Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - How Gnosis 3.0 Paves the Way for Mass Adoption - Friederike Ernst

Episode Date: July 20, 2024

One of the OG flag bearers for decentralisation, Gnosis initially set out to build a prediction market on Ethereum. However, unlike the vibrant ecosystem of today, the early Ethereum days were barren. As a result, Gnosis team decided to build out their own infrastructure and tooling to suit their needs. Before long, tools such as Gnosis Safe, Zodiac, etc. were quickly adopted by the entire industry. Nowadays, since the foundation has been tried and tested, Gnosis 3.0 aims to focus on improving consumer dApp UX in order to facilitate widespread adoption.Topics covered in this episode:Gnosis’ background and visionGnosis 3.0Gnosis DAOCapital allocation managementHow Gnosis Pay revolutionizes payment railsThe ‘Baguette Conundrum’: privacy & regulatory compliance for on-chain paymentsThe future of the EVM vs. modularityWould Gnosis shift to an L2 architecture?Episode links:Friederike Ernst on TwitterGnosis DAO on TwitterGnosis Chain on TwitterGnosis Pay on TwitterSafe on TwitterCoW Swap on TwitterSponsors:Gnosis: Gnosis builds decentralized infrastructure for the Ethereum ecosystem, since 2015. This year marks the launch of Gnosis Pay— the world's first Decentralized Payment Network. Get started today at - gnosis.ioChorus One: Chorus One is one of the largest node operators worldwide, supporting more than 100,000 delegators, across 45 networks. The recently launched OPUS allows staking up to 8,000 ETH in a single transaction. Enjoy the highest yields and institutional grade security at - chorus.oneThis episode is hosted by Sebastien Couture.

We deployed the first smart contract to Ethereum back in the day. It was a prediction market on our then-competitor, Auger's token sale, whether it would sell out or not. We were so early that we started building lots of foundational infrastructure for the wider Ethereum ecosystem. So we've built things like the NOSUSA safe, KOWSWB, Zodiac Dow tooling, Nosis chain. All products and projects built with a NOSUS should accrue value to the NOSIS token. when you have an open platform, anyone can kind of make the user experience better. In 10 years, all the infrastructure will be blockchain-based. Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization and the global blockchain revolution.

I'm Sebast Sankuichu, and today we have a bit of a treat because one of the hosts is becoming a guest. That's right. We have Frederica Ernst, who is co-founder at Nosis, and she's in the guest seat today because we're going to be talking about NOSIS, and specifically, NOSIS 3.0 and their updated vision and thesis for the platform. Before you do that, though, here's a few words from our sponsors. This episode is proudly brought to you by NOSIS, a visionary collective committed to fostering and expanding applications for a decentralized future. NOSIS is at the forefront of innovation with NOSIS pay, Circles, and Metri, revolutionizing open banking and creating a superior form of money.

With Hashi and NOSIS VPN, they are building a more resilient and privacy-focused open internet. Are you seeking a robust L1 to launch your project? Well, look no further than the Nosis chain. Enjoy the same development environment as Ethereum, but with significantly lower transaction fees. And with a robust network of over 200,000 validators, nosus chain stands as a credibly neutral and resilient foundation for your application. governance adnosis is driven by nosis Dow, where everyone has a voice in shaping the project's future. Join the NOSIS community today by participating in the NOSISDAO governance form.

You can deploy your project on the EVM-compatible and highly decentralized nosis chain or help secure the network by running a validator with just a single GNO and low-cost hardware. Embark on your journey towards decentralization today at NOSIS.io. course 1 is one of the biggest node operators globally and help you stake your tokens on 45 plus networks like Ethereum, Cosmos, Celestia and DYDX. More than 100,000 delegates stake with course 1, including institutions like BitGo and Ledger. Staking with course 1 not only gets you the highest years, but also the most robust security practices and infrastructure that are usually exclusive for institutions.

You can stake directly to Quaros I's public note from your wallet, set up a white table node, or use the recently launched product, Opus, to stake up to 8,000 eth in a single transaction. You can even offer high-year staking to your own customers using their API. Your assets always remain in your custody, so you can have complete peace of mind. Startsaking today at corus.1. Karika, how does it feel to be a guest on Epicenter for the first time? I am weirdly nervous about this. I mean, I've been on probably like 200 Epoena episodes,

and this is the first time as a guest. It feels weird. It's nice. It's nice, though. Yeah, I think Brian was a guest once, like, way, way back in the day. I had interviewed him about his whole Bitcoin kamikaze attack thesis. Sunny's been on for sure. But I don't think Meher's,

been a guest. Anyway, but yeah, happy to do this and really cool to, you know, see NOSIS continue to grow as an ecosystem, like very organically, but always like up into the right. So let's get started. So like for folks who are coming at this with a fresh set of eyes, what is Nosis and what's the background here? I think like most people, of course, are familiar with Noisasas as like a long time builder in the space, one of the very first companies to be, to build on Ethereum and has gone through several iterations of products and visions. But yeah, what's the Nosis vision today and how did you guys get here? So we've been around for in blockchain terms of very long time. We were, we deployed the first smart contract to

Ethereum back in the day. It was a prediction market on our then competitor Auger's token sale whether it would sell out or not. Yeah, so basically we've been around for a super long time. We started as a prediction market platform. We were so early that we started building lots of foundational infrastructure for the wider theorem ecosystem. So we've built things like the NOSUSA, COWSWOP, Zodiac Dow Tooling, Nosis chain, obviously,

and a couple of other infrastructure projects that are still around and alive. today. Many of course are not, but I think this is the natural course of building stuff. And we have recently pivoted a little bit to what we call Nosis 3.0,

basically from building foundational infrastructure for the wider ecosystem to building adapts that are meant to be usable eventually by actual real human people who want to use it because it works

better than what they currently have. Mass adoption. We're going to get there. I mean, we've been saying this every bull market, not me personally, but kind of the space has been saying this, every bull market since 2015, probably. I feel like this time it's true, though,

because we have built so much technology that actually allows us to abstract things away from the user. So, for instance, one example is the seat phrase, right? the seed phrase, it's a terrible user experience. These are your 24 words. Don't ever lose them, but also never show them to anyone or everything else gone. I mean, this doesn't work. This doesn't work for us.

