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RAC FM🦝welcomes Mag & Interchain Labs to the studio🎙️#Cosmos ⚛️😎
Recorded: Aug. 1, 2025 Duration: 1:12:31Space Recording
Full Transcription
okay guys let me get co-hosts in thank you very much there mag for being very prompt
uh we'll get the requests out red eye you've got
the co-host there brother okay
right mr red eye uh what's the audio like it's the first time on the new tablet
are we doing okay yeah it sounds
really good actually does it no feedback yeah no none you sound super clear no
tinny sound no feet yeah no feedback no nothing sounds good brilliant look at
the room filling up already mine dude are you hyped for this or what you must be
hyped right yeah we've kind of talk to some really cool projects lately,
but it's always good to circle back to, you know, the original home ground.
Some good old Cosmos folks.
Yeah, I'm very excited about this.
And as we always say, brother, you know, time is money.
So let's get right down to it.
We've got to maximize this.
We know that the kind of hour-long interviews
you know always do the best numbers on all the streaming platforms so guys without further ado
good morning rack fm and it's an absolute beautiful morning all the time we've been in
cosmos almost five years we've been doing this show for like
you know three years right over three years yeah and this is the first time we've had like the
official project on so to say that we're pumped is an absolute understatement for everybody
listening on the replay or on this streaming platforms guys it is fr Friday the 1st of August What a beautiful time to be alive
Alright 2025 yeah
And unfortunately
B-Bands might be a little bit busy today
But we've got Red Eye co-housing
And I'm extremely
Extremely buzzing
To welcome the team over
Mr. Magmar
Good day to you sir
How are you doing you okay
I'm doing alright can you guys hear me oh yes crystal clear brother crystal clear yeah
wonderful i got the zoom mic so i hope it's working um rack what is your uh accent is that
scottish welsh you're very close you're very close yeah so i'm from the uh
sort of far northeast coast of england a little town called by a little city called sunderland
you probably heard of newcastle right i have yeah yeah yeah we're very awesome we're very close to
scotland i'm pretty i'm closer to edin closer to Edinburgh, the capital of Scotland than I am London.
You know, I'm actually closer to Amsterdam than I am London.
But I'm over here in Thailand, bro.
I've been living in Bangkok for the last like 13 years teaching English.
So it's like late evening for me.
Red eyes in South Carolina.
So it's early morning.
Is it good afternoon for you?
Are you in Europe are you
in the States or I'm in New York so it is good morning 9 30 in the morning oh superb see red eye
I told you to do the good morning rock FM intro was the right way to go you know always go in the
morning you know hey red eye before we kick off this is a really this is i think this is one one of the spaces
that i've been doing this for three years uh personally i'm coming over four years i'm up
to four years actually from the uh juno genesis was my first space but red eye we've i don't think
we've been as pumped for a space for quite a while right have you got anything to say before we get down to business yeah i'll just say you know i've been uh let's say a user a contributor to the cosmos ecosystem
for about three and a half four years and you know when we looked at leadership from the ecosystem
level me personally i i wasn, I never got particularly excited
until I saw you, Mag, kind of step up
alongside some of the other folks,
the Skip team, and really try and put forward
this vision that's actionable.
And so I just want to say, I was really excited
to see you and the rest of the team step up and really start trying to push for this new vision for the Cosmos ecosystem.
And so, yeah, I'm just finally glad to kind of sit down and get to hear what that vision has been like, some of the bumps along the road and, you know, what you've learned along the way.
So I just want to say I'm really excited to have you here yeah i appreciate that excited to be here too i know
it's been i know it was a persistent process to try to get me on this um so i appreciate the
the outreach and the consistency uh or the persistence and yeah happy to be here. Well, brother, I will pre-empt what Red Eye
said. We have
had Skip on twice
and then we also
had Sam
on the show, I think, back in January
or February when he just moved on.
So, you know, old school Skip
we've been obviously very familiar
with. I mean, you're not in IBC, right?
If you're not familiar
with skip yeah but we did have sam on a couple of times to represent skip and then obviously when he
departed uh he came on you know gave his like vision of wanting to become a founder so kind of
bbanz is here uh i'm really pleased i'll just send her a quick call. She might be busy. She's a high-flying businesswoman these days.
But I'll tell you what, Mark, I have got something for you personally, but I'm going to kick this off in a very different way than what we normally do.
And I'm actually taking a leaf out of Cosmos Joe or Dead Cat Joe's book, right, from back in the day.
or dead cat joe's book right from back in the day i've got just a very short list of yes no
or partially uh questions for you so close questions right right no no explanations and
i'm hoping this will facilitate some further conversation and uh maybe a little bit audience
engagement so guys if you hear this sort of lightning round
quickfire round right uh it's going to be just literally a yes or no answer or partially you
know we've got to give you a manner that 50 50 right so we'll go through them let's welcome
b-bans okay she has joined us good morning B-Bans.
Oh, no.
Oh, she's in northern New York State and her internet is not known to be the best at times.
So hopefully we'll bring her in at some time.
Right, let's go for a lightning round, Mag.
Literally one answer, yes, no, or partially,
and then we'll get down to business okay
i'm set is cosmosm absolutely critical to the cosmos hub's future as a developer hub
no okay excellent will permissionless interchange security uh be the primary driver for onboarding new chains to the Cosmos hub?
Okay, brilliant.
Does Interchain Labs see Atom becoming the primary store of value across multiple chains in the Cosmos ecosystem?
Yes.
Oh, interesting.
Is unifying liquidity across Cosmos sovereign chains
your top priority right now?
Oh, here we go, Red Eye.
I hope you're writing these down, yeah?
Will IBC Eureka make Cosmos the go-to interoperability protocol
for non-Cosmos ecosystems like Ethereum and Solana?
Yes.
Oh, spicy. You notice, Red red eye we didn't get a partially
i like that so decisive right i love it uh b-bands do we have you if not we'll just move on right
do we have our girl no okay mag i i do want to approach this from a personal aspect to start out, okay?
You know, I like to put myself in, say, someone else's shoes.
And I thought about what you guys have been doing, the journey you've been on since the acquisition, everything else, right?
