Notes from the Liquidity and Beyond panel, hosted by Ryan Watkins and featuring Carson Cook of Tokemak, Chad Barraford of THORChain, and Sunny Aggarwal of Cosmos.
- Why Interoptibility Now? - Ryan
- Scalability demand due to high gas - Sunny
- Self-soverign chains with lots of value -Chad
- wasn’t possible (for thorchain) until now due to previous lack of TSS and other Cosmos work
- Carson: Technologists pushing for cross-chain. Now, degens need it.
- Degens want higher yield, may be on other chains.
- Sunny: Cosmos approach is IBC (Inter-Blockchain Communication)
- Trustless & Permissionless
- Currently solutions only usable for “Famous” chains.
- Validator sets are picky
- IBC is on-chain, allows any 2 Cosmos chain to ‘bridge’
- One con is the higher-lift for IBC support is the requirement to build light validators on the chain.
- Thorchain is the best example of protocol to do cross chain
- Chad: Thorchain has very little requirements to work with a chain — can connect to any L1/L2 due to neutrality.
- IBC didn’t exist at time
- Not quite a perfect fit
- IBC didn’t exist at time
- Carson: Liquidity is fragged across L1/L2s. Need any-to-any protocol. Accept tokens wherever they are, allow TOKE holders to direct liquidity in frictionless manner.
- Sunny: “You have many chains that are trying to talk to each other”
- 4 Approcaches:
- Centralized Operator (WBTC)
- Decentralized Operator (Wormhole [REN?])
- Trustless Decentralized Operator, i.e. THORChain
- IBC: No central operator, just let all chains talk to each other.
- All have tradeoffs, all have strengths and weaknesses.
- All will be important in the future
- 4 Approcaches:
- Ryan: How do you see ways you can work together to solve this problem?
- Sunny: Unification of semantics
- Formatting of data, standardize on app-layer semantics. Allows integrators to abstract away which xchain solution is used
- Carson: Seed & Cost vs. Security & Finality
- User shouldn’t even know about the weeds, should be abstracted away like TCP/IP
- Chad: That is very difficult. Like US/EU plugs, still not abstracted away.
- Doubtful that it will ever be simple.
- Blockchains are all so different, ship has sailed on standardizing.
- Thorchain is good at being able to adapt.
- Sunny: Unification of semantics
- Ryan: what are some use cases unlocked by cross-chain interior.
- Chad: All chains have unique value. BTC == SOV. Monero == security.
- Being able to transact and move between allows users to have the best of all worlds. Very powerful.
- "The fact that we rely on Binance or Kraken to get us across chain is fucking ludicrous!".
- DeFi Cross-chain is critical.
- Chad: All chains have unique value. BTC == SOV. Monero == security.
- Ryan: Centralized solutions in between Decentralized solutions is bad.
- How does cross-chain inform strategies for deploying apps?
- Sunny: multi chain vs. interchain.
- Multi == L1 -> L1.
- Inter vision: provide 1 app specific chain that connects to other app specific chains. e.g. Compound building CompoundChain, becomes defcto. “Thorchain Gets It”
- Bets that Maker will be its own chain.
- Chad: Only picking EVM leaves out 60% of crypto.
- Thorchain hopes to support everything
- Serious DeFi projects must target 99% of blockchains/liquidity
- Carson: In todays world, with blockchains of various things
- Whale chain (ETH) prices normies out.
- Decision point for apps: What type of tx throughput do I need to target, pick chain that fits best.
- What role do general purpose SC platforms target?
- Chad: SC in general doesn’t make a lot of sense
- If you are building a serious app, you don’t build on a platform you don’t control.
- e.g. Heroku, great for hobby, not for production.
- Devs want control.
- Cosmos is super powerful because it gives devs full control vs. Ethereum.
- Building a chain is more difficult that simply launching a SC.
- Future isn’t smart contracting, devs will want isolated env. Will use something e.g. Cosmos to own the chain.
- Sunny: “Totally Agree”
- Smart Contract chains are good for testing/finding product market fit
- SC is useful as an add-on to app-specific chains.
- Core functionally not in smart contract system.
- Chad: SC in general doesn’t make a lot of sense
- Ryan: Composability will be on separate chains, asynchronously. How does this affect UX?
- Carson: Writing on the wall. Tokemak is going beyond ETH L1
- Liquidity is bandwidth.
- Fragmentation is a problem.
- Tunneling is a challenge, how to move the liquidity.
- Tokemak can help solve this
- Sunny: Web dev is all async.
- If we want blockchain to become big, much adopt this async model.
- It will take time for tooling to get better.
- How do we get XC UX as good as single chain UX.
- Carson: Writing on the wall. Tokemak is going beyond ETH L1