if you are one of our speakers and I've invited you to speak please accept the
Just rallying the troops.
Thanks for your patience, everyone.
Thank you for your patience, everyone.
There we go. We've got most folks here, just waiting for a couple more to join us.
And we'll get going in just a second. Thank you everyone for being here.
Okay, great. I think we have everyone here.
How exciting. This is a pretty big event for all of us here on stage and for everyone who's listening.
Thank you for coming to Informal Spaces.
This episode will be talking about bringing Bitcoin security to the Cosmos Hub with Babylon.
We're really excited to have everyone here and for all of our live listeners,
but you can always follow us on Twitter for recaps and reminders.
Just a little bit of housekeeping at the top.
Nothing that we talk about here is investment advice, just insight into some things that we're working on.
You can follow us at Informal Inc., Babylon at Babylon Chain,
and we have folks from Stride and Quality here as well.
So very excited to have everyone here.
I think before we get started, there are those who are here from the Bitcoin ecosystem and from the Cosmos Hub ecosystem.
So we'd love to get everyone's intros going.
Thyborg, do you want to introduce yourself to start?
I'm Thyborg. I'm the business leader in Informal System,
and I will let Riley, who is next on my app, to introduce himself.
Hey, I'm Riley, one of the co-founders of Stride Liquid Staking Platform in Cosmos.
Johan, do you want to introduce yourself?
Yeah, excuse me. I'm Johan. I'm the product owner for the Cosmos Hub team at Informal.
Hi, guys. I'm David. I'm the co-founder of the Babylon Project.
Great to have you. Elijah, would you like to introduce yourself?
Yes, sir. I'm Elijah. I work on strategy and neutron.
I'm also a big fan of Babylon and David, so I'm excited to chat with him today.
And last but certainly not least, Sanka, do you want to introduce yourself?
Hi, my name is Sanka. I'm the head of product strategy at Babylon. I'm excited to be here.
Excited to have you. We'll kick things off just in general.
I'm assuming almost everyone here hopefully has read the forum post,
but for those who maybe haven't been able to get into the forum post,
Tebow, do you want to dive into the description of kind of like what we're talking about today?
For sure. Yeah, we're talking about Bitcoin restaking on the Cosmos Hub using Babylon technology.
So essentially what's going to happen, and I'll ask David later to give us an overview of how that's going to work on the Bitcoin side.
But essentially people will be able to use Babylon scripts on the Bitcoin blockchain to lock in their Bitcoin,
and they will be able to choose a validator on the Cosmos Hub side,
and the stake that they put on the Bitcoin side will be slashable through Babylon technology.
And that provides an amount that we can choose and that the consumer chain can choose of economic security
that is much higher than what we have right now with Strictly Adam.
Yeah, David, is there something you wanted to add to that?
No, that's a great summary. Yeah, so we are very excited to bring this technology to the Cosmos ecosystem.
In particular, this partnership with Cosmos Hub means a lot for our project
and for our long term vision of bringing Bitcoin sticking to the entire POS ecosystems,
because we believe that Bitcoin is one of the largest supply, most stable assets that can help everybody to rise.
Yeah, I love that. All of us coming together and riding this wave together.
Johan or Thyborg, I think it would be beneficial for us to go into like, what does this mean for the Cosmos Hub?
Yeah, I guess I'll just say kind of simply what the effect will be.
So what will happen is that people on Bitcoin, people using Bitcoin, Bitcoin holders,
will be able to lock their Bitcoin into a special type of sort of script that Babylon has created on Bitcoin
and basically choose a validator on the Cosmos Hub, and then it will add to that validator security on the Cosmos Hub
and also on any consumer chains that validators on.
Yeah, it's super exciting. I mean, I know we have some consumer chains on the line.
How are you all feeling about this?
Riley or Elijah? Yeah, sure.
I mean, like, you know, I think like one thing that the Cosmos ecosystem has needed for a bit is confluence, right?
Like it's like the sort of bringing together of different ecosystems and like the aggregation of all the different things that these different ecosystems have to offer.
And I think like this is a really interesting step in the Cosmos Hub's evolution as a security provider.
I think it's like, you know, I also think it's like aligned with the vision of interchain security,
which is like, you know, bringing the best security products to POS chains and retaining the quality of the teams that they're working with as well.
I think like Babylon is phenomenal, phenomenal team and research arc, et cetera, et cetera.
So yeah, I'm really excited about it. I think it's really cool.
Yeah, yeah. Stride's very excited as well. I think in a way, it's poetic.
The first app chain, Bitcoin, helping to secure, I think, the second app chain, Adam, plays into ICS very well.
And the onboarding for new wallets to Cosmos Hub, if played well, could bring a meaningful number of new users into the interchain.
Yeah, Thuyberg should speak about the quests.
Yes, that's so I want to speak about the quest and I want to ask also questions to Neutron and Stride about what that would mean for them.
But I think maybe we should start with asking David exactly how that's going to work on the Bitcoin side.
And there was some I read just before the Twitter space, the question that people were posting on the on the forum post that Jehan put up yesterday.
