Interview: Osmose is determined to be the coin base of the cosmos – Matic Network (MATIC/USD), LUNA (LUNA/USD)

In late September, the Cosmos Network hosted its first Cosmoverse ’22, described as the premier Cosmos ecosystem event, with three days of presentations at Hotel Las Palmas in Medellin, Colombia.

Despite the bear market, the event had a decidedly positive atmosphere. It celebrated the launch of ATOM 2.0 and presented a white paper outlining new tokenomics and an economic model for the future.

Cosmos has had some challenges in 2022, including the collapse of terra network LUNA/USD. Terra was once the largest project in the Cosmos ecosystem.

However, at the time of writing, according to the Cosmos Chain Registry, Cosmos has a market cap of more than $62.5 billion with a separate market cap of $9.2 billion for the Cosmos SDK, also known as Intex-Blockchain Communication ( IBC).

The self-described “Internet of Blockchains” is a unique interchain system with a central Cosmos Hub, but encourages projects to use the Cosmos SDK to develop their dedicated networks to meet the need for scale and specialization.

A standout achievement in the Cosmos ecosystem is osmosis OSMO/USD. This decentralized exchange allows users to connect to more than 47 chains for transactions and create their own liquidity pools. Osmose Founder Sunny aggar whale spoke of Cosmoverse on day one, wearing chain mail to represent the need for mesh security.

Osmosis suffered a sharp drop in token price in May, but a bullish rating in InvestorsObserver caused the token’s price to rise by 3.8%, and the innovative DEX seems to be a rising star in the Cosmos ecosystem.

Benzinga interviewed Aggarwal on his crypto webshow Web3 Anarchy to learn more about Osmosis’ growth plans and the pros and cons of the Fat Protocol philosophy versus the benefits of greater decentralization.

This story is part of the Benzinga Future of Crypto 2022 Summit related content. Aggarwal will speak about the intersection of art and technology at the inaugural Future of Crypto Live Summit on December 7th in New York City at Pier Sixty.

Some of Web3’s brightest minds and most important projects will be in attendance including Rarible, Cosmos, Yuga Labs, Solana, Laguna Labs and Algorand. Keynote speakers include Jordan Belfort, Kevin O’Leary and Anthony Scaramucci.

Photo: Sunny Aggarwal, Source: Cosmoverse 22

BZ: How did Osmosis become a Cosmos project?

Aggar Whale: “Remember, I worked on Cosmos for about six years when we started Osmosis. We’ve always believed in the full sovereignty and full customization of chains. We’ve been working on the Cosmos stack for a long time, Tendermint and the Cosmos SDK called IBC: once the tooling of those things got to the point we were happy with, we said, ‘okay, what do we want to build?’

BZ: What are the pros and cons of the single-chain model versus the Cosmos interchain model?

Aggar Whale: “There are definitely pros and cons to a single-chain model. It’s easier to think about security – an app with one contract wants to interact with another contract. We can all just assume that we are all under the same security regime.

However, you then lose a lot of sovereignty. I think there’s a trade-off between finality and community decision-making power—or, as I like to say, sovereignty. By sovereignty we mean the ability of a community to make its decisions and change its protocol when the community makes social consensus decisions, not always what is written on the blockchain. Let’s say there’s a hack or something. The chain wants to undo the hack. We’ve seen Ethereum do it, but that was back when Ethereum was small and nimble. It’s unclear if Ethereum could do that again, where it can coordinate a fork in the event of a bug or hack.

Right now, everyone in crypto is following a bold protocol thesis, which is the idea that all value goes to the base protocol, whether it’s ETH, SOL, etc. I think it’s silly. Going back to the 1990s, people weren’t sure how much value would be created on the internet. Companies like AOL and CompuServe tried to build small walled gardens. But what really won in the end were the applications – the Googles and Amazons. Those are the things that are really sticky, and they have relationships with users. So they built their own infrastructure. And now AOL and CompuServe are dead and AWS, which Amazon built for itself and then made available to others, dominates.”

BZ: What problems did you want Osmosis to solve? Where did that lead?

Aggar Whale: “We were really interested in privacy and we still are. We decided that we simply couldn’t innovate at the privacy level on an existing platform. Because to innovate at the privacy layer, you need to change cryptography and other things that happen at the base blockchain layer. If you’re forced to write smart contracts about it, you don’t have that ability. So we decided that we need to build our own blockchain.

What’s interesting is that the Cosmos ecosystem had a lot of catching up to do in terms of liquidity. So if you look at CoinGecko, let’s say out of the top 200 assets by market cap, the Cosmos ecosystem has the most after Ethereum.

