00:00:05: Anna Rose:


Welcome to Zero Knowledge. I'm your host, Anna Rose. In this podcast, we will be exploring the latest in zero-knowledge research and the decentralized web, as well as new paradigms that promise to change the way we interact and transact online. 


This week I chat with Zaki Manian about the Cosmos ecosystem, and I ask the question, "Is Cosmos dead?" We run through the key events in Cosmos history and map the teams and players who worked on the project during different eras. We tease out the strengths of Cosmos, but also the structural flaws that have led it to be in the state it is today. There is a key distinction, and one that I hope comes through during this episode, between the Cosmos Hub and the Cosmos dream. And one may be faltering, but I think you can tell by the end of this, the other is unlikely to ever die. We wrap up with a chat about some of the initiatives in place to try and revive the ecosystem and bring different factions in Cosmos together towards the central goal.


Now, before we kick off, I want to point you towards the ZK Jobs Board. There you can find job opportunities to work with top teams in ZK. I also want to encourage teams looking for top talent to post your jobs there as well. We've been hearing from more and more teams that they have found excellent talent through this Jobs Board. So be sure to check out the ZK Jobs Board. We've added the link in the show notes.


Also, a quick reminder, our bi-annual ZK Summit event is hosting its 12th edition in Lisbon on October 8th. Our one-day ZK-focused event is where you can learn about cutting-edge research, new ZK paradigms and products, and the math and cryptographic techniques that are giving us epic efficiency gains in the realm of ZK. The early-bird tickets are sold out, but we still have general tickets for sale over at zksummit.com. I've added the link in the show notes. Hope to see you there.


Now Tanya will share a little bit about this week's sponsors.


00:02:04 Tanya:


Today's episode is sponsored by Anoma. Intents are a new way to build dApps based on user-defined outcomes instead of virtual machine transactions. Anoma is making an intent-centric future possible by introducing a distributed intent-centric operating system. This will enable builders to create user-friendly dApps compatible with any blockchain. Use Anoma to add intents to existing dApps, or build on Anoma and settle wherever your users are. Anoma aims to vastly improve blockchain user experience, enable novel applications, and promote a more human-centric future for decentralized technology. Get ready to build with intention. Anoma is the universal intent machine, introducing a new era of applications where you define the outcomes you want. Follow Anoma on X to learn more at x.com/anoma. So thanks again, Anoma.


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And now here's our episode.


00:03:41: Anna Rose:


Today I'm here with Zaki, co-founder of Sommelier and a longstanding member of the Cosmos ecosystem. Welcome back to the show, Zaki.


00:03:49: Zaki Manian:


It's great to be here.


00:03:50: Anna Rose:


For today's episode, we return to the topic of Cosmos, and I want to do a catch up. Last time you were on was February 2023, and I think we were talking about Atom 2.0 and what was hopefully coming for Cosmos. I want to do a brief look back at the history of Cosmos, but I really want to understand if, as many are saying online, Cosmos is now dead. I'm not doing a big intro to you because you have actually been on the show many times, but I think over the years, I've very much considered you one of the main champions of Cosmos. And I think your influence has been really widespread. You are kind of legendary for having advised most of the main projects in Cosmos. So I feel like you're the right person to talk to about the state of this ecosystem.


00:04:38: Zaki Manian:


Well, I've been part of the ecosystem in many ways since 2014.


00:04:43: Anna Rose:


Whoa.


00:04:43: Zaki Manian:


Cosmos is a very, very old project.


00:04:45: Anna Rose:


Okay.


00:04:46: Zaki Manian:


And I think it's often forgot about because most people encountered it in 2019 or 2021, during the Terra era. These were the touch points for different people, but I've been at this idea of interoperable blockchains, of proof-of-stake, of all of these things for a decade.


00:05:09: Anna Rose:


Wow.


00:05:09: Zaki Manian:


And it does feel like we're at another inflection point. So it's a good time to catch up. 


00:05:14: Anna Rose:


Let's do a quick mapping or sketch of the key dates in Cosmos. So launch of the network 2019.


00:05:23: Zaki Manian:


Yes.


00:05:25: Anna Rose:


What actually launched then? Was that like a full validator set?


00:05:29: Zaki Manian:


Yeah. So it was the Atom Hub.


00:05:30: Anna Rose:


Yeah.


00:05:31: Zaki Manian:


Okay, so there was this event called Game of Stakes, which was the first incentivized testnet, which the team executed. And sort of I led that process and sort of unleashed the incentivized testnet monster upon the world.


00:05:46: Anna Rose:


Which we've seen ever since.


00:05:48: Zaki Manian:


Yeah. So all of these incentivized testnets that airdrop hunters are -- and we never promised anyone anything, but we ended up doing a reward for the participants that was baked into Genesis. And so the validator set got -- there was a release of software, the validator set got together, they launched a network. And so Atom was born. And what was probably notable was Atom was like the first proof-of-stake network that got widely integrated both on the staking side by major centralized exchanges. So that was kind of the big story of 2019, was kind of this process of different exchanges onboarding Atom, and wallets and all of these different players onboarding Atom as, okay, this is an asset you can earn yield on.


00:06:36: Anna Rose:


Wow.


00:06:37: Zaki Manian:


And that was kind of a pretty new concept in the centralized exchange world.


00:06:41: Anna Rose:


Was there already a PoS live? Was Tezos live?


00:06:44: Zaki Manian:


Tezos. Tezos was live.


00:06:45: Anna Rose:


Okay, so it wasn't the first first, but it was like in the first five or something.


00:06:50: Zaki Manian:


Yeah, I mean, Tezos had all of its early struggles -- all of its struggles. Right? All of the drama that happened with their foundation and everything. And so Atom was able to execute a very strong go-to-market. The token was pretty widely listed. We had a policy of not really engaging with centralized exchanges, but nevertheless, the demand for the token was very strong. So lots of exchanges listed us. Then this whole process of staking integrations, Coinbase made it, I'm pretty sure, their first staking integration. So that was a pretty big factor. Yeah. And so this very decentralized community of validators were operating the network.


00:07:31: Anna Rose:


But at the time it was just the Hub. So Cosmos literally consisted of like one chain, no connections. It was only that first part of the vision.


00:07:40:: Zaki Manian:


Yeah. It was --


00:07:40:: Anna Rose:


There were no -- were there any other Cosmos chains at the time?


00:07:44: Zaki Manian:


Yeah, so I guess at the time -- so first and foremost there was this other chain called IRIS, which is mostly forgotten at this point, but that chain launched. At the same time, Matic, which became Polygon, was also live, running --


00:08:02: Anna Rose:


No way. They started as a Tendermint chain.


00:08:04: Zaki Manian:


They're still a Tendermint chain today.


00:08:06: Anna Rose:


Oh, I didn't know that, actually. That's funny.


00:08:08: Zaki Manian:


And then BNB chain also launched very soon.


00:08:12: Anna Rose:


The Binance Chain.


00:08:14: Zaki Manian:


Yeah, you find the Tendermint code kind of everywhere because it is this sort of very well understood implementation of a BFT consensus algorithm, and it is very stable.


00:08:27: Anna Rose:


Although. But just going back though, 2019, you're not seeing the full vision of Cosmos. It's just a stand -- like Cosmos itself, the Atom was just a standalone chain. All it did was allow for transfer and validation basically, staking.


00:08:42: Zaki Manian:


I mean, and so what was going on behind the scenes very much, though, before launch, everyone was focused on one thing. Then we launched, then we have this asset. This asset is worth billions of dollars, even just in the early days. And there was always a lot of conflict in the team. There was always a lot of different visions. There was always -- you had this incredible pool of talent that was working together. Jae, Ethan, Sunny, Chris Goes, me, Jack Zampolin. Like, you had this pool of talent that have all gone on to build lots of things. And so here is incredible pool of talent, but they were all pulling in different directions, and it was like keeping them all aligned. But really a huge tax on Cosmos from the beginning was, there was not a lot of alignment.


00:09:35: Anna Rose:


The company at the time was All in Bits.


00:09:36:: Zaki Manian:


Yes.


00:09:36:: Anna Rose:


But was the ICF already formed?


00:09:39: Zaki Manian:


ICF existed.


00:09:39:: Anna Rose:


Okay.


00:09:41:: Zaki Manian:


ICF. So by the time of launch, we were sort of in this state where Jae was running All in Bits. I was at All in Bits, and Ethan was running the foundation notionally, and he was building a team there. And then over the course of 2019, Ethan left, being operationally in charge of the foundation, started Informal Systems. The fragmentation of Cosmos contributors was already baked in, and it was like a thing that we were trying to manage. But there were all of these people -- like the people who were drawn to build Cosmos were the people who's like, yeah, I don't have to do what anyone else says. It was not like we are all going to work for Atom.


00:10:26: Anna Rose:


Wow.


00:10:27: Zaki Manian:


It was always like, I can build -- like I want this thing to exist so I can build my own thing.


00:10:31: Anna Rose:


Okay. 2020, early 2020. I remember seeing you -- this is pre -- just before COVID, SBC and all this crazy shit. I think you weren't there anymore. You had left All in Bits.


00:10:44: Zaki Manian:


I'd resigned from All in Bits, publicly called out Jae.


00:10:48: Anna Rose:


There was a moment where it really looked like this ecosystem is imploding.


00:10:52: Zaki Manian:


Yeah, it really did. So, basically, most of the team then left All in Bits, started their own -- many of them started their own entities. A big chunk of people then started working directly for the Interchain Foundation.


00:11:06: Anna Rose:


There's also Interchain GmbH, different org. Right? Or what is it?


00:11:10: Zaki Manian:


It's a corporation.


00:11:12: Anna Rose:


Okay.


00:11:13: Zaki Manian:


Which has an extremely weird structure, but it is a German company that is owned by the ICF.


00:11:20: Anna Rose:


Oh, so it is in the same umbrella.


00:11:23: Zaki Manian:


Yeah.


00:11:24: Anna Rose:


I always thought of it as independent.


