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TC App Layer and Switch Assets
Recorded: April 4, 2025 Duration: 1:07:40Space Recording
Short Summary
Kujira and ThorChain are set to revolutionize the DeFi landscape with the launch of a new app layer that facilitates cross-chain liquidity and innovative financial products, including a decentralized online casino and a launchpad for fair token distribution.
Full Transcription
Thank you. All righty, good morning.
Good evening, guys.
We've got Hans as speaker.
How are you, Hans?
Good, thank you, guys.
How are you?
are you? Good, good. And just watching him in here. So the agenda for today will be to
Good, good.
And just watching him in here.
go over again the app layer and also the switch assets and the rough sequence of plan from today
over the next month. So just to give you a bit of background,
PM's requested to speak,
so I'll add him to co-host actually.
Bit of background.
So QJira nine months ago was a separate L1,
Cosmos wasn't running the fancy Cosmos wasn't stuck.
Actually, Hans, why don't you give us a bit of background to the tech stack to where Kujira was nine months ago. Exactly what were you running? What apps were you running?
Yeah, so we were a, I mean it still is technically I guess, a Cosmosm enabled chain
running a complete kind of DeFi suite of highly composable apps.
And the nice thing about Cosmism,
just to get into technical weeds for a second,
is that it kind of has isolation of actors inside this model.
And so you can build things fairly fearlessly and fairly independently
that don't affect the greater picture without explicit permission.
And so we were running an order book, like completely decentralized, 100% fair execution
onto an order book, borrowing and lending, which is the order book with spot margin
products, a stable coin, a launch pad, NFT marketplace in the pipeline, like, you know,
all the kind of key, key
deeper components. But yeah, the thing that was lacking was the access to that
layer one liquidity to the native, the native BTC. And so, yeah, back in August,
this, this seems like a, like a kind of a partnership that was ordained in the
stars almost.
Yeah, exactly. And conversely, ThorChain had none of that.
And instead, it had built a huge chunk of logic
into its base layer.
And this was part of the Wasm stack.
So Hans, why don't you just try and describe
how ThorChain's base layer was differentiated
from Kujira's base layer versus your app layer.
Where did you split the logic between app layer and base layer at Kujira?
Kujira, there wasn't really a separation.
App layer and base layer was the same thing.
You had this kind of, our connection to the outside world was IBC and IBC only.
to the outside world was IBC and IBC only.
Even integrating with the likes of Axelar
who had EVM compatibility or with Wormhole
who we did who had compatibility with Solana, et cetera.
You know, that initial point of contact was always IBC.
So we had to be, we were just dependent
and the only way we can connect to anything was through IBC.
And so it was just kind of like,
I mean, I don't know if you want to pick up from here, but yeah.
Yeah, so basically Kijira was a complete vanilla, unmodified base layer.
It was just pulled off the warehouse shelf from Cosmosm GitHub
and you just went for it, did you?
Yeah, yeah, that is basically it.
You know, we kind of had various kind of pillars of self-sovereignty,
of, you know, real yield, the same things I think that, you know,
you built 4Chain and the 4Chain community holds dear,
but with a complete, you know, massive difficulty to access liquidity and access that
layer one liquidity.
Right.
Okay, cool.
So that's the differentiation here.
So Kajira was a stock standard vanilla Cosmosom latest version chain, and all of the DeFi
functionality and apps were built in this app layer as smart contracts that lived in
a different execution environment
on top of the base,
and you relied on the IBC connections
to the wider world to import assets
and then do fancy stuff with them, essentially.
Whereas on the flip side,
Thornton pre-dates,
well, started in 2018,
Cosmos Alpha Software,
so very older software, and it didn't have an app layer,
and everything was done at the base layer,
and everything was extremely highly modified.
Everything from valid shurning to, yeah, just the whole baseline was this crazy custom beast to tackle Bitcoin, ETH,
decentralized churning, no delegated proof of stake, etc., the MPC machine, etc., etc.
So that was July last year.
There was this Kajira with this crazy DeFi suite sitting on top of a vanilla base layer,
and the ThoughtChain with no app layer, with this highly modified base layer. And so in the last
nine months, we've worked extremely hard to try and figure out how do you transmit the two
and bring them together so that the end result is if we say, if we give ourselves three months to do this merge and deployment of these apps.
So July this year, the end result will be,
blockchain will be this modified Cosmos chain
that can facilitate cross-chain liquidity at the base layer,
Bitcoin, ETH, and all the nuances to do with that,
but that has this vibrant app player that lives on top
that's able to essentially call into the base of liquidity.
Hans, would you agree that's like the three-month vision
to where we want to be?
Yeah, absolutely.
The thought chain provides the rails to be cross-chain settlement.
If you think about cross-chain liquidity
is like a specific use case of settlement,
but we've had teams approach us that want to do you know on and off ramping or want to do gift cards or
whatever they need settlement it's not swaps it's just settlement and that is like 10 times easier
or 100 times easier using floor chain rails than it has been on any kind of vanilla cosmos stacks
including ours awesome so that that's that's the kind of three-month vision is to get to there.
And that's the big differentiation between what's at the app layer
and what's at the base layer.
Now, historically, ThorChain has tried to do DeFi,
but at the base layer and only inside its own liquidity
and inside its own assets.
So this is the big shift in launching this app layer.
ThorChain is now, and has for 12 months actually,
entertaining the idea of bringing on assets,
securing them in a system,
and then essentially minting them into its app layer
and letting people do things with them in the apps.
So Hans, do you want to give us like a 30-second overview
of the life of a Bitcoin as it goes from L1 into ThorChain
into the app layer to do something and then back out again?
Yeah, I mean, it's super simple, right?
It's the same as you would imagine things should be correctly done
in a centralized exchange.
You deposit into the exchange.
That exchange says, right, I have one Bitcoin. Now I'm allowed to do things with one Bitcoin inside my exchange. things should be correctly done in a centralized exchange you deposit into the exchange that
exchange says right i have one bitcoin now i'm allowed to do things with one bitcoin inside my
exchange and there are plenty of exchanges that do now things with two or five or ten bitcoins
because you've deposited one um but in the thought chain model you deposit one bitcoin there is one
bitcoin represented that's minted inside the Thorchain app layer.
You do what you like,
and then you can withdraw it again.
And it's as simple as that,
but it is verifiable.
