Bankless - Axelar's General Message Passing Launch with Sergey Gorbunov, Zaki Manian, & Steven Goldfeder

Episode Date: May 3, 2023

We’re entering a new multi-chain and secure cross-bridge world very soon. With Axelar's General Message Passing launch, a new era for interoperability has been unlocked.  Tune in to hear from CEO/Co-Founder Sergey Gorbunov, Zaki Manian, Co-Founder of Sommelier Protocol, Co-Founder of Iqlusion, & Steven Goldfeder, Co-founder of Offchain Labs, and contributor to Arbitrum ------ 🚀 Airdrop Alpha is waiting for you on Bankless.com  https://bankless.cc/Alpha   ------ BANKLESS SPONSOR TOOLS:  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2  🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask  ------ TIMESTAMPS:  0:00 Intro 5:09 Axelar Explained 8:25 Cross-Chain Bridging  10:46 Axelar’s Announcement 15:10 Bridges of the Past & Future 19:00 General Message Passing 21:40 The New Way For Interoperability  28:42 Arbitrum’s Side 32:36 The Tech Metaphor 35:40 Multichain & Interoperable World 37:00 Bridge Security 39:05 GMP Applications & Services 40:57 Zaki’s Cosmos Vision 43:20 Why is this Bullish for Arbitrum?  47:27 Resources 48:00 Closing & Disclaimers ------ RESOURCES: Sergey Gorbunov https://twitter.com/sergey_nog  Zaki Manian https://twitter.com/zmanian  Steven Goldfeder https://twitter.com/sgoldfed  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Bankless Nation, we got an extra show for you today. Here we got a panel of cross-chain experts. We got Zachian from Cosmos. We got Stephen Goldthetter from Arbitrum. And new to Bankless, Sergei Gorbinoff from Axelar. Axelar is a newer IBC chain on the scene. It's been around for a while, but it's new to me. And it is working on interchain composability. So not only is the world of Cosmos and IPZ chains, a world of interoperable mesh network of Cosmos, like, once, but also Axler specifically is working on interoperability beyond the IBC realm. And so the announcement going out today is that Axelar's new technology, what they are calling general message passing, is connecting the world of Arbitrum to the world of Cosmos, which is why Stephen Goldfeather

from Arbitrum is on this panel as well. So previously, we have been skeptical at Bankless about cross-chain bridges, generally the position that everyone that we've seen so far, far is fundamentally insecure. And I am still cautiously optimistic about Axelar, but there is a lot of new technology that they are bringing to the table. And so they are able to produce what seems to be a meaningful integration between Cosmos and Arbitrum that has both communities pretty excited. And according to Sergei from Axelar, the interconnections between different changes doesn't stop there. Because if you can connect the IBC language of Cosmos to the EVM language of Ethereum, you can actually kind of connect any languages from any blockchain, or at least that's the idea. And so if you are into

the world of the many layer one landscape with bridges connecting all of these things, this episode is definitely for you. And so we're going to get right into that conversation with Zachie Stephen and Sergey. But first, before we talk to Zachie, Stephen, and Sergey on this show, we're going to talk to some of these fantastic sponsors that make the show possible, especially Cracken, our strategic sponsor for 2023, who, if no matter what chain you choose or no matter what asset you prefer, it's all on Cracken. And so if you do not have a account with Cracken, perhaps consider going and signing up for one now. So we're going to go here from Cracken right now. Let's go. Cracken Pro has easily become the best crypto trading platform in the industry. The place I use

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deep in the weeds of crypto investing. The last feature of the token hub is the ability to upvote or downvote token ratings. The Bankless Token Hub lets you learn from your fellow citizens to rate these tokens yourselves. The Bankless Token Hub is launching right now and has already been beta tested by your fellow Bankless citizens. So stay tuned in the Bankless Discord for updates. And if you're not a bankless citizen, well, you better sign up if you want access because this corner of bankless is available for citizens only. I'll see you in the Discord. If you haven't yet experienced the superpowers that a smart contract wallet gives you, check out Ambire. Ambire works with all the EVM chains, the layer two is like Arbitrum, Optimism, and Polygon, but also

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And while you're there, sign up for the web app wallet experience as well. So thank you, Ambire, for pushing the frontier of smart contract wallets on Ethereum. Bankless Nation, we have two returning guests and one new one. Zaki Manion from Cosmos. Zach, welcome back to the show. It's great to be here. And Stephen Goldfetter from Arbitrum. What's up, Stephen?

How's it going? Great to be here. Thanks for having me. And also the new entrant into the Bankless Nation, we have Sergei Gorbinov from Axelar. And this is the center of this announcement. Sergei, welcome to Bankless. Hey, good to be here. So today we're talking about chains and bridges and a particular new type of expressive bridge that Axelar is bringing to the table.