It doesn't work for the wider public. But having that self-custodial element and that permissionness that kind of comes with it, but having a much, much better user experience, this is something that kind of we can create now. And consequently, I think that this is actually the bull market in which we will see consumer adoption. One of the things I like about Nois and I find quite commendable is that it appears as though the organization is very value driven and staying very true to the original ethos of crypto of like, like have custody of your assets, running your own nodes, and getting to financial sovereignty.

And I think that in a lot of cases, you know, teams that sort of start with that original vision or start with those original values over time maybe get corrupted in order to achieve better efficiency in order to build better products. Like, how have you guys been able to maintain, like, such a high level of focus on, like, the vision and the values of crypto while at the same time building tech that enables users to, you know, to abstract away, as you said, like, all this kind of complex technology? I think I would disagree with the premise of the question a little bit. I think in the past we've not done this successfully. So in the past, I think we've built very much for people in the space who already knew how it worked and who were already accustomed to the user experience drawbacks of crypto.

So I think things like the Nosis Safe, for instance, under the hood, it's fantastic tech. It's very much not a retail, it's not a retail product. Same for a cowshop, actually for most taxes. They're not retail products as such. So, kind of so far we've kind of optimized for building things that kind of stay true to the ethos and thereby sometimes neglecting user experience in terms of, I mean, maybe it's not even fair to call it neglecting.

So kind of we've prioritized building truly decentralized tech over usability. And I think that's kind of been, that's kind of come to our detriment. Many times over the years where kind of we saw competitors kind of pull ahead because kind of they were, they were taking shortcuts. And I mean, it's completely fine. But I think now we're actually in a place where we can build everything on a completely decentralized stack. And I think it's kind of, it's time to kind of think about

why we actually wanted to do this in the first place, right? So if you think about why would you build anything on a completely decentralized stack, from an engineering standpoint, it's a complete pain. So building anything, building everything on kind of AWS would be much, much easier and faster. So kind of thinking back to what exactly the the decentralization value proposition was, I think kind of it comes in three, it comes as a

triptych, right? So basically the first thing is actually decentralized ownership. So kind of, if you do anything on the internet today, kind of it accrues value to the same five companies and people behind the companies. And with decentralized technologies, we can kind of decentralize ownership in, in that sense. The second thing is individualized agency. So kind of on the, on the, on web three, we can lower the barrier to entry for people very significantly so they can have access to things they previously didn't have. And this, this also includes kind of coordination in very large scales and dows and so on. And the third thing is actually user experience, ironically, because kind of when you have an open platform, anyone can kind of make the user experience better. So if I kind of have

a killer feature idea for a centralized product like Google Maps, there's no way I can kind of integrate it. But kind of at that point where you kind of have a decentralized Google Maps, I could, for instance, say, I know exactly how I'll give you, I'll give you a fictitious example here. I know exactly how traffic light, the traffic lights are set in Berlin. So I can give you better estimates of how long it'll take to get places based on kind of which phase there and so on. And I could kind of just add that onto the existing decentralized Google Maps product. And you can't do that kind of if you're building on centralized technology.

So kind of when we. think about kind of what can we actually build now that has additional value to retail users, I think these are kind of the three prongs that kind of we need to look at. So can we make things, can we benefit users from making ownership more decentralized? Can we make things accessible to users that previously weren't accessible to them? And can we kind of build a platform on which anyone can innovate? Okay. So where does the NOSES? 3.0 vision sit into all of this and what is the Nosis 3.0 vision and how did you arrive to this state of Nosis? Yeah. So basically, NOSA 3.0 vision is twofold. One is just very organizational.

So kind of, I think in the past, because we have built so many things, people are always confused about kind of how it relates to the Nosis token. And kind of it clarifies that. So it kind of very clearly specifies that all products and projects built within NOSUS should accrue value to the NOSIS token, either directly or indirectly. And the way that can happen is either they use GNO as its own token, or they kind of have a different token that then is value coupled against the NOSIS token. So for instance, SAFE, they have their own token, and it gets put into an automated market maker against G&O. kind of if safe appreciates,

G&O will appreciate, and vice versa. So kind of without using the same token and kind of while having in, kind of, independent, kind of act the way that's in the interest of each project individually, you can still economically couple them together. And we do that both with projects that we have spun out and with projects we have invested in.

So Nosis has actually, we have invested in over 80 projects over the last six years or so, so kind of like a mini VC. And we hold very significant positions in many other tokens, consequently, and kind of we can couple them the same way. So for instance, one example, for instance, would be Autonelus. So we hold $50 million worth in autonomous tokens. So kind of we couple it to the G&O token this way.