It's transparent.
It's decentralized.
It's trustless.
It's all the things that we're here for.
Yeah.
Now, a couple of weeks ago,
we had space,
and we threw out the idea that apps are just addresses
that have code as a way to explain what these apps are.
So do you want to elaborate on that? Like how, when we deploy a start contracting app layer,
it actually has a thought chain address. It looks like an address, but it's just got a bunch of
code. So do you want to explain? Yeah. So the only thing that a smart contract, so yeah,
you can consider a smart contract to be exactly the same as a wallet address that you generate yourself offline.
But a smart contract operates and is executed inside the same state execution logic.
So the transactions share the same mempool, but that is literally where it ends.
that that is literally where it ends.
The only way that a smart contract on ThorChain
and the ThorChain app player
is allowed to do anything inside the ThorChain base layer,
inside the ThorChain core,
is by emitting a message deposit.
The same way that everything else happens,
a swap, a deposit of liquidity,
a bond to a node operator, whatever.
You do that all through a message deposit.
And that's the only way that a smart contract address,
the same as an EOA is allowed to interact with a base layer the difference is that because they share an execution
environment or share a share a mempool they're guaranteed to execute and they're guaranteed to
execute in the way that the code defines it so you can suddenly start organizing uh organizing you
know uh liquid state bond providing or order books
on top of the base air pools or launch pads
or whatever it is, all the apps that we're gonna bring
and that we're currently building out.
But it is, yeah, you're right.
It's kind of, I think it's,
you can think of a smart contract
as almost like a more limited version of an EOA, right?
An EOA can start an offline company somewhere
and put some rules together and say,
these are the things that we're gonna do,
this is how we're gonna behave,
but they might change how they behave.
A smart contract can only do those things.
It says, this is what I'm gonna do,
and this is only what I'm gonna do.
And it's been approved into existence
through a chain upgrade,
because you can only deploy the code that you've
been approved to deploy. And that is now a very restricted version of an EOA. An EOA is actually
a much more permissive entity than a smart contract. Yeah. So just hanging off to that idea
then that these apps are contracts, especially EOAs or addresses that have automated on-chain rules for how they function.
So let's say, for example, a lending app.
The rules are, if you deposit one Bitcoin, someone can deposit 50,000 USCC and then borrow
that one Bitcoin at some kind of interest rate or some amount of Bitcoin at some kind
of interest rate or some amount of the Bitcoin at some kind of interest rate. And so this app, this address that can do things,
is just managing the reserve ratio and who pays who
and unlocks the Bitcoin and UCC at the correct time.
But I can facilitate lending right here today in my house.
You come to my house, you give me one Bitcoin,
and another person comes to my house and give me the UCC,
and I will enforce the interest rates, and I will enforce the solvency and the reserve rates.
And I follow my rules.
But the smart contracts are just basically putting that all on chain, essentially.
And to go a bit further, because we want to explore.
So we've got the ThoughtSense base layer with the secured assets.
We've got the app layer, which are these addresses that do things.
So do you want to give us a quick overview of the,
let's say the next six apps that we would,
that the RUG team would entertain deploying?
Okay.
So the first couple will have trade, which is the, it's the order book.
It's the order book that actually,
the first version of it was released in the fires of the terror implosion in 2022.
It's 100% on-chain. It's fair distribution.
So most, quote-unquote, fully on-chain order books have some kind of off-chain crank, which determines when a price hits an order price,
who gets filled first, how much they get filled by, all that kind of stuff. So we have, to the
best of my knowledge, the first, and I think still only, fully on-chain, crankless, fair distribution,
and then to get a little bit nerdy, O1 Complexity, fully on-tune order book.
So that will be launched along with a completely revamped market-making product, which is Pools, right?
So you can be a dual LP and there'll be more advanced strategies coming in the future.
Follow it up.
And then we'll have some perps for Curtis and the Levana team. They will be launching, borrowing, lending,
a launchpad which will offer bonds, a Dutch auction mechanism for a fair launch mechanism
that allows people to buy into tokens without being front run, without being sniped, without all this
whatever you want to call it that we've seen on Solana
and PumpFun and all that kind of stuff.
Yeah, bonds, all these kind of like,
these financial primitives that are just part of
any sensible financial ecosystem will be coming to Agera
and accessible to everybody.
Awesome.
So those are the rough kind of apps.
If we were to have built that at
the base layer, that's like a year's work. And that's like the entire dev team focusing on
building default at the base layer. And all that code is going to sit alongside critical vault
code, churning code, liquidity code, and the amount of errors that could happen and security
checks. I mean, that's why it takes so long to build at the base layer.
But at the app layer, because if we say, hey, well,
these apps can only do message, deposit, message, send,
and just like a human can.
So that's all I need.
We just let them call message, deposit, message, send,
let them do their things, and they just live in a completely separate execution environment,
completely unlocked in bandwidth.
Because rather than having one,
even if we do three weekly release cadence at the base layer
and Chad's checking everyone and 9-mill's doing security checks
and everyone, there's just like a really slow cadence.
But at the app layer, once you essentially whitelist out
the deploy addresses and smart contracts,
we can scale over the next four months to having hundreds of apps on a release cadence.
So Hans, what's likely the release cadence for apps
and the processes required to get these apps downrange?
Yeah, so it's really important, obviously,
that everything is voted in.
There's kind of a security element
that is not related to Thorchain initially, which
is kind of vulnerabilities in the Cosmism stack. Over the last, we've been doing this
after four years, pretty much every single vulnerability there has just been a very niche
case of somebody with a malicious smart contract
who can exploit the issue.
And so as long as you have control
over who is allowed to deploy
and what they're allowed to deploy,
you mitigate those.
And so having control over who's allowed to deploy
and what they're allowed to deploy is key, right?
And so those permissions are hard-coded
into the Thor node binary.
But that said, it's important for, like you say,
for the velocity of the app layer
and all these smart contracts to be decoupled
from the release velocity of the base layer
and what Nine Realms and the core team are doing.
And so we built a kind of a review process
which allows somebody to basically look at the permissions
that are being requested.
There's a link in those permissions,
which is hard-coded into the Thornode binary.
You go to that link, you run a script,
which compiles the code that you're looking at.
You can verify that the code of that commit
produces a WASM file with a hash,
like a checksum of a certain value.