So, Sergey, since you're the new one of the bunch to the Bankless podcast, could you just explain a little bit about Axelar, what it is? And you can just tease up for this announcement that we are going to be talking about here on this episode today. Yeah, for sure. I mean, high level accelerates a network that connects other networks, right? So it's a decentralized, you know, blockchain technology that allows you to connect different layer ones and layer twos and send information across them, right? And so we build a kind of a full stack of intraoperability that allows you to compose your applications across different ecosystems, right? So you can have smart contracts on one chain, talk to smart contracts on another chain. and really enable kind of very simple developer and user experience to interact with multi-chain

ecosystem that we live in now, right? And so Axel is a decentralized layer that, you know, enables a lot of this functionalities. And Axelar is a Cosmos IBC chain. And so like many of the other Cosmos IBC chains, it just fits right in into that mesh network landscape of Cosmos chains, correct? That's right. Yeah. So Axel is powered by kind of a tenderment, right? And a lot of the rules around the consensus have been customized to go beyond cosmos, right?

So be able to connect different ecosystems like Ethereum, like layer ones, like Arbitrum Optimism and so on and so forth, and kind of really be the connector across different software language stacks. Right. So this is where the explanation for Axlar kind of gets a little funny because we have Cosmos, which is a network of chains. And then we have Axelar, which is supposed to connect the Cosmos network of chain. to other chains. So can you just like open up that

can of worms and help explain that a little bit? Yeah, for sure. I mean, I think Cosmos has been built right with interoperability mindset at its core, right? And so kind of IBC protocol can be used quite well to connect a lot of the cosmos ecosystems, right? But the reason IBC works and everything else is because

the Cosmos stack has been designed with interoperability in mind. So IBC is kind of a very native to the cosmos ecosystem. All of the chains speak the same language. And so, you know, IBC helps you put packets back and forth across them. Now, if you want to go outside of Cosmos, right, to EVM chains, you know, to arbitrium and so on and so forth, you have to speak a different language, right? Then you have to have a different protocol in mind to connect those chains, right?

And so this is where Axelot comes in, right? So our protocol, you know, can be used to connect an arbitrary EVM stack, you know, and then be able to compose those ecosystems with each other, right, and with other cosmos chains, right? So, and you can think of Axler acting as a sort of a translation layer in that,

in that process, right? So you have messages or transactions that can be executed on EDM chains that can be translated into the sort of the packet formats or messages that can be executed on cosmos chains and vice versa, right? And so Axelis serve allows you to connect the software stack that speak very different languages and, you know, sort of unite them together. So previously, generally on bank lists, we were critical of cross layer one bridges.

Generally, as a form factor, we kind of think as a structural pattern that they are insecure. They tend to kind of collapse down to just a multi-sig. So how is Axelar different in that respect? Yeah. So Can Axel is one of the only one of the Vertein networks that are fully decentralized. and then the powers, you know, interoperability, right? So it's powered by, you know, tenderman. It's an open, you know, validator set.

Anybody can participate, anybody can join. You know, and security is something which is very seriously kind of from the ground up, right? So a decor a networking layer, you know, the network is decentralized. It has, you know, robust security policies like quadratic voting, right, for process and cross-chain requests, you know, validator key rotations and so on and so forth. So that's sort of the base layer, right? There's a very secure, very decentralized network. On top of it, you know, if you're thinking about security for cross-chain, you have to have very robust engineering practices, right?

So everything from, you know, we've done over 40 audits on the network, right? Multi-million dollar bug bounties, you know, lots of ruders like unit tests and so on and so forth. So you have to have the operational, you know, excellence, right, if you want to ship anything cross-chain. You know, and finally what I call is like application layer security add-ons, right? So if you are transferring value between chains, then in your... code, right, or in your functionality, you may want to have things like rate limits, right, that would prevent, you know, worst case disaster attacks, you know, the network and layer. So that's how we think about security, kind of a from the ground up, a full stack approach,

making sure you have multiple robustness, you know, protocols in place throughout it. And the end of it can be actually a very, very secure, you know, and scalable architecture. You know, and the final point I'll mention there, kind of a new paradigms, things, like general message passing that we have a lot of applications building with, actually enable you to build different class of applications that don't rely on explicitly token bridges, don't rely on token transfer in particular. And those designs can be a lot more secure. And we can go into the details of it.

But I'd say that's the new wave of how cross-chain applications will be built out is using kind of general message passing paradigms that enable a very new architecture and design space that's more secure by default. And that's the subject matter of the announcement that's going out of Axler today, correct? That is the big thing. So, like, there's a big thing happening. There's an announcement that Axler is making. It's called Somelier.