Does NOSS provide what in Cosmos we call like protocol-owned liquidity, where Nosis, the chain can provide liquidity, say, in like no token to a protocol in exchange for that protocol's token. And like this is used particularly in the case of the Cosmos hub where the hub provides atom liquidity, say, to like a dex. And then that dex in return, it's sort of like a cross-chain swap, essentially. and then it aligns, you know, incentives both ways. Do you guys engage in that sort of? This is exactly what we do. So, yeah, protocol owned liquidity is also what we call it in our books. And it works amazingly well for us.

And then obviously we have NOSIS chain so that, you know, the staking token for NOS chain, NOS chain is very decentralized. So there's 230,000 validators, which is 20% of what Ethereum has. And you can, we have intentionally lowered the barrier to entry for staking so that interested laypeople can kind of become a part of this network. So you need one G&O costs around $350 these days and you can run it on most hardware. You need, and yeah, we try to make it easy. For people, you get between 10 and 15% APY. It's lots of people do it just for the fun of kind of being part of a decentralized network.

I think it's, in terms of technology, it is a similar degree of technical expertise required to running an Ethereum node, but only a fraction of the capital requirement. So kind of the validator set is very large for us. How big is the diagnosis validators like now? It's like 230,000 validators. Right. There's a lot of validators. Right. But just like an Ethereum validator, this is essentially like every validator is a chunk of, you know, like 32-no or something like that.

So do you have an idea of like how many individual stakers that is? Yeah. So it's difficult to kind of pinpoint exactly and also that's deliberate to a certain point. but it must be around 2,000 individuals who are validators on the network. This might sound like a kind of silly question because I don't know this, but is there liquid staking in NOSUS? Yes, we also have liquid staking. I mean, anyone can kind of run a liquid stake on top of NOSA, so kind of its permission is that way. we don't encourage it particularly

just because as soon as you have liquid staking you have economies of scale again and then you end up in a kind of Lido-like situation where a significant portion of the staked acid actually rests with one set of contracts and that's yeah I think this is difficult from a network perspective if you want to make your network

as resilient as possible. This is not a great situation to be in. But what we also have, and this was, this, we actually had the first instance startup this week is Obol,

which is... It's decentralized validator. Exactly. And there's also Diba, which is also decentralized validation and so, and we've also, those are also

among the projects that we as NOSUS have invested into, just to make sure that kind of the ecosystem remains robust. Right. So how are you leveraging OBL? OBO runs on NOSIS chain, just like it does on MENA. Okay, got it. Okay, interesting. So this pivot from building foundational infrastructure to DAPs, what does that mean, sort of organization? Does it mean that NOSIS is taking a step back in terms of maintaining the foundational infrastructure and we'll have more sort of product people building DAPs internally, or are you investing or financing DAP developers to build on the infrastructure? So yeah, how does that kind of?

Yeah, that's the other part of the NOSIS 3.0 vision. So that's kind of the idea that now we kind of have to build applications that kind of serve real people with real problems, we will not stop maintaining the infrastructure for sure. So kind of like part of the infrastructure projects are spun out. So safe and cow and zodiac and so on, their own things just as Kapatkirs, which we retain a large stake in,

but they are their own projects. And we have no hand in kind of running them operationally in any way. And nosus chain, yes, we will absolutely continue maintaining it. It is more of a co-ordinative role, kind of just like you wouldn't say the Ethereum Foundation kind of runs Ethereum. Kind of we have a Kordef coordinator and we have all the different clients that, or most of the different clients that Ethereum Mainnet also has. So they have dedicated NOSIS chain teams. And kind of we have someone in-house who coordinates those teams. But in principle, that is pretty decentralized and we don't have to do a lot of things.

There are other things where kind of we do have a hand in making sure that foundational infrastructure is there for the NOSIS ecosystem. So things like making sure there are block explorers, making sure the RPC endpoints work and so on. Usually that is run via the NOSUSDAO, so kind of the RPC endpoint providers and and the blog explorer providers and so on, they just make a proposal to the noses down. Obviously, we've reviewed this, but so do all other GNO holders. So kind of this is kind of, it is,

we still feel responsible for it to a certain degree, but it actually runs pretty well on its own. And this idea that kind of we will pivot to applications and specifically payments and financial rails applications, this is the other half of the NOSUS 3.0 vision. Yeah, I want to talk about the payments and financial rails in a second because I think that's actually one of the most interesting things here. So how did we get that?

So we just literally sat down with a blank sheet of paper and kind of brainstormed where we think we can add the most value with the technology stack that we currently sit on. And there were a couple of contenders. Another one was social media, because obviously clearly it would benefit a lot from kind of being on a credibly neutral platform. But the easiest lift in terms of technology seemed payments,

while at the same time the business model that kind of payments comes with, it's very clear. So kind of this is tried and tested a million times. So we kind of eliminated as many unknowns as possible and said, okay, this is where we can provide something that is actually useful to a very significant number of people and we think we can build it with what we currently have. That was basically the rationale behind it. Yeah, so I'd like to talk about NOSIS Dow a little bit and its role in governing the

NOSIS infrastructure. What aspects of the infrastructure does it govern? Is it just NOSIS chain or does it have also a role to play in other of the foundational infrastructure like the safe or like what are the interactions I guess between NOSIS DAO and the SAFE DAO and you know some of the other infrastructure that you have? That's a fantastic question. So first of all, it doesn't really govern noses chain. So there's very few parameters that the Dow actually sets. In principle, kind of noses chain is governed

by the validator set because they kind of, they decide on whether to upgrade their notes to which software. If the validators are not on board, there will be a hard fork and so on. So, and then

there's actually a lot of other stakeholders that also kind of influence nosis chain, often not as directly as the validator set. So things like the core developers, the stable coin providers, the RPC endpoint providers, the Oracle providers, centralized exchanges and so on, basically that entire set of actors, they somehow govern noses chain together just like the same is true for Ethereum, right? We wouldn't say, the Ethereum Foundation governs Ethereum. And it's the same for NOSUSS.