And I thought to myself, I would not have wanted to do Mag's job for all the tea in china all right i just want to make that statement very
clear yeah i would not have wanted to have been in your shoes in the last seven eight months right
has has the last well has this year has it like took any toll on you have you had any sleepless
nights or do you wake up invigorated every day as if it's just a brand new day
Or do you wake up invigorated every day
as if it's just a brand new day?
Is that a yes or no question?
Oh, no, buddy.
Sorry, mate, I finished.
Yeah, I only had five.
Okay, okay, okay.
I was going to say there's yeses to that
and there's nos to that.
So in terms of the toll,
The toll has been immense.
the toll has been immense.
Like emotionally and, you know, I don't want to say physically, but, you know, I think at some point the emotional and the physical toll becomes one.
I think there are things that hurt and there's things that don't, right?
And ultimately, that's a very personal thing, right?
Sometimes I think people can find the parts where you need to let go of things really difficult.
And other people can find the change really difficult.
And some people, I think, can take a lot of or find the criticism really difficult.
I think for me, it's been an exploration and pain tolerance.
How much pain can I take and how much can I shoulder on behalf of a lot of other people, specifically the community?
Because I think I'm not like a psychopath, and it would be a lot easier to do
this job if I was. And I think that's one of the bad truths of being a founder, and specifically
doing something like what I'm trying to do in Cosmos, which is a very challenging restructuring of a lot of people
and doing it in an environment where there is not much.
If Adam was $200 or even if Adam was $20,
some of the pain would be less.
But because it's not, you always have this question
at the back of your mind when you make any decision,
which is, am I actually doing anything important?
Is what I'm doing, I might think it's a great idea.
Is it actually going to be the thing
that is doing the right thing? And Is it actually going to be the thing that is doing the right thing?
Right.
And is it actually going to make a difference?
And who are, who do I care about?
Right.
Like specifically who, who is my customer?
Who am I building?
Who am I doing this for?
Right.
And I think that's a really important question to ask in any situation, but
I think, especially in this situation, it's a really tough question to answer.
Am I doing this for the community?
If so, who is the community?
Is it the Cosmos community?
Is it the Atom community?
Am I doing this for my team?
Am I doing this so that we can build something credible?
Am I doing this so that, you know, we can build something incredible? Am I doing this for the world? Am I doing this to create a better decentralized future and create a stack of something that I think is a genuine improvement over, like, the existing centralized infrastructure and architecture of the world?
Am I doing this for, like, the people who come next who don't have to inherit this shit show and can, like continue building and not and like all of this
stuff can be flushed away for them and i'm just like the gardener it's it's really it's a it's
a challenge right and if you don't know exactly who you're doing it for and everyone thinks you're
doing it for them right to fix their problem or to fix a problem in their mind, then you'll end up
disappointing everybody, right?
Because there's a huge number of people who think I'm doing this for the price of Adam.
You know, that's not really true, but it's also not completely untrue.
A lot of other people think I'm doing this because I really believe in it, which is true.
I do really believe in it.
Otherwise, I would have zero energy to do this.
I would have dropped out a long time ago.
Some people think I'm doing this for the team.
The truth is I do love my team.
And I have extremely high respect for my team.
And it brings me joy to work with them.
It's like energy creation to get to the office every day and work with these guys.
It's fun.
So it has been a very personal journey
is what I'm trying to say.
And it's been a journey of figuring out
what my own limits are, right?
Because there are times
when I'm really pushing those limits.
And like, for example,
like around the EVM cancellation announcement,
I was at my limit in some places when it came to,
when it just came to, you know, like thinking about the amount of criticism I was getting,
the amount of people saying, you know, you're a fucking idiot. You know, you're, you know,
this is just classic ICF. Like none of, none of that criticism is real because I'm not the ICF.
I wasn't here for a long time. I'm, I'm trying to make independent decisions and, but, but it still
stings, right?
It's things because especially some of the people that I really, that, that
I was using as a source of energy because they were encouraging what we
were doing left, right?
Like there's a huge contingent of people who are just like, oh, I bought
stride because I thought they were going to be the uh
the decks for the hub and now that you're shifting directions i lost money goodbye like it's over
and they just like vanished right it's like extremely painful to lose those people um
so yeah that's that's the i'm giving you the honest answer but if everybody knows like i i
only give honest answers pretty much no mate, mate, we wouldn't expect anything else.
Hence the kind of, like, I wouldn't want to have been in your position for all of the tea in China.
That was a real honest statement from me, you know.
I will say, mind mag, when the takeover happened, when the acquisition happened, right, and you guys came in,
we had several conversations with people and everybody was of the mindset of like right we've
got some adults in the room so from an appreciation factor the people who were long-termers who have
been here for a long time and have seen it all a lot of people were really like hanging the hat
on you guys and being like right we've got adults in the room now you know who are not you know
worried about uh rapping on stage in a in a in an astronaut outfit right but like they're gonna actually do
do something for this uh i have got actually we'll get this out of the way mark i did think
this was quite important right so we've been hanging around for five years right we've been
you know doing a lot of stuff on a lot of chains we're being quite integrated into cosmos over at rack fm the two biggest bugbears that we've heard
constantly on shows and spaces and through tweets right have been in regards to uh the staking
the original like sdk staking module right and also ibc and i'll give you just a very very quick synopsis of what
i mean by that so the staking module uh you know you've got tokens as a founder you've got tokens
that they're vested uh but automatically staked i believe right through the staking module yeah
and then what happened was is that uh you know rewards staking rewards from those tokens when
the stake in your aprs were quite high and stuff yeah the staking rewards weren't say like
automatically compounded right so people were able to go and like farm them uh i mean do you think
that's being like a big problem in regards to like the kind of you know founder mindset and the the other
one so the staking module is a big problem people have had and i'd like to know your thoughts on
that the other one is ibc was ibc broken by default from the start and what i mean by that is
you know if you look at ibc and how it works and really is right so osmosis could just set a direct
channel up here between osmosis and stargaze right and not have to do anything with the hub
like the hub's been bypassed by like a lot of like traffic right even though it's been the sort of
central centrifugal force of the whole thing am i barking up the wrong tree or do you know what
we mean about you know was ibBC broken by default from the beginning?