Salmelier. Is that correct? Simileet. Samilliers. I'm not French. Simileet. Should be. So, Jackie, maybe I'll turn to you.

Since you're the one wearing the sommelier shirt, what is this announcement? And technically, what does it do? Yeah, yeah. So co-founder of Samillier. Samillier is a project that I started with my, with Christy, my co-founder, back in like sort of early 2021, right around the time when IBC was launching. But it was really, you know, it's been a passion project about the combination of Ethereum Defi and EVM Defi and Cosmos Tech.

So the idea was to build us a decentralized active strategy manager. So essentially, like, think of it as urine two point out. It was like you want to, because urine strategies, anyone who's used them has seen a pattern. You know, you start out, APYs are really high. You put more, as more money comes into them, the returns get diluted. And you've got to, and you've got to pivot to the next urine strategy. And it's just sort of this sort of endless process. And so wanted to build a protocol for strategies that adapt evolve over the time, but didn't

give up decentralization. And it was always sort of a core value for me that, like, we wouldn't be bridging tokens. Bridging tokens super hard to do well and a lot of risk, right? There's all this risk associated with it. But what we wanted, what we realized is by bridging essentially data and rebalances, like sort of trades, we could manage the trades on the Cosmos side. So you could have like strategy signal providers that are, you know, DFI. experts talking to validators, those validators agree on and process proposed trades before they happen. Like they agree and it gets bridged over. So we've been using our own bridge for over a year to run our strategies. And we have like, we have two strategies right now that collectively

have about 17 million TVL. We have the best stable coin yield on Ethereum, real yield USD, and the best ETH denominated yield on Ethereum, real yield ETH. These two strategies are the these adaptive, market adaptive strategies, they can scale, they can do, they can allocate into multiple strategies. They don't have to compromise decentralization for this. And they never bridge the tokens. So, you know, you aren't taking this like security risk of the bridge when you use the system.

But like the hottest place to be in defy right now where all of our strategists are like, how can we get on arbitram? When can we get on an arbitram? You know, it's clearly the coolest, hottest place to be. in D5, right? Most protocols, most exciting stuff, lots of volume, lots of TVL. And so been looking for what would be the right way of doing that and have been keeping an eye on Axilar for a long time and realized that this composability between IBC and EVM was possible and realized, you know, we could in a very short order get access to the ability to run our strategies, you know, similei strategies on

arbitram and, you know, many other EVMs. And like, you know, it's like, I mean, people don't really know this about me that I've been, you know, building this massive, like a very large scale, very sophisticated Deuterium project. I'm like, you know, we just joined the ERC 4626 alliance. We're like, we're, I'm like basically an ETHIMAXI at this point, like, and like love using it. And yeah, so this was like huge enabling technology. And, you know, I think, you know, it took us basically two years to get simile to like full maturity and a lot of money and a lot of time.

But like the next generation of builders, the builders who come after all of this, can just use Axol. And immediately take like combined Cosmos tech and ETH tech to build something like bigger, or better amazing in like, you know, months. Okay, so my understanding of this so far is that Axelar, Cosmos IBC chain fits right into the Cosmos IBC ecosystem. And then we have Arbitrum with this very vibrant defy ecosystem on the other side. And these things are disparate.

They are disconnected. While Axelar does have cross-chain communication capabilities, I don't think that they are meaningfully differentiated from bridging, from the cross-chain communication capabilities. from the cross-trained bridges that Bankless has previously been concerned about. But this is when some some, sorry, Samillet. Sorry, Zach, it was Samillier. I might have to do that at their time. Psalm.

Psalm. Psalm. But this is where SOM comes in and changes the game, correct? So just at a high level brush stroke, that's what we're talking about. Is that a way to do this? Yeah, I mean, well, we're like the first of what is a category of applications, right? Okay. I don't think the bridge applications of.

of tomorrow and today really look like the bridge applications of the past. Like the bridges of the past were like, okay, I need to like, I want to go like ape into this like high APY to cool on like some weird chain. I'm going to like bridge my stable coins or my other coins over. And like that's, you know, that's that's been the bridging experience of, you know, the last two years. what similei is is like no we're getting you the best eth native yield we're going to get you the best arbitram native yields we're going to get you the best we're not sucking your liquidity into some new ecosystem we're making your liquidity more effective more efficient more powerful in its in where

it's natively um so you know uh for for arbitram native defy protocols all like the GMXs the the options protocols, the Camelot Dexes of the world, we're building optimized experiences there using the cross-chain tech. Okay, so I think I misspoke. So, Somelier is a defy app. It's in, it's an application. It's in the application layer. And so I misspoke when I said that it is the thing doing the magical bridging.