And it's that checksum which is provided permission
to deploy on the thought chain.
So, and you can then also in the same repository
at that same commit, see that there's been an audit,
that the audit is for the same commit
and that they've given it the green light.
So the level of requirement and responsibility for node operators and for base layer participants
is significantly reduced. Everybody should still be vigilant and still check things to the degree
that they want to, but we have a process here that allows app layer
with its complete logical separation,
complete financial separation from the base layer
to move and iterate quickly,
but still go through the right procedures with the base layer.
Yeah, exactly.
And so in summary,
the developers will put up apps
with some kind of like view on usability
and like some kind of security check,
looking at audits or that the node operators
and baseline data feel comfortable
that deploying this app is not going to cause chaos
and like hacks and stuff like that.
And then it does pass some kind of like culture and vibe check
because we want you know
the thought chain or the ruji ecosystem wants to have high quality apps that all work well
and are secure and and all make sense like we don't want like 15 different versions of
meme coin launch pads right so but like one or two will do, you know? And by having this kind of one layer of, like,
permissioning and checking off via the node operators,
we can easily enforce a high-quality filter
on these apps that are going to be deployed.
But also, if something did go wrong,
we can give node operators ability to quickly pause
a problematic app if it's, you know, blowing up
and could cause damage or
has it's about to be hacked or or you know security researchers come to us and say hey
this app's got like 20 million in funds but there's a p1 vulnerability we're disclosing a bug
10 percent bounce before the whole thing blows up no developers can jump in pause upgrade the
contracts pay the bounty and move on something
like that right yeah exactly yeah yeah i mean we have that exactly already built in so node operators
uh can pause individual contracts they can pause uh entire versions of code uh and they can pause
the entire player should they kill the need to yeah and. The leaders of that. Yeah, and the specific pausing is, well,
the same as we're already saying,
three nodes can pause, four nodes can unpause,
five nodes can pause, six nodes can unpause.
So, like, as long as it's not too contentious,
you'd imagine that most of the, you know,
the couple of votes cast, like the four, five, six,
maybe ten, is enough to represent all of the node operator's interests.
Or that would cast a vote as well.
But also, we also want a culture of the node operators
and base layer to let the RUGY flourish
and the app layer flourish to what could be,
and not to be too bothered about what's going on. As long as the app layer does message deposit, could be, and not to be too, you know, bothered about what's going on.
As long as it's, as long as the app layer does message deposit,
message stand and does fancy stuff on the app layer,
then it's going to go a bit, just be fine. Right.
And one thing about that is the fee sharing.
So do you want to discuss why we negotiated fee sharing and what we're
starting off with and the direction there?
Yeah. I mean, it's kind of stands to reason that, you know, we are utilizing the full chain
infrastructure.
Node operators are securing assets and so there should be reward paid.
And so the approach there was a 50-50 split where, I was gonna say where appropriate,
but those aren't quite the right words.
It's where the fee hasn't already been shared
with the base layer.
So where we, basically it's just a case of paying
for security so that these assets
that are being deposited and secured
and then utilised inside the app layer
aren't just sitting dormant, right?
Because there's no point. There's no value to be gained from somebody just taking a million
dollars of BTC and securing it and then just having it stuck there. Like, they don't want
that. We don't want that. It's just not going to happen. So we're going to build apps that
have a velocity of money that generate fees. And then those fees, they contribute to RUGIS-ACERS
and they contribute to base-save security
and therefore to ruin bond providers.
Yeah, exactly.
So switching gears a bit, talk about the switch assets,
why they were selected, where they're coming from,
how they actually route over to ThoughtChain,
what happens when they hit the chain chain and et cetera, et cetera?
Yeah, so switch assets,
you've got kind of two different types of switch assets here.
I always get confused about the numbers here.
I think there are five, so there we have merge assets,
switch assets that will become merged
and switch assets that are their own individual project
that want to individually migrate over to ThorChain
and then run their operations
on top of the new app layer. And so we've got Koozie and RKoozie, which is everyone's,
Unstake, Wink, Fusion and Levano, which are all merging into the Rudy token. And Rudy will be
the fee switch token of the app layer. We've then got, I think, three other projects,
Auto, Nami and Boon, which are individual projects,
which have either launched or are kind of pre-seed stage
from the Kudura ecosystem.
Obviously see the value in the Raja app player,
see the value in the partnership with Thorchain,
and have chosen to migrate their entire supply and encapsulate it inside the Thorchain ecosystem. So it's a
massive vote of confidence, I think, to have these kind of independent projects that were never part
of that initial merge agreement involuntarily elect to come over. And you know, these guys,
they've been building already and like, well then, I mean, the auto guys particularly have been building.
It's just very cool.
As far as the actual mechanism that goes, obviously,
4 Chain doesn't observe Kajira.
And so, but we need to basically just allow somebody to transfer their own assets.
So the mechanical process of it is you take your assets from Kajira,
whichever one of these they are, you IBCc them to the cosmos have to gaia uh and they have the you know ibc token
reference denomination there um and then you can then trans and then those are now observed by
bifrost in the 34 update all those tokens are now with their IBC denomination, observed by Bifrost, on Gaia, and you can deposit them.
Because they're all registered to switch assets,
you can't do anything with them except try and switch them.
If you try and switch them right now, it'll say no, the nodes haven't voted in.
And the view for this was that the switch handler isn't just for RUJI,
it's not just for these assets.
It's designed to be a way for ThoughtChain to attract any project
from any chain that's connected to, to say, hey, I can see the value
in moving my project, my ecosystem over into the ThoughtChain app player.
And so my first step is to have my assets whitelisted on Bifrost and Observable.
And the next step then is to have them approved by node operators.
And at that point, instead of just saying, we're going to approve them at a height one,
we're going to approve them at a height 30 million or whatever it is,
like something that we're going to start the switch in three months' time.
And it was kind of the architecture of this module.
Obviously, it wasn't just for Rooji, it was for Yeah, it was to allow to allow Thornton to
benefit from any ecosystem, any other ecosystem wanting to
migrate over. And so it was providing the flexibility of
that kind of moment to switch it on. And so that's what we're
doing now is that switch on moment, but we're switching it on as soon as it was launched.
Yeah. And once, so once these,
which these assets may move over,
just peg us through a bit more of those steps.
So they hit the bolts.