And specifically, I think people want to understand exactly for the Bitcoin stakers who, you know, we know they are risk averse.
They don't like DeFi too much. They are very much focused on long term holding.
How exactly will that work for them? Where they need to send their Bitcoin?
How long will they lock them up? How do these scripts work?
How do you make sure they are secure? Like if you can, David, give an overview of all that.
Yeah, sure. I'm glad to say something about the technology.
So first of all, the as we know that Bitcoin doesn't have a smart contract layer.
So therefore our technology actually does not involve any smart contract.
In fact, we think of that as a plus because if you think about it, one reason why Bitcoin remains to be secure for so many years is because of the lack of smart contracts.
So our staking contract is actually written in the Bitcoin script.
It is very simple because of lack of smart contract, but just enough functionality to do what we need for staking.
So as I think Jehan already mentioned and the type also that the sticker will probably go for a wallet that we integrate with like an OKX wallet or trust wallet.
And then on that wallet, it would be able to send a Bitcoin to a self custodial address locked on the Bitcoin chain for a certain period of time.
Now, as like in Cosmos, we our functionality allows so-called on demand and bonding.
So in other words, there's no need for the sticker to fix a certain duration of time.
But whenever it wants to unbound, it can request to unbound and the unstaking period will be something like a week or five to seven days, roughly.
Yeah, so that's on the Bitcoin side.
Now, when it sticks on the Bitcoin chain, then a client like the Cosmos chain in this example at Cosmos Hub will be able to view the stake and then give the validator that is assigned to you.
That's the thing is that voting power, voting power.
That means now the validator can now vote using his Bitcoin stick to increase the voting power.
And the main functionality we want to provide is the ability to slash the stake.
So cryptoeconomic security is the central, I think it's one of the central innovations of the Cosmos ecosystem, the ability to provide slashing.
And we preserve exactly that functionality, but using some cryptographic machinery to do the slashing on the Bitcoin chain without the smart contract functionality.
So that is one of the main innovations of our technology.
And so, yeah, you can provide full security to the Cosmos chain, Cosmos Hub consumer chain, full first grade security slash low security.
I want to add a point on top of Tybog, what you said.
So me and Jehan, we kind of started working like I would say like from Stanford Blockchain Week, Cosmosverse.
So one of the aspects we looked at when we were working at Babylon is like, why would Bitcoin holders be interested in security bootstrapping?
And we looked at the wrapped Bitcoin market just to understand like what could be an yield potential Bitcoin holders would be interested in.
And we found that the wrapped Bitcoin market is roughly five and a half billion dollars.
Eighty percent of that asset is unutilized.
Twenty percent is lend out on lending protocols at a one to two percent of APR.
So this was a very interesting market for us to attack.
And once I started working with Jehan, the objective was that, hey, can we align the best of both worlds?
I think Cosmos brings us to the best battle tested infrastructure abilities.
And with Babylon, we can let the Bitcoin holders rent their Bitcoin to this kind of infrastructure bootstrapping.
Right. So to add to everything what David said, we think that Bitcoin holders, given they have access to ATOM and the subsequent shared security protocols,
they would be extremely interested in using this new infrastructure than actually going to the wrapped Bitcoin market for DeFi and stuff like that.
Yeah, that makes a lot of sense.
For David, just on the on the bonding period specifically, you said five to seven days.
Where did that number come from? Is that something that Babylon would enforce?
Yeah. So yes. So the parameter is specified in the sticking contract.
So it could be done on a chain by chain basis through governance properly, just like in the Cosmos chains.
Different chains also have different bonding periods, some seven days, somewhat two weeks, some three weeks.
So that is the parameter. Now, the reason why there needs to be a bonding is because I'm bonding time is because there needs to be time for the POS chain for the Cosmos chain,
the watchtowers or the relays to report any slashable offense, any fraud, in some sense, back to the Bitcoin chain to slash the stick.
So we cannot allow the stick to un-bond before that happens.
So there's a time, just like any optimistic consensus system, that the time needed to leave for such fraud proof reporting.
So that's roughly where it comes from. Like an arbitrum, for example, is about one week.
So that's roughly the same order of management.
I see. And in terms of the actual interface that Bitcoin restakers will use, will it just be like, OK, send your Bitcoin to this address and that's it?
Or will you guys put up something where they actually have to go to a website or something and they will be guided through it?
Yeah. So on the testnet that we are launching, actually, we're launching the testnet in a few weeks.
There will be a website to help the Bitcoin stickers to use it.
However, when we launch the mainnet, our goal is a completely decentralized protocol.
So we don't plan to have a Babylon website. We plan to integrate with multiple wallets and users can use these wallets to do the sticking.
I see. And maybe that's a question for Sanka then. But what is going to be the marketing strategy that you guys use to get people to to stake their Bitcoin, to restake their Bitcoin?
Yeah. So so the first thing for us, we started the behavior of Bitcoiners that are extremely sensitive about security.
So we are onboarding two very big security clients, Ledger and Fireblocks.