Should everything have been going through the whole bright and the stake in
module?
How do you feel personally about how the stake in module was set up from the
beginning?
Sure.
So yeah, on the staking module, I mean, yeah,
inflation is a huge debate and I think everybody knows the different sides of this debate.
But just to go through it one more time, I think the summary of the arguments that is in favor of reducing the inflation and reducing the staking rate is that, you know, it's really tough to create any kind of long-term value accrual story or narrative
if you have an infinite supply, right?
Because people tend to think in extremes, right?
People love to say, people loved ultrasound money because it seemed like an infinite ETH go up machine, right?
At least in theory.
Obviously, that was very much so not the case.
And I think with infinite supply or theoretical infinite supply or consistent inflation, that is equally disturbing in the opposite direction.
An infinite money go down machine.
That's obviously, or maybe not obviously, but that is not how things work in practice.
There are many infinite supply machines that do not depreciate, in fact, appreciate.
Solana is one of them. The US dollar is another one of them.
There are many situations here.
There are reasons why the US dollar untethered from the gold supply
a long time ago. And then on the other side, but that's the argument, right? And I think
the other thing that people are upset with is that when Adam does go down,
or when any Cosmos token goes down, they consistently
blame or they look for, which is natural to look for a culprit, they look for, they look for people
who are selling, right? And they conclude that the reason people are selling is because they are
taking in these staking rewards and because of tax and, you know, validators needing to pay for
operations that they're selling Atom for cash,
which is true.
There is definitely some sell pressure from that, right?
Or some marginal sell pressure.
On the other side, people say, well, a lot of people are honest with themselves
and they're like, well, actually, the only reason I bought Atom in the first place
was because of the staking rate.
Because I saw the 17% APR on Coinbase and that was attractive.
Right.
And I didn't know any better or like that, that seems lucrative.
And so I bought Adam and I staked it.
And then I started to get into the community.
I got interested.
I ran out about inflation and now I'm upset about it.
I found out about inflation and now I'm upset about it. Right.
That side argues that actually a lot of the demand for Atom and for Cosmos tokens
is based off of the inflation rate.
That's a feature, not a bug.
If you stake your Atom or you stake your Cosmos token,
or you go into STAtom or some kind of liquid stake,
you don't
have to worry about this, right?
Because technically you are benefiting from the staking rate and you are, uh, like theoretically
appreciating faster than the inflation, right?
Not at the same rate of inflation, faster than inflation, because a lot of people are
Because a lot of people are not staking. 40% of the supply is not staking.
not staking right.
40% of the supply is not staking.
I think the truth is, these are concerns with an asset.
Philosophically, these are treating Adam as something like gold.
as something like gold. In the case of gold, if you find a gold mine and you flood the market with
gold, yes, the price of gold will go down. Scarcity is part of the value of gold. It's also part of
uh, value of like diamonds and, you know, other precious minerals and, and materials.
And the side that is missing from a lot of this is sort of like the demand side, right?
Because, you know, there are like, you know, Celeste is about to reduce their inflation
massively, but I don't think like, I I'm, I'm almost positive that that's not going to fix
But I don't think like I'm almost positive that that's not going to fix their issue.
their issue.
And in my opinion, a lot of this is missing the point of what are we actually doing with this asset and how do we create structural buy pressure?
Right.
Not just change the supply and things like that, but actually how do we, because these things aren't gold or diamonds or platinum.
Like we can create reasons for people to believe that there's value in these assets right like they're they're
programmatic um and we can use it for different things um and so a lot of my thinking around this
has been like i don't really want to touch the supply because i'm not an expert in psychology and in like, you know,
specifically like psychology and economics.
And so it doesn't feel extremely effective to like start making preemptive
changes to that before we fixed or at least created one consistent source of
demand slash buy pressure on the atom asset itself.
So that's my first, that's answering the first part of your question.
Second part, which was IBC being broken.
I mean, IBC is a protocol, right?
And a protocol can be implemented in many different ways.
Originally, the intention of the Cosmos topology was to create the Cosmos hub as the center routing point
so that we could collapse the scaling property of the IBC network
to O of n versus O of n squared, which it is today, right?
Because if you have a bunch of bilateral connections between multiple different chains
multiple different chains and you have to route through all of them and go back,
and you have to route through all of them and go back,
it causes a massive increase in the number of routes, the number of assets.
It's exponential, hence it's O of N squared.
We fixed that with SkipGo.
It directly fixes that problem.
It makes the O of N squared problem.
It doesn't fix the actual underlying problem, but it makes it usable.
But the O of N system would have been superior, at least from a scaling perspective.
And that was what was originally intended.
The reason it happened, the reason why we didn't have a hub at the center of everything,
was because Osmosis did not want the Cosmos hub to be the Cosmos hub.
This was made very clear and specifically stated.
Osmosis wanted to be the Cosmos Hub in that it wanted to be the center of IBC connections.
Because Osmosis had the liquidity and was the primary DEX for a very long time,
that's no longer the case,
there are DEXs that are larger than Osmosis at this time.
It was the natural choice to be the routing hub. the case, their depths are larger than Osmosis at this time.
It was the natural choice to be the routing hub.
Ultimately, these things worked out to an equilibrium where Osmosis is the hub for some things,
and SkipGo has cleaned up a lot of these paths and routes over time just by consistent usage by users.
And it is very difficult to retroactively change this routing path because it involves changing asset types.
For example, if all of your USDC has been routed through Osmosis,
if you want to change it to be routed through a different chain,
you have to route it all back through Osmosis,
route it back to Ethereum if that's where it's bridged from, and then route it to the new chain.
So it's really tough to fix in retrospect.
But with IBC or RECO, we had an opportunity, since it was new connections,
to build in a better routing story, specifically with the Cosmos hub.