00:11:25: Zaki Manian:


But it always -- so there was a Berlin office for All in Bits, and that Berlin office all resigned. And they resigned and they went under the Interchain Foundation, but with their own -- with a considerable amount of independence. What was clearly lacking was a leadership team at that entity.


00:11:47 Anna Rose


 Okay, but the Interchain GmbH, that was the team that eventually shipped IBC. Right?


00:11:52: Zaki Manian:


It did ship IBC.


00:11:53: Anna Rose:


What happened to All in Bits around this time?


00:11:55: Zaki Manian:


So All in Bits went through a couple of iterations. So there was like the immediate post-crisis intervention. Then this early contributor named Peng took over as CEO. And Jae stayed on the board, but left. Still had the majority shareholder control of the entity, but Peng. So then there was the Peng era. This was pre-IBC. So there's the -- and in this era, there was an attempt for everyone to work together. So I had left, I was just working basically under my validator entity, Iqlusion, and doing my own thing. The advisory business started to expand. So invest advice business started to expand, but mostly working on shipping IBC. You know, we did a whole episode about this. But one of the things that was really painful was all of these centralized exchange had integrated Atom. And then as part of shipping IBC, we were making substantial changes to the code base.


The other thing that happened is there was this team called Regen, which has a chain that is like, again, not super famous, but exists within the Cosmos. They actually took over as maintainers of the Cosmos SDK. And so now you -- so you had the patterns that I think have been problematic for Cosmos get sort of cemented in this era, which is all of the core contributors have their own projects, all of their own core contributors have their own teams. There are a variety of different teams. No one has any value alignment or alignment around Atom. Like very few people have, very few people are contributing own Atoms have Atoms. Some of us do. Like, I have a bunch of Atoms from the early fundraiser days and stuff like that. But again, no alignment around an asset. And like most entities are kind of ad hoc groups of people who kind of were like, okay, we have to figure this out before we miss a payroll cycle. Let's just put an entity together.


00:14:02: Anna Rose:


Whoa. This is the lead up, though, to the Stargate upgrade.


00:14:04: Zaki Manian:


Yeah.


00:14:05: Anna Rose:


And that, actually, I did an episode. All of these I'm going to add to the show notes, but this one was, I think I interviewed three different people to talk about this Stargate upgrade.


00:14:14: Zaki Manian:


Yeah.


00:14:15: Anna Rose:


That was the launch of IBC.


00:14:17: Zaki Manian:


Yes.


00:14:18: Anna Rose:


This happened in 2021.


00:14:19: Zaki Manian: 


Yes.


00:14:20: Anna Rose:


So you made it through, like, despite this fragmentation, it got there.


00:14:24: Zaki Manian: 


Despite all of this, we shipped IBC.


00:14:27: Anna Rose:


Was Terra already live before --


00:14:29: Zaki Manian: 


Terra was live


00:14:30: Anna Rose:


IBC. Okay. What was it doing itself? Was it just a standalone thing?


00:14:35: Zaki Manian: 


Terra had been pitched as a payment rail in South Korea. Then they had pivoted to doing DeFi.


00:14:46: Anna Rose: 


But as a standalone chain.


00:14:47: Zaki Manian: 


As a standalone chain.


00:14:48:: Anna Rose: 


It was kind of unusual at the time.


00:14:49: Zaki Manian:


Yeah. And they had partnered with Wormhole, which is a bridge network. Also, early Cosmos people to connect themselves to a bunch of other chains in an early pre-IBC system. 


00:15:05: Anna Rose: Was like Atom in Terra then? Like there was no bridge of Atom into Terra. Okay.


00:15:09: Zaki Manian:


There was no relationship. And Terra did not care about Atom. And couldn’t have cared less?


00:15:15: Anna Rose:


Yeah.


00:15:16: Zaki Manian:


But they ended up eventually. So then I think it was May or June of 2021, Osmosis launched.


00:15:23: Anna Rose:


Yes.


00:15:24: Zaki Manian:


So Sunny and Dev launch Osmosis, and then Terra decides to enable IBC. So like Osmosis launches, and there's not really anything to do on Osmo except--


00:15:33: Anna Rose: 


Trade Osmo for Atom.


00:15:34: Zaki Manian:


Trade Osmo for Atom.


00:15:35: Anna Rose: 


And move stuff over IBC, which is cool.


00:15:37: Zaki Manian:


And move -- but then Terra launches, and we get this massive injection of liquidity into the ecosystem as Terra has this massive fan base, massive user base. And a huge advantage for Terra was that Atom was widely available on many centralized exchanges.


00:15:57: Anna Rose:


So was that the link into Terra? Is that how people got Terra?


00:16:00: Zaki Manian:


Yeah. So that was a big part of how people got Luna.


00:16:05: Anna Rose:


That was the on-ramp.


00:16:05: Zaki Manian:


Like you could buy Atom, buy Luna, buy UST on Osmosis.


00:16:12: Anna Rose:


So that opened the can of worms. But before it got sour, there was this moment of incredible growth. You'd see new chains launching weekly, like lots of airdrops. It's funny because the airdrop hunting era, I think, for a lot of people, is more the 2023 era. But I remember beginning of 2022 or late 2021, early 2022, Cosmos chains, there was so many Cosmos chains.


00:16:38: Zaki Manian:


Cosmos had airdrops before anyone else. Airdrops are very easy to execute within the code. We kind of baked that in. We also baked in this idea of, you just would have a token. You basically launch an idea, okay, and you have a token.


00:16:53: Anna Rose:


And there is a massive graveyard of all of those chains too. Like most of them didn't work. Some of them worked for a little while, like Juno.


00:17:02: Zaki Manian:


Yeah. But it's been a disaster. Just like -- I mean, basically, all of these tokens are down.


00:17:10: Anna Rose:


Yeah. Or dead.


00:17:10: Zaki Manian:


Are down --


00:17:10: Anna Rose:


Or fully gone.


00:17:12: Zaki Manian:


Or fully gone.


00:17:13: Anna Rose: 


Yeah. There is only -- I mean, of that time, what launched? Stargaze, still around.


00:17:18: Zaki Manian:


Stargaze is still around.


00:17:19: Anna Rose: 


Juno. I don't even know. Is that still around?


00:17:21: Zaki Manian: 


Juno was around that time. It still exists?


00:17:23: Anna Rose:


Oh, it still exists. What else?


00:17:24: Zaki Manian:


Sommelier.


00:17:25: Anna Rose:


Sommelier.


00:17:26: Zaki Manian:


Yeah.


00:17:26: Anna Rose:


Anything else?


00:17:27: Zaki Manian:


Agoric.


00:17:27: Anna Rose:


Agoric was around that time. And then there was a lot of random. I actually don't remember their names even. 


00:17:33: Zaki Manian:


So many, so much.


00:17:35: Anna Rose:


Wow. Gravity Bridge.


00:17:37: Zaki Manian:


Gravity, Lum. You know, just, like all kinds of things. So we had this Cosmoverse at the end of 2021, and --


00:17:48: Anna Rose:


Oh, that was so fun. This was in Lisbon.


00:17:50: Zaki Manian:


In Lisbon.


00:17:51: Anna Rose:


Yeah. That was like --


00:17:51: Zaki Manian:


It was kind of like, you know, I have a house here. I, like, spend a bunch of time living in Lisbon now. That was my first introduction to Lisbon. Like I came --


00:17:58: Anna Rose:


That was such a special month. That was also pretty early after Covid era, so -- and I remember it was  -- first, it was the Cosmoverse. I think it was first Cosmoverse.


00:18:10: Zaki Manian:
 
There was NEAR, Cosmoverse and Break --


00:18:10: Anna Rose:


So I don't know which came first.


00:18:12: Zaki Manian:


Breakpoint.


00:18:12: Anna Rose:


No, but there was an Ethereum thing too.


00:18:14: Zaki Manian:


There was ETH Lisbon too.


00:18:16: Anna Rose:


And there was LisCon.


00:18:17: Zaki Manian:


Yeah.


00:18:17: Anna Rose:


There were so much. It was actually, like a full month, maybe even six weeks, where every single week, a different ecosystem came to town. It was very cool.


00:18:26: Zaki Manian:


So that was 2021, and basically, a lot of the next couple of years of Cosmos kind of got sketched out then. Basically, it was the first time that teams were meeting face to face post IBC, and people starting to figure out, how will this IBC thing actually work? What are our relationships with each other? Like what is the business to business community of Cosmos look like? We have all these sovereign chains, and they're all sending -- you know, all trading on Osmosis and everything, but what is this actually -- how does this all fit together? That was November 2021. So we were all trying to make sense of this stuff. We all had a very difficult relationship with Terra.


00:19:08: Anna Rose:


Okay. It was fueling a lot of the --


00:19:12: Zaki Manian:


Terra was fueling everything.


00:19:15: Anna Rose:


Okay. Because people were buying Atoms on exchanges to get into the ecosystem.


00:19:19: Zaki Manian:


Yes.


00:19:20: Anna Rose:


So once they'd be having the Atom, maybe they'd hold a bit of the Atom, or they'd put it into other projects. Most of it, though, was going towards Terra because they -- and the reason were, like they would offer, what was it? Like, 20% --


00:19:32: Zaki Manian:


APY on --


00:19:33: Anna Rose:


APY. And it was pretty consistent, unlike a lot of the other things, like Yearn, where you'd have really high APY and then it would drop, Terra stayed --


00:19:40: Zaki Manian:


Yeah. It was just all artificially sustained by their -- by this sort of leverage that doesn't look like leverage that was built into the instability of the UST mechanism in Luna. And like all of these bailout. So there's all this drama, right? A lot of us didn't trust them. We looked at the UST mechanism, we were like, this is unsound, like this thing has a huge death spiral risk, but it was the thing that was keeping breathing life into the ecosystem. We all were starved for resources to build any of the things that were needed. To build wallets, to build block explorers, to build everything. And so we were also trying to get resources from that.


00:20:21: Anna Rose:


It's interesting, like IBC launching at that time. So far, there's never been a big bug in IBC, has there?


00:20:28: Zaki Manian:


No, there's been a big bug in IBC.


00:20:29: Anna Rose:


Oh, there has been.


