like you know bootstrap their liquidity and then stargaze then return stars uh to the community pool like couple weeks later uh and so that was like you know i but in general i think like these sort of like longer term things is and like especially when it comes to negotiation you know like this like we saw this with like the sushi uh the fiasco where like sushi was trying to

dow was trying to raise from race funds from vcs it's sort of hard for uh to do that kind of a lot of that it's really hard to negotiate in public i would say right um and so that's kind of why having someone like reverie come in and be able to take on a lot of that like negotiation and evaluation role that kind of often requires like hard disc hard conversations right um and being able to delegate those tasks it's a good point i mean it's honestly just hard to buy things when the counterparty knows exactly how much money you have like we saw this with constitution dao it was like of course someone was going to outbid the dow because

we knew how much money the dad had raised so uh santa i'm curious we haven't actually talked about this i don't know if you would agree with sunny or you would agree with olaf kind of two counterpoints there like just the role of a doubt in allocating capital i'd be curious to get your take on that i think it's uh it really depends on the on the dow um you know i think at the end of day like you need to look at um it is most styles are struggling and will continue to struggle to actually coordinate uh it's super super hard i mean of course when values on the line people tend to pay more attention as opposed to traditional political systems but even then like um i'm i'm i'm not a believer that you need that pure like truly decentralized like dao is going to work like you need to have

one or two really competent people that are ultimately like managing the stuff but like everything you know it's it's i think the the you the reason why you'd want to like the criticisms that we're seeing a lot in today's market is you're you're trying to like create stuff that no one really needs and it's you know you're just adding a layer of complexity that no one really wants and it's not going to work the only reason why i think you wanted that out is one you're able to bootstrap and court like and amass capital pretty quickly and then there's more accountability and transparency in how people vote and delegate and then ultimately there is going to be a high degree of centralization in ultimately whoever is taking the decisions and if you look at the most successful dials out there

you know like pleaser and illuvium and a few others like you have a council of people that are really competent and then at the end of the day people don't like that they can remove you from that role and that's really it right it's just more transparency and accountability and tracking a lot of this stuff which you don't necessarily have in traditional fund management or political assistance or that so i don't know if that answers the question but that's just my view which is the only reason why this is kind of exciting in the margin is there's just more transparency accountability on these decisions i think that's a really good point derek i would expand the question to you um and add in like org structure actually um in the in bull markets everyone wants projects to be completely decentralized

right but over time like crypto or non-crypto org charts and org structures of a startup have to evolve over time right block works ourselves we had 10 people then we had 50 people like the company needs to look very differently at those two sizes i think a lot of d5 founders that i speak with understand this but they almost feel constrained by decentralization saying look i get it we need to move really quickly but like we need to let the community figure things out we need to be decentralized in a bear market uh this probably i think changes right where we allow teams to iterate and experiment with new org structures things like working groups and pods and maybe like a bigger degree of centralization i'm just

curious what you're seeing on that front and if you have thoughts on it yeah i think candidly i think a lot of what happened in the past two years was teams rushed to to launch their tokens um during a bull market everything's going up and when you launch your token you basically unleash pandora's box in terms of like if you're trying to like the token has certain certain rights certain decisions that the community made and the protocol might not be ready for that if the protocol still needs to figure out product market fit it doesn't need hundreds or thousands of of voices on how to build

the product or how to set vision so i think sort of in terms of protocol governance and shipping i think certain teams put the cart before the horse i think um [Music] what we're seeing now i think is a is a pretty interesting we're seeing protocols take many different approaches to to re-centralizing to re-concentrating decision-making and power um i think ave is one example i think they've they've hired the bjd labs team to basically be one of the core dev teams building for ave we've seen obviously maker dow with the court unit model we're seeing some protocols go with with

pods um osmosis has different subdials so i think yeah we're again definitely seeing a sort of bottoms up approach to re-centralizing um and i don't mean that it'll just end up being like a literally a company in the sense of having like a bunch of employees with functions but i think it will be somewhere in between in the sense that the protocol needs to figure out who to hire what specialists to bring on and then hold them accountable um whether it's every quarter every six months every year so yeah definitely think innovation in in newark design is happening but

candidly there's a lot of lessons that we can borrow from traditional startups and traditional corporate governance so sonny i would not be doing my job if i uh i messaged some people like hey i'm sonny's coming on the podcast i wouldn't be doing my job if i didn't ask you about the exploit so i just want to learn like you know every crypto i think project or company uh ecosystem goes through this at least once probably multiple times what what happened and like what are some of your lessons learned from the exploit yeah so um what happened was well i mean at the surface level uh there was a bug where um where basically we miscalculated how many how much lp

