AMA Recap: Building on The Cosmos Interchain

The Cosmos ecosystem has seen extensive innovation enabled by its modular structure that allows independent networks, or appchains, to operate as a group of sovereign, interoperable, and app-specific networks on its Interchain. From Injective Labs providing Cosmos’ initial DeFi orderbook, Neutron launching using Replicated Security, to Initia emerging from stealth and employing the first MoveVM on Cosmos. 

In light of the latest launches and developments within the Cosmos Interchain, we sought to gain insights directly from the builders shaping the Cosmos ecosystem. To delve into the challenges, opportunities, and advancements in the ecosystem, we hosted an AMA session with Binance Labs' portfolio founding teams: Zon, Head of Strategy at Initia; Eric Chen, CEO & Co-Founder of Injective Labs; and Avril Dutheil, Core Contributor at Neutron for an AMA.

Stay tuned for more AMAs on our Twitter as we invite portfolio founders and subject experts to deep dive on emerging technologies and developments in Web3. To listen to the full discussion of Building on The Cosmos Interchain, click here or take a look at a snippet of our discussion below. 

We asked: why build on Cosmos?

• Interoperability of IBC - a unique property of the ecosystem is that it’s the most standardized protocol that allows developers to not only execute token transfers but also integrate with applications across numerous domains, bringing the ability to deeply integrate crushing interoperability to smart contracts. 

• Cosmos stack: modularity & flexibility - the Cosmos stack offers the ability to shape low level for machinery of the blockchain to better serve applications whereby developers can shape the consensus production through the via IBC, and other tools in the Cosmos SDK toolbox to ensure protocols are recapturing MEV, increasing performance, and designing the application to be more secure or, provide better services for developers building open-source tools and modules on Cosmos.

• Enhanced Interchain Security - Cosmos as a chain is a strong security zone for various chains through Interchain Security. It implements the Replicated Security protocol which is an open sourced IBC application that allows Cosmos blockchains to lease their proof-of-stake security to one another.

• Mindshare from talented developers - Cosmos SDK as the base layer, almost has an altruistic kind of aggregation of mindshare from a lot of talented developers and projects who contribute to improve it progressively and share the same type of consensus for developers to build the type of applications, protocols and chains without having to build everything from the ground up, but at the same time finding this shared common ground of usage. 

Cosmos Major Milestones & Upgrades

• Application BlockChain Interface upgrade (ABCI++) - a major evolution that has advanced the speed in which Cosmos chains can now produce blocks as well as the integration. It opened up access to Optimistic execution, which allows blocks to start being executed as they're being built - a powerful tool for all Cosmos chains. 

• Solving liquidity on Cosmos with stablecoins - a recent appchain launch on the Interchain is now offering native asset issuance of USDC on Cosmos enabling builders to access dollar-backed stablecoin with institutional on-and-off ramps. Native stablecoins have always been one of the big barriers to the Cosmos ecosystem as all the stablecoins were wrapped assets with bridging risks that users are not comfortable with. 

• Replicated Security - the launch of RS is Cosmos’ flavor of restaking which allows Cosmos Hub validators to share its validator set to stake with other blockchains and provide security to it. 

• Upcoming launches this week - Celestia, a modular blockchain network geared up for its mainnet launch, and other deployment of Decentralized Exchanges (DEX) on Cosmos.

A general consensus: the Cosmos tech is solid, but how are issues related to adoption & liquidity being viewed?

• Resources & distribution - builders on the Cosmos ecosystem have envisioned and built advanced technologies but there has been a lack of BD resources to make the ecosystem well integrated with what’s outside the ecosystem such as centralized exchanges, other networks and ecosystems which is now being addressed. 

• UX & high barriers for entry - moving from a monolithic blockchain to modular systems which are inherently disjointed, causes fragmentation in the ecosystem. Modular systems are great in nature, but there needs to be a UX that binds everything together. The infrastructure of the bridging stack, and the network itself should eventually be completely abstracted away to enable users to utilize any DApp, on any chain without having to purchase gas tokens and feel like they’re moving explicitly between different chains. 

How is this being addressed?

Injective inEVM rollups: bridging Ethereum, Cosmos & Solana

Eric, Injective: Rollups such as EVMs and SVMs are very important for Injective’s case. With Injective having CosmWasm and a smart contract environment built natively, and connected natively with the chain itself and all the modules via plug and play - it creates a fairly limiting factor in terms of the developers that can build their contract. Currently CosmWasm is mainly implemented in Rust with a Rust centric environment, and all the contracts written in Rust. That kind of became a blocking factor for a lot of developers from the ecosystem that are more used to let's say, Solidity or SVM.  

Through Injective’s rollup layer, it's partially like an onboarding education where there's a massive inflow of developers joining the Injective ecosystem by deploying their application on top of the rollup layer in a semi strong connector way with the Injective core modules. Obviously not as strong, as the native CosmWasm environment, but most importantly is that these developers have now onboarded onto the Injective ecosystem, got a taste of the ecosystem and what the apps going on top are capable of. They’re willing to build very creative applications, create this mind share, and create more interoperability stacks. Many of them started with learning Rust, and created a competing edge for CosmWasm smart contracts.