The magical bridging is Axol. We are, we are the application layer of, and like we're the application where that's really highlighting what can be done now. So, Sergey, where is this? Go for it. Yeah, I mean, just to add to that, right? So traditional like Axler has been kind of composing Cosmos in a lot of EVM chains for the, one of the, you know, exciting applications was the bridge and moving tokens around, right?

And I think like like Zach said, I think sort of moving tokens around is cute, but it's kind of turned humans into manual routers, right, that they have to move their tokens back and forth just to use one application, right? And so, you know, I think what we're doing, like with the upgrade for the general message pass, and what it means is that you can have applications on Cosmos, you can have applications, you know, on arbitrum

that can talk to one another by issuing contract calls and send in messages, right? And so what that enables you is to have liquidity wherever you want it to be, but manage the contracts and manage and compose the applications, in the same way as you could compose them if they were all like an arbitram. But certain applications could not be built on a layer one or layer two on its own, like Samelier.

It needs its own validator set. It has its own security model and things like that. So those needs like separate stacks. But now they can have the same level of composability with all the applications and, you know, all the liquidity on these chains as if they were actually residing there. So I think that's, you know, that's the exciting part of them. sort of that's the general message pass and sort of paradigm, right, that we've kind of open it out between these two software stacks.

So I was talking to Zachie before the show, and we were talking about just like the war against non-interoperability. And I called it like a front, right? A front that we need to advance in order to create interoperability. And there's like marginal improvements. You get cross-chain bridges. You get some language efficiencies. You get to improve.

And so I was trying to like, weight the magnitude of what is being announced today, which is just to make it really specific, Axler's general messaging, passaging, is the announcement that we are talking today, the GMP. And so, like, the answer that he gave me was like, I was trying to measure it between, like, a small incremental step and, like, a breakthrough that we've never seen before in the world of crypto economics. And so I'll throw that question to you, to Sergey. The general gist I'm getting is like, this is a large step forward. It's not, it's not like a zero. one breakthrough moment that we have totally upended the world of crypto economics, but this is not

just an incremental improvement. Help me understand, like, how big of a deal this is for the world of cross-chain interoperability. Yeah, I mean, I think this is the first time where you can have very two different software stacks, right, like EVM stack and a Cosmo stack, being fully composable with one another, right, you know, through excellent, through the genomic passage. And on EVM land, you know, it's much easier to compose things, you know, and XER have been doing like general message pass and there. But across different software stacks like Cosmos and AVM, it's, you know, it's much harder to do, right?

You know, like Zach said, they sort of spent, you know, kind of two years building the initial version that connected to, you know, Ethereum, right? So how do you do that for all the chains for all the cosmos and all the, you know, EVM chains? And that, you know, that's what we've done with the very simple architecture. So, you know, what I view it is a step forward to, have better developer and better user experiences where people, you know, don't have to think about

bridging, don't have to think about moving their tokens that would in turn, you know, enable us to have more users in the ecosystem because I think, you know, right now it's very painful. If you have, you like to play with an application, oh, it's in a different chain. Oh, let me find a bridge. Let me move my token. It's a different token. You know, oh, I need a wallet. I need to pay gas across all of those things.

But all that stuff we can remove away, right? And so you can have, if you're user of Samaria, you can just interact with arbitram and vice versa. If you have an application on arbitram, you want to submit a request and that request needs to be executed in an application in a Cosmos ecosystem, you'll be able to do that. So much, much simpler, you know, user experience, much better, you know, liquidative properties. I think that's what, you know, it all has made. So, Sergey, when I said, like, had bankless had previously been critical about cross-chain bridges, I think it is that migration of tokens across-chained bridges. I think it is that migration of tokens across chain is where we start to get scared. And I think we are in agreement in that philosophy.

It's like that is where the insecurity comes from. And so this is the new strategy that Axelarch pioneering is not token transfers, but data transfers. So you call it general message passing to just allow chains to talk to each other, communicate messages to each other, not share assets with each other. And so I think it's saying that this is the new way to do interoperability, is to not share assets, but share data. How does one actually achieve a fully expressive level of interoperability if only data can be passed?

So the way that you and Zach are talking, it's as if the full vision of interoperability is equivalent in this world. Are there any tradeoffs in just like the messes passing versus token passing world? And do we actually get the fully expressive interoperability world that we would get if we had secure token passing too? I mean, you can build secure. But yeah, I'll say briefly, I'm checking me head on. You can build token transfers as an application on top of general message passing, right? So if you want to transfer tokens, you know, you can build that as an application.