And so whenever you have any kind of new connections or new assets,
you have that ability to sort of have a central hub and i do believe you know unfortunately the cosmos hub is political and
and and the cosmos ecosystem historically has been political but i do believe that a central
routing point would be a good idea oh you're a brush breath of fresh air i'll tell you what oh
red eye i told you this was going to
be good i enjoy in this this is so good right hey red eyes our little uh red eyes our little
liquidity freak red eye do you want to come in here or shall i continue i agree with uh mag's
stance that you know the the latter sort of design uh of ibc like with ibc eureka being latter sort of design of IBC, like with IBC Eureka being this sort of central routing point, it definitely would make it easier, I think, on any application or layer one that's looking to connect to any of these chains where liquidity and or users already exist should be cheaper and more straightforward to manage that sort of relationship, given you have less relayers, less chain connections to worry about.
definitely also understand how difficult it can be to unwind those things and try and
promote a new connection once you already have existing TVL and users bridging assets
over a previous connection.
So yeah, it's a difficult problem to try and solve.
Yeah, no, 100%.
But it's also something that we have a very good solution to today.
SkipGo does this with a 99% success rate.
And so the user actually doesn't suffer that much anymore
because of this mishmashed topology.
Mark, do you think that the Cosmos Hub,
with you guys, with this acquisition, with this move forward,
do you think that the Hub's reached its kind of like line in the sand moment, right,
where moving forward, like, it's always going to have its own identity
and that identity is going to be very sort of clear and clarified
and, like, there's not going to be, we're not going to be two years down the line
and then have to be rethinking about you know what exactly is the hub and what position does
the player right is this the line in the sand moment is it uh so i would say we spend a lot
more time thinking about adam than we do thinking about the Cosmos Hub specifically.
And the reason for that is because there's not much to think about when it comes to the
Cosmos Hub as a L1, right?
Because in the grand scheme of things, if you were to treat the Cosmos Hub as just another L1, right? And you were to, you know, do the things that generally accrue value to L1s,
like, you know, smart contract platform and things like that, you are kind of
missing the whole reason why Cosmos was successful to begin with, which is that
people want to build their own L1s, right?
And so you have to think about the hub and atom in context of okay how do we preserve the
ideals of sovereignty which means everyone is their own thing and you know non-codependence
and still have a valuable sustainable business model to create that right And so a lot of, I think, bad ideas have been thrown at this problem over the years.
One of the bad ideas was ICS, which was, okay, people want to create their own chains with Cosmos.
What if we created a system to be dependent on Atom so that you could have basically inherited security
and alignment with the Atom community.
And that way, sort of like jumpstart a couple of the things that are difficult
in Cosmos, which is finding your own validator set and getting security,
et cetera, et cetera.
This was bad because that's not what people want, right?
People join Cosmos because they don't want that kind of relationship.
Otherwise they'd be an L2 on Ethereum, which can offer more of those kinds of things.
And so people ended up just still opting for sovereign L1 chains.
So then you have to ask the question.
It's like, okay, well, well, you have to provide some kind of service that people
want, right? You can't
just force this asset and this chain down people's throats because you want to, right? Because they
will go away. They're free people. Like you can't, you can't force them to do these things.
And so the question then becomes, and the question that we've been trying to be very clear headed
about answering is what will they pay for?
Right.
What will all these chains pay for?
What, where are they okay with accruing value or giving you value?
Where are they okay sharing either their sequencer revenue or, or sharing their
inflation or sharing, you know, just money, right.
And, or, or, or signing contracts for services.
And that's where we found that there are things
that are valuable that include new additions to the stack. So basically we built this Cosmos EVM.
That's something that we've already started to monetize. So we are charging multiple different
chains for use of the Cosmos EVM. We haven't closed-sourced it or licensed it, but we are charging for basically support.
So we're helping integrate.
We're charging ongoing support relationships.
This is something that's valuable to the chain
because they want an EVM, right?
And we're charging them for it.
And then the separate thing that we found people want
are general on-chain services,
things like oracles, things like bridges,
things like potentially in some cases, like ways of managing their validator set, right? Things like connection to assets that they don't have access to.
So for example, like issuance of USDC or things like that.
These are the things that people are willing to pay for, right?
And that, I think, is the right common ground
for basically how the Cosmos Hub and Atom
can monetize the ecosystem for which it funds.
In my opinion, that is half of the story.
You need to find a way to monetize what you have, which is what all of that stuff solves, services, etc.
You also need to find a way to 100 to 1000x grow the Cosmos ecosystem itself.
You need to find a way of growing your customers.
Because no business model works if there's only 250 Cosmos chains.
Many business models work at 10,000 Cosmos chains where they're all profitable.
Many business models work. 1,000 business models can bloom.
You have to solve the first question while also answering the question of how do we
get people who are not grifters and not just launching these down-only chains to join the Cosmos
ecosystem.
The conclusion of those two things, focusing on the profit and focusing on the growth,
led us to our current roadmap, which is it's not enough to rely on organic growth.
Also chains that launch with teams that do not have any kind of revenue are
not going to be sustainable customers, right?
Or, or very few of them will be.
And there's many people in the business of launching chains that should not be in
the business of launching chains because chains are difficult to shut down.
They're not really fitted for a good startup or they're not really fitted for a
startup that's like pre-market market, pre-market fit.
Um, instead what we should be going after are real companies, people who have real
revenue, right?
Because those are the people that if we can convince them to build chains, we'll
be able to pay for our services.
You know, it's a very simple conclusion and yeah we're not on that point it reminds me i don't want to interject
but it does remind me a little bit it's got echoes of uh rim back in the days research in motion right
and the enterprise service that they were putting out so for people who might not know rim were the founders of blackberry right but like the the biggest part
of their business at the time right was the enterprise service right so like you guys are
kind of hanging your hat on the like software as a service model do you think so i i didn't want to
interrupt but i did have a question.
You know, everyone in the community is kind of seeing that you guys
are pivoting towards like a solid sort of institutional SaaS model, right?
Supporting these institutions to build like sovereign L1 chains,
essentially paying the bills, right?
Is that like an accurate framing, do you think at the minute?
Yeah, I would say the accurate framing is Cosmos has always been a B2B business,
right? Like what is Cosmos? Cosmos is a stack, right? It is literally, it always has been a stack, right?
Cosmos has been IBC, like the original, like when, when Jay Kwan wrote his paper,
it was about Tendermint, which is part of the Cosmos stack.
That was the beginning.
And then the Cosmos SDK and then IBC, like that is what Cosmos, Cosmos is a stack.
Right.