00:20:31: Zaki Manian:


Yeah. So why don't we get to that part of the story?


00:20:34: Anna Rose:


Wait. What year -- is that pre Luna.


00:20:35: Zaki Manian: 


Post Luna.


00:20:36: Anna Rose:


So let's do Luna quick.


00:20:37: Zaki Manian:


Yeah.


00:20:38: Anna Rose: So Luna crash is May 2022. It sets off all of the crashes. It's the first, I think. Right? It's the first thing that destabilizes everything.


00:20:49: Zaki Manian:


Yep. $60 billion gone.


00:20:52: Anna Rose:


Yeah. And actually I wanna really highlight this episode we did in 2023, because you go into a lot of detail in that one on the play by play of Luna crashing. For this episode, I just wanna kind of briefly say like, what did it do in the immediate aftermath?


00:21:08: Zaki Manian:


So in the immediate aftermath, liquidity in Cosmos collapsed just catastrophically.


00:21:15: Anna Rose:


It was just gone. It wasn't even like people exited. Like, it was all in Luna and then it was zero.


00:21:20: Zaki Manian:


Yeah. And it was just like --


00:21:20: Anna Rose:


Did anyone get anything out? Like was there an attempt? Like did anyone settle into Atom? Did they get into Atom and just stay there? Or did everyone like move out whatever they could?


00:21:30: Zaki Manian:


Most people, it happened too fast.


00:21:32: Anna Rose:


Whoa. Just wipe out.


00:21:34: Zaki Manian:


So, yeah, so the ecosystem -- I mean, and the ecosystem has never economically recovered. But also we now no longer had a stablecoin, DeFi in the ecosystem became essentially non existent. We were really -- like the whole ecosystem -- like there was just -- because basically, what was the ecosystem at the time was there were a bunch of chains, but it was like, there was Atom, which was this token that didn't really do much, but it was listed in exchanges everywhere and you could stake it. There was Osmosis where you could do Uniswap-style trading, and there was Terra, which had like the stablecoin and anchor, but then like a bunch of other stuff, like apps launching and stuff like that. There was a lot of activity. And so once Terra was gone, that whole structure just was destabilized.


00:22:26: Anna Rose:


Wow. So this destabilization and it's not -- I mean, the Cosmos hit was early and hardcore and fast, but the rest of the market gets hit over and over and over again by other things.


00:22:39: Zaki Manian:


Yeah. Then FTX happens.


00:22:40: Anna Rose:


But there's also bridge hacks and the culminating in FTX, the final pin that just let it all crash down. Cosmos during that time, did it experience actually the same level of crashing as the rest of the market after that initial Luna thing?


00:22:58: Zaki Manian:


Yeah, yeah.


00:22:59: Anna Rose:


It continued to feel rough.


00:23:02: Zaki Manian:


Just rough.


00:23:03: Anna Rose:


I speak about this like I'm not in it. You know, we have validator, we for a long time were very high in the validator set. So we are also obviously seeing this happen. But it's funny to map it out. So near the end of 2022, there is a new proposal that comes about.


00:23:20: Zaki Manian:


Okay, so --


00:23:21: Anna Rose:


Let's talk a bit about the fragmentation at this point. Like who are the players at the end of 2022, after the Luna crash?


00:23:30: Zaki Manian:


So Luna is gone.


00:23:31: Anna Rose:


Luna is gone.


00:23:31: Zaki Manian:


Or like Luna is gone and the refugees have not really coordinated into anything. That will come later. The builders in the Luna ecosystem, some of them came over and wanted to build stuff in Cosmos, but very little had launched. So it was really like, there was Osmosis, there was Informal Systems, there was Iqlusion, Zaki, there was Jack with Strangelove, there was the Interchain GmbH team, there was the Interchain Foundation.


00:24:01: Anna Rose:


There was Binary Holdings.


00:24:03: Zaki Manian:


Binary Holdings didn't really become a player until later.


00:24:07: Anna Rose:


Okay. They had been a validator.


00:24:08: Zaki Manian:


Yeah, so.


00:24:09: Anna Rose:


But, okay, I thought that they were already.


00:24:10: Zaki Manian:


So we had Regen.


00:24:13: Anna Rose:


Okay, what happened? Is All in Bits not even a thing?


00:24:16: Zaki Manian: 


Yeah. So at this point, then in 2022, Jae came back, fired --


00:24:22: Anna Rose:


This is at the end of the year.


00:24:24: Zaki Manian:


This was like mid -- like post-Luna collapse.


00:24:26: Anna Rose:


Post-Luna, but pre-Atom 2.0.


00:24:28: Zaki Manian:


re-Atom 2.0, Jae comes back during the summer.


00:24:31: Anna Rose: 


Okay.


00:24:33: Zaki Manian:


Jae tends to be more active during the summer.


00:24:35: Anna Rose


Okay.


00:24:35: Zaki Manian:


He has this weird seasonality to his behavior. And so he tends to be more active during the summer. He comes back during the summer, another round of people getting fired from All in Bits happens. Another round of -- like Peng leaves. There's like a whole nother round of drama. But it's very self contained, because the rest of us are off dealing with Terra collapsing.


00:24:57: Anna Rose:


Okay.


00:24:58: Zaki Manian:


But there still is an energy. There's like, there's an energy.


00:25:04: Anna Rose:


Despite all of the collapsing, I guess there is this hope that because there was some really interesting building happening in Terra, it had attracted not only money, but also talent. And those folks still understood Tendermint at least. So like --


00:25:17: Zaki Manian:


Yeah, they understood CosmWasm, which was our smart contract. We had a lot of people who had been building with CosmWasm, and CosmWasm has been weirdly sticky. Like developers who got exposed to it don't want to leave, so they keep looking for places to build. That's been like weirdly sticky. CosmWasm is a smart contract language. It was this niche smart contract language that got -- it was never really organized, that Cosmos would have its official smart contract language be CosmWasm. There was a hackathon project, and then some of the devs from that hackathon project kept building it. And it was kind of not going anywhere. Then Terra adopted it without really asking them, they just adopted it. And suddenly this created an entire builder community around it, and that has like weirdly persisted.


00:25:59: Anna Rose:


Okay. But so, at that moment, late 2022, there is energy. There's a bunch of teams who seem to still care. There's a sense of like, we've had a rough year, but can we turn it around?


00:26:12: Zaki Manian:


But also, October 2022, we find a massive bug in IBC.


00:26:17: Anna Rose:


Oh, that's the bug. And that's IBC bug. See, I always thought it was a Cosmos Hub.


00:26:22: Zaki Manian:


No, it was a full drain everything.


00:26:26: Anna Rose:


Holy moly.


00:26:27: Zaki Manian:


Double spend, but we found it. So what had happened --


00:26:30: Anna Rose:


This is Dragonberry.


00:26:31: Zaki Manian:


This is called Dragonberry.


00:26:32: Anna Rose:


Okay. Who named that? The hacker?


00:26:36: Zaki Manian:


No, no, no.


00:26:37: Anna Rose:


You found a bug.


00:26:38: Zaki Manian:


So, Dave -- Dev from on the Osmosis team. So what happened was Binance is a bridge between -- that they used for BNB, the asset, was based on Cosmos tech. They literally used a bunch of code in Cosmos tech that Jae had written for a hackathon. And like --


00:26:59: Anna Rose:


Oh. Not CosmWasm. This is IBC code or something. Bridging code.


00:27:05: Zaki Manian:


This was code in Tendermint.


00:27:06: Anna Rose:


Okay, okay.


00:27:07: Zaki Manian:


So they'd written their own bridge, not using any IBC tech, but using this prototype of IBC that Jae wrote for a hackathon once. And the rest of us had  -- like I mean, I had looked at it and been like, I wouldn't use that code, but, okay, like, whatever, move on. So someone had hacked that bridge for $50 million. And so, I remember I was in New York. I was walking down the street going to meet Shane from Stargaze for Sri Lankan food. And I'm scrolling Twitter, as I always do, and I see samczsun from Paradigm tweeting about this Binance hack, and he's halfway through it, and I'm like -- and I realize that it was a vulnerability in Cosmos-related code. So I called him, and I'm like, you have to stop tweeting. I need to go figure out --


00:27:59: Anna Rose:


If there's any effect. But why -- it wouldn't be, though, right? Because if they're using -- they're not using the IBC --


00:28:05: Zaki Manian:


I hadn't put all these pieces together. So I'm just like, I leave dinner with Shane, and I'm like, sitting on a stoop in the East Village in New York on GitHub on my phone like tracing out the code, and I'm like, okay, IBC doesn't use this code. It's like Jae's weird hackathon code.


00:28:21: Anna Rose:


You're safe.


00:28:22: Zaki Manian:


We're safe. But then we're like, as always happens, like, half of the Cosmos devs that are sort of core Cosmos devs are like, on a plane while this is all going -- I couldn't get in touch with anyone. So I'm just doing this by myself. So that happens, but then the next morning, everybody wakes up and we're like, well, all right, the bug was fairly exotic, fairly unique to our code base. We should go look and see if there's anything like this in IBC.


00:28:55: Anna Rose:


Okay.


00:28:56: Zaki Manian:


And then that starts a 72-hours bug hunt that a bunch of people contribute to, and we have a bunch of near misses. And then Dave finds a full exploit.


00:29:07: Anna Rose:


Exploit. Whoa.


00:29:09: Zaki Manian: 


I mean, it was the first of, and then -- I don't want to spend the entire time doing the timeline, but because we got to talk about the philosophy of this thing. But anyways, so we find the exploit, and then we start this frantic effort to get all of the networks patched. It was like one 72-hours zoom call, where we ran a war room, and we would just call up the validators on different chains, and we would be like, we would just patch people's code without telling them, call their validators, say, it would be like Zaki and Ethan have told you, stop running Injective, start running this variant of Injective on pure trust.


00:29:52: Anna Rose:


Whoa.


00:29:54: Zaki Manian:


And so we ran around, we patched all of the Cosmos chains. No funds were lost.


00:29:56: Anna Rose:


Why Dragonberry?