There's a number of roll ups that are slated to be launching soon, and we’ve been working with Celestia to build the best and first bridge solution to make sure that they're all well integrated into the Interchain economy. I expect that these new connections, activities and new value entering the ecosystem is going to be tremendously beneficial for the entire industry. I'm looking forward to seeing close integrations and collaboration in the Cosmos that will be essential to the ecosystem's growth.

Initia: network for 0-to-1 omnichain rollups

Zon, Initia: Because Initia owns the L1 - the L2 system, and everything in between, we can make it as seamless as possible for interactions with any new rollup that we spin up and we're able to enforce. What we mean by Initia’s 0-to-1 omnichain rollups is that we've developed something called Minitia, a ‘mini Iintia’ which is a full-featured Cosmos SDK blockchains where you essentially rip out Tendermit consensus and you plug in a Optimistic rollup framework that we've built from the ground up. What this allows teams to do is have entire Cosmos SDK blockchains where they have access to all the native modules that exist in Cosmos, and are able to enhance their UX and tweak how their chain works. 

But they're also the most product ready infrastructure because developers have access to native USDC, they can alter the way their transactions work, change how inflows and outflows work with gasless transactions, and access Oracles and bridging capabilities from day one. So it's quite an advancement over the traditional rollup frameworks within the OP stack or Arbitrum Orbit because these come with the biggest challenges already solved for you right when you launch a Minitia. I think the big advantage here is that even though the underlying infrastructure shares the common denominator of Cosmos SDK for all interoperability, we can bring this to teams in a much easier fashion by integrating various different VMs on top of the Cosmos SDK layer. So aside from WASM VM, CosmWasm unfortunately doesn't have a lot of smart contract developers as opposed to things like EVM. 

So what we've done recently is integrated MoveVM on top of Minitia, where this Move integration is incredibly robust in the sense that it very much follows how CosmWasm is integrated with Cosmos. You can do IBC transactions, you can do Interchain accounts directly within Move. You can also read through the bank module just as you would for any other Cosmos chain, and directly access information from the Move side - so directly from the EVM, you can also access IBC, Interchain accounts etc.

We're just finding additional ways to bring developer talent to Cosmos without having them sacrifice and learn an entirely new programming language to really combine the best of both worlds by bringing languages that folks know, with the powers that the Cosmos SDK has to offer. We're gearing up for the public testnet in the next couple of months and we've been building for six to eight months in stealth thus far. So everything is ready, and we're just finalizing some of the product infrastructure but we’re incredibly excited to bring 500 millisecond block time, 10,000 TPS Cosmos chains to the masses without them having to run any validator sets or deal with anything. 

Neutron & Replicated Security

Avril, Neutron: I think you know security is one of the core properties of the blockchain. So that's something that we thought fairly long and hard about. The issue that Hadron Labs were faced with when building a liquid staking protocol on Terra before it crashed, is that it wasn't able to scale across the entire Cosmos ecosystem because smart contracts were kind of isolated from the ability to really interact with these kinds of technologies. And so, while doing our research we realized that there were 3 blockers: crushing interoperability, ecosystem alignment, and most importantly security. 

The reason why security was so important is because if you're an ambitious builder and you want to build an application that is going to really scale, you need to ensure that your protocol is never going to become like a honeypot that’s worth attacking. And so that was an issue in that a number of the platforms that were available in the ecosystem didn't actually have that much economic security. That's sort of what led us to Replicated Security as kind of the perfect solution for ambitious cross-chain application builders that want to ensure that what they build will be secure long term. 

Replicated Security has this very nice property, a differentiated sort offering when it comes to security, which is that it provides you with the economic security of a top ten blockchain in the industry. From day one, Replicated Security provided very close alignment with the Cosmos Hub and its community with the ATOM token, and that can massively help bootstrap the community and the distribution of your product. To put things into perspective, I think where this differentiates Replicated Security with other security offerings is that when you launch a rollup on Ethereum, you're going to be aligning with the theorem in order to court the capital and user base of the inter of the Ethereum L1. But the Ethereum L1 itself will never take a stance in your favor. It will never be aligning with you directly because its vision, its value proposition is to remain credibly neutral and therefore, not actively support you any more than it does any anyone else.

As a result of this, what we're seeing is that there's some degree of inertia on some of the most innovative kinds of avenues, like adding OP codes for certain ZK proofs to enable ZK rollups to become a lot more efficient and functional. These things just don't happen or if they do they happen over the span of years, which is not really the pace at which the rest of the industry in particular DeFi operates. 

In Replicated Security on the other hand, you have this property whereby the security agreement between the Cosmos Hub and the partner or consumer chain is explicitly a two way agreement whereby the hub provides security and support, and then the consumer chain’s success becomes that of the Cosmos Hub. The Cosmos Hub derives benefits from accrued increased distribution for the ATOM token, increased value, increased revenue from the revenue share of the consumer chain and potentially large token allocations and such. I think it makes that technology very unique in the sense that it's kind of like this mutual alignment around security, but that that goes beyond security which is not really a property that you see in any other of the alternatives out there.

The above is a snippet of our conversation with Initia, Injective and Neutron. Check out the recording for the full discussion: Twitter Spaces

Disclaimer: The content on this article has been prepared solely for informative purposes and should not be the basis for making investment decisions or be construed as a recommendation to engage in investment transactions or be taken to suggest an investment strategy in respect of any financial instruments or the issuers thereof.