What happens next?
Yeah. Yeah. So they're, they're observed by Bifrost.
They're received by Thorchain, Thorchain and Pro system
inside its own state machine.
Each switch asset has its own target address.
And so the asset comes in,
and then the only way that that deposit is confirmed
is if the TX out is also coming,
that TX out sends it to the address that is nominated
as part of the pull request, as hardcoded into Thornode.
And for every single one of these assets, it is the Cosmos Hub 0 address.
So if somebody wants to try and guess that private key, they can do that.
But it's the same as the EVM null address.
You're not going to do it.
Yeah.
Awesome. And this is essentially enabled on all chains. Because the EVM, no address, you're not going to do it. Yeah, awesome.
And this is essentially enabled on all chains.
So in a few months, once we move these assets over,
I can start building out the ecosystem around them.
One project, a couple of projects I'm keen to move over is one is Vaultizig.
I think any Thorechain affiliate fee wrapper
is just going to get so much more power
and usability
by managing the affiliate
fees and the collection of them and the distribution of those
aka staking contracts
directly on the applay itself.
I've been keen to
move Vaultasig over to the
applay in a few months
and this will give us like precise control
of affiliate fees, staking, distribution.
And there's quite a few people hitting up
ThoughtChain affiliates saying that
if a ThoughtChain affiliate swaps,
quote unquote, bad money,
according to someone else in the world,
then they should be returning that money
to the counterparty.
And I took a stand and said, absolutely no way,
because, you know, the so-called, quote-unquote,
bad actors or whatever are only viewed by one group of people
in the world to be bad.
And, like, there are incentives and layers upon layers
of fees paid everywhere.
Like, if you make a transaction on Bitcoin,
you pay Bitcoin miners, or if you settle on Ethereum,
pay Ethereum block producers.
So like why are you differentiating?
Who are you differentiating
returning and refunding?
Fees are fair and should be charged.
And the best way to do it
is to even just make this whole argument null and void
is to send all the affiliate fees,
skip central processing
and stick them into a staking contract.
And the only way you can get them out of the staking contract
is by staking the token of that project.
So shifting all of these projects to a pure decentralized cashback
staking real yield tokens, I think makes total sense
and you get done right on the RUG app layer.
Cool. So switch up a little bit more.
Pierre, PM, do you want to give us a –
you're coming more from an ecosystem manager point of view,
but do you want to give us your perspective on the switch assets
and moving to the app layer and what's ahead?
Yeah, sure.
So maybe a quick rundown on the various non-core products moving to the app layer. So Hans mentioned actually three projects, there are four. So first one is NAMI. we will be merging. What they are doing is effectively building the equivalent of Savers for what Savers was
on top five.
So they will provide effectively vaults,
single-sided deposit vaults, that automatically
allocates funds.
So if you have, let's say, a BTC,
it will look at all the opportunities
available inside the RUGERA ecosystem
and allocate funds to those allowing you to have yields that is not subject to impermanent loss.
So that's one of the projects coming in. They are also helping us currently doing the work on
stations, so station wallets.
The NAMI team stepped in to build this new,
it's being adapted from Sonar,
which used to be our mobile wallets in Kujira.
This is gonna become station
and the NAMI team is helping there, leading the efforts.
So it's a great team, super helpful and helping us build.
They recently also onboarded another team,
which was the action team, who is now
going to be part of NAMI.
And they are also, so there is a great dev
there called Mateo, who's helping us with the data here.
So building all the API to query data
that will allow us to build some very good analytics
for the ecosystem.
So he's doing that.
And he will also be the one building
Rooji League, which will be this big competition
that we will use to incentivize economic activity
on the app layer, where everybody can just
do whatever they want to do on the app layer.
Every time they pay a fee, effectively, they earn points.
And then there's a leaderboard and we will distribute periodic rewards once we start the Rugelig season.
So that will be a big marketing push we do for the app player once we are ready. And a very fun way for our community
to use the apps and make money while using those.
So that's one of those.
Then the other one is Otto Ruggira, another great team
helping us a lot on different things.
By the way, the Kujira team is, as you can see,
we are an expanded team.
We have the core team, which historically was just three
people.
But then we got also teams that are very close to us
that work with us, including into building this app layer
on top of Torch.
So auto team, what they are building
is all sort of automation solutions.
For example, one of the first products
they built on the kuji
raw was an auto compounder that allows you to stack tokens that give you the reward and automatically
collect the reward and and restack it to grow your position now they are helping they have been
building the auto competitor for tcy so everybody who was affected by a top-eye blowup
and that is a beneficiary of TCY
will have the possibility to use their TCY,
deposit those on the app layer into an auto-componder.
And every day, whenever they receive the run reward,
those will be automatically swapped for more TCY,
and the position will compound over time. And they are also building the RUJI AI,
which is a chat GPT-like interface for RUJIRA.
It's already live for people who want to access the beta testing.
It's very promising.
I will allow you to, for people who don't want to interact
with the apps directly, just go there and speak with a bot effectively
and do all sorts of things.
And of course, the biggest part of what they are doing
is that they are building those Lego pieces that
are automated strategy to do all sorts of things
so that the AI agents that you speak with
don't hallucinate and do random stuff,
but do exactly what it's
supposed to do inside a given strategy.
So they are helping us with that as well.
Super helpful team.
Very, very grateful to have them around.
Then the third one is a former Montadao.
They are going to relaunch on Rojira as liquidity.
So they take the opportunity to do a rebranding.
There is two parts of of this uh business one part the biggest part is really uh acting as a market maker so they
provide liquidity they have a token uh who historically was a yielding cash flow from
another product which was um the multi-op router for for Finn
at the time, so now RuggiTrade
and we need to swap any input token
to any output token and
spreading between different routes to capture
any arbitrage that they may be.
They will try to rebuild that also
on the app layer, by the way.
There's a bit more complexity here because
now we have oracle orders, we change every block
so it's a little bit of complexity but we are going have oracle orders, we change every block, so it's a bit of complexity,
but we are going to find a way to tackle that.
And that's a very helpful product for anybody who wants to integrate
and do swaps very easily, optimize swaps.
And then this yields a base level of cash flows,
a base level of cash flows and this cash flow gives fundamental value to the token.
and this cash flow gives fundamental value to the token.