00:30:00: Zaki Manian:


So, I mean, so at the time, we were using fruit names for --


00:30:03: Anna Rose: 


Okay. For bugs?


00:30:05: Zaki Manian:


For bugs. For security vulnerabilities we were using, and it seemed like a big --


00:30:11: Anna Rose:


Big one.


00:30:11: Zaki Manian:


The big one.


00:30:12: Anna Rose:


It's a weird one. It's exotic. 


00:30:14: Zaki Manian:


Yeah. And so we were like -- it was like -- but I think the entire experience created this, at least within me, the sense of crisis in the software development of Cosmos.


00:30:28: Anna Rose:


Ooh, you're saying, like why was that allowed to continue? Why didn't they find it?


00:30:31: Zaki Manian:


Exactly. Why in the name of God did this actually get through our software development process?


00:30:37: Anna Rose:


Had it been incorporated later, or was it a very old bug?


00:30:41: Zaki Manian:


So the bug was in the original IBC implementation. It had been there from the beginning, but it showed a lack of capacity in our auditing process. Like, all of the things that I had been a part of and the rigor in which we had built the Cosmos Hub, launched everything, was just fragmenting because of the fact that you had -- like it was no longer one team. It was like, well --


00:31:09: Anna Rose:


Although it hadn't been for like two years at this point.


00:31:12: Zaki Manian:


Yeah. And it's like one team is writing IBC, another team is auditing IBC, different parts of the code are owned by different people. So it was like one team owned this part of the code, which is not even part of the core IBC team. There were just all of these -- you know, you had this fragmentation of development, and it was like, clearly, we have a problem.


00:31:33: Anna Rose:


Right around the same time, Fall 2022, Atom 2.0.


00:31:38: Zaki Manian:


Yeah.


00:31:39: Anna Rose:


I mean, I remember it as something to vote on in the Hub. It was a signaling proposal, as far as I could understand, included in it was sort of like, what ICS, this Interchain Security, would mean, but yeah.


00:31:51: Zaki Manian:


So there had been this product for the Cosmos Hub that had been proposed in 2022, then shipped till 2023, called this idea of Interchain Security.


00:32:00: Anna Rose:


ICS, yeah.


00:32:01: Zaki Manian: 


Yeah. And so actually, the first -- so the way Jelena, who's the founder of -- CEO of Noble and co-founder of Noble, and I got close and started working together, was, I was helping her with go-to-market --


00:32:14: Anna Rose:


For ICS?


00:32:14: Zaki Manian: 


For ICS.


00:32:16: Anna Rose:


Maybe just briefly, ICS is a bit of -- it's funny, I just did an episode recently on restaking, and it's a bit like --


00:32:22: Zaki Manian:


Yeah. It's the first restaking primitive.


00:32:24: Anna Rose:


Yeah. It also had a bit of an echo of Polkadot, with the Hub being the center and then chains branching off it. Yeah.


00:32:32: Zaki Manian:


So, and we had bought, onboarded Neutron and Stride in 2022. Stride is a liquid staking token that had already existed as an appchain. We'd onboarded them. You know, they were going to join. And Atom 2.0 was really an attempt -- you could say it was basically an attempt to redo the ICO. I think that if you want to ask, like what the question was.


00:32:57: Anna Rose:


Was it like going to redistribute like --


00:32:59: Zaki Manian:


It was going to redistribute a massive amount of Atoms?


00:33:01: Anna Rose:


Whoa.


00:33:02: Zaki Manian:


It was a huge restructuring proposal of a dramatic nature.


00:33:07: Anna Rose:


Wow.


00:33:08: Zaki Manian:


And because if you wanted to get most of the core builders back on the same page, back aligned around Atom, back aligned around like on one team, essentially, this is what it was going to take. And when Atom 2.0 failed, basically the fragmentation of the ecosystem accelerated.


00:33:32: Anna Rose:


And just like a note, because the last episode that you came on to talk about this, at the time, Atom 2.0 had been voted down --


00:33:41: Zaki Manian:


Had failed.


00:33:42: Anna Rose:


But it was just a signaling proposal. But you sounded still pretty positive about it. Like was there a sense, even after the signaling didn't work, that maybe it would still happen?


00:33:51: Zaki Manian:


You know, people had voted -- you know, a lot of people had expressed, hey, like, we like parts of Atom 2.0, but we want a more incrementalist approach. dYdX had announced that they were building their Cosmos chain. I knew at the time, I don't know what was public at the time, I knew that USDC was coming. I was bullish about the Celestia launch. You know, it was February 2023, and public sentiment on Atom -- on Cosmos was pretty low post Atom 2.0. But I was like, there -- we have this.


00:34:25: Anna Rose:


There's something coming.


00:34:26: Zaki Manian:


There's a bunch of stuff coming that's very -- that's exciting and is likely to have a positive impact.


00:34:32: Anna Rose:


So this is 2023, post Atom 2.0 failing. At the end of 2023, you have the dYdX and Celestia launches. But what's happening in the middle there? And who are the -- are the players the same as they were the year before? Is it still Osmosis, Informal, Iqlusion, Strangelove, Regen?


00:34:50: Zaki Manian:


So, Jelena had left Informal and started Noble. Celestia had raised a lot of money in the bull market and had become more and more of a player in the ecosystem. The modular narrative had really kind of hitting its stride.


00:35:05: Anna Rose:


Yeah. Because there was the first Modular Summit, actually, I think, in 2022.


00:35:11: Zaki Manian:


2022 was the first Modular Summit. '23 was the big


00:35:15: Anna Rose:


The big one.


00:35:16: Zaki Manian:


The big one pre --


00:35:16: Anna Rose:


Okay. Yeah, yeah, yeah. That was the one I was at, actually. It was 2023, and so that was -- and that was so -- there was so much excitement. That was during EthCC Paris and that whole venue everyone was packing into it. It was so exciting. And I forget sometimes that that was pre-launch for Celestia.


00:35:35: Zaki Manian:


Yeah, so the L2 narrative was kind of strong. The shared sequencer stuff. There was, like, lots of -- there were just all these modular things, lots of tokens. There was everything. A lot of this sort of infrastructure madness was kind of very strong in the VC investor community, and there was a lot of energy around that. And concretely, we were like, we're going to launch dYdX. It's going to really show what this technology can do. USDC is going to come to the ecosystem.


00:36:10: Anna Rose:


Native.


00:36:10: Zaki Manian:


Native USDC, that's going to inject a lot -- like restore a lot of liquidity to the ecosystem.


00:36:16: Anna Rose:


This is replacing what Luna had sort of destroyed.


00:36:18: Zaki Manian:


Yeah.


00:36:18: Anna Rose:


Because even though there were always stablecoins, but they were like, bridged.


00:36:22: Zaki Manian:


They were bridged from Axelar, primarily.


00:36:25: Anna Rose:


Yeah.


00:36:25: Zaki Manian:


People were starting to really engage with interoperability. You know, I was frustrated with the IBC team because they were not really focused on modular. They were not focused on outside of Cosmos, all of that stuff. But that was -- and so, I helped co-found Hyperlane as a kind of IBC alternative in that era. And so, yeah, there had been like a lot of -- there was just like a lot. So there's a lot of stuff coming to the ecosystem that was like, to be excited about. Even if there was less hope in my mind that would buy time for Atom to kind of figure itself out.


00:37:04: Anna Rose:


ICS also launched in 2023.


00:37:08: Zaki Manian:


ICS launched in 2023.


00:37:09: Anna Rose:


And so at least you had that experiment in action.


00:37:12: Zaki Manian:


Yeah. And the flaws of the ICS product became apparent pretty quickly.


00:37:18: Anna Rose:


Okay.


00:37:19: Zaki Manian:


It became -- Neutron had a lot of halts and stuff like that. And that was clearly -- and this idea of not having a very aligned validator set where you -- because the first version of ICS had to be opted in. And the other reality of the situation was, is that it became very clear that people were not willing to pay -- projects, were not willing to pay a lot of their tokens to use ICS. So Neutron ended up doing this airdrop to the community pool, which the Hub can't figure out what to do with, and no one knows what to do with. Stride provides like 10% of their fees or something like that. Some small percentage of their fees to the top stakers, and people are like -- it's like, all right, what is this? Right? The excitement that would then -- this was the first restaking thing, but then EigenLayer starts their restaking process, or like their contract that you could walk funds in --


00:38:21: Anna Rose: 


On Ethereum.


00:38:22: Zaki Manian: 


On Ethereum. And that becomes 3, then 5, then $15 billion. And you're like, no one remembers this ICS thing.


00:38:30: Anna Rose:


Yeah. There's also, I don't know when, but liquid staking on Cosmos. Was it like --


00:38:35: Zaki Manian:


Yeah. So I really, really pushed liquid staking on Cosmos, put years of work into --


00:38:41: Anna Rose:


That was earlier, too. That was 2022.


00:38:42: Zaki Manian:


That was 2022. I put years of work -- I put basically a year of work in addition to all of my other things. I would be writing good code at 2:00 a.m. in the morning. I really believed that liquid staking could really transform Atom and make it something that would make sense and be useful and become part of the wider Cosmos ecosystem. And while I'm excited about Drop, which is a new liquid staking project in Cosmos, the 2023 liquid staking era was a big disappointment.


00:39:14: Anna Rose:


Moving into 2024. So actually, end of 2023, Celestia dYdX, lots of excitement. People are excited. Early 2024 this year.


00:39:23: Zaki Manian:


Yeah.


00:39:24: Anna Rose: 


Still pretty --


00:39:29: Zaki Manian:


So Celestia bull market is still running strong. Like that airdrop narrative with Atom had continued


00:39:32: Anna Rose:


Although that soured by March, I think. Like I don't know when Starkware even, I think -- and this is. So it's a different ecosystem. This is more like the Ethereum side of things. So it moves over to Ethereum, like the airdrops that are coming early 2024, they don't perform as well. But these are not Cosmos airdrops. But it's still like Celestia, and I think there might have been one or two others, but it's still sort of --


00:39:57: Zaki Manian:


So Celestia's airdrop to Atom holders did really well.