shares to give out when someone adds liquidity to the pool um so but you know let's zoom out for a second um basically you know tara crashed and uh there was sort of this like sudden on flow of developers that was kind of like a lot a lot of the terror project uh dubai projects were like you know using osmosis as sort of like the next place to go after you know to relaunch their projects you know we we share we have the same smart contracting system called cosmosome uh we're sort of the biggest e5 application now on cosmos um and so basically ever since then there's been

sort of a little bit of a you know we we had actually been working on getting a lot of our cosmos on tooling and stuff to the po you know because we we actually adopted cosmosome relatively recently you know tara had been using it for like you know almost a year and a half at that point uh we we added it like a month or two ago and we we were spending a lot of time on making like the dev ux like tailored to what we wanted and then suddenly we had an onslaught of developers that we like weren't prepared for and so we kind of had to start like rushing a lot of things um part and part of it was there was this uh conference call on so there was a terra dap expo that was supposed to happen in austin and it was cancelled

for reasons and but the you know we were friends with the organizers and they were stuck in all these contracts with like the caterers and uh venue and all this kind of stuff and so we kind of like offered to take over the uh conference from them and so that way they could give a refund to more of the attendees and sponsors and stuff and so we we we threw our first osmo con uh a in the course of you know we planned it in basically like 10 days um and we because and we were trying to get uh this upgrade uh this new upgrade that has a lot of these cosmosome uh features out before the conference just because you know we knew that like hey

if we wait till after the conference it's going to be like you know uh it's going to take another two weeks or something to to get this upgrade out and so we kind of did this upgrade more rush than we should have we didn't go through the normal testing processes that we normally do uh part part of it was like we you know we also added a stable swap to osmosis um and we did this like sort of big refactor to the amm module that makes it so it supports uh custom curve type so instead of having a single amm curve which we currently have the balancer one we we would support you know balancer and then stable swap and you know we can add more and more um and we knew that we didn't test the

stable swap uh enough uh and so we actually pulled stable swap out of that upgrade and so we didn't add that but we kept the actual refactor that generalized the emm and yeah so i mean basically the tldr is that you know we just didn't test things properly we didn't uh we had our test nut and stuff running but we never connected our front end to it uh we had a lot of tests on um single-sided liquidity ads because that's what we actually did a lot of major changes to but not on the simple thing which is basically greedy adding um and so yes what could you have done different because like this is like not testing enough but i guess this is just for general

founders but like i understand there's chaotic innovation in crypto and the community and you want to push this stuff out pretty quickly but how do you avoid this because you sort of knew that you're not destined enough like how do you avoid this yeah so one i mean definitely just don't rush on these things like you know we ended up you know our worry was like hey if we don't launch before osmocon we're gonna have to waste two weeks on not being able to get this upgrade out it's like well okay we definitely spent more than two weeks now uh like on on deal with the aftermath of things um would that have required an audit and if so a big challenge that i hear is it's kind of impossible to get nodded

pretty quickly yeah so i i mean i think audits are good i'm not sure i i think people kind of hold up audits as these like perfect end-all be also oh you get an audit you're good and i mean i'm not gonna lie like every audit that we've kind of gone through has not been very great uh like we've uh you know some auditors i feel that like ron linter is on our code and just like give us the results um the i think the solution really is just better code practices and review practices so um you know there's a linus torvald's quote about you know given enough eyes all bugs are shallow but i think right now in the state

that's a lot of our amma module was in it was like you know there just wasn't enough readability and like code comments that like someone making it very easy for someone to follow along exactly uh what is happening and i think that's sort of the well the mistake that was made and that's sort of what we're doing right now is you know we're we're not working on any feature development right now we're spending the next few sprints just focused on like hey let's like you know add more code comments readability we did this thing interestingly where after where during this upgrade we actually walked we did a walkthrough with a bunch of validators and we you know we said

like hey whoever wants to join this zoom call we're going to walk through all the changes we're making uh in this like bug fix upgrade um and that kind of help because it just makes it so other more people understand the code and actually since then we've actually seen that more values contribute to the code as well which is uh pretty cool um but yeah so i think and then you know just better testing frameworks so we have this thing called the simulator which is a tool in the cosmos sdk that like you know lets you define invariants and then it does like it does random transactions and you you know it it was actually such a helpful tool in the early days of cosmos it found like so many bugs and like help solve them but just a lot of the ergonomics around it