So Ledger is working actively with our technical team to create this integration where our technology would be one of the prime focus for Ledger in 2024.
We're also working with Fireblocks where there are a lot of institutional interest for allocating Bitcoin for this kind of security yields.
So the Fireblock conversation is going a little slow because they're more institutional.
So these are the two very much on the institutional side.
On the retail side, OKX wallet is an interesting wallet which gets you to look at native Bitcoin as well as these rewards coming from Adam or Stride or Neutron.
So we have we've already integrated OKX wallet.
So these are the three wallet integrations we're actually looking at.
David is also having conversations with BitGo, which are the biggest like rap Bitcoin service.
So they're also actively looking into this stake as earn type of service for us.
So these are the kind of initial, I would say, GTMs we are targeting.
And also this Cosmos Hub announcement is a big thing for us.
So we tend to we are planning to work very closely with you guys to figure out the right strategy so that the most number of people get access to this.
For sure. And I think the tweets yesterday on the forum post was very, very well received.
I think that's actually one of our most popular posts from the informal accounts.
So so far so good. So so far so good.
Just to to ask a little more questions about Babylon and then I'll come to Jihan.
So he explains things on the Cosmos website.
But David or Sanka, I think initially Babylon was about time stamping.
Right. And now there's there's a bit of a there's been a bit of a switch that pivots.
So can you explain what's what's been done?
What is the core focus for Babylon now? Is that is that restaking?
Yeah. So yeah, let me explain a little bit about the evolution of the project.
So from day one, Babylon is about bringing Bitcoin security, Bitcoin security to POS chains.
In particular, we start with the Cosmos ecosystem.
The first protocol that we built is called a time stamping protocol that is using Bitcoin as a timestamp to timestamp or POS blocks.
And that's what we built in 2022.
And we launched a test that right now.
The testnet has about 40 to 50 Cosmos chains integrated on that time stamping testnet.
Now, what we discovered, one thing we learned during this process is that whereas the time stamping,
testnet has a very good use case, which is fast unbonding of the native POS chain.
And that was the first product we had.
However, it doesn't provide fast analogy.
It doesn't increase the fast analogy, secure the POS chain, which I believe is the number one key property to achieve fast analogy securely.
So then we came up with this another idea, which is Bitcoin sticking,
which now, in addition to time stamping, which gives you a slower security, also gives you this fast analogy.
And so the time stamping now takes on a row of a primitive, which helps with the Bitcoin sticking protocol.
So remember, I mentioned that you need to save the unborn.
To save the unborn, you basically have to synchronize the Bitcoin chain and the consumer chain because voting is happening on the consumer chain.
But the stake is maintained on the Bitcoin chain.
So the synchronization is actually done through the time stamping primitive.
So the time stamping technology became a primitive to the Bitcoin sticking protocol.
And the Bitcoin sticking protocol is what we're focusing on right now.
Got it. Yeah, that makes a lot of sense.
And so you don't think time stamping would be offered as a standalone product from Babylon?
Yes, we will. Yes, we we will offer that for the fast and bonding use case for the native stick. Yes.
And that's that's already live for osmosis.
If I'm not mistaken, there was I saw a proposal on osmosis a few months ago.
We have a governance proposal passed with osmosis is a is a the governance proposal.
We passed almost about eight or nine months ago. Yes.
OK, and what about how do you prevent slashing on the Bitcoin side?
Like, how do you make sure the people that, you know, restake their Bitcoin, how do they feel secure about that?
Like, what can you say in terms of auditing or any other mechanism that you have in place to avoid them being slashed in poverty?
Yes, yes, that's certainly very important.
So we have we have engaged with two security auditors, one a specialist in Bitcoin script and two a general auditor, really high quality auditor to audit our project starting very soon.
We just open source our code a few weeks ago. And so that's one effort.
Another effort is that we are teaming up with a project called Cubist, which is a key management system that they're building.
And the key management system is focused on essentially preventing accidental accidental double sign.
And that leads to slashing. So that is the key management system essentially says that you cannot if you use integrate with Cubist, then you cannot double sign accidentally.
Of course, if you want to attack the protocol, you can still intentionally double sign and that will be punished by slashing.
Yeah, that's the whole point, right? Like they put their stake at risk and receive rewards from it.
And so let's let's ask Jahan now, how will these rewards work exactly?
So I'm a Bitcoin staker or risk taker. I've put my Bitcoin on the you know, with Babylon on the Bitcoin side.
How do I how do I get my rewards in in Adam or consumer chain rewards?
Yeah, so I think so. Technically, what's going to happen is and David and something correct and wrong on anything involving Babylon.
But what's going to happen is that the rewards will basically live on the cosmos hub and you'll be able to claim them by providing proof that you control the Bitcoin key that was staked with.
And so that means that Bitcoin stake is becoming a cosmos and they will be creating cosmos wallets and they'll need to do that to get the reward.
So it's not like they can just kind of sit there and have it as an income stream.
They do have to have a little bit of engagement with cosmos, which is one of the things we like about this.