And the people who use the stack are businesses.
Right. They may be buying hits.
They may be Juno, but like these are, they may be startups.
They are businesses and it does not make sense for Cosmos to be anything other than a B2B
like business.
Right.
And, and the ICF and the ICL as the primary funders and builders of all of
this technology need to think of it as a b2b business and so it i i would say yes that that
is sort of how we're thinking about things except i think when people in crypto say institutional
they think of like big stuffy banks right like it's it's unsexy. It's like, oh, I hate that world.
Right.
It doesn't, first of all, like that's not true.
It doesn't have to be that way.
You know, we're not just talking to JP Morgan and, you know, your like local
like community bank, we're talking to a lot of really exciting businesses that
exist outside of crypto that are, you know, helping refugees and, you know,
building really interesting fintech services and very modern banking services in terms of like,
you know, robo advisors and things like that. We're talking to, we are talking to a couple
of regional governments that are doing like sandboxes and things like that. You know,
we're talking to, we're talking to like gambling companies
that want to like move some of their
like casino services on chain
and build things around that.
There's many kinds of businesses.
But the core thing about all of them
is all of them have the capacity
to pay for a product,
which is a very baseline thing
that you need to be working with.
And it is challenging to build a company when you don't have that.
So I think, yes, we are definitely going after businesses and businesses we define as having
revenue streams outside of crypto, non-self-referential revenue streams.
So actually, that's a really good point and so on that note
right if if we're thinking about it from that mindset right what you've just explained yeah
uh you know the b2b model etc etc so if if you were putting a business plan together you know
something that's always going to be in there are your opportunities right and your
biggest threats you know there's no nobody wants to see a business plan right unless there's
opportunities and balanced out with threats essentially with the route that you which i
think is the correct route mind i think you guys have nailed it right i think i think you're so
on the money right now people don't understand how early you guys are.
If you were to just give us a quick overview right now of your position and where you stand,
what would be your biggest opportunities versus your biggest threats?
Yeah, so I think this would be the beginning of what we'd call a SWOT analysis, right?
A strengths, weaknesses, opportunities, threats model.
But I'll just take the OT part.
The biggest opportunities right now and the opportunities that generally I view as things that are external, right?
Is that we are at a, and we truly are, and I'm not saying this like some fucking KOL,
we truly are at a very interesting time for crypto.
So we are seeing widespread institutional adoption or at least interest in stablecoins
in a way that we've not seen before.
A lot of the pain that came out of SBF and FTX and Celsius, etc. has gone.
The industry or the wider economy has forgotten about this now.
We are seeing massive regulatory accomplishments in the House and Senate and just generally the US government
with the Genius Act, which clarifies stable coins and the Clarity Act,
which is supposed to give some kind of classification to different crypto assets.
You know, MICA obviously has been a thing.
There's new legislation coming out in Hong Kong and China and in the APAC region.
We are at a point where the world is trying, right?
The world is genuinely trying to figure out what do we do with this
technology? And they're interested. Everyone is interested, right? Everyone knows. So that,
that is a huge opportunity for us because the winners have not been decided at all. Right? Like it's not even close to having like the, the, the race being one at the end of the
day, Solana still has one successful application.
Pump.
Fun.
Ethereum has two successful applications, basically Aave and Uniswap, right?
All the other applications are basically downstream effects of those applications.
DeFi really has had two use cases, I would say,
which is trading and lending.
Trading comes in the form of perpetuals and swapping and spot decks.
Then lending has come in the form of also perpetuals to some degree,
but then of course, like your classic Aave type lending pools.
It's very early. We haven't solved any real problems. Stable coins have been very big,
but there is so much opportunity right now, right? Like the opportunity is huge.
And this opportunity is way beyond the problems that we think about in cosmos.
You know, we keep thinking about really small problems, right? Like one of the very small
problems that people think about is atom inflation. No one gives a shit about inflation.
If you're actually able to bring a huge number of enterprises and value and users on chain.
That's an inconceivably small problem.
And no one gives a shit about the politics of what Jacob Gedikian said,
or what Jaquan once said, or what Buckman once said, or what AEDOW did,
if you're actually going after these people and solving these things.
In fact, any time spent thinking on those is a waste of time to actually
trying to capitalize on the current opportunity that is very real.
And the opportunity that we see for cosmos is companies want to come on chain, right?
Companies represents all financial activity, right?
Like all financial activity in the world is companies, companies and users.
And those companies want to come on chain increasingly in different, some sectors more
than others, but increasingly all of them are wondering, what do I do with this technology?
Especially now that the government has made such a big sink about that?
I can use this technology.
We want Cosmos to be there, right?
We want Cosmos to be there unburdened by its past.
You know, we don't want Cosmos to be there in the form of, oh, here is a, you know, old or politically strewn ecosystem.
We want Cosmos to be there as the best tech stack to bring your company on chain,
like hands down, right? Like full stop. That's it. Like it's the best technology for you to do that.
And you can pay to have us do that for you. And you can pay for services that allow you to scale
with that technology. But we want to be there for those companies so that we can be the primary choice.
Right.
What that, we know what we need to do to get there.
We need to make the stack faster.
We need to, um, you know, basically improve, uh, its interoperability properties with,
you know, like existing APIs and the existing web to market.
We need to make modifications to like privacy and compliance and some things around that the properties with existing APIs and the existing Web2 market.
We need to make modifications to privacy and compliance and some things around that, very basic things.
We know what we need to do to get there.
It's going to be a question of,
can we have the focus to actually do that
and not get distracted by these small questions?
I'll stop there, but I can go into the threats immediately
if you'd like me to.
No, mate. Honestly, this is just music to our ears, right, Red Eye? I'll stop there But I can go into the press immediately if you'd like me to Bro, no mate
Honestly this is just music to our ears
Right Red Eye, we've been saying all week
This is probably going to be our best interview
Dude, you are fire, Mag
Like I can feel
The fire in your soul
And like I said here at the beginning
We're just glad that the
Adults are back in the room
Right, that's, I've been In this game for a long, long time at the beginning, we're just glad that the adults are back in the room.
I've been in this game for a long, long time and been around this ecosystem for a long time
and I've seen a lot of hookups
and a lot of good things.