00:40:01: Anna Rose:


Yeah, yeah.


00:40:02: Zaki Manian:


And people got really excited about it.


00:40:03: Anna Rose:


Totally because it was unexpected and nobody really could game it in the way that -- I mean, I think there was this assumption like, you should stake your Atoms or you should stake Osmosis maybe, but there was no big game.


00:40:16: Zaki Manian:


Yeah. The Celestia airdrop was well executed. The Celestia launch was well executed. It was executed well in the same way that Atom's launched, you know, most exchanges listed it, it had a strong narrative, strong team. All of this stuff. Like really good.


00:40:29: Anna Rose:


But come the new year, there's these other airdrops in another ecosystem that sort of sour, at least the spirit of airdrops. People get a little bit more annoyed. That sort of, I mean, in a way, it's the false activity gets called out and shown for what it is. But it also --


00:40:43: Zaki Manian:


Airdrops are never a reason for an asset to exist.


00:40:46: Anna Rose:


Yeah.


00:40:47: Zaki Manian:


Like, let's just be,  from my point of view. I think, what did people understand Cosmos assets as? So like, first, there was just this like, we don't really understand where the yields coming from, we don't understand inflation, we don't understand unit bias, we don't understand any of this stuff. But we're like, the markets, like, well, I just get more Atoms in my wallet and I can do it from centralized exchanges and I can do all of this stuff. So it's like yield coin. All right. Then people got retrained as this is airdrop coin. Okay?


00:41:21: Anna Rose:


So you hold your asset because you might get airdrops.


00:41:25: Zaki Manian:


Yeah. You hold -- you stake your Atom, you hold it, you might get airdrops. None of these things are sustainable reasons for anything to be valuable or exist but those have been dominant narratives. And in general, as one would expect, those narratives have been running out of steam.


00:41:44: Anna Rose:


And they sort of managed to keep them going for a while by slightly altering the plan. But, yeah, it was getting kind of into -- I think the Ethereum airdrop story became more -- like there was just such a complex amount of activities that people are supposed to do. They kept sort of adding, like, oh, it's not just hold it in this asset. Now you have to do something. You have to move it around, like five times, you have to spend this much, you have to do that. And everyone -- like a lot of people trying to guess what they're supposed to do.


00:42:10: Zaki Manian:


Yeah. But on the builder side, for Cosmos, the story started to become, if you airdrop to Atom holders, all you do is get tens or hundreds of millions of dollars of sell pressure for your asset that, if you are lucky, reproducing the success Celestia had with their airdrop on the builder side. And so, more and more teams started asking the question, okay, if I want to airdrop within Cosmos, does it make sense to airdrop to Atom stakers? Do I want to look for users? Do I want to try and find other signs on-chain that people are actually users? Because a big frustration that builders had within Cosmos is they would look at these numbers and every builder in Cosmos would look and say, okay, I see 3-400,000 accounts staking Atom. Great. I see 50-60,000 accounts swapping on Osmosis in a month. My app has 100 users. How do I grow? How do I do anything?


And this was a problem that every builder was having in Cosmos. And so people started really -- there became this huge, became a very strong misalignment between Atom stakers and the staker community in Cosmos and the builder community in Cosmos. Which I think, again, has propagated as a problem, because it's like, I want apps that people, all of this stuff depends on apps. If apps have no users, why am I building in this ecosystem? And if all of these people who are staking which, who appear real, like it's not just -- you know, it's not one person with 400,000 accounts. There's like, at least a few hundred thousand people in this community. But if those people can't be engaged to engage with any apps, like, what do we do?


00:44:08: Anna Rose:


Yeah, this summer, summer 2024 seems like one of the lowest points for Cosmos.


00:44:14: Zaki Manian:


Yeah, we're at an inflection point.


00:44:16: Anna Rose:


So now we're recording this in September, but I feel like a month ago, two months ago, you just started to see kind of core people, like people in those teams that you've mentioned, say things like, I think it's dead, it's over. I think even maybe you've tweeted something that suggested it's over, which I think my team at ZKV flagged being like, whoa, if Zaki thinks this --


00:44:40: Zaki Manian:


So, I mean, I had this very famous tweet in 2023 that Cosmos has 12 months.


00:44:46: Anna Rose:


Okay.


00:44:47: Zaki Manian:


Okay. So it was March of 2023, and I was like, Cosmos has 12 months to figure this stuff out, otherwise we're screwed.


00:44:55: Anna Rose:


This is post Atom 2.0.


00:44:56: Zaki Manian:


This is post Atom 2.0.


00:44:57: Anna Rose: Okay. Were you trying to prompt another Atom 2.0 movement? Like, were you trying to get another one?


00:45:03: Zaki Manian:


I was trying to get people to understand there was this feel -- that there needs to be a view of crisis. Basically, what we had so, like, a year from that was March of 2024. March of 2024, Celestia was still looking pretty good, dYdX was growing very rapidly. Well, Noble USDC has continued to grow rapidly. So again, if the ecosystem is dead, it's not, because there's lots of metrics that continue to show a lot of volume and engagement and stuff like that with the ecosystem. But you're like, you're sitting there going, I foresaw a crisis. I saw that a crisis --


00:45:43: Anna Rose:


So it wasn't March 2024, but a little bit after that.


00:45:47: Zaki Manian:


Yeah. So March 2024, the good stuff that had happened was kind of disguising the sense of crisis. Then, weirdly, how we got here in the summer was -- so in the spring, we found another IBC bug. It turned out not to affect most chains. It required a very particular set of IBC features, but it was, again, an emergent property of multiple teams not working on a coherent design, everyone adding little pieces. And when you put these pieces together, you had another vulnerability.


00:46:24: Anna Rose:


Wasn't Interchain GmbH supposed to be doing that, though? Weren't they sort of meant to be like the IBC center point?


00:46:31: Zaki Manian: 


Yes.


00:46:32: Anna Rose:


Okay.


00:46:32: Zaki Manian: 


But --


00:46:33: Anna Rose:


No one could be the center point.


00:46:34: Zaki Manian:


You had different users who wanted different things. One of the big problems that Cosmos has had is the teams were not very commercially oriented. They were all these very researchy-oriented teams funded out of the Interchain Foundation, who were not -- so you have this division in Cosmos right now between teams that were very commercially-oriented, Neutron, Skip, in some senses, Strangelove, me, who are very commercial-oriented, and then this not very commercially-oriented team. So users of the tech were like, we are missing this feature. And frequently the attitude, like what you would get back from -- I mean, again, this is just my perspective, but on the whole, what you would frequently get back from the Interchain GmbH team is, yes, we will work on that in two years. And everyone's like, yeah, that's not going to help. So I'm going to go find someone, Strangelove, another vendor to make it to like --


00:47:35: Anna Rose:


But that's kind of dangerous then, too, right? Because that's when you get other teams adding and, like maybe it won't be vetted as much and checked.


00:47:44: Zaki Manian:


Exactly. And in my mind, we created an entire design that was supposed to mitigate this bug at a design level, and then that design was subverted because of incoherent design. So we get this bug. Again, it gets white-hatted, these wonderful people at Asymmetric Research who seem to be finding lots of Cosmos bugs, who seem great, like, report the bug through our bug bounty process. We get this bug bounty. The chains get patched. Now, in June, somehow, well, we kind of know how -- sorry, this is like a lot of stress.


00:48:21: Anna Rose:


Oh, no, this is still fresh.


00:48:22: Zaki Manian:


Yeah. So in June, Terra --


00:48:28: Anna Rose:


Terra? Rears its head again.


00:48:29: Zaki Manian:


Rears its head.


00:48:30: Anna Rose:


Oh, no.


00:48:30: Zaki Manian:


And Terra has reverted the fix. So they reintroduced the bug --


00:48:37: Anna Rose:


That you guys had just fixed. But just for the Terra --


00:48:39: Zaki Manian:


Just for the Terra chain.


00:48:40: Anna Rose:


Okay.


00:48:41: Zaki Manian:


But then Terra gets exploited for like $6 million.


00:48:44: Anna Rose:


Who's still on Terra, though?


00:48:47: Zaki Manian:


Some people. Mostly, this project that was born out of Delphi, the investment and research team called Astroport, which is a DEX that sort of competes with Osmosis, is still on and that has most of the funds. And so like literally, I'm back in the Terra validator channel, patching Terra again like I was in 2022. And I'm like -- Sunny and I were like both in there in this war room call to deal with the vulnerability, and we're just like, we're doing this again. Can't you just turn it off and not turn it back on? Isn't this just like a good time to be done with the Terra blockchain? Because we've had to do this? Somehow though, in the social consciousness of crypto, this vulnerability, which was, on the whole, a small exploit in --


00:49:44: Anna Rose:


But it involves a very sensitive topic.


00:49:48: Zaki Manian:


Yes.


00:49:48: Anna Rose:


Terra. Not just like Terra for you, but also Terra, I think it triggered lots of people.


00:49:53: Zaki Manian:


Yeah. And so --


00:49:54: Anna Rose:


So Terra broke again.


00:49:55: Zaki Manian:


Terra broke again.


00:49:57: Anna Rose:


Something, something Cosmos.


00:49:57: Zaki Manian:


Something, something Cosmos.


00:49:58: Anna Rose:


Something, something IBC.


00:49:59: Zaki Manian:


Something, something we don't really understand, but we were just like, Jesus Christ, what is going on here? And so this triggers this just avalanche of -- like there had been in Cosmo circles, negative sentiment kind of brewing for a long time, but this somehow escapes the bubble and triggers this outpouring of negative sentiment that has just been sort of with us --


00:50:25: Anna Rose:


Since then.


00:50:26: Zaki Manian:


Since then.


00:50:27: Anna Rose:


The teams going back to who's still here in 2024, like where do they all stand? Osmosis. I mean, Osmosis has gone through lots, especially recently, lots of announcements for new directions.


00:50:42: Zaki Manian:


So Osmosis, the team has just been grinding on the core product.


00:50:48: Anna Rose:


Forever. Yeah. Since 2021.