And then also, you know, there's we still haven't completely finalized, you know, economically how it's going to work.
One of the suggestions that came up from from from a few people yesterday when we made this public was, you know, why not have all rewards be in the form of of Adam?
And so that would be where, you know, consumer chains basically pay for their Bitcoin security in the form of Adam instead of their own consumer chain token.
And I think, you know, that's something we need to figure out when you talk to consumer chains, figure out whether that's kind of what, you know, what what they want to do.
But but yeah, I left anything out of missing anything or any questions.
No, I think, John, I kind of agree with that. So some of these designs are going to be so we wanted to create the signaling proposal.
We seem to have got a lot of positive response. We're going to kind of be heads down in coming up with the right incentive mechanism.
Yeah. Yeah. So we'll ask Riley and Elijah in a minute what they think about the consumer chain rewards.
But first, I'd like to ask a little bit more about on the Cosmos website.
So you have Bitcoin stake, right? That Bitcoin is trading at a price.
How do you how do you make sure that the economic stake, how do you make the conversion from the Adam's stake plus the Bitcoin stake?
Do you need an Oracle? What kind of Oracle? How how would that work for the hub? Yeah.
So we need to. There's two pieces of information you need to do this. First of all, you need information about who staked on Bitcoin.
Obviously, I mean, you need to see that they've locked up their bitcoins and everything, which validator they chose and all that.
You also need a Bitcoin price fee to to scale the security. So if somebody's locked one Bitcoin, I guess, you know, that's what is that, like five, five thousand is worth five thousand atoms.
So it's like you want to be able to one person's got one Bitcoin and a validator and somebody's got five thousand atoms on another one.
They have the same power at today's prices. But so you need a price sheet as well.
We still need to figure out the details there with with with Babylon. But one of the options is to use to use skips slinky Oracle framework.
And that might actually be there. There's actually some synergies we've been talking about recently with with neutron as well having price feeds.
So we will have to figure out how to get that information into the Cosmos Hub to enable that. And there's several different ways of doing it.
Yeah, yeah. Thank you. This is a vote extension. Yeah, exactly. Yeah. Yeah.
I was going to say vote extensions. That's like, you know, it's part of ABCI, which is kind of this low level interface that the Cosmos block fees use.
But basically that lets the validators the validators would then be running of the chain the information comes from would be running a Bitcoin, a Bitcoin client and then also some kind of price Oracle.
And basically every block they would be able to put into the chain, you know, what that information is, like what staking that's happened on Bitcoin, what the Bitcoin price is today.
And yeah, I was just a geek out for one second there because, you know, we've been looking at multiple solutions of how to integrate Babylon with the Cosmos Hub.
And in fact, one of the approach that we think about to use vote extension for the finality votes that with the special signatures that we need for BBC sticking to work.
So that may drive very well with the solution of the Oracle because, you know, when the votes come, you have to convert the Oracle, Oracle as well.
Yeah, I was going to jump. Yeah, I was going to jump in and say, like, I think this is like a great example, too, of like the, you know, the AZ really coming to fruition and like building, building like a symbiotic relationship.
So just for like some context, right?
Like the this is the slinky Oracle integration isn't free.
You know, it's pretty costly.
But, you know, you know, Neutron, the Neutron Foundation development team behind Neutron Hijin Labs felt that it was like a really, really powerful primitive to bring to the AZ.
And so, like, you know, I think it's a really great example of like, you know, the Cosmos Hub, Babylon, Neutron all coming together and sort of like contributing some core pieces and potentially like growing the pie in the process.
I think like this is like really, you know, what the vision was for the AZ coming into it was like bringing in all these different components and consumer chains that can really complement each other and having them work together and build these partnerships and, you know, fit the bill for components that make them, you know, make sense for them to fit the bill for.
For sure. That's a great point. Thanks, Elijah.
So Slinky is Skip's Oracle and that would be the piece of software that would bring the price feed for Bitcoin.
It's actually just to kick out some more. It's actually one of the big benefits of Cosmos chains, the ability to do this kind of thing, which I think that is one of the big selling points because you can have an Oracle you don't really trust because the validator is doing it.
So it's like the same trust is up to the chain itself.
What Jihan means is that it's a plus compared to rollups, which Jihan is very skeptical about.
I'm not very skeptical. Also anything else, really, you know, anything else, a smart contract, anything. So well, except smart contract on the front. But yeah, but it's clearly for rollups in your mind.
OK, so in terms of rewards, the blog post mentioned that the consumer chain would be able to dedicate part of the rewards to Bitcoin risk takers.
I think we know that right now the rewards that are being sent back to the hub from consumer chain are not that big, like it's actually minimal.
So we discussed with Babiran a few different ways to go about kick starting the whole thing and making sure that Bitcoin risk takers receive enough rewards to incentivize them to actually use the product.
So Jihan, can you go a little bit into that and explain our thinking there?
Yeah, I mean, we need to work on what this what this looks like. I think one of the ideas that we have considered is actually having.
So with with the Bitcoin integration, what's going to happen is that, you know, consumer chains are going to be able to choose part of their security budget.