And it's like the adults...
And you know, when we interviewed Skip,
you could just tell there was a different level
of critical thinking,
a different level of professionalism.
And you're certainly bringing that to the hub.
What you guys did with Skip, you can see that same mindset being kind of almost replicated with the hub.
Mag, I just want to ask you about this.
We always are going to ask a team about things like funding and sustainability, right?
Not to pivot too much
but we always do it so i believe in 2024 uh the icf allocated uh 26.4 mil i think it was right
and that was a reduction obviously from previous years uh can i ask you how are you guys, Interchain Labs now running the show, how are you guys prioritizing resource allocation to make sure that you enable sustainable growth?
CF doesn't have any real revenue, right?
It is a nonprofit foundation,
but it also has not ever built out the capacity to make money.
It is only really built out the capacity to spend money.
And its reserves are still substantial.
They pale in comparison to the reserves of,
you know, Ripple for example, but they're still substantial at almost $300 million.
And with the recent rise of Ethereum and Bitcoin, that is increasing, believe it or not.
So in terms of how we've restructured things, we have tried to bring down the budget substantially
or the spend of the ICF.
Not because we wanted to do that as a first principle,
but more so because it was just like egregious
what it was spending.
To give you a sense of how things work.
So I think last year it was upwards of $40 million that got spent overall.
And that was between, and basically the reason for that is because the ICF was bankrolling a bunch of sub-companies that were dependent upon the ICF funding.
Including Strange Love, including Binary Builders, Informal, Confio,
what are the other ones that I'm missing? Zondax, etc.
The acquisition was supposed to end that system.
So what we did was we canceled all of those contracts, which was painful.
Going back to the beginning question of, has it been painful?
That was extremely painful. Those were hard conversations. There were legal lawsuits
threatened all kinds of crazy fun stuff. But we canceled all those contracts and we internalized
the development of the entire Cosmos stack. So now we build all that stuff in-house with the skip team
and we've hired other engineers since to manage it as well.
That has brought the spend down considerably
to the point where we are now spending
in terms of headcount around $20 million,
which for a team of 50 people,
plus all of the different infrastructure
and stuff that we have to spend,
it's not crazy.
You know, that's like on par.
So that's generally how we reduce costs.
In terms of sustainability,
which to me implies you're spending less than you're making,
there are two ways to go about that.
One is that our assets appreciate so much to the degree that we can swap a large percent of it into cash and then use the yield on the cash to actually pay for the foundation's operations, the ICL's operations. This is what Polkadot did. Dot went up. They sold a bunch of dot to cash, I think like $500 million worth.
They use that $500 million to basically put it into treasuries,
and the yield is enough to pay for $50 million per year T.
It's a ridiculous system.
We don't have that, and neither do we want to swap our existing atom,
because we don't have a lot of it, or our other assets either.
And so really the only option there is to create
revenue, right? Which is part of why we want to go down this path of revenue generation, right?
Selling the staff to people who can pay for it and selling services to those people so that we can
basically start monetizing. And then we can hit our dual purpose of one, paying for our own sustainability and operations. And, you know,
the ICF is a nonprofit,
but that doesn't mean they can't cover its expenses. And two,
starting to accumulate more Adam, right?
Like I want to accumulate more Adam.
I want the ICF to accumulate more Adam.
The ICF wants to accumulate more Adam.
And so that, that,
that is really why we like this idea
of treating atom as something that we want to accumulate
versus trying to force atom down other people's throats
to have it be a utility asset.
Oh, I lost sound there. Do we still have you mind yeah i was done i don't or yeah oh yeah sorry dude i went yeah i didn't want to interrupt uh we do just have red eye back there i'll tell
you what though mark can i just say this on a personal basis you are exactly exactly the kind of figurehead this org is needed for a quite a long
time because you you articulate everything to like i'm writing down notes here dude i'm running out
of ink over here right like this is going to be something you know when you're hosting these spaces
you can't always enjoy them as a listener i'll be going back and i'll be listening
to this in great detail uh red eye i know you're back brother do you want to come in with anything
before i quickly move on to the next thing i want to mention i've missed a portion of that last part
twitter is being a little weird right now so dude we just talked no we just talked about like runway
uh sustainability funding etc it was quite a basic question dude uh is there anything that you've got in mind that
you want to mention because i i'll say i'll say this you know as someone who you know is historically
focused on more operational management um positions uh it sounds like you have a really good understanding, Mag, of how all of these things
tie in, which I think is really important for someone trying to help kind of steer the ship
that has a whole bunch of other ships, smaller ships potentially sailing right behind it. So
I just want to say it's been great getting to listen to you kind of um elaborate on some of
the the current risks what your opportunities are how you guys are going to capitalize on it
what resources you have to capitalize on it and some of the things that you know you're kind of
checking and watching along the way i just want to say robo i think you've done a great job this
far and mag thank you for being so uh forthcoming you know and very very truthful and straightforward
yeah like i said the the adults are back in the room and for people who don't know and don't know
history right about technology when i mentioned the rim stuff earlier and the enterprise grade
technology just go and do your homework and understand how big and successful it was
obviously before it went south right mag at the beginning we did
ask you the yes or no questions and i do want to bring this up and just get your honest opinion
you know this is just your honest opinion is an independency not the head of the org or whatever
uh neutron so we did ask you question number two uh about interchain security, you know, being a primary driver and you're like, no, straight away.
Do you think Neutron made a boss move at the right time to migrate away from interchain security?
If you think yes, why? And if you think no, why?
So specifically what it means, like, what does it mean to migrate off of ICS?
Right.
What it means is you stop using the hub validator set as your validator set and you switch to
your own validator set.
Right.
That, that's what it means.
Um, so before all the hub validators were running a neutron and a Cosmos hub or a Gaia binary.
And now some of those validators are only running the Cosmos hub now.
And some of them are just running the neutron binary.
So it's hard to describe it as a boss move or not boss move.
Because technically, it's an extremely minimal and trivial difference.
What it does mean is that they no longer have the economic security of the Cosmos hub. Now they have
the economic security of Neutron as a token, right? And so they have decreased their economic
security by 10x, or I think a little bit greater now. It's like 10 to 12x.