This is part of the whole Cosmos thesis of why people like to build on top of all these other Layer 1s. They try to capture all values ​​in a native layer 1 token, no matter if it is avalanche AVX/USD, Solana SOL/USD or polygon MATIC/USD. In Cosmos, these are all just app chains, so the value flows into your application token. This causes a lot of tokens, but the problem is that it is difficult for them to get listed on centralized exchanges because the exchange has to run a new chain. It’s not as simple as adding an ERC-20. You must be running new node software. So there were all these high quality assets that had no liquidity. Osmosis could come in and say, ‘Hey, here are the first steps.’ It is very easy to get listed or integrated with Osmosis as you only need to integrate an IBC protocol and the integration process is automated. That helped launch Osmosis, and that helped launch DeFi on Cosmos.”

BZ: So is a building around a central chain simply better for fundraising? How does it affect development?

Aggar Whale: “Building around a central chain can be good for more than just fundraising. It’s great that a lot of money and human capital is pouring into improving the basic core infrastructure of these blockchains. Solana has brought about real innovation at the protocol level.” Oops and all, that’s valuable innovation at the protocol level. But it has this trade-off that the protocol developers are isolated from the application developers. I think you can actually notice that very strongly on Ethereum where there is this big gap between the ETH core developers versus the app developers and sometimes their incentives are not fully aligned. The core developers often don’t know what the application developers need.

There is no central development team at Cosmos. There are multiple core development teams, and many core development teams also have their own applications. Osmosis consists of core developers of the Cosmos stack, but we have our own chain. This is a very interesting phenomenon because it means core developers have a better understanding of what app developers need. I think that’s why the Cosmos SDK has become such a popular stack because there is actually an understanding of what needs to be built and they really focus on developer UX. And that’s why I think building apps on the Cosmos SDK is much easier than on rollup platforms.”

BZ: What does decentralization mean to you in terms of added value for the overall project? It seems like this is a pretty central tenet of Cosmos beliefs.

Aggar Whale: “Decentralization means that no entity can fail or become Byzantine and destroy the project as a whole. The project will continue – as with Bitcoin. The founder simply disappeared and the project was able to continue. And I think that was like a test of how decentralized it is and how much of a movement it is, and I think we’re seeing that with Cosmos as well.

Cosmos went through the same process with the founder, Jae Kwon, which left after a while, and the project went into turmoil for a while. And that’s kind of why people haven’t heard too much from us in 2020-2021. But we managed to figure it out.”

BZ: What do you think of increased regulatory oversight of cryptocurrencies in the US?

Aggar Whale: “I think the Security Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) are starting to get a little more aggressive. I think with crypto, innovation just makes it a lot harder. I think it makes the US less attractive place to build things. There are many builders trying to leave the US for friendlier jurisdictions right now. So we’ll see how that develops, I think.”

BZ: What strategy is Osmosis pursuing for the future?

Aggar Whale: “The bear market gives us time to build up. By the next bull cycle, we aim to have the Osmosis product ready to the point where users can be the first entry into crypto. Today it is Coinbase. If you’re trying to get someone on crypto for the first time, you need to send them to Coinbase. We want to make Osmosis user friendly, easy to onboard and well connected enough for new users to get the full range of crypto assets so you can buy and sell everything in one place. That’s what we’re working towards. We’ve always been product oriented – we made things friendly and playful. Because I think at the end of the day, wanting to reach the retail users is key.

Liquidity will flee to where they get the highest return on fees. Institutional volume is channeled via aggregators to where the highest liquidity is available. But the retail users are the users who are sticky and get to what’s easiest to use and they build relationships.

We are also expanding the range of products that Osmosis offers. Today it is only the DEX. But soon there will be other options, whether built in-house or by external teams and built on Osmosis. Today, when you go to a centralized exchange like Binance, they do spot trading, but they do a lot of other things. They have launch pads, fiat on ramps and information services and all kinds of stuff. I think all of these things need to be part of the Osmosis suite at some point. We’re working on a number of things for that vision right now.”

The last word

Reviewing Cosmos alongside other reviews of “alternative blockchain networks” is like reviewing a set of cars and then reviewing a freight train. It’s difficult to put them side by side, and in one case, looking at the whole requires perspective. And it is incomplete to look at osmosis without looking at the cosmos as a whole.

Osmosis is realistic about the fact that their audience will be mostly blockchain native, as the Cosmos ecosystem is a longer stretch for most normies. However, with the greater control and customization that comes with Osmosis’ dedicated chain and a focus on creating a user experience for a mass audience, one day new retail users might not care where their exchange is located.

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