Historically on Roger Azz's allow the DAO to raise a treasury,
which is currently still worth around 1 million net of some debt they still have to repay.
And so this liquidity will be coming to the app layer and will be added to provide liquidity
and help to strap the liquidity and economic activity on the app layer,
but also on the base layer.
So Mandadao has been buying some rooms historically in the past few months.
And they will be also providing liquidity with some of the rogis that will be merging
and act as one of the first big market maker for the rogir in pair and stack that and then use all
this revenue from the market making activities and from the swap router to build more liquidity
inside rogir so that's a third one and here also we have one of the devs involved in Montadao called Jan,
who is also super helpful and working with us,
building the analytics alongside Matteo.
So Matteo does the part with the API and collecting the data chain.
And Jan helps us doing all the front end of that,
the visualization of the data and other things.
And we are going to do something very, very nice
and differentiated versus any other ecosystem.
And then there is a BUN team.
And they are a bit different.
It's more like a traditional Web 2 project,
but applied to Web 3.
And they are acting more as a way, a marketing agency kind of,
allowing you to amplify a certain type of content with a reward. They were launching just at the
time where we signed the deal and we made this move to become the appellant of Torchain and they
should be migrating alongside the rest of those projects.
That's for what is coming from
the project migrating but not merging.
Then we have of course,
all the other project merging.
If you want a bit more detail
on the different product we'll be launching,
very happy to deal into any of that.
Awesome. Thanks PM.
Now, in summary of the last 36 minutes, we've gone over the QG stack where it was nine months ago, the thought chain stack where it was, and how the, you know, the base layers were different and thought chains uh basically which allows cross-chain liquidity rails with a vibrant and safe applay ecosystem
we talked about the projects that are moving over and the mechanisms for that via the switch
handler uh which nodes are voting on right now to to essentially bring them into the ecosystem
um and i do want to point out that was missed the the switch assets don't have any impact
on security they're not they're not secured assets uh as soon as they hit the vaults they
are burnt immediately uh and they are minted as native ThorChain assets and these uh they're
natively and there's no way for them to ever leave the system again right there's no they
switch in and forever commit themselves to thought chain space
layer um and they can't get back again so it's the biggest thing in secured assets is uh the
secured assets are not uh managed by thought chain in the vaults and the nodes need to like churn them
and migrate them and consolidate them etc but you can still leave and get back to you so you can
deposit bitcoin do things with it and then leave again with your Bitcoin.
Whereas a switch asset is a one-way street,
one-way ticket into the protocol itself,
never to go back out again.
So that's why they have no impact on security.
And this vote that's going downrange at the moment,
actually, does someone know how many votes
are almost required to get them over the line?
Mark, I know you've been keeping your eye on it.
Six more.
Six more votes. Okay, I know you've been keeping your eye out. Six more. Six more votes.
Okay.
So everyone today, just humbug your node operators
and just campaign to get those last six votes.
And let's get this across the line.
So hopefully over the weekend, the migration can begin.
The great migration will begin.
But I'm pretty sure it's going to happen over the weekend.
The migration, I know you've been a bit coy about this,
but whatever.
The migration can start the second these votes pass.
The merge contracts are deployed.
The app layer is live on blockchain.
The UI is ready.
It's just gated at the moment
because you can't switch your assets right now.
So the second the first one of those votes tips over, the most starts.
Really exciting.
And then over the next few weeks, we're going to go through and start bringing up the main apps,
porting them out to governance, getting them improved on chain,
porting them out to governance, getting them improved on chain, and away we go.
and away we go.
And we've talked about them.
And we've talked about them.
Now, PM, do you want to...
So there's two possibilities going ahead
over the next three to six months.
One is for the first three to six months,
Rooji's going to tightly control the deployment of these apps
because we just needed a really orderly process.
We needed a set of culture.
We needed a set of vibe.
We needed to assert precedents with needed a set of culture, we needed a set of vibe, we needed to assert
precedents with a whole bunch of things, including fee sharing and audits and open source code.
And so that's why Ruji is blazing the trail. Now, given after three to six months and everything's
all fluid and emotion and ticking along, there's two ways to deploy an app on ThoughtChain. One is to go, you know, the first one and the most obvious one
is to join the RUGGI Alliance.
And, PM, do you want to give us an overview, like,
why would an app join the RUGGI Alliance versus just going it alone,
rolling out an app and doing it themselves?
So we have a bit more nuanced view
of the different type of apps
and the different way to join
and become an App On The App Player, actually.
So in total, you can actually have five different categories
and there are projects.
So the underlying idea here is,
if we really want to build this decentralized finance,
we want to keep a certain
coherence inside this ecosystem as you were saying earlier gp we don't want a 15 different
version of a pump.fund that don't add any value it's just like a fragment liquidity and
and clusters a chain for nothing so the way we see the world is you will have five different buckets. The first one is what we call the value additive protocol on top of the core apps.
So this includes most of the projects that I mentioned earlier that are migrating.
So the Nami, AutoRugira, Montadao.
There are also a few more like Ruge Index, for example,
There are also a few more like Rugi Index, for example,
which will be building index products with native assets
on top of Torchain with the app layer.
All those projects, they come and they build the core primitives,
which already have a fee sharing with Torchain with the base layer.
So it's a very attractive proposition for those builders
because suddenly building on the app layer,
it means that they can access native assets.
For example, for the index product,
that's the only place where they will be able to create
an index that has BTC, ETH, and SOL,
at the same time using native assets secured by Torchain.
So quite a good proposition.
They can also tap in this 120 million plus base layer liquidity.
So quite a nice proposition.
And those projects, because they are built on top of the core apps,
they will be doing trade on RUGITRADE or providing liquidity on RUGITRADE
or doing all sorts of things in underscore apps,
which are already sharing their fees with the app players. That means that they already pay
by the fees they pay to the score apps, they pay for security on the app player. So they can keep
100% of their revenue. And those apps, we actually don't want them to join the RUG alliance. We
encourage them that they can have their own economic models,
they can have their own token, and we will have, of course,
one of the products we will have is the launchpad.
And so we want this launchpad to be used.
We want to foster a big economic activity.
We want a lot of projects to come, launch token, raise capital,
and trade markets on RUJI trade and uh creates a ton of
economic activity and generate fees for both uh ruji stickers and the base layer and so for that
those project perfectly fits for a lunch on the launch pad so their way to access capital will be
to then launch a token of course the project migrating already have a token but any new
project i want to join will be encouraged to launch a token and fund this way.