And this is not FUD, right? This is just economics here. But I think, you know, let's talk about the
philosophical implications of doing so, right? Like the sovereignty of doing so. I think really what
Neutron wanted was, um, they wanted, initially their pitch was to be the smart contract layer
for the Cosmos hub. It has, um, it has become clear, I think to the Cosmos community and to
myself, that if there is to be a smart contract layer for the Cosmos hub, it should probably be on the Cosmos hub
and the gas token should probably just be at it, right?
And there shouldn't be like another token in the mix.
And so I think we realized that and they also realized that.
And so they wanted to forge their own path
to creating basically their own ecosystem,
not dependent on a narrative that involves
the Cosmos hub.
I think, I don't know if this is a boss move or not.
I mean, it's definitely a bold move.
But, you know, the proof, it's not going to solve any of their problems, right?
Like if Neutron was struggling,
and I know they have great ambitions to be, you know,
much larger than they are today in terms of developer count,
in terms of TBL, et cetera,
like becoming their own chain is not going to change anything, right?
There's no reason to believe this.
But I think if it gives them the confidence and it gives them the feeling of,
independence that is necessary to work on those things on both,
right?
Like let's go,
let's say it does mean that they had,
I think they had to add an inflation on their own token now,
right?
So now they have,
they do have inflationary tokenomics,
unlike what they had to have when they were an ICS chain.
Um, I think to talk about like what
I do view as boss moves for Neutron, one of the things that I think is really exciting is they
have, you know, really focused on a consistent narrative and a consistent product for a long
time now, which is this BTC5, right? They're really working on this.
The whole company's working on it from different angles.
That is how I've seen in the past progress get made
is not when you're just going from narrative to narrative
and you're redefining yourself every month
as something new,
but when you actually spend the time
to build a real lasting, organically better product
in a specific category
and you stick with it for multiple cycles.
And I hope that's what they're doing right now. They're trying to solve the question of how do
we get Bitcoin liquidity specifically? And I think that's a problem worth solving. It's a tough
problem because Bitcoin is a very weird asset and there's not a lot of it outside of, you know, the Bitcoin network.
But I also think it's something that could be very fruitful if they are able to solve it.
And I think the other boss move that they did was they inherited Cosmoblossom, right?
So we are now paying them to maintain Cosmoblossom.
It's a large contract that we're paying them, but we are thankful that they were willing to take on that responsibility and go all in on cause and loss.
So it's a large contract that we're paying them.
There's an easy world where they could have just adopted EVM because there's not that many cause and loss developers, but they said, no, this is our platform and we want to double down on it.
I always respect that.
And so I'm very curious to see how those two things
play out together.
And I'm, you know, I'm a big ally of Neutron
and a big friend and a big supporter.
So, you know, I'm excited.
Like, I think the future is bright right now.
Yeah, bro, we are, I mean,
I'm not going to say we're Cosmos and Maxis,
but we do have a lot of belief and faith in Cosmwasm,
and we are actually Cosmwasm Maxis.
But, dude, I just want to say for the audience,
like, we've got the main man on here,
and he's on Rack FM, like, talking about boss moves.
Like, you're not going to get this conversation anywhere else.
Mag, something that's really piqued our interest lately is,
you know, we've had all of these buzzwords
in crypto over the last couple of years right deep in rwas etc etc right and in the last sort
of you know 12 to 18 months maybe dsci has become like one of the hottest topics you know
and i'm just wondering i, I'm wondering what you think
about sort of DCI, right, decentralized science
and its broader implications.
But I'm also wondering about, like, you know,
the interoperable, like, architecture of Cosmos, right?
Like, it seems to be a match made in heaven.
We had a project on last night, and they were talking about zora chain
we had another project on the other week who were talking about the stuff that we're doing with ega
like to me like cosmos right and like i say it's architect it's interoperable architecture
and dsi seems to be like a match made in heaven i mean i know you guys are busy but have you got any eyes on
the dsi world are you guys like talking about it as if like oh this is like another avenue we can
like really you know have some exploration into and really start to make a difference you know
what i'm saying bro yeah yeah and and this is the last question I'll answer just because we're out of time. So yeah, on decentralized science, I'm not an expert is the truth, right? So I'm not a scientist, and I'm not a scientist and I'm not a researcher. But to my understanding, it's a very early field.
And what they seem to be trying to solve are a number of different things. One of the first
things is trying to solve the funding problem, then the funding allocation problem. So specifically
what the problem is there is when it comes to conducting
research and developing drugs and therapies and, you know, medication, um, it is, it is,
it is oftentimes something that is driven by, um, basically massive profit margins and this machine of basically FDA approval. And what I think D-Sci
hopes to solve in some ways is figuring out a way to crowdsource some of that funding from people
who want the company to focus on specific problems that are important to them. Right?
So I've seen D-Sci projects where like you can fund specific things yourself
and, and therefore not have to wait for the giant biotech machine to basically prioritize what you
want there to be research on. So you can have more agency perhaps in the process.
The other thing that I've seen potentially getting solved is distribution,
right? Figuring out a way to distribute drugs or information or healthcare data to people
in a much more efficient way by having it all go through blockchain. So there's actually one example here called MetaBlock,
which basically encodes medical data from the different users, its Cosmos chain, from its users
on the Cosmos chain, and then pays them in Medi, or the Med token, I forget what it's called,
for sharing that data. And then they sell that data once it's been anonymized to healthcare companies.
So there's many different places
where people I think are solving
or trying to solve these problems.
From my perspective,
the most obvious relationship
is that crypto funding and crypto markets are the most similar to biotech public markets.
So if anyone's not familiar with how biotech companies work on NASDAQ, they're massively speculative entities.
Even crypto is bad.
Like look at the stock prices of these like biotech companies.
Not the big ones, but the small ones.
Because everyone is betting that they are either going to zero or infinity, right?
Because like oftentimes they will IPO early to raise a bunch of money, like $300 million.
And then they will stay at a certain level.
And then they have some kind of drug that they want to pass.
And then every stage of the trial that they pass when it comes to FDA
approval will like either make the stock go to completely zero,
like completely flat out, or it will go up to like 10,000 X.