are just very sort of annoying to use and we kind of stopped um using it at some i i don't even know how to pinpoint an exact point in time where we stopped using it we kind of just kind of and now it's like okay no we have to go make sure that we're like using the simulator properly making sure as we're doing more code changes we're adding more and more invariants um things like that how much i want to ask two questions one is how much uh trust do you think was lost and how do you recoup that uh and the second is what impact have you seen in this in this market correction in terms of user flows and activity and again this is an

overarching kind of theme that i'm seeing in the market now which is most people are now saying this is all ponzi ponzinomics and these are there's no real use cases for web3 i'm curious what you're seeing from the users that are coming to use osmosis and how that has changed uh recently given market um sticking a leg down yeah so i mean i think definitely some trust was lost on like you know i think uh our our dev team is one of the you know we we've been working on cosmos for like a number of years and so you just sort of expected that you know we we are supposed to have these like highest coding practices within within the cosmos ecosystem and so i think

you know what yeah you know there's there's gonna be work to be done on like you know making sure especially not just yeah just for users a lot of for the developers who are building on top of osmosis just showing that like hey look you know we're we're we're going back to the and like re-implementing a lot of these like security practices that sort of i don't know we got i don't think we got lazy it's just that we kind of sort of started over prioritizing speed and velocity over like you know safety and security and so we have to like kind of go refine that balance again um on the user's side we've been you know i think that i would say that we haven't really lost

many of our users that we had you know like i think everyone in even like at awesome con which was like the market was nuking and like the chain was down like i think everyone was in like extremely high spirits and like um i yeah i generally just don't think we've you know i don't i don't think the uh community has had that like that of a network sort of a sentiment uh to this um and you know we're kind of just all focused on like going forward and building um but you know one thing i like about the bear market is you can work on sort of longer term things uh where there's a lot of

like features that you know for example our front running stuff uh with threshold encryption it's something that we knew is like a six-month project but we just kept having to prioritize the like one to two month faster wins during the bull market and getting things shipped faster and so now in the bear market it gives us time to like actually go focus on like building out some of these like longer term but it might be like more important uh features so um looking forward to sort of doing that because as we start to think about wrapping this uh this podcast up which has just been an amazing conversation so far i want to start to actually just spend a couple minutes talking about the future and talking about uh

roadmap and visions and things like that both on the reverse side of things with derek but also sunny in your world as well um sonny i think i'd throw it back to you right now when you think about like osmosis decks on cosmos what is the you said bear market gives you time to actually build what is the not six month product roadmap but the five to ten year vision here i mean one is i don't i i don't want us to be considered the decks on cosmos i really see ourselves as the main trading hub on cosmos could i say that i would say we are the inter chain decks where you know we're not focused on just the cosmos ecosystem right like the goal

is that you know we want to be if your people are trading bitcoin for eth for seoul like that's you know osmosis is the place to do that and our our bet was this sort of bet on vertical integration that we are going to be able to build the best decks because we have this like deep control over like not just the app but we have the app we have the chain and our team also maintains the wallet for uh and so we have this like sort of deep integration from the full stack and that's going to build allow us to build the uh best uh flows um and so yeah so you know right now really focused on uh a lot of like ux stuff uh so we're

working with axlar which is like sort of a bridging solution to allow people to do like you know nate we call them like native swaps where it's like oh you have ethon ethereum you want avax on avalanche you should be able to do that swap in like a single click uh you don't even need to have an osmosis account or anything sort of like you know osmosis today very much feels like the centralized exchange experience you deposit assets you trade you withdraw um we want we also want to be able to offer sort of the shape-shift experience right where it's like okay single click and it does the entire uh trade for you um a lot a lot of focus on just like you know new key management systems like uh

osmosis has this like for example like uh hot session keys where it's like you know every time you make a trade i don't want to like have to pop up my ledger to sign every single trade right i should be able to generate a hotkey that like it says oh with this key you're allowed to trade up to like five percent of your portfolio uh and anything more it it requires a ledger signature or something like that so you know kind of like it's kind of like smart wallets but they're actually like built natively into the uh protocol itself and so um yeah that's a big focus about is um yeah i mean so like i said i mean long term that that's that's where we're going be you know

focusing on the entire intel chain um and i think that's what's going to happen you know what's going to happen is that more and more assets are going to types of assets are going to enter are going to become crypto native assets today it's like you know cryptocurrencies are but we also have like you know what i would dow tokens what i could consider like the new form of equity um i think we're gonna start to see commodities and stuff be listed on on our sources and for to deal with that i think we're gonna have to see like a bifurcation of the osmosis um experience today like there's like one app where people go to trade like all of the assets but i think you know we actually have one called um there's a