And then they can keep 100% of their revenue.
They will be able to spin out a DAO super easily with DAO,
reuse revenue converter contract, and have all the tools
to effectively have a great end-to-end experience for builders
to just launch a project,
launch a token, seed liquidity on regi pools,
and have a DAO with a secured infrastructure
to manage all the projects transparently,
and eventually we'll even provide analytics
to provide real-time accounting very easily for all those projects.
So a lot of very cool stuff that you can only do,
will be only able to do on the app layer
so that's the category of project i think we want to attract the most for example uh one project
that will be very cool that we don't have yet would be a project that uh a brief uh market
making custom market making strategy on top of uh of uh trades so we will have our own market making strategy with
roji pool but there are probably people that have experience in that that can do a better job or a
different job than us and the more market making strategy we have the more uh liquidity there will
be uh in the order book and uh the more uh volume we can facilitate and fee we can generate for the app
layer so that's an example of another project come here but you can build all sorts of things that
use those core apps and you will be welcome in this category
sorry sorry the main the main thing i want the point that i want to get across is
if you join the ruji alliance, you're going to access funding,
shared UI, shared market, marketing, and a shared community that's immediately deployable.
And some of the stuff we've discussed PM is things like bringing on developers, giving them, you know, 20, 30 grand grants or plus or minus, get them started, get them onto Rooji apps,
get them making fees and get the fee sharing. And then there's a get them onto Rooji apps, get them making fees and get them fee sharing.
And then there's a, for the Rooji Alliance,
there's a bucket of incentives that just looks at fees earned
on a quarterly basis and pays developers on a boost to that
and some kind of like a fair boost.
So developers can see the incentives are clear.
Get a grant, just get started, get access to shared community,
and then get even more boosted incentives along the way.
So we hope that the Rooji Alliance
is going to be this kind of like collective
and force for goods that's going to assert high standards.
It's going to like put up the auditing costs
and we'll have a streamlined auditing.
So at least if you join the Rooji Alliance with the app,
we will help you cover the auditing costs,
cover the governance process and everything.
So that would probably be the main collection of apps
just because the incentives are great in RUJI,
the funding's there and the quality's there.
But there's also ability to do it your own way.
So as PM was talking about,
if you don't want to be part of the RUJI Alliance,
but you want to be like loosely,
you want to run your own front end, run your own middleware, et cetera, do your own governance process and launch your own token or whatever, then that's totally cool and totally fine as well.
We anticipate that the checks on, you know, like having like stopping like 15 different types of PubNut funds is going to happen at the governance process.
So node operators are not going to let 15 lending protocols be launched
or 15 pools because it's just all fragmentation.
So that's how we vision it's going to go downrange.
I want to be clear that...
Yeah, go.
Yeah, that was going to be the second bucket,
but I think there's a big difference here.
So the first bucket I mentioned,
built on top of the existing apps.
So there is also an incentive for the app layer
to keep those independent,
to foster this economic activity with different tokens.
And also there is this constraint
that a lot of those projects are migrating
that already have the token.
And so we cannot merge them into the alliance but
then there is the second key strategic bucket which is for differentiated yet strategic apps
and that's exactly the one that we want to join the ruji alliance so anything that we consider
key but we don't have yet in our roadmap. So something, for example, like a tokenization of yield,
a bundle protocol type of thing, we don't have that,
or some real world asset project
where I choose as probably in a different bucket.
But tokenization of yield, I think it's a cool one.
We could have that as a new vertical,
and that would be part of the alliance.
Anything that is new and that we don't have in the roadmap will be there.
And then we can have grants.
Actually, we can give grants to any of the first two buckets.
That's all fine.
And help with audits as we see fit.
So it's all working.
But I think those are the two things really that we want to attract.
Aether people will build on top of the existing app
and will be doing their own marketing,
and they may also as well integrate inside the main RUJI app.
It's not because they have a different token
that they can't integrate.
As long as they use the core apps,
they generate fees for everybody, and it's great.
Or we have those new verticals
that become part of the RUJI alliance,
won't have their own tokens,
but will be paying their revenue 100%
to base layer plus RUG stackers split 50-50.
Those are the two ones.
I want to change gears a bit and touch base on security.
So a couple of questions I've got into my inbox are,
is the app layer dangerous for the base layer?
So there's probably, and I'll switch back to Hans here,
there's probably two levels of security
that we're contemplating, or three.
One is, can an app, which is just an address to do things,
cause so much damage to the base layer
that it could be bad?
So one kind of app that could might be a candidate for
this is a rune denominator collateral lending vault and so that is like people deposit rune
borrow against it to mint a stable coin and then because there's so many rune holders in the
community and thought jets everyone uses it next thing you know there's 100 million rune holders in the community and thought jets everyone uses it next thing you know there's a hundred million rune in this single app and there's like you know hundreds of millions of
stable coins out there and then something goes really bad and the whole thing blows up so hans
um do you agree that this is this is this is probably a dangerous app and this is what everyone's
talking about i i think that the yeah um there's there's no direct systemic risk to the base layer in that, you know, the applet can't release funds that it's not allowed to release and it can't drain pools and it's not allowed to drain, all that kind of stuff.
But yes, I think the way that a smart contract is allowed to aggregate and organise funds, if left unchecked.
to aggregate and organise funds if left unchecked.
And let's be honest here, right now,
this is why we're all here,
or unless we're all here,
is that back in August,
this got very lopsided on Kodira
because it was left unchecked.
And it was the fact that smart contracts were allowed
to collect too much of one token without enough checks
that the way that they were managing
the solvency of those funds was there.
So we are acutely aware of this.
It is something that we, if not right now, we should have lots of very public conversations about,
understanding how we manage these types of kind of systemic risks that you might be able to generate
through aggregating funds and creating basically leverage, right?
Any kind of leverage.
Yeah, so it comes down to collateral. So I guess we could say that Rune collateral,
LP units collateral or bond units collateral could create systemic risk.
Whereas taking Bitcoin...
Yeah, I mean all of them.
Yeah, you just need to, you need to, the hardest thing, right?
