Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Initia: Incentively Aligned Appchains - Ezaan Mangalji, Anil Lulla & Jose Maria Macedo

Episode Date: May 16, 2025

Blockchain architecture is constantly being forced to adapt to new technologies, as well as to meet new demands from users and builders. While the idea of apps building their own chains was first explored by Cosmos, it lacked the support and tooling to see it succeed. Later on, rollups also took the centerstage of Ethereum’s scaling roadmap, but due to their general purpose design, it led to a cannibalistic ecosystem. Initia learned from these 2 models and combined the best of both worlds: it built a full-stack framework for a seamless DevEx from the get-go and, more importantly, it designed its tokenomics in order to ensure maximum incentive alignment for its appchains. While the former decision removed the need for each separate chain to reinvent the wheel and risk ending up ‘a jack of all trades, master of none’, the latter ensured that appchains would not extract value away from the L1.Topics covered in this episode:Ezaan’s backgroundFrom building on Terra to InitiaHow Initia is rewriting the appchain thesisInitia’s enshrined liquidity & vested interest program (VIP)Metrics & Initia’s bet on crypto innovationSolving liquidity fragmentationDelphi’s involvement in InitiaFuture roadmapEpisode links:Ezaan Mangalji on XJose Maria Macedo on XAnil Lulla on XInitia on XDelphi Digital on XDelphi report on InitiaSponsors: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: one of the largest node operators worldwide, trusted by 175,000+ accounts across more than 60 networks, Chorus One combines institutional-grade security with the highest yields at - chorus.oneThis episode is hosted by Brian Fabian Crain.

interesting to note is that app chains, at least in the in the broadest sense of sort of like an app-specific execution environment, are winning. Like in the first cycle, there were sort of of Ronin and Flow and Step-in. In this cycle, there was Do IDX, Hyperliquid. It's clear that there's product market fit for large projects doing like app-specific environments. Most of them are going for L2s nowadays rather than L-1s, and I think that makes a lot of sense, which is also why Inisha's design makes so much sense. Allowing teams to build entire Cosmos S2K chains in whatever VM they want as roll-ups on Inisha and have instant access to basically everything they need from explorers, liquidity, integrations,

rewards, kind of all the participants of a world that's so fragmented in terms of, you know, L2s that care about themselves and their growth, users on the L1, stakers, How do we align all these people? And we've basically built a very robust economic framework that lets us do that, which is called Inisha VIP. Welcome to Episode at the show, which talks about the technologies, projects, and people driving decentralization and the blockchain revolution. I'm Brian Crane. And today I'm speaking with Zon, who is the co-founder of Venetia. And we are joined today by two very special guests, guest hosts.

So Jose Maseido, who's the co-founder of the Elphino. and he runs Delphi Labs part and then Anil who is the CEO and founder of Delphi. So Innesia is a layer one blockchain that's designed around deploying, customized, interconnected or intervowen as they call it, roll-ups. They've just launched. So really excited to dive into Inisha today. So just before we get started, we'd like to share a few words from our sponsors to If you're looking to stake your crypto with confidence, look no further than Corse 1.

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with just one GNO and affordable hardware. Start your decentralization journey today at nosus.io. Cool. Well, thanks so much for coming on, guys. This is going to be fun. And it's kind of a different format than we usually do, but I think it will be a good one. So maybe we can just do some introduction.

Let's just go around. Maybe Zon, do you want to start? Sure. Howdy, fellas. I'm Zahn. As Brian initially said, one of the co-founders of Inisha. We just launched.

It was pretty awesome. I think we launched the Initia L1 plus around 10 layer 2s, all on different VMs, all at the same time. It might be the largest orchestrated multi-chain launch ever, probably. I don't think people usually launch multiple changes at the same time. So this is probably the only one that happened, but also, I guess, the largest. Yeah, I'm sure we'll dive further into it, but passed over to Enniel. Yeah, so I'm one of the co-founders of Delphi.

We've been early sport as Zazan and the Initia team for a while now. So it was super excited about this launch and, yeah, excited to be here to talk about Initia. I'm sure Jose and I will talk about our whole, like, you know, ab-chain thesis, the failure with it and then how we kind of ended up, you know, diving down in Nisha Rabbitol. Yeah. I'm Josei. I split my time between Delphi Labs and Delphi Ventures. Adventures actually led this initial investment and known Zun for a few years now.

And yeah, hoping Zon can make App Chains finally work. And Avenger, I think all of us on this call have been bullish Cosmos, which isn't ideal, hasn't been ideal. So hoping Zon can run it back. make appchase finally work. Inshallah, brother. Yeah. Maybe Zon,

so you were building on Terra before. I'm curious, what was you experienced really on Terra and how did that lead to you starting in Isha? Yeah, so I wasn't just building on Terra. Before that, I worked at Terra as a smart contract dev. It was like my first time getting into smart contracting and building in crypto.