project called bitsong they have like creator fan tokens and they've actually created a separate front end for osmosis called synfonia that's like very tailored around uh the fan token training experience they have an embedded music player and all this kind of like uh stuff and i think we're going to start to see more of this like sort of um you know okay this is focus you know this is focused on trading uh l1 to l1 assets this is focused on trading commodities so like uh we're going to see that sort of bifurcation as well so osmosis will come to sort of like protocol for all of this interesting if i'm reading between the lines here and derek i'll throw a question to you

sonny if i'm reading between the lines you are gonna eventually end up going head-to-head with some of the centralized exchanges like a coin base right you you could really see a world where you guys end up taking on someone like a coin base or actually derek before throwing into you sonny agree disagree uh i agree this was like this is the mission we started out that is the goal okay okay that is derek i'd throw it to you then does someone at what point does like defy end up actually becoming a real competitor to cfi and so the reason i say like actually is because you know there were days a year ago or two years ago like you know it's in the in in the news and things like that like okay uniswap volume overtakes coinbase volume but like at the end of the day

coinbase is a 800 pound gorilla compared to someone like uh you guys right now or unit swap or really any anyone in d5 so derek i'd throw to you and just say like when does that flip happen yeah i think it's i mean the easy thing is to talk about i think the the ui the ux the the fiat on ramping things like that i think regulation is also part of it but i think like learning to to to sort of use d5 is just it's gonna take time and i think in the past cycle like the the order of magnitude of crypto users broadly increased and it will take them a while to make

that jump from traditional centralized exchanges to to d5 so i think like the d5 experience and and usability is is only increasing and is slowly converging to the centralized exchanges but we just need more people that have been using crypto and and are comfortable self-custodying with a portion of funds um using some of the the wallets and and and making swaps on on on dexes so yeah i think a lot of it's just the passage of time and um i think that really is the the main thing because the other factors will will will happen so i mean i'll take a take on this like uh

back in the day when defaults getting started um the stablecoin disabled coin transfers is a pretty popular you know used like use case right and there came a time where there were no reason if any sophisticated or just normal person would trade in a centralized exchange because the slippage was was higher than using something like curve and ultimately like you know anyone that's trading in decent size is going to use curb um versus you know some other you know centralized or some centralized exchange um and that's just the the beauty of the model here which is in at least in financial functions people are pretty sophisticated and and you're just going to go to the

place where you can trade with the best execution and the upside case here for d5 to derrick's point which i agree with is look guys it's going to take time but at the end of the day these things are super efficient and you're going to go to the place that has the least amount of friction and i understand there are certain frictions that are can be addressed pretty quickly which is or over time which is you know regulatory concerns and onboarding and you know a lot of this stuff can be fixed but at the end of the day i think the the upside case here is these decentralized systems are transparent have certainty around execution and over time through lindy effects and whatnot like you have you sophisticated financial players whether it's if you're a font if you're

a trader or if you're the user aggregator the bank is going to use d5 rails because again it's the only reason why technology gets adopted faster better and cheaper we're at different varying points of these three dimensions but you sure i mean i'm a believer that over time it will be faster better and cheaper than a centralized institution no question about that i agree i agree i'm curious where you guys think it lives though like what pre all these c5 lenders blowing up i thought the stack was you had all the banks and things like that they the weight best way to get capital into crypto would be through c5 and d5 would live in the background and you would never interact with defy and it would just be like behind a block fire or something like that i'm actually questioning that thesis i think i

probably was wrong i think a lot of c5 ends up getting acquired by the big banks um in in the bear market here and that d5 will actually have an amazing bear market and that d5 is like really primed for another colossal couple of years so sonny i'm curious where you think d5 lives in the stack maybe with the specific question of like do does retail end up interacting directly do i do i end up leaving my wells fargo bank of america account and just have like a d5 bank basically so i mean i'll say that i focus mostly on the exchange side of things more than the bank you know we're not really building sort of a lending protocol side of stuff we're really focused on

the dex exchange experience and i do think that like re i don't think that awesome us like osmosis is gonna be like just the place where uh coinbase is just a front you know executing on like tapping into its liquidity i do think that retail users will interact directly with osmosis as a as a via the you know multitude of front ends that are being uh built for it right and i think that like that's kind of why we focus so heavily on like the ux and design and brand you know i think that we

we know that like our goal is like to have this similar or better uh of retail experience than than something like a coin base yeah uh when you look at a coin base just to keep going down this rabbit hole coins centralized exchanges are not exchanges they're a suite of products they are platforms for doing things with crypto lend borrow interest trading um derivatives right is the do you guys have the same goal and and if so do you if this was a non-crypto company right you'd be saying the big question is okay if you have the same goal building a platform well then it's a build versus buy question and if you actually look at someone like