Is so, so the number one thing is that you create constraints and this is kind of,
was part of the refreshed mantra going forward since August was that anything
like this, where we have leverage, um, there will be like dynamic limits, limits that can be specified based on known liquidity,
which is over constraining in its initial principle, right?
Because, okay, fine, if you're just dealing with liquidity
that you only have inside your ecosystem, fine,
you know how much you can liquidate across it.
But for like Bitcoin, like you were about to say there,
you have no idea like what the how much the
wider market can absorb, but better to be safe than than
sorry, right. And so these are these are discussions that should
be had. These are very key factors and configuration elements
of the protocols that will launch as and and when we get onto these kind of margin
and leverage and borrowing and lending protocols yeah so um i guess for the stable coin we have
planned for ruggie that is likely to be a maker dow cdp uh protocol so people will be depositing
bitcoin eth uh doge and then minting a stable coin against that so being like a mixed bag make it our cdp system
there will be liquidations at certain collateralization ratios and there'll be
fees charged etc but why wouldn't this create a systemic or why do we believe this wouldn't
create a systemic risk to fortune uh and is not a dangerous app even though it's contemplating a
stable coin well it's the same model right though it's contemplating a stablecoin.
Well, it's the same model, right?
Like it's whatever the collateral is.
And so you wouldn't like,
I think it'd be a very bad idea
to create a stablecoin factor against Rune,
even if it's not an algorithmic one,
you don't want that kind of endogenous risk
where the kind of subsequent death spiral.
And so this is all, it's funny, right?
We've all been through, I think there's a lot of people in the shared communities
that have been through a lot of these kind of lunar and whatever kind of spirals
and have become much more informed on it.
So we can have a much more sensible discussion about these kind of things.
Yeah.
So interestingly, Maya protocol could create a maker dow cdp position and take
run as collateral but it shouldn't do its own token but and thought chain could take
maya coin as collateral in its mixed bag but it's not its own so that's that's kind of like all right
well let's obviously let's stay away from You know, we're about just highly functional apps that make fees that work all the time, right?
So avoiding leverage, avoiding the leverage loops is going to be a key component of our culture.
Yeah, I think leverage is an organic part of the space, organic part of any kind of financial system, right?
So, I mean, it's a critical part of any financial system, but we can't let it be unchecked.
And so it's critical that the way that we build it
and the way we design it and the way that it's managed
from here on out is dynamic and it's sensible
and it's, you know, constrained.
Yeah, exactly.
So, okay, so there's apps that could be dangerous
or systemic based on accepting various collateral and liquidity. So there's these more economically risky apps. And that will be very clear. And like, there's nothing planned in the RG about, so just one last comment, like we were
saying about how smart contracts are just, you know, hard coded versions of EOAs.
There's nothing here that a centralized exchange or a jump or whatever couldn't do.
They can take the same positions and collect the same amount of collateral and have the
same kind of reflexivity.
Yeah, exactly.
Yeah. and have the same kind of reflexivity. Yeah, exactly.
So there's economically risky apps,
and we will navigate that and discuss that with governance and avoid, obviously, risky collateral.
Then there is, because these smart contracts
are only really doing message deposit, message send,
we've confined them in what they can do
already to what a human can do today.
So we don't think there's any,
we're not adding extra risk there.
There's no IBC contemplated yet.
We still haven't worked out how to really use that.
Although in the future, I can see how we can use IBC as a token factory out.
So if we do have a stable coin from a mixed bag CDP like position,
we can wire out that stable coin across the IBC, get it to Solana,
you know, EDM chains evm chains etc so that's
that's like the future version of ipc as lastly there's like the you know the cobrisk and that's
why we have you know an experienced team who are just porting their already existing already live
apps with some few tweaks into thought chain passing an order, passing governance. So from the start, the whole vision for this was,
could we debut a high-quality, well-coordinated,
well-funded app layer onto ThorChain,
which has never had one before,
and do it in a way that makes sense and everyone wins?
And I think it's been a lot of work, Hans,
and the team to even get here today and consistently show up to work
for the last nine months and keep building.
And there's been a lot of chaos and drama and blah, blah, blah.
But that's just crypto.
There's always chaos and drama.
But I'm extremely bullish, and we've got some people,
Mark and Hans and PM here.
But, like, what's your outlook?
And you go around each turn.
What does the roadmap for the next four years look like?
And how much is your mind blown when you think about it?
Do you know what?
I've told you this before.
My mind got blown, I think.
It was, like, a month or two after we started this.
And it was, like, kind of, like, that early peak under the curtain
when I started writing the – or just, like – I mean, it was, it was honestly, it was just like cloning Chad's trade asset code and modifying it slightly for secured assets.
And suddenly you get to write base layer code that interacts with any base, any other layer one.
of it had been this eternal struggle for us at kajira for years that we just couldn't access
these assets that we wanted to integrate and bring the liquidity before for all these products we
were building and it was just there right at right at my fingertips and and kind of at that point i
saw that kind of like that thread unravel like the months ahead there's like you know we're going to
do this and then we're going to do the cosmos and that it's going to be a bank token and then we're going to and and i could just see how this is suddenly
going to become this right and it's it's a meme it's not a meme anymore actually frankly a competitor
to the centralized exchanges because you have exactly the same experience where you can just
deposit from your layer one you deposit your bitcoin you deposit your wreath you deposit your
soul you do your things with it you earn your yield on it you You LP with it. You trade it, whatever you do with it.
And then you withdraw it back.
And then you carry on with whatever that layer one is good at doing.
And you crack on there.
It's just, it's, yeah, it's, it's, it's, it's sounds cliche, but it's a zero to one moment.
Awesome.
Mark, what's your perspective?
How much is your mind blowing for what we're going to do in the next four years?
Mark, you's your perspective? How much is your mind blowing for what we're going to do in the next four years? Mark, you can unmute. Sorry, I'll make you speaker, actually.
And Pierre, what's your view on the next four years and what we're going to shoot?
Yeah, so next four years, I think. So super excited about this Omni chain thing, as Hans was describing.
The fact that you can connect any wallet from any connected chain
and trigger action on the app is quite mind-blowing.
And the view is we are going to first roll out our core apps,
and then we need to build some very good differentiated market
making strategy for Ruggie pools.
And then we are going to start to scale
with an affiliate fee model that is similar to what
has been very successfully implemented by TorChain,
so allowing people to add fees on top of the core apps.