What the NOSUSDAO actually mainly does is allocate treasury. So the NOSUSDAO sits on a very large treasury, around 500 million in GNO, and another 500 million in ether and stable coins and other tokens. and the NOSUSES token kind of is a voting token in the DAO, so the allocation of funds happens via the DAO. This is kind of the main thing that the DAO does, and then kind of it tries to align on of these portfolio tokens, portfolio companies, with NOSUSES interest. So for instance, Nosis Dow holds 20% of the safe token supply. So obviously, kind of there are talks between Noses Dow and Safe Dow

about kind of like how to align each other strategically. And then kind of just because kind of there's very large aligned economic interest between the two DAO's. And yeah, in principle, that should be much more out in the open. So I think a lot of this actually happens, like for all Dau's at the moment, kind of behind closed doors and different telegram groups and then kind of proposals get posted and kind of there's protocol politicians and so on. I think coming to a point where a lot of that is transparent and open to anyone who kind of wants to join that discussion. I think this is somewhere we need to get to. one initiative that we're spearheading is kind of having a dedicated forum page for each large holding in tokens that NOSISDAO has

where kind of people can talk about the strategic alignment, say, between NOSIS and SAFE, and what SAFE should do for us and what we should do for SAFE and kind of what happens if this doesn't happen because always kind of when he holds tokens, obviously divestment is always an option, right? So, yeah, basically having these alliances out in the open that are currently, and I mean, I'm not even a part of most of these alliances. They kind of, they happen between different, you know, token holders and safe token holders, and they kind of result in proposals in the forums.

But, yeah, so in principle, this is how, this is how NOSES and the portfolio companies or projects kind of align themselves. What's the philosophy in terms of capital allocation management? Like is the Nosis philosophy to have all of the capital, the treasury managed by the Dow? Or do you guys have like sort of organizations that are allocated pools of capital with like a board that that itself allocates capital? So like for instance, in Cosmos, like the hub allocated quite a bit of capital to this organization called ADAO. they have a team that reviews grant proposals and issues those proposals. So it's, you know, it's sort of outsourcing that work because what, I mean, I think what we found here, at least

in Cosmos governance, was that the hub was not really, like the token holders were not always the better, the best equipped to make decisions about what to allocate capital to. And so this is why like part of the Cosmos Treasury was allocated to, ADAO? Does something like this exist in NOSIS? Yes. So historically this has grown. So kind of back in the day, a company actually conducted the token sale and that company still holds a small part of the treasury. And kind of from that company, we do actually do product and product development mostly. Anyone else could in principle ask for a grant from Nosis Dow to do the same. But so far this has happened once.

So kind of we had once a proposal, was a very large proposal of a group of people who credibly claimed to what to do business development and ecosystem building on our behalf, because business development and marketing and so on, they were never our strong suits. and they said, look, you allocate us this capital, we can do it for you. And in the end, kind of the funds were returned because it didn't go so well. But in principle, Nosis Dow is very much open to that. So kind of having different contributors in charge of different things. And one relationship where that's actually worked incredibly well for NOSUS in the past is the relationship with Karpakki,

which is also a DAO that has spun out of NOSIS. It's a treasury management DAO. So they manage our treasury, but also the SAFE and Cal Treasuries, as well as Lido and Ava and Balancer and a number of ENS and a number of other DAOs. And for us, this has worked super well because we don't want our capital to lie fellow. But obviously, this is not something that a DAO can vote on, kind of on, you know, in a cadence that makes sense. You can't say we want to vote on whether to withdraw funds from this pool and so on.

So this is also what drove the development of the Zodiac Dow tooling. So that kind of we can, we as no stock would hand this over to Kapakakakki without them having custody of the funds. So they can now do things to, they can do certain operations to the funds. that they're managing, but they, for instance, they can't withdraw them or sell them and so on. They have a permissioned list of things they can do to the funds, kind of like a fund manager. Okay, no, interesting. Yeah, I mean, I guess it works for as long as it works, right?

If the DAO and the token holders are effective in allocating that capital and the community at large is satisfied with how capital is managed and allocated, then it makes sense to continue in this configuration. Yeah, no, but I'm 100% with you. So kind of DAO's and NOSUSDAO included need to become much, much more efficient. So I think kind of the one thing that kind of we need to understand is that the very constrained thing in Daos is attention and kind of paying for the attention of the of the participants and kind of only escalating certain decisions, kind of delegating some decisions to others. I think this is this is infrastructure that kind of we as an ecosystem very much still have to build up. Because kind of saying, for instance, I trust X, Y's judgment in terms of treasury allocation, but I don't want them in charge of, say, the marketing tactics and so on. I want someone else in charge of that.

And kind of saying, it's telling people, basically having a way of kind of delegating your vote, depending on what topic you're voting. I think this will be a great tool for the ecosystem. Yeah, one of the things that we've seen experimented with in the cosmos ecosystem is the use of sub-dows. So cosmos Dow infrastructure, at least the Dowdou infrastructure that's used primarily allows for sub-dows. And so some ecosystems or some chains have created sub-dows, right?

So you have like the treasury, and then the treasury will allocate, some capital to another DAO, and then that DAO would have members that managed, like a smaller pool of members that manage that capital, say for like marketing or business development or project funding. And the parent DAO has some amount of also power over revoking, you know, some of those members.