You should have, you know, robust security there, maybe rate limits and so on and so forth. So that you can do. And so I guess what general message passing allows you to go, you know, sort of, beyond that, like we said, right? And so the analogy that I like using, right, is we traditionally move the liquidity to where the application logic lives, right? And that's what creates like the painful experiences,

fragmentation. You can still do all of that, you know, if you want to move liquidity and, like, build a bridging application. But, you know, with this new software paradigm through a general message pass, and you can move the application logic to where the tokens are, execute that logic, and then return the result back to the user's wallet.

Okay, so I submit it with my wallet on like Cosmos chain, the transaction is executed on Arbitrum, and I get result back to my wallet. Like when it is not moved, it's the interaction that we have, you know, within it. So you can build, it gives you kind of a, you know, you know, in the theorem, right, I think everybody knows that EVM is serve too incomplete, right? Meaning that you can build anything. And so with Geno message pass in it, sir, it's a too incomplete way to compose, you know, chains and ecosystems that you can build anything. and, you know, bridging could be one of the applications if you really feel like it, but it doesn't get you the same level of experience. Sure.

Zach, you were going to ask something? Yeah. I mean, I think that right now, the user experience that is most familiar to most users, most capital, is like the EVM, like the MetaMasks, noses safe type experience, right? That's primarily an experience that you want, you know, you want to be able to get give. So like when you interact with similei, you don't, you know, you don't know about the Cosmos side really as a user of real eat the real. And the same thing will be true for our arbitram strategies, right? Like you'll interact with all of them from Metamask. You'll, you know,

it'll feel like a complete, it always feels like a completely native arbitram or experience. But you're getting all of these benefits sort of behind the scenes. And I think that that kind of application paradigm. And you think about how much more accessible it makes everybody to be able to embed, like, we need to be able to move away from this like current world where like when you want to do something, like every time you want to like access something new in blockchain, it's like, okay, I got to like learn a new wallet, learn a new ecosystem, learn new block explorers, learn everything, right? It's too much. The similei version of multi-chain has been like you get all you get you're getting these enormous benefits of just get expressed as better yields

from the multi-chain world but you're just like your user experience what you know you know you can go look at a simile strategy on d bank see where the assets are allocated you can you know you can your transactions are all on ether scan you know this is what the world would people want Learning about crypto is hard. Until now, introducing Metamask Learn, an open educational platform about crypto, Web3, self-custity, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. Metamask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual practical experience for navigating Web3. The purpose of Metamask Learn is to teach people the basics of self-custity and wallet

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to Defi with the Uniswot mobile wallet, safe, simple custody from the most trusted team in Defi. Download the Uniswap wallet today on iOS. There's a link in the show notes. So, Stephen, you've been patiently waiting for us to arrive at the Arbitram part of this conversation. From the Arbitrum perspective, if you could, if one could speak for the protocol, why would the Arbitrum protocol be interested in this? Like, what's exciting from the Arbitrum side of things? Yeah, I think from a technology perspective, you know, I think it's all about access, which is I don't want to repeat the, the points have been made.

But the idea is there are different ecosystems with different properties and allow you do different things. And the question is, are these siloed or can you access one from another? And to, to Zaki's point, you have the similei, had an idea there. Just kidding. you have a similei, um, um,

um, um, um, a commoise chain and that has some really nice capabilities. For example, I think, you know, one of the things that I,

that I'm, uh, most excited about is the ability to ingest private data and, and use that to inform these strategies. And, um, now the question is, um,

so you have these strategies, you have this data, these strategies. What can you access there? I think that's where Axler is helping. Oh, now you can access the Arvishm ecosystem. You can access that this as well.

And, you know, fundamentally, um, You know, bridging is really, really important. And actually, so I'll talk about the Arbitrum Roll Up Bridge for a second. Many people don't know this, but that's also just the bridge between the native bridge and Ethereum and Arbitrum is a general message passing bridge, which most people

just use to bridge tokens. But obviously, there's a lot more to explore when you look at general message passing, be it between Ethereum and Arbitram, be in other ecosystems. And, yeah, I think some of the really important value here in connecting these different chains, in these different technologies is not being siloed and having the ability to be, you know, securely, that's the key word here. And that's where the, you know, the questions you're asking, David, of course. And I think that's, you know, Sergey's focus here is to securely be able to bridge and access

these different ecosystems because, you know, just two things. One is like there are different levels of expressiveness, different ideas, what you can do, what you can do with private data, you wouldn't necessarily be able to do directly in these ecosystems. Also, the idea that you just want to access multiple ecosystems from your strategy, I think these are all really important. I think from, you know, the arbitrage, from technology perspective, it's nice to have to be open and accessible from these different environments. And also I'll just say one more thing on a multi-chain, you know, a multi-chain vision that I have, which is, you know, we get very focused here, or I get very focused on, like,