00:50:51: Zaki Manian:


Since 2021, but I've been a critic of Osmosis. I think Osmosis, when we got to this rebirth of Optimism in November, Osmosis did not show itself well. Osmosis went down during the Celestia airdrop. People who used -- a lot of people from outside of the ecosystem who got the Celestia airdrop, touched the Cosmos ecosystem for the first time, touched Osmosis, had a bad experience. What I would say is -- so it's been about a year since then, Osmosis is now amazing.


00:51:24: Anna Rose:


Yeah.


00:51:25: Zaki Manian:


Like, Osmosis --


00:51:26: Anna Rose:


They got it back on track.


00:51:27: Zaki Manian:


Osmosis is just killing it from a product point of view. The product is just unbelievably good. It's as good as any DEX. I mean, I use everything. I use Solana DEXs, I use Cosmos, I use Ethereum. Really, the product is as good as anything out there.


00:51:46: Anna Rose:


Nice.


00:51:46: Zaki Manian:


And like, just -- and the team has done such amazing work and it contributed a lot of amazing work. They've fixed Comet BFT Tendermint bugs that I've been chasing for years. Just amazing, amazing, fantastic work that has not been rewarded in any way, shape or form by, in token price or users or anything, but it's there -- it's still fucking amazing.


00:52:107: Anna Rose:


Okay. What about Informal?


00:52:14: Zaki Manian:


So Informal has -- so Informal took over the responsibility for -- in the beginning of 2023 for Comet BFT --


00:52:24: Anna Rose:


And Cosmos SDK?


00:52:25: Zaki Manian:


No.


00:52:26: Anna Rose:


Oh, okay.


00:52:33: Zaki Manian:


So they own Cosmos Hub. So the Cosmos Hub team is Informal. So Jelena onboarded two teams, Stride and Neutron. Then no --


00:52:39: Anna Rose:


To ICS.


00:52:40: Zaki Manian:


To ICS. They announced, Jelena left, Informal executed, got them onboarded, launched them. They've been running for more than a year. There have been no new teams. The teams that Informal has talked to about onboarding have all come back -- came back with a litany of reasons why not to use it. Informal has dutifully worked on all of those problems. And so, there is a version of ICS that is sort of about to launch that fixes a bunch of obvious problems, but there is also absolutely very little reason to feel imminently excited about those product improvements. It seems very -- it would be -- it's like a huge lift to get from where we are today to something that would really get people excited about Atom and the Cosmos Hub through those product improvements.


00:53:30: Anna Rose:


What about Strangelove today?


00:53:32: Zaki Manian:


So Strangelove is still a contributor to IBC. I don't know, like their main thing right now is -- so one of the things that's very exciting, actually, about Cosmos is so one of the biggest Cosmos chains. Oh, actually, that was -- it wasn't live, but they started building it before Cosmos Hub launched. It's called, is THORChain.


00:53:53: Anna Rose:


Oh, yeah. Is it also Tendermint, somehow?


00:53:56: Zaki Manian:


Also Comet Tendermint, everything. So Strangelove is actually involved in this massive project. So THORChain, while it was built with Comet BFT, was never integrated into the IBC network?


00:54:05: Anna Rose:


Yeah. Yeah. I think of it as very separate.


00:54:07: Zaki Manian:


It's very separate. Though it does have -- it integrates with Atom, but nothing else on Cosmos for their various products. And so Strangelove is actually involved in this massive project to turn THORChain into a Cosmos DeFi chain. So THORChain will have CosmWasm, it will be connected to IBC, it's current product set and feature set. And JP, who is one of the -- I guess is the founder of THORChain, who was anon for many years, though I met him in 2018. JP is on a warpath kind of launching products and building stuff. There was this Cosmos team called Kujira, who were a Terra survivor who sort of had a financial meltdown, so the summer, who got bailed out by JP. And now he's trying to merge -- he's merging THORChain and this Kujira product, and you're getting this consolidation, which was very exciting.


00:55:07: Anna Rose:


Okay.


00:55:07: Zaki Manian:


So, you know --


00:55:08: Anna Rose:


That's what Strangelove is doing. Binary, because we didn't really -- they sort of entered.


00:55:11: Zaki Manian:


So there was this team, Regen, who had been responsible for a lot of the Cosmos SDK work post AiB collapse. And I personally was very unsatisfied. And I think a number of other contributors were not super satisfied with Regen's work as leaders. And Marco, who started in Cosmos as a DevRels guy, took over as product lead and frankly, quietly has made the Cosmos SDK a state-of-the-art blockchain building toolkit and fixed numerous problems. But it's basically taken 18 months of really, really hard work from his team to kind of turn Cosmos SDK into a truly state-of-the-art system.


00:56:03: Anna Rose:


Nice.


00:56:04: Zaki Manian:


So a lot of builders are very -- like this is what we see, current generation of builders is super excited about the Cosmos SDK. You know, you have new projects that are like, we raised $100 million and we're going to go use the Cosmos SDK every -- like on a regular basis.


00:56:21: Anna Rose:


Story. Who was it?


00:56:22: Zaki Manian:


Story, yeah.


00:56:22: Anna Rose:


Yeah, Story, okay.


00:56:34: Zaki Manian:


Which I'm an advisor to.


00:56:26: Anna Rose:


And yet this summer we hear Cosmos is dead. And when they say that, do they mean Cosmos Hub? Do they mean Cosmos ecosystem? Yeah, what does Cosmos is dead mean then? Why is Cosmos dead? Or is it dead?


00:56:42: Zaki Manian:


So I think what people very specifically mean is its, I no longer associate this asset, Atom and Cosmos, with the success of the ecosystem in a meaningful way. The fragmentation of the ecosystem now has reached the point where it's like, I realize that people will continue to be -- there will still be a Comet BFT, there still will be IBC, that IBC is the third largest bridging protocol by volume on DefiLlama. But I can't -- I no longer have any reason to believe that Atom will gain any value from this.


00:57:25: Anna Rose:


So it's not Cosmos is dead, it's Atom is dead.


00:57:27: Zaki Manian:


Yeah. Because anything else doesn't make any sense. Right? Like is Celestia dead? No, there's new stuff launching on top of Celestia all the time. Is IBC dead? No, it's the third largest bridging protocol by volume. Is the ecosystem dead? No, there's $270 million of USDC on Noble doing DeFi stuff. Is dYdX dead? No, it's the second largest perp DEX. Obviously, Cosmos isn't dead. But what people are really saying is, where does the attention go? What is the core of the ecosystem? What are the things to be excited about? And this thing where it's primary property was its decentralization, that was -- many people viewed as the -- which was to a lot of people, the core of the ecosystem.


00:58:15: Anna Rose:


And the great part.


00:58:16: Zaki Manian:


Yeah. Is there's nothing to be excited about.


00:58:20: Anna Rose:


Or its own decentralization made it hard to have that central leadership.


00:58:25: Zaki Manian:


Yeah. And so one of the problems that I think, and we could get to -- I mean, it was probably a good time to kind of analyze how did we get here? One of the reasons I think that we really got here was, so All in Bits, the organization that we all worked at when we created Cosmos, shambles, Interchain Foundation has gone through many iterations of turnover of core people, of leadership, is now off on a search for an executive director again. Is doing stuff -- there are talented people who work there, I'm not trying to be negative about everybody, but it has been a deeply -- there's also a governance proposal right now to audit the ICF or to convince the Swiss to audit the ICF, which I don't know exactly what the theory of why the Swiss government cares about governance proposals on the Cosmos Hub. But maybe they do. But also, who knows if it will pass? I'm not bullish, this auditing process, but I was --


00:59:29: Anna Rose:


There's a sentiment of anger towards the ICF.


00:59:31: Zaki Manian:


There's a sentiment of anger towards the ICF that you see in the community.


00:59:36: Anna Rose:


That's the foundation. This is the thing that gives out grants, this is the thing that -- this is separate also from the community Hub.


00:59:44: Zaki Manian:


It doesn't really give out grants. It funds these various fragmented development organizations.


00:59:49: Anna Rose:


It used to do grants --


00:59:50: Zaki Manian:


It used to do grants.


00:59:50: Anna Rose:


Years ago. I also was kind of part of the ICF during that small window of time when they were doing grants. But, yeah, so it's different from the Hub, which is more community chosen. It has -- I mean, I think this year there was a huge rearrange. Like last year, Billy, Sam left, right? This is 2023.


01:00:12: Zaki Manian:


Yep.


01:00:13: Anna Rose:


This year, Brian leaves.


01:00:16: Zaki Manian:


Brian left.


01:00:17: Anna Rose:


I don't know who else leaves, but it seemed like there was another big shift.


01:00:21: Zaki Manian:


Yep. Absolutely. There's a lot of frustration that the ICF, this non-commercial nature of the ICF, and that it's delegation of commercial -- like Informal is its own commercial business. Strangelove is its own commercial business. I left everything to do with the ICF at the beginning of 2023. I have nothing to do with it. Don't get any grants, don't take any money, I have no connection to it. I just was like, this leadership is a mess. I don't want anything to do with it.


01:00:51: Anna Rose:


I think I was there in 2021. But yeah.


01:00:53: Zaki Manian:


So 2023, I finally disassociated myself and just was like, nope, I'm doing my own thing. So this frustration with the non-commercial nature of it, where it's like, what is our goal? What are our metrics? What purpose are we serving? Our job right now is just to shovel money out the door at some rate and not spend the entire treasury on one thing. Every other foundation in crypto that's well run has some set of commercial goals or objectives, some goals around adoption, some goals around use, some goals around distribution of the technology, et cetera. And the ICF has never had any of that. And so this lack of commercially-oriented leadership at the ICF has been a source of great frustration in terms --


01:01:42: Anna Rose:


But don't all the foundations have that exact thing, though? Like, they're all meant to be non-profit, they're not supposed to be super financially driven? I mean, EF --


01:01:52: Zaki Manian:


Yeah, bit then --


01:01:53: Anna Rose:


NEAR Foundation, Solana Foundation, I guess Solana Foundation's the exception. Right?