If the community feels that like members are not acting in a way that's desirable, like they can revoke access, they can veto certain types of proposals. So it creates, like, I think, a really streamlined architecture for DAOs to reallocate pools of capitals to other DAOs instead of like sending that money to just some organization off-chain, right, that has a pool, like those members that aren't accountable, directly accountable on chain to the parent Dow. Yeah, I think that makes a lot of sense. And I think this is also, by and large, how traditional companies are structured, right?

Kind of like you have a marketing department that has a certain budget, and if they go totally off the rails, you kind of, you have heads rolling. And then kind of you, and I think this is exactly how kind of it needs to work in DOWs down the line as well. But obviously kind of putting all of these things that, all of these mechanisms on chain, it's always a bit of a challenge. Yeah. So let's talk about the payments focus. here. So NOSIS pay is I think one of the main products that you launched in last year. That is actually quite interesting. We talked about this when you were on the Interop podcast a couple of months ago and all the cool tech behind NOSIS pay that allows people to have money like basically

like on an on-chain address and the credit card signing the transaction. And it's actually like quite quite cool, I think technically. But there's other, there's two other products here that I'm not very familiar with, which is circles. I know that's your universal basic income protocol and then Metri that I'm not very familiar with. So yeah, what's the what's the overlying thesis here? Like why did you, you know, when you sat down and like thought about what this infrastructure could be used for, why did payments stand out as the, the vertical where you could provide the most value. That's a fantastic question. So if you kind of look at payments in our bubble, kind of like, and I don't mean the Web 3 bubble, but kind of like the global north bubble,

payments are not a lot of, are not a big pain point for us. So kind of you can send funds to your friends, you know, in a couple of minutes at more or less zero cost. You can get, you have access to loans, you have credit cards, kind of, everything, kind of. of works for you. This can't be set for a lot of the rest of the world. So, I mean, even for us, there are some edge cases where we kind of feel the limitations of the financial system. So recently, for instance, I had to send a fairly significant amount of money to the United

States for an investment. And it cost me, I think, 100 euros. with wise to kind of send it. And I mean, obviously, had I just sent USC, it would have cost me almost nothing. But, I mean, those are edge cases. By and large kind of payments work well for us. If you look at, for instance, Latin America or even countries like Turkey in Europe, we see that inflation runs rampant.

And even access to a dollarized account is a status simple. To us, that's not even a product anymore, right? Being able to hold USC on chain, we don't think of that as a product. But really it is. For a large part of the global population, this very much is a product. So for our rationale was if we can kind of build something like a way for people to access this technology, even without building any more financial protocols ourselves, just providing them with access will actually unlock a lot of economic.

value for them. So the idea behind Metri, which is the project you're unfamiliar with, but not really, because it used to be called Nosis One. It's just got a proper name. So Metri is based on the safe. It's kind of, it's a nice mobile interface build on a safe backend. And what it allows you to do is it allows you to onboard your friends really easily, kind of they they can kind of set up a new account with the push of fingerprint.

They can secure it later, kind of when they have significant funds in it, they can always add more signers. But it gives them the opportunity to kind of hold stable coins. They otherwise wouldn't be able to hold that currency. And that is a very simple use case for us, but something that is of a very real value to actual people. And then the way that we think about is kind of, okay, now you kind of have to connect it with the legacy financial rails that we already have,

that people already use. So you want things like you want an IBAN integration. So kind of you want your wallet to be addressable by an IBAN. so you send funds with that iBAN, they show up in your wallet. You can do a separate transfer right out of your wallet. That's all tech that exists. It's all tech that kind of we can, we just have to put together in one place. NOSUS pay as well.

So kind of NOSIS pay is kind of built on the same premise. So NOSISPAY allows you to connect a self-carsodial wallet, such as the save under the hood of the Metri wallet to a credit card, allowing you to kind of off-ramp your crypto, anywhere that visa is accepted. And kind of building those bridges between the old and the new is how we think we can make adoption happen. And kind of an example that kind of I like to use is the telecom revolution, right?

Kind of when we were kids, we had landline phones. And then kind of when we were like teenagers, Skype came along. And kind of you had Skype out. You could kind of call any landline phone. for the local tariff and the way that that worked. And this is for the younger listeners. So basically, phoning other countries used to be really, really expensive. So when I was a kid, I had an aunt in America calling her was like the entire family

kind of collecting around the telephone, kind of saying, oh, hi, hi, auntie Margaret, how is everything going and so on? And then kind of we hang up like three minutes later and was 10 German marks at the time or something. and kind of having that step up to Skype out where kind of you pay the local tariff regardless of where you phoned and that was fantastic in terms of user experience. The way they did it is they kind of they used new rails

for the first 95% of the call, namely it was routed over the internet and then the last 5% were over the old copper cable. And then kind of as this voice over IP, protocol kind of gain traction and other people had Skype too. You could just do everything over the internet and kind of became completely free. And now even when you kind of phone landline phone to landline phone, it would still be routed over the internet.