like, you know, the values that I care about, which is, you know, security and decentralization. And that's obviously what led to decisions that off-chain made or the arm when it was, you know, initially designing the arbitralicum technology or I was doing back when I was with Ed and Harriet Princeton. It doesn't mean, though, that we have to ignore the fact that there are others that make different decisions. And I'm not talking about any of us here. I'm talking about some other, say, other layer ones or other layer twos that have different properties. They can have different values and different decisions that allow them to make a different set of tradeoffs. It's all tradeoffs. So they're always pros and cons. But the idea of being able to

talk to each other is still valuable, right? You don't always have to be so maxy and say, it's either you believe in our set of values and interact here or else, you know, get away from us. It's like, no, okay, you have, you know, this environment and there's this other environment. And there's a different set of properties in them, maybe express to this, express to this, maybe security, but can we bridge these? And I think Axelar, you know, is, you know, one of a great, a great project that's working on exactly solving this problem. And Simileet is one of the first users, or perhaps the first user of this particular integration that's showing the power that can happen when you grant this access from one ecosystem to another.

So the image that I have in my mind about how this is, I try and turn these into like visual metaphors just because I understand those better. And so we have the Ethereum multi-layer-to landscape. I always kind of view it as a tree with the tree trunk as the base layer, and then it branches out to the layer two is and then layer three is on top of that. And then we have the philosophically aligned version of the Cosmos Mesh Network app chain system, which is like a like a bush or like a mycelial network. Mycelain network is a really important metaphor because what I'm seeing with Axelar here

is that we are actually seeing the first cross connections, the first bridges being made between the Arbitrum Layer 2 and the Cosmosmester Network. I don't know if you call it a layer one, but the flat landscape of chains. And so this, and Sergey, correct me if I'm wrong, but the idea here is that this starts with GMP, the general message passageing. It starts with data as perhaps just like the small thread of connection that connects these two endpoints. But I'm assuming that it grows from there and it becomes a more robust than just data

and can the actual threads can actually combine in a more robust way. That's my intuition. Can you reflect on the accuracy of that metaphor and maybe perhaps they can make it a little more tangible for us? Yeah. No. So you're right, right? Like so kind of a, the data itself that you can pass, right, can be like I said, sort of arbitrary, right? And so when I guess like when you when you talk about reinforcing what can be done is that where, you know, this is where we rely on builders like Samalia, right, to actually build the application logic into that data.

So, you know, performing those types of, you know, cross-chain calls, you know, and Axel will help you facilitate all of the communication in parallel, right? I guess just to add one more thing to, I think, what Stephen said, right? Like, I think why it's important, you know, to intraoperate these ecosystems is to really allow innovation to continue to happen across the software stacks, right? I think we're still in the early days. I think there's still a lot of decisions to be made on how to scale. there's still a lot of decisions to be made, like how EVM should evolve,

a lot of decisions, how Cosmos should evolve, right? And so the interoperability between that means that you don't, you know, you can innovate sort of any way that you want within Cosmos stack. You can innovate any way you like the application within the Arbitrum stack, right? But they can all still be kind of composable and talk to one another. And yeah, kind of as more cosmos chains, right, like use the sort of the XLF with the general message passing. You know, you can think of them as more connections being made, right?

through the axler and then axelor helps facilitate that with arbitram. So lots of data pass and then arbitram you have a lot of applications that can consume the data from all of the cosmos ecosystem through, you know, what we call like as a gateway smart contract. So you can talk to one contract and you have access to, you know, now like hundreds, right, of cosmos chains for free essentially, right? So that's kind of a one connection, but many to many on both sides of the equation. And so, Gary, correct me if I'm wrong, but I think the way that this works

is that if you can connect an EVM chain like Arbitrum to a non-EVM chain like anything in Cosmos, can't you do anything? Like, those are just two language types. Like you could do other language types as well, correct? Correct, yeah. We're ready working with a lot of different layer ones, right? So stellar, you know, we're working with kind of sweet, right?

Like app those integration. So pretty much anything that has a smart contract capabilities can connect with X-A-Sah. And that was one of our requirements, right, as we're designing the protocols to make sure we can plug-and-play interoperability. So don't require any changes from layer one or layer two be able to come in and just sort of plug-and-play, make sure the protocol is like as late as possible, you know, requires as little effort as possible to integrate. And, you know, again, like that's very important, I think, in this phase of the ecosystem them to allow innovation to happen across languages, across settlement layers, right, across consensus protocols, and having this sort of plug-and-play approach that you can talk with,

you know, any different language or a virtual machine is, you know, pretty important. And that's what we're following. Okay, so I hate to get fixated on the bridge conversation, but just like, remind me one more time about the security model for Axelar and how it's compared to bridges in the past. Like, we've seen the wormhole hack, we've seen the nomad hack, We've seen the Rohn and Bridge hack. We have cross-chain bridge hack PTSD. And so I really want to just drill down into this.