Before that, I was just a regular software engineer. I played a lot with Ethereum, but never actually built contracts there. And so Cosmozoam and Terra were my first time, you know, actually doing that. And it was a lot of fun. I thought it was really interesting. Cosmosm was cool. I got to learn Rust for the first time. All these new principles when it comes to building smart contracts.

And the craziest one is just that stuff doesn't. and execute automatically. Something has to poke a smart contract to move, and that was just like a crazy paradigm shift in my mind, as opposed to building in Web 2. And so that was a lot of fun. I got to build some really cool applications, and then I left Terraform to build my own project

with my current co-founder Stan, and it was an options project that was basically hooked into Anchor along with We had a lot of the ecosystem teams ready with integrations and is really exciting because Terra as a chain was like one of the most vibrant ecosystems out of any blockchain that existed at the time. Obviously, a lot of it was fueled by Anchor, which we know was super unsustainable, but it was like this crazy run that was happening in Cosmos. And Terra really was all of Cosmos. And I think it was somewhat propping up the App Chain thesis to

a big extent because we're like, hey, look, this one app chain really succeeded, but none of the others really also succeeded in their own merits. And so once Terra collapsed, I think that with it, a lot of the app chains and Cosmos just crumbled. And obviously, the project that I was building there didn't make any sense anymore. And so we scrapped that, returned money back to our investors who funded us back then. and then basically a few months later we're thinking about what to build next because me and Stan still wanted to do something

and we started basically thinking about Initia and rebuilding the App Chain thesis with a much heavier guiding hand one where you shape its creation, the first few app chains and how everything comes to play rather than leaving it all up to an open source system. Yeah, that was kind of the,

the beginnings of that and when I was working on Terra is when I first met Jose and Anil. I think at the time they were on the labs team working on Astroport and that's actually how I met my co-founder Stan. He was designing building UniV3 or concentrated liquidity pools for Astroport and I was supposed to help build it.

So thanks Jose. You're welcome. So yeah, let's talk about the upchain thesis more generally. I mean, I guess if you sort of zoom out, right, then the thing that everyone competes for the most in crypto, I would say is like application developers, right? And application developers have a lot of different options today.

You could build maybe unique maintenance, but, you know, fees are high. So that's probably not the preferred choice for most people, but you have things like Solana and Base, you know, that are at the top, right, where you can just build your smart contract on there. Or you could say you build your own L1, right? So that has maybe struggled a bit, but it's still happening quite a lot, right?

People still build their own L1, whether it's like, you know, kind of totally new L1, or whether it's maybe Cosmos chains or, you know, some other people competing, trying to compete there, maybe like Avalanche and some others trying to go in. Or there's roll-ups, right?

And then roll-ups, again, there's many options, right? You could deploy on an existing wall-up or do your own roll-up, and you do your own roll-up. You can do it on Ethereum. You could do maybe some sovereign roll-up on Celestia, right? Or you could build on initia, right? Like interval and roll-up. How, maybe for any of you guys,

how do you guys see the sort of pros and pros, cons here and the state of the app chain thesis. So yeah, I think the the tradeoffs, and I think one thing that's interesting to note is that app chains, at least in the in the broadest sense of sort of like an app specific execution environment, are like winning. You know, we've seen it and across all cycles, right? Like in the first cycle, there were sort of Ronin and Flow and Step in. In this cycle, there was DoIDX, Hyperliquid, blast.

extract, converge now. Like, it's clear that there's product market fit for large projects doing like app-specific environments. Most of them are going for L2s nowadays rather than L1s. And I think that makes a lot of sense, which is also why Inich's design makes so much sense. And I think the main reason that people do this is because sovereignty and customizability matter, right? Developers want to control the ground they build on.

They want to be able to build fully vertically integrated experiences. they don't want to necessarily compete for block space, face uncertain costs. They might want to customize parts of their stack. They might even want to be able to roll back state if they need to, right, without relying on an L1 having to do that. If there's a hack or something like that. So I think there's a lot of reasons for going into an app-specific environment, and I think that thesis is winning.