It'll still be a voice of IP. Don't actually do this on copper cables anymore. And I think it'll be the same for financial rails. So in 10 years, all the infrastructure will be blockchain. based. It's just that we kind of have to take out bits and replace them by the equivalent blockchain infrastructure that is hardier and simpler and by and without people noticing in the process. So I think the user experience was they largely the same as it did with kind of calling someone on the phone. Yeah, that's a great analogy. I really like that. And I'm reminded of just how

much regulatory pushback there was also on Skype and all these voice over IP providers because they were, I think, I think telecom companies saw that they were going to either have to adapt or lose a large part of their revenues for voice calling, which, you know, they have, they've made up with really expensive internet plans and this sort of thing. But yeah, I think that, one of the use cases I absolutely love about this whole like Nosis pay infrastructure is the I ban to blockchain. So I use Monarium fairly regularly for you know personal use but also for my company. And that being able to send money to send money to an I ban and it appears on chain and vice versa send money from a chain to a bank account. And it's instant. It happens. It happens.

happens in seconds. I mean, it uses the instant SEPA infrastructure rails, which allows you to get separate transfers in less than 10 seconds. It's magic. It just feels great to be able to move in and out of a chain without having to go through like, you know, your cracking account or some other exchange that on ramp, off ramp. It's so seamless. And, you know, there's so many improvements that could be made there, I think, just from that particular use case, namely, you know, with Minerium, the ability just to swap directly into that Eurocoin, et cetera. I mean, I think maybe they've added that by now, but, but Noses Pay is kind of similar where, and I don't even have a Noses Pay card yet. I'm just talking from what others have told me. I need to get one. I need

to apply for it. But yeah, with Moses Pay, you have funds on chain. And if you, if you you've used one of these, you know, crypto to credit card services before, typically what you have to do is you have to onboard. You have to, you have to top up your card, right? So you have to send money to an address. Then it shows up on the card and then you can make your payments. But here, the card is actually signing a transaction on chain on your account. And so you don't need to do this, this kind of top up thing. that introduces some interesting privacy issues that I'd love to get your opinion on. As someone who I know is like very particular, and it's sort of careful about your on-chain privacy, what are the risks that people get into here

when using this card where essentially every, not just on-chain transactions, but also their real-world transactions, like every time they buy a baguette, you know, which is for me every day. That shows up on chain. What's the risk here and how do we resolve this issue? Yeah, this is the main issue at the moment.

So we decided to kind of launch this knowing that the privacy was non-existent just because there were other heavy lifts kind of engineering, of, you know, in the engineering of this, that kind of we just needed to get out of the, door and kind of we couldn't work on this forever. So, yeah, privacy shit. So, I mean, currently when you go to your local baker

and you pay two euros 90 for baguette, two euro 90, the two euro 90 payment shows up. I don't know where you're buying baguettes, but... How much is the baguette in Paris these days? The baguettes in Paris are like a buck 25.

Okay. I need to go back. to Paris sometime. That sounds wonderful. Yeah, so you pay you pay one euro 25 for your baguette. And that payment shows up on chain. You can't see that it goes to the baker because it actually goes to the monarium off-ramp account.

So odd payments kind of go to the same address. And then the settlement of them is actually batched. We try to obfuscate a bit by kind of rolling different. transactions together, but it's not very good affiscation. So you are 100% right, that kind of the privacy aspect of this currently is the Achilles here. Why do I still use it? Because basically I think it's important that kind of we iron out as much of the user experience

aspects as we can when we can. We're working on the privacy aspect. So there will be a privacy respecting version I don't want to say soonish because that it jinx it. Also, privacy on-chain is pretty hard. But yeah, we're working on it. I know it's a problem and we will address it. Yeah, the other aspect here is the regulatory issue, which is that, I mean, well, I know that that policymakers, at least here in France and some,

the EU level are pushing for all crypto transactions, whether they're happening on an exchange or some kind of payment service provider, for that data to be automatically sent to local tax, like their local tax authorities. I think this is, you know, obviously a massive infringements on people's rights to privacy, where, you know, we're not talking here about a government being able to sort of subpoena or request one's transactions information because there is a suspicion of a crime or evading taxes or et cetera. We're talking here about wholesale, all transactions being available to the state at any point in time. What types of technological improvements can be made to products like NOSISPAY to curb, at least to some extent, this infringement that it's not in place, right?

But I know that there are policymakers that are proponents of this sort of blanket, you know, Gestapo style data collection. Yeah. So, I mean, this is also why many lawmakers. has push for CBDCs because basically everything is transparent and on chain. I think we need to push back here on a

cultural level and say privacy is normal. Privacy, basically I morally object to having this sort of transparency for the state. I think how it can be mitigated and how

it should be mitigated because I also I also see the legitimate interest of states to collect taxes. So I don't think all taxation is theft and so on. I think by and large states deserve to collect taxes and pay for public goods that way. Obviously, the way that they collect them should be improved in a technological way. So for instance, we could have something like zero knowledge proof attached to transactions, saying, okay, this transaction of a private matter, for instance, I am gifting my sister, 10,000 euro, so she can kind of put a down payment on a house sort of thing that is not taxed, it shouldn't be taxable, I kind of attach a proof that this is nothing to be taxed. The state shouldn't have to know whom I'm sending it to or why I'm sending it and so on, it should just know that in principle this is not a taxable event. Same for other things. If I sell something to someone, obviously this is a taxable event and this could also be kind of

conveyed with a zero knowledge proof. So I think keeping people honest and kind of enforcing honesty while at the same time protecting privacy, this is kind of the Goldilocks zone for me. and I think we can get there. The one thing that really worries me is how much privacy has already been undercut by and regulatory captured. And I worry that while regulators usually say this is to protect and to make sure that taxes are paid and so on, I worry that this is not the only motive and that they will be. Yeah.

You don't have to worry about it. It's actually not the only motive. Yeah, that they will be resistant to kind of changing this to a way that is demonstrably fair and effective at enforcing taxes while at the same time still being privacy preserving. And I think this is a battle we will have to fight generally as a people. And we're here to fight it. Right. I think like the good faith argument that ZK is the technology that enables states to have oversight over the types of transactions. I mean, not just in this case.