coinbase a lot of coinbase was built through acquisitions like coinbase custody was really zappo uh coinbase like their prime brokerage was really to gomi right so do you guys a like same goal yes no b have you guys thought about m a within d5 yeah so definitely same goal um i would say it is sort of a partner sort of situation but like very close partnerships so sorry so one thing maybe worth mentioning is that so i mentioned how osmosis has this like smart contracting system one thing that we do very sort of uniquely that i then most places is it's it's a permissioned smart contracting and this

what i mean by that is to deploy a smart contract requires making a governance proposal so it's not a permissionless deployment of contracts the purpose of osmosis is we don't have a smart contracting system in order to become we don't want to become a generalized smart contracting chain that kind of just goes against our vision for how blockchains uh blockchain should work we still are this application specific chain but we're able to work we want to find the like you know we're going for quality over quantity where we want to find the other protocols that like can build the court the necessary pieces that interact very closely with the osmosis to build the sort of user flows we want so this

is sort of like what we're doing with mars so mars is like they've they're building this like lending protocol that they're going to deploy onto osmosis but like we can do like these very interesting interactions between them you know they're going to be able to use osmosis lp shares as um uh collateral you can use uh the the m tokens as in super fluid staking which is this protocol we have of allowing uh defy assets to be used to secure the upper state blockchain um we're gonna you know they have this thing where it's like um you can have a so you know you know how like centralized exchanges they when you borrow assets on

you you get like a margin trading account you can't go like borrow take these assets off of the centralized exchange right and so this is sort of something we're working on with mars which like hey you can borrow assets into this like protocol controlled account and then you can use it to margin trade on osmosis but that the assets in that trading account are still owned by the protocol and so it can actually be so the assets that you borrowed can actually also be used to liquidate uh and be like seized by the protocol so that way it is a uh you can have like much you know lower margin requirements so that's like sort of an example of like these like sort of tight integrations that were that we're doing and mars is just one

example there's like others that you know we're working with to to build out that and then you know the goal is to have it all be available through this like you know nice easy to use osmosis uh ui yeah this has been an amazing conversation guys i want to end with one question to each of you um what is the one thing in this bear market that you're most looking forward to that is not related to something that your company is building or that you are invested in uh what is one thing just like in in the arena of crypto that you're most looking forward to uh i will make it an open-ended question to any of the three of you santi you're included if you'd like to answer shield me don't don't call on me

sonny maybe i'd i'd pick on you here um i think like there's a bigger usage of like social and web of trust based systems it's you know if i wasn't working on osmosis what i would be doing is working on like web of trust uh systems and i think there's just like so much part of my view of that crypto is that like you know it's we're building for these like trustless all these like hyper trustless systems but that's just like not the world that actually exists right like there exists a fabric of trust in the world and i think what we need to be

doing is making those trust relationships more legible and but and then thus computable over so you can like you know take advantage of transient uh uh you know multi-hop trust relationships in order to make um you know certain economic or or even non-economic interactions possible that weren't possible before um i think the biggest bottleneck you know when we were deciding what to build uh we went down the osmosis route because we kind of were really interested in the anti-muv stuff uh but the rebel trust stuff the biggest challenge is like the uh the privacy side of things and you know like i said it this is like

this is constant balancing act of like in blockchains of balancing privacy and transparency we want to have these computable over trust relationships but i don't want to be able to go see like oh what score did derek give santi right like that's not you know it's not people get mad if he derek didn't give him a great score right so it's like how how do we uh sort of provide that in like private compute is like a very hard problem and so um i think that's i'm hoping we can see a lot more progress on that i love that answer derek you want to finish this off yeah i think i mean for me it's it's zero knowledge applications i think there's obviously been a ton of

discussion about zero knowledge in terms of roll-ups scalability and privacy but i think fundamentally like communicating is is is present in every interaction in our lives in real life digitally and i think zero knowledge uh tech has a much broader range of of applications um beyond just improving how how some of crypto protocols like function so i think excited to see that like touch touch like everybody in in terms of all interactions so nice cool guys amazing conversation uh sunny and derek both of you guys it's tough to uh

hear what you're building and not root for you uh this is super exciting and uh especially at a time when things are going really crazy in cfi i just like it's time to double down on what on what you guys are building so i love it so thanks for coming on empire thanks a lot jason and santi thanks for having us thanks guys [Music] you