So maybe they're sending five percent to get Bitcoin security, 10 percent to get out of security, whatever they want to choose configurable.
But we could do a similar mechanism for the hub security itself. So maybe one idea is maybe the hub could be giving one percent of inflation to to get Bitcoin security for the hub.
And so what that would do is, first of all, would let it would let Bitcoin like it would give Bitcoin holders a reason to get involved.
And then what it would also do it was sort of what would sort of like establish like a loss leader.
So any Bitcoin holder staking their Bitcoin to get that one percent would also be giving power to validators, which would also secure the consumer chains and would also kind of get Bitcoin holders.
I think they're going to be pretty sticky. Like once they kind of get involved, they're not going to, you know, they're probably not going to leave very quickly.
So it's like almost like a loss leader in like sort of a business sense. Right.
And so that would give that that would give Bitcoin holders a reason to get involved would bring a lot of Bitcoin holders in to use the Cosmos hub.
And it would also build up our lead as being the best place to launch a Bitcoin security consumer chain.
Yeah. And I did a little bit of math to see what what that would look like in terms of APR if we dedicated one percent to Bitcoin restakers.
If there's a hundred Bitcoin, it's like a 90 percent APR. So, you know, very attractive for the first people that would join the system.
If there's like five thousand Bitcoin, which is about two hundred million dollars, that would be like a two percent APR.
So Sanka was mentioning that we've robbed Bitcoin. It was like below one percent, I think you said, or a little bit above.
Yes. Yeah. So I just want to add to one point to what Jihan was mentioning.
So when we studied the behavior of Bitcoin holders very closely in order to kind of start thinking about this integration with Adam and one aspect for big Bitcoin holders, specifically miners and whales, they index their wealth when Bitcoin denomination.
Right. So if a Bitcoin holder comes in and he takes his Bitcoin and then he starts getting Adam rewards, stride reward, Newton rewards, it becomes like a portfolio management problem for him to understand all these exchange risks.
So one of the things which we have to kind of come up with is for smaller Bitcoin holders, they might be OK with getting all these air drops, different tokens.
But for bigger Bitcoin holders, they index their wealth in terms of Bitcoin.
So there I think what Jihan was mentioning, that let's say having all the rewards in one currency and kind of reducing this exchange rate risk would be really helpful.
Yeah. Yeah. The calculation was just taking into account Adam's invasion.
So one percent of Adam's invasion. That doesn't factor in anything from the consumer chains.
And that's actually a good segue to ask the consumer chain what they think about Bitcoin restaking.
Like, would the stride and neutron be interested in paying for that security in native tokens?
Or would they be open to like swapping them into Adam to be paid to Bitcoin restakers?
Either religion or writing.
So my thought here is probably like I think that so I personally think that the one of the most exciting parts around this is like the potential for user acquisition.
Right. It's like how do you bring in this class of users that Cosmos currently isn't reaching, but it's just as large, if not larger than the current Cosmos user base.
So I think like whatever the costs are there, I think if we can understand the benefits to it and see what they are, I don't think how they're paid for really matters as long as the yield is actually there.
I would say, though, that like probably the way it makes sense to design is to structure it like somewhat like a marketplace where where there might not be one perfect way of doing this.
You know, there might not be like one ideal way that like consumer chains want to pay in or users want to receive or whatever it is.
Maybe some users want Adam. Maybe others want Bitcoin. Maybe others want like I don't even know like a theory or whatever it is.
Right. So I would say, like, you know, probably makes sense to keep it like keep it keep it like non bias and let like the consumer chains or the consumers of the Bitcoin staking figure out what their pitches to some degree and make that pitch to Bitcoin users.
And like, you know, I think like doing it this way will sort of like allow the right market forces to figure out what is the best way to actually incentivize Bitcoin stakers, like get them activated.
You know, maybe it's wrapped Bitcoin. Maybe it's like no Bitcoin. Maybe it's, you know, Adam, maybe, you know, maybe it's staked out.
And, you know, it could be any number of things. So I think like, yeah, so I think like I would say we're open to anything.
I think like, you know, the interesting parties use your acquisition. I would say, like, you know, let's run the experiments and see what gets users activated.
Yeah, it's open. I mean, how we could do it. I think the stuff we put in this in the forum post was basically the simplest possible technique where you just say, here's the percentage of inflation that we want to spend or the percentage of rewards.
And in case that we want to spend on Bitcoin security and you just make that available, you know, either as the hub or as a consumer chain and then Bitcoin stakers decide to come in based on that or not, you know, depending on what they like it.
But you could definitely do things are more sophisticated, more nuanced and, you know, if they serve their purposes better.
Yeah, let's talk in a second about quests. But first, Riley, I have the same question for you that I had for Elijah.
Yeah, I like the open market approach, though. I do think the overall program would be most effective if we made the pitch simple to Bitcoin stakers and had a single asset.
I haven't thought through the implications of consumers having to sell their native token to acquire that Adam and pay it out.
My understanding of the prop in the first place was that Adam would be paying for this, not the consumers.