I mean, there's all sorts of use cases where ZK could allow people to have privacy while ensuring some form of attestation about, it could be whatever. It could be a transaction. it could be someone's where someone's living, it could be someone's income. There's all sorts of really interesting use cases that allow us to have sort of like this best of both worlds type of scenario. The fact that I think that these technologies will never be adopted in full deployment because they don't allow states, nation states and, you know, the sort of EU governance machine. to have full visibility into people's dealings. Like I think that fundamentally this is out opposition with the modus operandi of the European governance system that increasingly wants to have more and more data and information and

access to that data information on its citizens. And I know this is not only in Europe. I know like in other places like in the states, you know, like although the states, I think, have much better constitutional protections. But many, most of European countries, I think, don't have the same constitutional protections that and puts us at risk of being, of becoming part of this police state. I mean, you can use these technologies for terrible things, right? I mean, kind of you can do an incredibly effective kind of social school, kind of like China has, using these immutable ledges. I think it's a battle we will have to fight.

And I think kind of imbueing people with the certainty that privacy is normal, privacy should be the norm, this is something that is, this is something that we have to do, absolutely. I want to talk a little bit about the EVM here. and, you know, NOSS, of course, like we've talked about before, is one of the, the, the, the, the, uh, most OG teams building on the EVM. And the EVM has really dominated, uh, the developer ecosystem for blockchains. You know, solidity is by, by a large margin, the most used smart contract language to build on blockchains across the not only Ethereum, but the entire EVM ecosystem.

But Solidity and the EVM are next year going to be 10 years old. And if we're thinking now that, you know, we're arriving at a place where we can now start to have applications built on blockchains and that essentially we're sort of in the, you know, I sort of see us as somewhere like, I see this moment akin to the kind of like when the iPhone came out. We had the internet before that, but things really took off when we had mobile.

And that's also when we saw a shift from PHP in the lamp stack to a very modular and modern development stack in the form of mostly like node and modularizing the development stack. So like AWS for instance,

and the cloud stack have very modular components that allow developers to kind of pick and choose and scale their applications. So from the perspective of the EVM, you know, I kind of see the EVM and solidity a little bit like PHP where they're very important and crucial to crypto as like a foundational piece of software infrastructure for crypto, but I think are going sort of in the way of becoming legacy software software. So in 10 years from now, when the EVM is 20 years old, you know, do we think that most college kids will be learning to learn, learning to code solidity or some other language that is modern, built for the modular infrastructure, interoperable, doesn't have the performance

and security issues of the EVM, performant, et cetera. And so that's kind of like my perspective on the EVM and then solidity. I think probably you don't share that. that perspective exactly. But, you know, looking long term, like 10 years from now, you know, NOSIS will most likely still be an EVM chain, but there's going to be lots of other chains out there that are leveraging modern performance, safe, secure programming languages. How do you see that playing out long term in terms of like the EDMs and solidities market share? And do you think that it can continue to compete and remain relevant in this? fast-paced, you know, sort of like evolving infrastructure space in crypto.

Yeah. So I think the EVM, I think we're not so far apart in kind of what we believe here. So I think the EVM will remain relevant kind of as the underlying. I think people in 10 years will not learn to program solidity. But I also believe people in 10 years will not learn to program any other programming language. because large language models and other transformer-like software systems will be so good at kind of understanding what we want software to do that they will build this for us. So I think this will be abstracted away from us in a much larger manner than most people currently believe.

And yes, I think kind of what things kind of compile to down below, people won't know about it and won't care. Just like they don't know how kind of your Python script today is transformed into bytecode that can actually be executed

by silicon circuits, right? Yeah, no, that makes sense. I mean, I agree with that more development work will be done by AI agents, like transformer types. But there remains, I think, some really important things to note about the EVM, like performance compared to some of the other, you know, parallelized VMs in crypto that allow for just

like much faster and much higher throughput. There are the security issues that remain, right, in the form of like reentrancy attacks, etc. And then some features that exist in other frames. that don't exist in the EVM. Like, for example, in the Move VM, we have the ability to have keys that are per application. So this enables some containerization or of like security risks, interoperability being embedded in other languages like, for example, cos and wasam, being able to leverage IBC, these sorts of things.

Like, do you think that the EVM in its current form and solidity in its current form as being like a very low-level blockchain language should include, or do you think that these features will get built on top of the EVM as like supplements and other layers on top? Or like this kind of framework approach, do you think it makes sense for that to become part of the underlying framework, like VM framework? I, so I think it goes without saying that if you were to kind of construct the EVM from scratch again today, you would make some choices differently than kind of we made them back in the day. I think this is a completely fair point to make. I think almost everything that you mentioned can be implemented on top of the existing EVM stack. It won't be

quite as efficient as if it were implemented kind of at the lowest possible level. But I think in the in the grand scheme that won't matter so much because the ebm has such a head start in terms of developer attention and kind of resources that have been created around it that competing with it won't just require being a little bit better here and there it would actually require being 10x better and I don't see that happening. So even with paralyzable systems, to a certain extent, we can actually do that

by having different execution environments and then kind of trustlessly connecting them together, kind of like IBC style. So I think there are workgrounds for all of these things and kind of having, I think where Ethereum has actually earned, where we can kind of learn from the cosmos style, blockchain

ecosystems is having a native IBC type thing so kind of having native interoperability kind of build into the system here I think this was the largest

thing that kind of was neglected kind of four EBM type systems but also for that I think we're catching up So I think at this point