And we are going to start to try to grow and attract
so institutional capital, capital for all sorts ecosystems,
because now, for the first time, either it's ecosystem like Bitcoin or the ecosystem that did not have smart
contract, but now access an app layer of this is massive and allow any asset
manager that do on-chain asset management to actually do that with native assets
all in one place and with strategy that will hopefully be making very decent returns
without taking any of the third-party custody or bridge risk.
So that's super exciting.
And I think eventually the longer-term vision is we're also building the two links.
I put, given my background, a lot of emphasis on analytics.
on analytics. I think we'll have very good analytics, very differentiated.
I think we'll have very good analytics, very differentiated.
And eventually you want to have this infrastructure or so that allows any project to launch super
easily and to have like automated accounting and all those things. And the next step, because you
mentioned the next four years, eventually crypto can only win if we would buy on crypto. So it's
all great what we have been doing with just like crypto apps and and crypto builders and that's how we should start and where should we should focus for now but longer
term what we want is to onboard the next generation of entrepreneurs that decide to
come to rogera and to build a real world business but decide to do that using blockchain rail because
it's cheaper because it's more convenient because it gives them access to capital rails real-time accounting and all those tools to do that in a very easy and very more
cost-effective ways and if they were to start traditional business and i think that's eventually
where we want to go we want to really become this cross-chain financial hub not just for
cross-chain activity but for the entire. That's where we want to go.
Awesome. And I share the same thing.
My view is ThoughtChain becomes basically this app layer
for any connected chain.
So if it's got 20 connected chains, you can deploy a single app.
It might be a lending app, might be a ventures app,
might be an OTC app or whatever, a gambling app,
a sports betting app, might be a ventures app, might be an OTC app or whatever, a gambling app, a sports betting app.
And you can accept collateral, L1 collateral from 20 different chains in one transaction and then start working immediately.
So you can roll out like a betting app, accept Bitcoin, like an on-chain casino using ThoughtChain, Entropy Generator, you know know state machine to make your banning
possible but in nearly accept collateral from like 20 different chains and get going one deployment
20 chains let's go uh yeah so that's that's my vision all right we've got a an additional speaker
dan uh jump up with your question hello guys my pleasure to be here. Yeah, I was exactly, my question was about actually that just what GP just started to talk about
because we are actually building an online casino.
I am working in iGaming and I have all the top tier partnerships and I have lots of connections.
And my question is that right now we're looking for options
where to launch the business.
We have a development team ready.
We can probably make something in four or five months.
And the question is that how could we possibly deploy
something on the Torch in a player?
How would the procedure actually look like
if we start development and we would do something on it?
Sure.
So you would jump in, you would first decide whether you wanted to do it
as part of the RUJI brand or do your own spin-off and collect your own phase.
If you do it your own, then that's slightly separate.
But if you do it with RUji, we will give you a grant,
we'll give you a process.
We would have a developer sit by you and guide you through the process
and it'll be much more accelerated.
We would underwrite your auditing costs.
We would help you get through governance and deploy.
So you're looking at accelerated deployment if you go through Rooji
and funded because we would be investing in your app with the idea
that if your app makes cash flow and fees, it would be returned in your app with the idea that if your app makes cash flow
and fees it would be returned to the whole ruji but if you want to do it your own have your own
token have your own stake in contract your own investors etc that's also totally cool uh we
would say hey uh and refer you to a more generic process but that involves step one deploy uh deploy
all your code in a staging environment.
And there's going to be like a DevNet, a Stagenet,
where you can like test your code out and develop your interface.
Get it audited.
At some point, it should be enough to get audited.
And then you would then bring that through the ThoughtChain Baselight devs for review.
And they would do a first pass check on it.
And it's probably going to be a monthly thing so i'll work with the baseline devs uh that perhaps on the first week
of every month everyone who wants to submit an app on the app layer puts up a submission
probably on a github that includes link to the code link to the order link to the one page a
link to the website or some kind of like pulse check, vibe check.
And then I would imagine that once a month, high quality apps that look differentiated,
have security checks, don't create any systemic risk, would then be whitelisted for deployment
and then go from there.
So it's probably going to be a monthly pulse check, a monthly app check process,
which we're going to flush out over the next three to six months.
And then away you go.
You're going to deploy it.
So does that answer your question?
Yes, I think it actually makes a lot of sense.
Well, we are very open to have a discussion.
We are very confident that what we can bring
is actually very innovative and very, very enjoyable.
So, yeah, if you can link me up with any of the developers,
then I can have a talk with them
to let, he can, you know, check my background,
check what we do,
and how can we actually make a match.
Exactly.
All right.
Well, do you want to DM other pragmatic monkey here or Mark
on Twitter and they can take you into a telegram group
and go from there.
But I'm definitely keen to see someone build
an on-chain casino properly because you can accept collateral
from many different chains.
You would have proper random number generation.
And the reason why I say it is because ThorChain
is essentially can source this entropy outside the chain.
So in every other chain or smart contract,
you can only source entropy inside its own environment,
which can be completely manipulated.
But because ThoughtChain reads from Bitcoin,
you can literally just get the entropy
from the latest Bitcoin blocks.
So it's quite exciting to see someone actually do that.
Yeah, I'm quite excited to see how others will perceive it.
Well, regarding the random number generator,
so our vision is that we would have in-house games
and those would run in-house
and that we can apply the TorChain source,
the random number generator.
I think that would be also something that the community would love to see,
how it can be utilized.
But other than that, we are also working with the top-tier aggregators
to supply the casino with the newest and the hottest games
that generate the most revenues.
And they have their own system.
But anyway, I will text to Pragmatiy and then mark and then i will let them
know about anything and all their questions will be sufficiently answered awesome all right well
thanks very much and i do want to highlight that an on-chain casino would never have been entertained
in the the old thought chain you just would never be able to like get the code through the base
layer so now that we have fortune has an app layer, we can have a hundred different style apps,
whatever you want,
as long as it's not going to crazy
and it can draw fees.
Let's get it on the ThorTEN app layer
and see what happens.
I got to jump off.
Big thanks to Hans, Mark, PM from the team
for helping me host this space.
And I'll catch you guys on the timeline.
We'll talk soon.
And looking forward to those last few votes,
because and the merge and migration begin.
So thanks all.
Talk soon.
Bye-bye.