So I'll have to go back and reread that. But sending a single token over, I think, is simpler and will make the whole thing more effective.
Yeah, so the the the forum post is about consumer chain. I think in practice, everyone, at least from Babylon informal, agreed that the hub should kickstart the whole thing and delegate a percent of inflation.
Here about consumer chain rewards. I think it's more of a longer term call for how that would work and not just false right and neutral, but also the, you know, partial security chains that will join and potentially want to get access to Bitcoin restaking as well and mesh security chains.
So there's a lot of potential users for this. Yeah. And I'll just note that that if, you know, given that it's all one validator set, the interesting thing is that the security from the Bitcoin stake is added to the validator no matter where the rewards come from, basically.
So you could get into, you know, in the in the in the future when this is fully mature and you know, there's you know, you could have like, let's say you have a consumer chain maybe where they decide they want to do 100 percent Bitcoin security.
Maybe they're from the Bitcoin, like a Bitcoin L2 almost or something, you know, they're from the Bitcoin ecosystem and they actually just want to say, we want all we want to put our entire security budget towards Bitcoin.
There you might get into stuff where they'd be kind of like more validators that really appeal specifically to Bitcoin holders.
But I think in the beginning, when it's mostly, you know, kind of mostly about about, you know, consumer chains and Adam and stuff, the security will will kind of be the sort of most shared, I guess.
But but yeah, it'll kind of be additive.
Okay, in terms of quests. So for me, that's the as Elijah said, I mean, for me, the biggest value add here for the Cosmos is this kind of user acquisition and user acquisition is not is not just for the hub.
It's actually probably more for the consumer chains, which, you know, exemplify the fact that the hub is the only shared security provider out there that actually cares about its consumer chain and want to see them succeed and is ready to take steps towards that.
So the idea here with the quest is essentially that for Bitcoin risk takers to claim their rewards, they would have to perform some actions on the consumer chains or at least it would be from the same interface that they claim the rewards.
But there would be some actions being sent to the consumer chains. So, for instance, liquid staking a fraction of their rewards on stride or performing a swap on neutron.
And I think you had some some ideas about what that would be unusual. Maybe you can you can explain a little bit there.
Yeah, nothing nothing like crazy. But I would say, like, you know, I think the idea would be to just have them on board to, you know, the IBC ecosystem might probably do some sort of cross chain thing between stride and neutron.
And I think that gives them a taste of both what Cosmos is about, but also, you know, like the easy specifically.
But, yeah, nothing nothing insane. But I think, like, you know, getting new users familiar with the technology and the products that protocols that are like present in Cosmos is really the most exciting thing to me.
What would be the the act like if there was one action on neutron that you would like users to take? What would that be?
I think I think it probably I would say right now probably makes sense to stick with stride and then, you know, or maybe swap for ST Adam on on a neutron.
This way we can engage stride and we can also get users on board into knowing what it's like to transact on neutron.
And cool. So we have a couple of people here that maybe want to join. I think, Isabel, you asked if effort capital wanted to say something or anyone who has questions, really, as we approach the end of the space, just raise your hand and we can add you as a as a speaker.
I'm D. I sent you the invite if you would like to accept.
So in the meanwhile, can I inject one comment about users acquisition? So I think so Bitcoin sticking, if you think about it, right, is kind of the trust minimizing way for Bitcoin holders to participate in the POS ecosystem like Cosmos help with the consumer chain.
But if you think about it, that the first that's the first step. But in a second step could be liquidity. There would be ways of bringing liquidity from the Bitcoin to the chain.
So we view sticking as sort of a first step. And I think liquidity is also equally attractive.
So just to maybe just to ask for a little clarification, is that suggesting that like some of the technology that's being used to build like the Bitcoin sticking is used for like the Cosmos hub potentially becoming a Bitcoin bridge?
Yeah, so exactly. So sticking is a way of providing security to a chain. But a technology we're working on is to allow that sticking to also secure bridges. So that's one way of helping to bring liquidity.
Hello, as much as this innovation benefits the whole ecosystem, but I do have a doubt that this kind of takes the place of atom in the shared security ecosystem rate. So why would a chain choose atom over Bitcoin security?
Let's say Neutron or Stride, they can just choose to be 100% secured by Bitcoin. So they can just remove atom out of the equation. So, I mean, what's the plan regarding that? Doesn't diminish the value of atom?
I can speak to that. I mean, I think that one of the things that since we started work on ICS, you know, it was ICS probably one of the earliest restaking platforms ever. Although, you know, Polkadot is a little bit similar, but is that it's not just like one asset anymore, you know.
So there's stuff like Babylon. There's also Eigenlayer on Ethereum. And it's becoming clear that, like, you know, we're going to a future where any asset can be used for staking.
And so it's actually kind of limiting. If we're just with Cosmos Hub saying, oh, you can only use atom, it's kind of limiting because, I mean, you know, Cosmos Hub's relatively big. It's a mid cap, you know, for these much bigger things and assets that are much bigger than atom.