Right.
And so like,
I was just looking at one of these companies recently
and it was called like Equilibria or something.
And, you know, it was at like $3, $3, $3, $50, zero.
And then now it's zero because they passed their first trial, $3.
They passed their second trial, 50.
And if they pass their third trial,
they go to actual production of the drug, but they didn't pass it, right. And if they pass their third trial, they go to actual
production of the drug, but they didn't pass it. And so it just zeroed out. And so I think what's
really interesting is that the investors who are used to crypto volatility might be some of the
investors that are interested in similar volatility of biotech companies and vice versa. And so there's a very similar class investor base there that I think can actually lead to maybe some really interesting combined entities where, for example, you could tokenize that stock and it would act much like a crypto asset.
You could create a bunch of really interesting perpetual features around it.
You could share the investor base
for actually funding the drugs between crypto users
and between, let's say, traditional stock buyers.
But it's a very interesting parallel
that I've noticed between medtech companies and crypto.
Bro, I know you said that's the last quote.
I know your time's very precious and I do appreciate it. We, we, I mean,
we are kind of becoming D, D side junkies, right?
We've had, I think four big projects like major projects on this year.
And it's amazing when we've spoken to them,
how little they know about things like sort of uh inter-chain
accounts for example you know uh i just think i just think i the ibc protocol and inter-chain
accounts could facilitate so many dc use cases right like decentralized clinical trials uh open
ip management uh dude we're gonna we're gonna have to go back to some of our d side friends and
we're gonna have to like bang on their heads and say hey you need to come and pay attention right
yeah you guys you guys can manage a lot of their like biggest fears you know we had a good
conversation last night about civil attacks and a few other things but mag i know we're limited for
time uh we'll wind it down i just
want to thank you for this this is probably one of my favorite interviews of all time brother
i really appreciate it yeah yeah thanks for having me on i'm sorry again about
how challenging it is to schedule um but you guys are great i appreciate the energy that you brought
appreciate the questions appreciate the difference in you brought. I appreciate the questions.
I appreciate the difference in switching it up with yes to no questions, etc.
Those were very fun for me.
So thank you.
Mag, what would be your last little piece of advice for people listening in?
Would it be like hold the line?
Would it be like, look, we're turning a corner.
We are becoming like this industrial grade product.
What would be your last parting words for anybody listening who's been involved in the ecosystem for a while?
My advice would be, what would be my advice?
My advice would be if you need to decide what kind of investor you are, right? And I needed to decide this for myself a while ago.
And, you know, what feels right to you?
And I think in life you have a lot of things you can optimize for.
You can optimize for fun.
You can optimize for risk. things you can optimize for you can optimize for fun you can optimize for risk and you can optimize for impact right one thing to note about me and therefore also to
note about the icl is that we are maximizing and we are optimizing for impact right we're not
maximizing for risk or we're not optimizing for risk and we're not
optimizing for fun or I mean, we have fun, but like, you know, we're not, that's not our focus.
And that, you know, I think that means when you're thinking about investing in Cosmos and
specifically Cosmos under our leadership, you know, the honest truth is we don't expect to
see the fruits of our labor for a while right for for at least another couple months and
the amount of like panic that happens that i see from a lot of people when they don't see short-term things and things feel
out of their control is really hot. And I get that. That's scary. But at the other hand,
we can't build a company for impact that has real impact if we're constantly worried about
the short-term panic. And so my advice would be, if you're in this, take a deep breath, make sure you have
other things going on. If you have panic to energy, take it out on those things where you can respond.
Maybe that's pump.fun, maybe that's NFT collections, maybe it's something else.
But what we're working on right now, it's not going to be served by panic, right? It's not going to be served by
short-term optimizations. It's not going to be served by optimizing for the next two weeks.
And that's just going to be uncomfortable for a lot of people. And, you know, I'm here to talk
through it with you, join the Adam community chat. If you're feeling scared or worried, or is this all worth nothing, or is it going to zero, or is nothing actually happening?
You can rest assured, I am constantly working.
The entire team is constantly working.
Everyone is razor focused on how do we optimize for impact?
How do we grow Cosmos? How do we sign new customers?
How do we make progress? And that no matter how panicked you are,
that is going to be true. If you're feeling great,
or if you're not feeling great, right.
If the item price is up or if it's down,
like that is always going to be true. So that would be my, my,
my word of advice.
Yeah. Nobody, nobody likes a panicicking as mr trump said nobody likes a panicking eh mag we'll end it now i know you've went over your time i appreciate
it i will say uh let's get you guys on at the end of the year maybe end of the year beginning of
next year for a v2 i would absolutely love to run this back when you
guys have had a like a bit more runway to actually you know prove what you guys are doing i will say
though from the entire rack fm team godspeed brother godspeed and god bless to you guys because
you're out there doing god's work right i just want to say that mark there are people who still
believe in this vision and we're extremely impressed i think it was a
boss move from the icf right to to do what they did with the acquisition and bring you guys in
and the adults in the room wasn't a meme you know what i mean brother we we feel like we're in safe
hands now so things are great things take time i want to thank you dearly for your time, Mag,
and I want to wish you all the best,
and we'll be looking forward to promoting all of the goodness
you guys are bringing, yeah?
I appreciate that.
Thanks for the support.
You're welcome, brother.
You're welcome.
Have a good day and have a good weekend, okay?
Hey, folks, thanks, everybody, for listening.
I appreciate it.
See you.
No problem, Mag.
And on that note, guys, we'll wind it down because this has been i
mean the hairs on the back of my neck are standing up even though i've just had a haircut what an
amazing space what uh what an articulate uh delivery of exactly what's happening in the
ecosystem so people uh we obviously have got our editor and archiver off on holiday at the moment
in montana for the summer
as he does uh we will get this up on all streaming platforms right as soon as possible
but this is the uh 1st of august 2025 and this has been another episode of rack fm 69.420 fm
coming in your ears five days a week guys uh tune in to catch some more shows we thank you all for
your support right uh good night and god bless from rack fm and take care of the people around
you right make sure you remain human you know we're all people at the end of the day yeah
we've all got souls right we've got to remember that yeah but what a great space all right
good night and god bless people take care bye bye