01:01:56: Zaki Manian:


Solana Foundation. What we're seeing right now is Solana running a very -- the Solana Foundation being far more attuned to the commercial needs of the ecosystem. And just doing a really good job. People come into Solana, they want to accomplish something. They will get help from the Solana Foundation. There will be people at the Solana foundation will help them. The Solana Foundation will have an opinion. They will say, these initiatives are important, these initiatives are not important. There isn't this effort to please everyone. And it has shown, I think, really positive effects.


01:02:35: Anna Rose:


Is it the only foundation that has such a strong showing so far? Because EF is currently, and has been over the years, lambasted for paying too much or not paying enough or hiring too many people or firing too many people.


01:02:51: Zaki Manian:


The EF, in my mind, is not very commercially-oriented, but pulled off such an astounding engineering feat with the merge and proof-of-stake and all of this stuff, which is just unbelievable that they were able to pull something like that off. And, but the fact that there has been very little commercial reward for that accomplishment, like this is the challenge that you have with crypto. Right? You set some engineering goal. The engineering goal is really hard. You go do it, and sometimes you don't get a -- there's no commercial reward on anytime horizon. But also sometimes the commercial rewards for those engineering goals can be delayed by months or years.


01:03:35: Anna Rose:


Sometimes you have people, though, be kind of pleasantly surprised that they get a retroactive or whatever. It's a weird space that way, but it makes it hard, like at the beginning to commit, I guess. Although I think, why have people committed in the past? I think it's because there was an assumption that there would be something at the end of that tunnel. Right?


01:03:54: Zaki Manian:


Yeah. That like something would work out.


01:03:56: Anna Rose:


Yeah.


01:03:56: Zaki Manian:


You know, you have a bunch of things, something works out. We're coming into almost like, basically, year plus of flat ETH price, Solana going up, but then flattening out. Like, things have been just like -- you know, one feels super rewarded for all of the hard work.


01:04:15: Anna Rose:


And that goes beyond Cosmos, then.


01:04:17: Zaki Manian:


But that goes beyond Cosmos. The problems of Cosmos are to the rest of the ecosystem as well. I'll just cover like a third thing and then loop back, which is there's AiB, there's ICF, and then there's the validators.


01:04:30: Anna Rose:


Okay.


01:04:31: Zaki Manian:


And in many ways, the sort of weakness of AiB and the weakness of ICF and the way the builders of Cosmos consumed of it is like, we are turning this thing over to the validators. But from the Atom 2.0 era onward, any sort of clear, this is where we want this thing to go, this is what we should do, from the validators, they've never viewed it as their responsibility, but at the same time, there was no one else. And they had the power. They had the power to reject everything. And so everybody has put so much time and energy trying to make incremental changes, oh, let's fund AA DAO, let's incrementally improve, let's constantly test the waters of the validators, because if we try to go too fast, the validator -- what we were in Atom 2.0 as the validators, we'll just say no. But that was too slow enough that the validators would accept is at this moment too slow --


01:05:30: Anna Rose:


To same the ecosystem.


01:05:30: Zaki Manian:


For them to save the market of the system.


01:05:32: Anna Rose:


In a way. It's funny. So as mentioned, as a validator, especially during that era where those votes were coming in, we were one of the few independent ones in the top ten. It really looked like it was exchange, exchange, VC, strange kind of company game thingy. It was very --


01:05:50: Zaki Manian:


Strange weird Japanese investment vehicle that no one really understands.


01:05:54: Anna Rose:


And then -- yeah, and I remember we took a lot of those governance decisions, especially the contentious ones, very seriously, and we would have big conversations trying to figure out what to do there.


01:06064: Zaki Manian:


The builders always viewed that ZK Validator vote as one of the most reliable allies. And with you guys gone, we're just -- we actually, we don't know. I don't know. I don't know what's going to happen.


01:06:18: Anna Rose:


Yeah, ZKV in the last month or so has -- you know, it's no longer in the top ten. We're still in the set, but we don't have the same backing that we used to and felt when it changed as like a bit of an end of an era, because we'd been up there for about five years almost. But yeah, I do wonder, who are the people? Because even if you look at the bigger VCs who had been there, even VCs that could have been friendly, they've been selling off. Like, you don't see the Paradigm or the Polychain.


01:06:46: Zaki Manian:


The Paradigms,  the Polychains is almost gone. There still are -- I mean, there's a lot of tokens, like Coinbase Custody is the biggest validator.


01:06:53: Anna Rose:


But they never vote on anything.


01:06:54: Zaki Manian:


They don't ever vote on anything. And it would be great if they were -- you know, because it's just like retail and retail users on Coinbase, but they don't get any voting rights or anything, which is just really frustrating. We've tried.


01:07:07: Anna Rose:


Yeah. Okay. So now this brings us to today.


01:07:11: Zaki Manian:


Yeah.


01:07:12: Anna Rose:


Atom is dead. Cosmos is not dead. But in a funny situation, the ICF is looking for new leadership, and yet we hear little murmurings of proposals, ideas, one of them is public, which is this Osmosis merger.


01:07:29: Zaki Manian:


So one thing that has been sort of -- you know, is not in the form of a serious proposal, but there is this idea of merge Atom and Osmosis in some fashion that has been out there. And as I have said, I've been very, very positive about the product progress that Osmosis has made and been very conscious of the complete lack of price action on Osmo. Right? I think that another frustrating thing for crypto builders in this last year, not just in Cosmos, but just in general, is that product progress is very rarely rewarded with token activity. There's a few examples where people have been able to make both the token and the product work, but you are very hamstrung by the market realities these days.


01:08:23: Anna Rose:


Although 2019, I feel like you had a similar thing over on Ethereum. I remember tools were getting better, 2019, 2020, and no one was using them. The things that had been blowing up in 2017, 2018, all of a sudden worked, but everyone was gone, so you couldn't battle -- and they were all meant to scale, but no one was pushing their limits at all.


01:08:45: Zaki Manian:


And the same thing happened in Solana, I think, in 2023. Right? Like, 2023 was Solana tech improved dramatically, but there were no users. And then users came. So we've been through cycles like this before. I'm not -- it feels like 2019 in that sense of nobody's like, where's the light on the end of the tunnel, on the tokens? Or do we have to -- I think Sommelier, for instance, has just committed itself. We're going to focus on revenue, because who knows whether or not we can make the token work or whether or not the token will ever work. Kristi, my co-founder, had put out this very nice op-ed about just like, okay, can't control token --


01:09:25: Anna Rose:


Can control revenue.


01:09:27: Zaki Manian:


Can control revenue, can grow revenue. Let's go focus on revenue.


01:09:31: Anna Rose:


Okay, but the proposals. So there's an Osmosis-Atom, like an Osmo-Atom --


01:09:35: Zaki Manian:


There's like, a soft Osmo-Atom merge proposal that is out there.


01:09:0: Anna Rose: 


But you think it's not super serious. I wonder if it's worth it to explore, or if you think --


01:09:44: Zaki Manian:


What I would say is the dynamics are very clear, which is Osmo is now a great product, and Osmo is very much the entry point for people into the ecosystem. It is the most widely used thing, it has the most daily active users.


01:09:56: Anna Rose:


Although from centralized exchanges, it's still Atom, right? Or is it more like ETH into Osmo?


01:10:03: Zaki Manian:


So one of the things, another form of fragmentation that has occurred is there are multiple front doors to Cosmos. So Noble is a front door because it has USDC from Coinbase, which is the only centralized exchange that it supports, hopefully more soon. But we integrated this thing called CCTP, which is a bridging protocol that is native to USDC, and that has provided -- you know, like you can go Solana Noble in under a second.


01:10:30: Anna Rose:


So it's a new on-ramp.


01:10:31: Zaki Manian:


So that's a new on-ramp.


01:10:32: Anna Rose:


Okay.


01:10:32: Zaki Manian:


And then you have Osmosis has gotten Binance and multiple other exchanges to list Osmo. So there are multiple entry points now into the ecosystem.


01:10:41: Anna Rose:


And TIA as well.


01:10:41: Zaki Manian:


And TIA is another entry point into the ecosystem. So now you have all these multiple entry points to the ecosystem, but they all meet like a good 30, 40% of the USDC is on Osmosis. A good -- there's TIA volume, there's Atom volume, a lot of this stuff happens on Osmosis. So Osmosis is for users of the ecosystem very much now.


01:11:04: Anna Rose:


A Hub.


01:11:05: Zaki Manian:


A Hub.


01:11:06: Anna Rose:


I feel like it has been for a while, but maybe more so now.


01:11:09: Zaki Manian:


More so now.


01:11:09: Anna Rose:


0kay.


01:11:10: Zaki Manian:


Because before Osmo was like --


01:11:14: Anna Rose:


Step 2.


01:11:15: Zaki Manian:


Was DeFi, but it wasn't like where all of the different on-ramps met. But now you have TIA, Atom, Noble, all of them meeting in Osmosis. Osmosis is much more, and Osmosis is a much better product now. The UX is much better. Like, the functionality of the DEX is contemporary to other DEXs in the ecosystem. So all of that stuff is happening.


01:11:37: Anna Rose:


What would a merger look like?


01:11:39: Zaki Manian:


I mean, in my mind, I tweeted this.


01:11:42: Anna Rose: 


How does that even work?


01:11:44: Zaki Manian:


So there would be the mechanics of it where there have been very few mergers in crypto. So the big recent one was this merger of Fetch and Ocean protocol, and I think a third protocol. Fetch is actually a Cosmos chain to do this AGI asset where they -- like you had three things that have all pumped because of sort of the AI bubble that have merged. So there was that merging process.


01:12:10: Anna Rose:


You and I were talking just the other day about, the NuCypher plus Keep --


01:12:14: Zaki Manian:


Yeah, Keep.


01:12:15: Anna Rose:


No equals Threshold.


01:12:25: Zaki Manian:


Yeah, it became Threshold --


01:12:18: Anna Rose:


A few years ago.