I would still bet on the EVM I don't think it's I wouldn't I wouldn't put all my money on it I think it's still possible that it'll be overtaken by other systems but it won't be for small efficiency gains

Yeah no I think that makes sense I think that I do think that that this sort of story of PHP and ASP as the dominant

development languages in the 2000s is a comparable analogy where PHP still

I think powers something like 60 to 70% of websites on the internet because it

powers this like legacy infrastructure or this like so I think like most of Facebook

is built in PHP WordPress which is like 50% of the websites on the internet uses PHP. So there are like a handful of really important pieces of internet

software that continues to use PHP and that make up for the majority of the deployments. But new applications, like new startups, etc. are mostly building like using other languages. And I think, I think that this is a similar path that the EVM will take where very important crypto infrastructure, AVE, compound, synthetics, you know, unit swap, etc. Like these very large and very important pieces of financial rails will continue to use EVM and fund the EVM's development, also perhaps, while, you know, newer applications, L2s, app chains will use other languages most likely. So that's kind of where I see things heading.

I wonder if that makes sense to you. Yeah, absolutely. And I mean, that's what we see today, right? I mean, a large number of L2 is actually decided against using the EVM, right? So kind of, yeah. Cool. Maybe just one final question here as we wrap up. So currently, you notice this chain is a sovereign chain.

I guess you could even call it a sovereign app chain because it is an application that allows you to run financial rails. It runs kind of like very precise and very specific types of applications. But will NOSIS become an L2 at some point? Like is there a world in which NOSIS rents its security from another chain like Ethereum? That's a tough one. I think as you ask a question, the answers probably no. I also wouldn't call noses an apt train because it's very much a general purpose chain and there's all kinds of applications on it.

But I think we will start thinking about L2s and L1s in a much more nuanced way. So we even see that already with kind of validiums where kind of we see L2s that check into the L1 periodically and kind of how often that is, obviously, this is a cadence that you can set. But kind of the data availability is not on Ethereum for cost reasons. It's elsewhere. And we also see these sovereign roll-ups, which some people say aren't actually roll-ups at all. but basically kind of where you can kind of play with how many validators you have for that particular roll-up, kind of what the rules are, how to become a validator, how validators are slashed if they misbehave, how often these chains kind of check in with Ethereum, how much of their data they actually pose as call data or in the blobs,

or where else to post them. So I don't think this is kind of going to be a binary thing. You're an L2 or you're not an L2. It's kind of going to be a continuous spectrum. And I think we can actually imagine a world where Nosis regularly checks in with Ethereum and kind of posts its state to Ethereum. You can also imagine a word where Ethereum does the same with Nosis, right? Kind of where Ethereum regularly posts the hash of the Ethereum state to Nosis chain.

That wouldn't automatically make Ethereum an L2 to Nosis, right? it would kind of just make them federated in some way. And I think kind of having a better terminology of how chains check in with each other and kind of what the trust assumptions are for transacting between chains, I think this will have to come because at this point it's not granular enough. Yeah, that makes sense. I'm going to push back on the app chain thing. I think NOSIS is an app chain.

The app is generalized smart contracts. But I think it's, I call it an app chain because it has a specific, like it has a vertical that is kind of its go-to-market. And that vertical is very much like foundational financial infrastructure. And so it's not an app chain in the same way that like osmosis is an app chain that has an app. right? And that app is a Dex. And then there's also other applications built on top of osmosis. So you could also say that like osmosis to some extent is a generalized, although it's not fully permissionless. But yeah. I think I see where you're coming from. And I think this makes

sense in kind of defining the vertical because what kind of different things in the same vertical often have in common is kind of how much they're willing to pay for a transaction, how much security they need, right? So if you were to have a, if you were to have a chain that primarily caters to games, the security assumptions that kind of you need as a game developer are probably very different

than the security assumptions you need if kind of you want to have the land registry on chain, right? So, and I think kind of making sure that the trust assumptions that come with the chain in terms of kind of how the validator set is chosen, what happens if they misbehave, what are the trust assumptions you have for bridging and so on. I think this has to be in keeping with what you're trying to secure. And obviously, kind of noses chain is very credibly neutral in the sense that it's decentralized and no one validator can sway the thing,

just like on Ethereum, then it makes complete sense to kind of say, okay, this primarily caters to financial applications because obviously financial applications have in common that there is usually money at stake. Great, Frederica, this has been really terrific. Being in the guest spot, not so hard, right?

I think it did pretty well. Thank you. Before we wrap up, I do want to plug Nebula Summit. I haven't talked about here on Epicenter so much. I've talked about it on my other podcast. But yeah, Nebula Summit is the Interchain Developer Conference that we are hosting. We interrupt ventures. It is happening in Brussels after ECC on July 12th and 13th.

So if you're interested in learning about the Cosmos ecosystem, the modular app chain ecosystem and so much more. It's not just a Cosmos conference. In fact, this year, you know, we're trying to go beyond Cosmos. We're getting more folks from other ecosystems, Ethereum, the EVM ecosystem, Solana, movement, etc. So come to Nebula Summit. It's a developer event. So most of the talks and content is very technical. We'll have developer workshops there. There's also an investor speed dating. So if you're interested in meeting VCs to pitch your idea and hopefully get funding, you can also. do that. You can apply for that. Everything is available at nebular. Builders. So here you can apply for

investor speed dating and also get your tickets. So once again, that's July 12th and 13th in Brussels. Really hope to see you there. I'm bummed out. You won't be at ECC this year, but I'm sure there's going to like lots of NOSIS people there. So looking forward to seeing those people. Great. Thanks so much, Felica. Thank you for having me on.