And so ultimately, we kind of limit the security available if we were to only stick to atom. And then as far as how value it grows to atom, I think there's definitely a lot of benefit in becoming or staying the center of something and ways to benefit from that.
You know, in general and everywhere in business, you know, like, you know, like even like Facebook or social networks, you saw the Facebook move or whatever they talked about that.
So there's that. But then also, more practically, you know, there's this idea of using having consumer change use atom as the reward token, which would help atoms well.
But then also what we'll be doing is in any case, no matter what, we'll be having a small tax. So a small percentage of the rewards going to Bitcoin will actually go to what will flow to atom in some way.
And so, you know, whether that's, you know, whether that's going to the community pool or going into people's stake rewards or even something else like like like burning atom or something.
So definitely, well, our focus is to become a platform, become the center, you know, try to be as central as possible.
And it's a lot better to like be the center of something really big and maybe not take as much take as much profit versus like trying to take a lot of profit and be the center of something small, I guess, you know.
Yeah, I wanted to maybe I wanted to take that. Sorry. Yeah, go ahead.
Yeah. No, I just wanted to say, you know, in crypto in general, anyone can do anything. Right.
Like the Cosmos up could be a deal layer. You could compete with Celestia. It could be a settlement layer and compete with dimension.
The point is who's actually doing it and who's actually doing it first. And I think that's why the Cosmos up is in a here is in a good position to provide that to consumer chain to ease the integration for them so that they don't have to do it themselves.
And therefore, you know, save time and efforts and let them focus on their core business.
Yeah, I also wanted to add the diversification aspect of the security market cap. So, you know, like we really came out of like almost like an 18 months of bear market where majority of the tokens, they went down 90 percent.
So the other way to think about this alignment is actually you're looking at two different types of capital, very different.
Adam being the native asset of Cosmos Hub. And then you have Bitcoin, which is probably the biggest decentralized asset with not really a lot of yield potential.
So in some sense, you're actually front running the market by understanding that this kind of an alignment of bringing external capital into the ecosystem where the behavior of Bitcoin holders tend to be going for.
They want blue chip yield, right? They don't want smaller tokens yield. So here Bitcoin holders kind of aligning with Adam Hub, getting some Adam tokens.
It gives you that option of having a certain amount of capital at the door and then making your design decisions, which before this alignment, you never have that option. Right.
So one other aspect of the technical side that the sticking script on Bitcoin, it has a lot lower potential of different slashing conditions than a pure smart contract infrastructure.
So if you see this whole ecosystem growing 10x, 100x, you will see certain protocols getting security from the Adam Hub, which looks for very innovative slashing signals and certain protocols which are looking for more Bitcoin alignment.
They would allocate a certain kind of Bitcoin budget in terms of their security bootstrapping. So it's not like a winner takes all game. It's more like you're looking at two, three different designs.
And these designs are adding diversification to the security budget.
Cool. I think you've got a lot of answers here.
Yeah, I actually want to push back on the idea that Bitcoiners want anything about Bitcoin. Right. I think it's very clear if you look at that culture of people that they want.
If they're going to do something with their Bitcoin, they want more Bitcoin. They don't necessarily want Adam.
And to whoever asked the question earlier about what's the use of Adam if they're going to use Bitcoin to secure, I would also add on that if you look at what Eigenlayer is doing with Etho Stake, that's another project where they're going to essentially use Ethereum to do the same thing.
At least that's their target. Right. So now you have Bitcoin via Babylon and then you have Ethereum or restake Ethereum via Etho Stake.
And it looks like a lot of competition and what could effectively crowd out something that I think many people sort of envisioned that Adam would have some responsibility or some role in that.
And the difference is that Ethereum, ETH and Bitcoin, which are the two largest networks, also function as money in their own ecosystem.
So they are very baked into the economic security and operation of their networks, whereas that's not necessarily the case with Adam.
So you have essentially two premium monies coming to secure this ecosystem and then crowding out something that's not at the sort of protocol or economic layer of Adam.
Now this is a cultural and social layer, so it's like a shelling point, but I don't think it goes beyond that. It just seems like a risk.
Not just honestly, less to do with the price of Adam, but more so with sort of the role and how it secures everything within the Cosmos ecosystem.
I mean, like, I kind of think that, you know, Tevo and Jayhan nailed it though, right? Like, you know, Etho is just going to happen. Babylon is going to happen.
But what platform has access to distribution right now that has a head start from learning from multiple waves of consumers and product cycles and people who have given feedback on the experience using some version of interchange security.
I would say like that platform is, you know, the Cosmos hub, right? Like, for example, Eigenlayer, you know, has a contract live, but it doesn't actually have any restaked applications live.
Ethos is pretty much just an idea and like a venture back project right now. The Cosmos hub has like been in this space, has learned about what consumers want, what they need, how they think about the market.
And it has an opportunity to either like let that lead, you know, sink or to become a large part of ushering in that new wave. So, I mean, you know, we could sort of like, we can sort of like say like, oh, like Adam and Adam's going to be replaced by, you know, BTC and Ethereum.