01:12:19: Zaki Manian:


And that's also happened. So that merger has occurred. Very few mergers have happened. One thing, though, that is a problem that I think Cosmos and all the other ecosystems are now having is everyone's incentives are new token, new token, new token. You have this, get this, what I call fractalization of incentives, where everyone has their own token with their own ecosystem, which is their own thing. And you have so many of those in Cosmos. You have Celestia, then you have Initia, then you have Astria, then you have --


01:12:51: Anna Rose:


Stargaze.


01:12:52: Zaki Manian:


Then you have -- you know, thing after thing after thing after thing, which is all producing their own ecosystems around them. And you're like, okay, what are the incentives anymore? Now, consolidation has to be the way that we put all of these incentives back together.


01:13:06: Anna Rose:


Yeah, I mean, I even remember when every project you talk to, I mean, still kind of the case, is about to launch a token, and you have to ask yourself, how many of these things are we going to hold on to?


01:13:17: Zaki Manian:


This is what everyone is -- this is the general despair in the ecosystem in Q3 of 2024, which is like, you have a lot of the things that launched in the sort of period of where things were looking good. October, November, December of 2023. Now their one year past TGE vesting unlocks start happening. So there's a huge amount of supply of different tokens coming into the market. And then everyone who was like, who thought they were going to launch in June, July, were like, oh, market's looking bad, I'm going to delay, delay, delay, delay, delay, delay.


01:13:52: Anna Rose:


Are stuck now.


01:13:53: Zaki Manian:


Are now -- you know, EigenLayer tokens are going to become liquid, tradable. Like all of these tokens suddenly. So now you have this like another massive wave of tokens into a market that has just, like there's no buy side.


01:14:06: Anna Rose:


Whoa.


01:14:07: Zaki Manian:


So it's a painful time not just for Cosmos.


01:14:11: Anna Rose:


That idea of merging tokens. I mean, I think this proposal is Osmo like, Atom, may or may not make sense, but I think that generally, that's a kind of good idea. Or has anyone absorbed tokens? Could one stronger token absorb another?


01:14:28: Zaki Manian:


Yeah, so, I mean --


01:14:28: Anna Rose:


I think Polygon did that a little bit with the Hermes token.


01:14:31: Zaki Manian:


I mean, somebody could write a thing that would, for instance, allow people to deposit Osmo and get vesting Atom of some kind in some module. Like, you could build this. Someone could build a Cosmos merger, smart contract module, whatever. They'll do this, and I suspect someone will eventually.


01:14:54: Anna Rose:


So you would have, though, Osmosis sort of give itself over to the Atom.


01:14:59: Zaki Manian:


But what I would -- in my version of this, the only version of this makes sense is, the entire Atom product roadmap of today, which is this ICS product roadmap is abandoned. The Hub product is the Osmosis product. The Hub asset is Atom.


01:15:18: Anna Rose:


But you'd have to -- how would you possibly do that? You'd need the buy in from the validators, I guess.


01:15:23: Zaki Manian:


You would need the validators to --


01:15:23: Anna Rose:


And now no one.


01:15:24: Zaki Manian:


No one knows.


01:15:25: Anna Rose:


No independent is on the -- is up there.


01:15:26: Zaki Manian:


So yeah, we don't -- so, you know, you don't know.


01:15:29: Anna Rose:


Wow.


01:15:30: Zaki Manian:


But like yeah. And not only, you would need the Osmosis validators and the Hub validators to agree.


01:15:37: Anna Rose:


Okay.


01:15:37: Zaki Manian:


And these things are hard. It is manifested, but this is just one of many plans that exist in some way.


01:15:45: Anna Rose:


Can you share any others or hint at?


01:15:50: Zaki Manian: 


So, I can hint at things. So Skip has a plan. I think we'll see when this comes out, whether or not this thing has leaked onto Twitter. But I'm not going to be the one to leak it.


01:16:00: Anna Rose:


If so, I think listeners should check your Twitter when this comes out and see if you retweeted anything around a Skip proposal for the future of Atom.


01:16:09: Zaki Manian:


The more commercially-oriented teams -- so I would view Osmosis as a commercially-oriented team, I would view Skip as a commercially-oriented team. They would say that there's such demand for what Cosmos makes, which is unability to build your own sovereign chain. Now, it's really unclear exactly what a Hub asset should do in that world because sovereignty is all about doing your own thing. Why do I need --


01:16:38: Anna Rose:


Why wouldn't it just follow the Uniswap model, though? If it is sort of like DeFi? I guess you don't think of it as that anymore. Now it's a center.


01:16:47: Zaki Manian:


So what I would say is the demand for sovereignty is huge. Again, all of these problems with Cosmos and Story, Berachain, all of these people are building with Cosmos tech, Babylon. A lot of the things that are like late this year, early next year that people are actually excited about, in spite of this massive supply of tokens and everything, the stuff people are actually excited about, so many of them are built with Cosmos tech, and so many of them are -- I'm an investor, advisor or whatnot. I've been very much -- I shifted out of Cosmos Core and I put all my energy into the more commercially-oriented stuff, which has been a struggle making it work. It would have just been far easier to build infrastructure and live off the ICF. But I threw myself -- like both me and Kristi threw ourselves into this vortex of trying to make commercially-oriented things work in Cosmos because we were like, the ecosystem will die without more commercially-oriented stuff. So we worked on Celestia, we worked on Babylon chain, we worked on Berachain. Like very, very commercial teams.


01:17:59: Anna Rose:


Last question, because I know we're almost at time. So you've talked about some of the proposals for how to kind of save Atom or Cosmos. I mean, Cosmos isn't dead from what I'm hearing, but it's not booming, and Atom is somewhat dying. There's people selling, there's people undelegating. I mean, we saw that. But so far, you shared a few. There's some proposals to fix it or turn it around. So there's still a desire to do that. But my actual last question is, when would Cosmos actually be dead? What would it be? What does that picture look like?


01:18:34: Zaki Manian:


So the picture of Cosmos being dead -- okay, so another sort of meme out there is the Cosmosification of the rest of crypto. So Solana, the new buzzword is network extensions --


01:18:47: Anna Rose:


Which is Cosmos.


01:18:48: Zaki Manian:


Which are Cosmos -- which are  sovereign chains that extend the Solana network.


01:18:52: Anna Rose:


The like rollups.


01:16:53: Zaki Manian:


They're a bit like roll ups, they're a bit like Cosmos chains, whatever you want -- I don't know. I have not read a formal definition of what a network extension is. It's just branding that is different from L2s. Then people are like the Cosmosification of Ethereum. ETH is the new Atom like meme is out there. Ethereum does feel like Cosmos. Now, it's like you have this fractalization of incentives where everyone has a different L2, everyone has a different token, the core devs get sucked up, scattered across multiple L2s. Ethereum Foundation is not, you know --


01:19:27: Anna Rose: 


The AVSs are going to do more of that even.


01:19:30: Zaki Manian: 


You have core Ethereum Foundation, people doing, like, EigenLayer advisory and all of this other stuff. And the revenue -- you know, the funniest thing is there are so many people who were pushing this, like Atom as gas as the solution to Atom's problems. And you see that Ethereum adds the tiniest little bit of scalability and protocol fees drop to like nothing. Right? So what would the death of Cosmos really look like? It's probably that the Cosmos idea doesn't go away, because I do think Cosmos as a mechanism of giving developers sovereignty, this ability of, or the idea that developers want sovereignty, the developers are not going to just accept that the choices have already been made for them. You must build with the EVM, you must build with the SVM. You must launch on top of the Solana Network with the Solana consensus. You must pay your MEV to the Ethereum validators or the Solana validators. You must do it in this prescribed way, and there are no other options, will never be the way that the most ambitious builders want to build.


01:20:35: Anna Rose:


So the dream you don't think will die?


01:20:38: Zaki Manian:


The dream will not die, but the death of Cosmos is people no longer use Comet BFT, IBC, Cosmos SDK for doing this. There are no more Storys or Berachains or Celestias or anything. There's no future pipeline of all of that.


01:20:54: Anna Rose:


And I guess the teams that you mention close up shop or they shift, they start working on other things. But currently it doesn't look like that's the case.


01:21:04: Zaki Manian:


We're not there yet.


01:21:05: Anna Rose:


Okay. Do you have another timeframe, another timeline? Do you have a 12 month, 6 month, 3 month?


01:21:11: Zaki Manian:


I mean, I do think that the ecosystems -- what the biggest question is, is Atom relevant to the future at all, I think, at this moment? And I think there may or may not even get to be a decision point for this, I think is the question. You know, it may be that just again, the more commercially-oriented teams in the ecosystem just decide that they want to build something outside of the framework of the ICF and are just like, let us move on. And then it may be more of a individual decision among Atom holders. It's like, do I stick with the legacy stuff or do I move on? But I think the question is more, is like the ecosystem needs to be at a really fundamental level, restructured and reconsolidated and new incentive patterns need to be created in a much like Atom 2.0 way. But I do think that the appetite among builders to ask the validators now is pretty low. They may get one more chance, they may get one more ask, but it will be a very, like take it or leave it. And if leave it as the answer, here's our very established plan of being done with it.


01:22:28: Anna Rose:


Whoa.


01:22:29: Zaki Manian:


I think people will be surprised at the willingness to do something big.


01:22:35: Anna Rose:


Cool. On that note, Zaki, thanks for this epic journey back in time to the beginning of Cosmos, all the way to today. Some sort of hints at what might be coming. And I mean, I think there's lessons to be learned for kind of anyone in the space from also stories of the Cosmos.


01:22:55: Zaki Manian:


Yeah, I mean --


01:22:55: Anna Rose:


So it's really cool.


01:22:57: Zaki Manian:


I mean, people like @chainyoda tweet always about learn from Cosmos because you are all walking down this path.


01:23:05: Anna Rose:


Also learn from Polkadot but --


01:23:08: Zaki Manian:


Yeah, but I'm not good at writing all this stuff out, so it was a really good opportunity to embed all of my experience and learnings and trauma into a single podcast that will hopefully the AI can learn from.


01:23:22: Anna Rose:


Nice. Thanks, Zaki. I want to say thank you to the podcast team, Rachel, Henrik and Tanya, and to our listeners. Thanks for listening.