Like, what's the security model for Axelar? And what's this defense against something like this? Yeah. So security models that Axel compared to a lot of the protocols that you mentioned is actually fully decentralized network. Right. So it's not relying on a small like multi-sig like three out of five or whatever was the Ronin hack where the keys got compromised, right?

It's a decentralized network where you have lots of validators. that are collectively processed in all the cross-chain messages. And so what that means is that, you know, from the security side, you have security that backs, you know, the same model is backs a lot of like layer ones on their own, right? So layer ones have a decentralized validator set that sort of secures and processes, and you get security through, you know, having a consensus, right? And so that's what Axel is.

It's kind of a security through a decentralized, open, and, you know, permissionless validator set, augmented with a lot of robust engineering and a lot of like application layer, you know, security features, right, like rate limits if you want to do a bridging application, right, or things like that. But it all starts at the very core, which, you know, you have to have the right sort of decentralized design to be able to diversify software deployments, to be able to, you know, encourage as many participants as possible and not have a closed, you know, multi-sign between a few people.

So does that, that makes it sound something similar to like Wren protocol, where it was a decentralized network of nodes along with a native token that would do a lot of cross-chain infrastructure. Is it spiritually, are we in the correct area? Yeah, so I haven't looked at like the rent full of design. I mean, I'm not sure if they're

valid data participation was fully decentralized, that anybody could actually join and anybody could participate. But yes, like, you know, in principle, if that's what they're doing, then yes. Okay, cool. Okay. And so like the the main question is like, Man, like, why didn't we get here sooner?

So, I mean, a lot of the cross-chain layer cross-chain bridges were just like multisigs, right? And so kind of egregious in hindsight. But it really just seems to be that the main big novel parts about Axler is that it's hooked into a pre-existing ecosystem that stood the test of time being IBC and Cosmos. And it's leveraged this general messaging as like the base level of cross-chain bridging. and then it's done just a lot of, I'm assuming, technical engineering lifts to get to the point where it's been able to connect the EVM to IBC and then also all the other chains. So this is my mental model of so far as a result of this episode. Is that right?

Yeah, I think that sums it up. Yeah. And I think, you know, the one thing that I just want to add, right, is that kind of, even if you have general message fast and or things like that, you still have to think about how do you build the types of application experiences that we talk about. So when a user submits a transaction similar, how do you make sure it actually gets executed on arbitrage term, right? Who's going to pay gas there and things like that?

And so, you know, we've augmented kind of the network itself with a lot of services that allow you to do those things, right? And so I think the developer experience building in a multi-chain world is very, very different. You have, you know, asynchronous message passing, and you have execution on remote chains and things like that. So you actually have to build, you know, a lot of services around these poor protocols to make sure the experience is as seamless as possible, right?

And that's our, you know, the final piece that we're working on is actually building the types of tooling that developers needs to build these types of applications. And Sunny, if we can put the Cosmos hat on, just how would you, and we zoom all the way back out and view Cosmos both as an ecosystem of many, many chains and also a long-term project that's

I think sometime in like 2016 or 2017. What does this technology mean for Cosmos? How does it fit into the whole Cosmos vision? So, I mean, there's no one Cosmos vision, but my Cosmos vision has always been the sort of Cosmos Ethereum merger vision, right? You know, the success of Ethereum L2's Arbitrum OPE stack have kind of brought the like toolkit for building blockchains, innovation marketplace that Cosmos already conceived. of to the Ethereum ecosystem.

And, you know, there's also, you know, with eigenweyer, things like ideas of like sort of subsetted validator sets, you know, like sort of, you know, partial, you know, shared security, all of these things. So like, there's just been this general sort of convergence that I believed in for a really long time of, you know, cosmos ideas, Ethereum ideas into the one. ultimately, like, we're not here. I'm not, I don't care if, like, Adam is, like, the most valuable token or, or, like, what the price of ETH is.