But like, you know, or we can sort of look at it as, you know, Adam is now becoming the platform that's aggregating all of these forms that it's like agnostic to any form of interchange security, just the center of interchange security.
Right. Like, that should probably be the goal that it strives to reach instead of just like sitting idly by and like, you know, watching, you know, other these similar offerings be offered in like other currencies. Right. So, yeah.
So, in Asian layer ecosystem, what Asian layer is doing is it's expanding the Ethereum's securing capabilities to other projects.
And but in this case, Babylon is actually expanding Bitcoin's securing capabilities into the Cosmos ecosystem. So it's pretty good. So Cosmos ecosystem is going to be much stronger.
But I believe there should be some kind of cap or something like that to restrict projects from misusing it.
Like I mentioned, a project could just use 100% BTC security or 100% Asian layer security through Etho State. So I think there should be some kind of cap on that.
Let's say 50% Cosmos 25 atom or 25 BTC or something like that. Yeah.
I will say in the short term, I mean, the long term I disagree. I think that it would be really awesome if we had 100% BTC secured projects coming in.
I think there's a lot of Bitcoin projects that are, you know, kind of trying to build more stuff with Bitcoin and they kind of need a platform to do that.
It could be an amazing platform to that. But in the short term, I think there will probably be a cap. There are still some limitations on restaking in general.
And I'm working on a blog post about it, but I've read about it before. It's a subset problem.
And so I think that there will probably be, we'll make it pretty configurable, but there definitely will be some caps at first just for technical reasons.
But in the long term, I'd like to see people have complete flexibility to get security from where they want it.
Cool. Okay. We're going to kick someone out to let Ethan comes in. He had some closing thoughts for us here. Ethan is from the hospital. He's very, very sick today.
He's not from the hospital, but he might as well be. He's very sick, but he wanted to join him.
Hey, guys, not in the hospital, but I am in bed. Thanks. Yeah, I just thought I'd chime in that, you know, this is something I've always really dreamed of for the hub is integrating with Bitcoin and Bitcoin security.
And I think, you know, on this point of like of like what this what this means for Adam, I mean, it's always been the, you know, the vision of the hub that a rising tide lifts all boats and that we really want to like bring projects together and change the landscape that other projects are competing in rather than, you know, sort of compete directly.
And I think we've been unbelievably successful at that. You know, the app chain thesis, interoperability, all these things were pioneered by by Cosmos and and funded by the hub.
And, you know, we've really we've really changed the game. And I think we can do that again and again. But we kind of we have to stick to those to those values.
And I think, you know, connecting with with Bitcoin, working with the Babylon project and and really like making this happen again on the on the on the on the interchange security and, you know, providing the best sources of security from wherever they might come and bringing those kinds of users in from Bitcoin and providing on ramps that that will, you know, support them and allow them to discover all the fun and excitement you can have in Cosmos is the way to do it.
So having the hub be the you know, the premier integrator for Bitcoin security and provider to bring Bitcoin into, you know, the interchange security realm, I think will be incredibly, incredibly exciting.
And I'm really, really excited for us to be working with the Babylon team and to be making this happen and to ultimately bring in, you know, Bitcoin liquidity and find other ways for for Adam and Bitcoin to be to be more tightly integrated.
And we've always sort of joked about Adam being kind of like the Bitcoin of the Cosmos ecosystem. But but I think that's that's that's that's true in a number of ways.
But but, you know, whereas Bitcoin has been more sort of inward looking and selfish, I think Adam has been a lot more outward looking and selfless and really trying to grow the whole space and and, you know, fun protocols and integrate protocols that that enable lots of other projects to thrive.
And that's what all this is about. So it's exciting to be doing that again with Babylon and it'll it'll create and open up all kinds of new possibilities for new consumer chains, new applications, new users coming in.
And all that is, I think, really exciting. So very much looking forward to to where we go with this and to the inevitable directions of protocol design that are going to be required to really, really make this work and make this work for Adam holders and Bitcoin holders and and everyone else to come.
Awesome. I think that this has been a really exhilarating spaces and very exciting for everyone in the audience.
You know, Ethan, I think, spoke on behalf of the Cosmos ecosystem as a closing thought. David, would you like to say anything as we wrap up?
Yeah, I have to echo what Ethan said is that, you know, the Cosmos as a technology, as a platform, IBC, Comet, BFT, all these are really cutting edge, battle tested technology.
And what we're seeing right now is that in the Bitcoin side, there's a huge amount of interest in leveraging of Bitcoin and build layer two, etc.
And really, the Cosmos technology is a really very nice platform for them to build layer two. And I think having this integration with Cosmos Hub will allow Cosmos and us to seize this opportunity.
We appreciate all of you for being here. Thank you so much, the Babylon team for being here and all of our consumer chains for being here and making the time.
I think this was a really great time for all of us to get together and, you know, share what we all think is is really the future of not only Adam and Bitcoin, but just for the entire ecosystem.
So thanks again for joining us and we will be coming to you soon with more episodes. So stay tuned.
Thanks, everyone. Thanks.