Like, ultimately, we're here to build a secure infrastructure for the entire world, right? That's the ultimate goal. And so, to me, it's always been about, like, how do you blend these, like, all of these different technology ideas to get to that? And so, like, to me, the vision is Cosmos, Ethereum, it's all one thing. thing ultimately for the users. And the users are just getting like robust, secure financial primitives and other, you know, interactions, transactional prohibitives that like they couldn't get anywhere else. And so, you know, in the ordinary world, if you wanted to have something like,

you know, simile, you'd be, you know, sending your money to a hedge fund. And instead you have like a decentralized secure system that like protects its users from like strategists going, you know, off the rails, doing anything malicious. It's actually able to have a coherent security model, but allows for extracting alpha that you wouldn't be able to get it. Stephen, part of the recent Arbitrum announcement was not only the launch of the Arbitrum Dow that made everyone very excited, but the idea of multiple Arbitrum chains being built in a stack. And so we got layer twos and we got the layer threes and everyone loves all the chains. how just from now that Arbitram is on like kind of the receiving end of Sommelier,

gosh, I'm so sorry, Zaki, Sommelier and the interoperability efforts from Auxlar. Is there like, how is all of these chains going to interoperate with the Axler bridge? And overall, what is the net effect upon Arbitrum, aka, like, why is this bullish for Arbitrum? Yeah, so a few things to be said. First of all, I think, you know, just getting, you know, more access to arbitram. I think the fact that just starting off with arbitram is very, you know, it's a good sign for arbitram and, you know, the strength of the ecosystem. And that's where, you know, a lot of the strong defy is.

So, you know, it's exciting to see that, you know, decision has made to expand to Arbitrum first. But in the comments to the L2s and another L3, so, yeah, it's a great question, which is, like, so how do those fit into the bridging environment if I understand? and then like how basically, you know, will they use axelar or something else? So the answer is like, I think, a little bit of both. You know, there is particularly when it comes to the air three chains, Arbitramorchamorbid chains, there is the ability for these things to talk together a little more natively. So to actually have some native interaction.

So in a roll up, for example, in Arbitram, you know, there's a view out there that says, all rolled up, sorry, is a bridge, right? So, you know, there's just like one of the framings of what rollups are or what chains are even more generally. And, you know, so there is, you know, the arbitram obviously has a direct bridge to Ethereum. And one of the interesting things, though, is, okay, but what about these other chains? What about two arbitral chains? Right. Today there's arbitration one arbitration.

No, but can they talk together? So today they don't talk together better than that, right? They can talk together via Ethereum. So there is room and there are these fast bridging solutions that go ahead and talk to one another, you know, can bridge that gap. I think over time, um, there are opportunities to develop technology that can allow different layer threes to talk together, um, more broadly or different layer two is to talk together, um, more, more, you know, more directly connected, but you will have, that will always only be like, you know, in the same family of technology, but if you want to

reach past that, say to get to the causeos ecosystem, say to get to the, you know, to other ecosystems, you're going to need, uh, interoperability solution that don't have those same native. properties and or don't have those same native abilities and those where I think are very important. One other thing we know, which I would all mention, which I think is very interesting, not to digress too much into the optimistic or the roll-up wars, but one really, one thing that comes up a lot with roll-ups. People like to talk about the benefits between like different types of roll-ups and bridging is one of those that comes up right away. People say, well, ZK roll-ups have a faster bridging, which is, which is, you know, which is true, right? If the, if the proofs are

faster. It's not instant. It's usually hours to days, hours to half a day or so, depending on the roll-up. But I think what people miss and what this show actually highlights is, that's looking at a very, very narrow bridging example, right? When you talk about bridging from Ethereum to a roll-up, people like to focus very much, but in a multi-chain world or a cross-chain world or whatever the term you want to use, both ZK roll-ups and optimistic roll-ups or any type of role-ups that want to access other ecosystems or other go across the boundary, not just to the chain that they're built on are going to have to rely on other, other bridging technologies. They can be more native. They can be third-party technologies. They can be axilar. And they're all going to be kind of

important to this to this big ecosystem. So, you know, from an off-chain technology perspective, I think, you know, interoperability is the frontier right now. And this is very, very exciting to see today's announcement. Well, Zachie, Stephen, Sergey, I really appreciate you guys walking me through the story here. And so, Sergey, I'll let you end it here. If listeners are peaked and they want to learn more about this, maybe they're a developer and they want to open up the docs or they're just a user and they want to use where out

they go? Yeah, I mean, I think a good start point is just to go to axle.network website, you know, and from there you can find links to Discord. We have, you know, developer channels. and you can find links to the docs. So it's docs.axil.dev, and you can take it from there. Awesome, guys. Thank you so much for joining me here on the show today.

Like always, Bankless Nation risks and disclaimers. Crypto is risky. Eth is risky. DFI is risky. Cross-chain bridges probably are still risky. Yeah, at least they are headed in the right direction. You can lose what you put in. But we are headed west.

This is the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.