The thing that didn't win was like Cosmos, right? Or I guess like Cosmos SDK has done well, has done okay. But Cosmos, like, Adam is a token. and sort of the tokens in that ecosystem haven't really done well. And to me, Cosmos just sort of misunderstood the role of like the hub needs to provide

to app chains, right? And I think part of it is because it was conceived 10 years ago before anyone who was even talking about, L2s and most of the design decisions were made optimizing for sovereign chains rather than roll-ups. But the second thing and most important, I think, is that it's sort of misunderstanding

what projects want from, like, their hub, right, from, from a hub, like the realities of what they want. Like, they thought, oh, all they need is, like, this optional security. But actually that that's, like, not at all the stuff that's most pressing. Like, the hardest things about doing in app chains and the biggest tradeoffs in launching one versus launching on an existing chain is simple stuff, like wallet integrations. Like, you have to do your own wallet integrations. You have to do, if you integrate with a centralized exchange, they need to do.

to integrate with your chain. It's way, way harder to get that done. Block Explorers, like, there's no Block Explorer, even some of the, like, biggest chains today, I mean Solana Block Explorer is notoriously crap, right? You don't have canonical bridged assets with liquidity, right? So you won't have stable coins. You're going to have like this, this alphabet soup of stable coins with different, with different prefixes. And then there's like the intangibles, which is the business development and ecosystem development, which is actually like one of the most important parts, right? If you're a high project on Solana, you get a lot of benefit from that. Like, there's a bunch of people that go farm your AirDrop. People are active on like Solana Foundation tweets you. People will be active on

your Discord just because you have that ecosystem behind you of everyone that owns Seoul and wants your project to succeed because it's good for Seoul. And all of this was missing from, from Cosmos. Like there was no, there was no unified way to bet on Cosmos. Like it never happened, right? And at the same time, every time we launched a new chain, you faced all these issues. And so it was just very costly to build an app chain. And this doesn't even go for the fact of like bootstrapping validators, having to pay out inflation, fragmenting U.X. And so, Inisha just sort of, from my perspective, really reinvented, like, rethought from first principles. What does, what do you want from a hub? Assuming we go into this sort of roll-up-centric app-specific world, what do these roll-ups actually want from a hub and then they sort of rebuild it from the ground up, thinking about all these things

and like solving kind of all the problems. And I've just, I've just rambled for a while. So maybe Zun, you want to come in and say how you guys did that? Sure. Yeah, I think Jose is right, right? Like there totally are two ways that crypto scales. We all know it's either the fast chain or the app chains. And everybody's working on the fast chain camp. I don't know what's actually going to win in the long run, but I can put my horse in the race for the app chan thesis because it seems like it's the natural evolution. It's an application's final destination is what we call initia, and it's because apps will want to capture their value and potentially make customizations that lead them to

winning one specific vertical because they've altered something that lets them edge out competition on that sector. And that's the way we've kind of seen things play out over time. You know, you have perp-dexes on every chain. Then one actually takes it seriously, builds the round chain, and they just fucking win. And this is going to happen along other verticals as well. So I think the option thesis will play out.

Now it's about how do we make this very easy? What do teams need? How do we get more of them to build? and I think Inesha is just designed in the right way to provide these teams everything they need. But if you look at some of the other options, they're just still so infeasible. Like building a Cosmos layer one,

you get the flexibility, but it's still goddamn hard. Building a roll-up on Ethereum, very easy. You have so many RAS solutions, but you fragment all the infrastructure because these RAS solutions give you like 10 DA options and 15 interop solutions and all these oracles. And you need shared standards across a multi-chain world for U.S. to properly work. And then you have no customizable, like OPE stack, Arbitrum Orbit, these things are great.

But you can't, like, for example, reorder transactions. You can't use a different type of virtual machine. The choices that do matter for developers day in and day out are things that you can't edit. but you get to change the DA layer. Those are not what's actually interesting. So at Nisha, we've kind of combined the best models by using some of the hindsight in history that we've been through as builders in Cosmos

as well as big users on Ethereum, allowing teams to build entire Cosmos SDK chains in whatever VM they want as roll-ups on Inisha and have instant access to basically everything they need from explorers, liquidity, integrations, rewards, and then ensuring that we have a very tight hand on what the product UX looks like. So what does it actually look and feel like

for end users interacting with 15 different roll-ups? And do we control those touch points so that over time we can get to a world where it feels like one? And the initial team can envision that and build that ourselves. And then lastly, like, how do we ensure that value is retained and how do we align kind of all the participants of a world that's so fragmented in terms of, you know, L2s that care about themselves and their growth? Users on the L1, stakers, like, how do we align all these people? And we've basically built a very robust economic framework that lets us do that, which is called Initia VIP.

And what that does is it essentially just distributes rewards to users that are using applications. Simple as that. And as a layer two, to get more rewards, you have to build use cases for the native init token and basically care and have a reason to care about it. And that's either you build a demand sync or integrate the native token on your chain or you try and influence holders on the layer one to vote for you. And so in this way, we kind of make sure that everybody still cares about in it. I like to use an example that Inisha is like the federal government and roll up to like states within the U.S. Where everyone has their own sovereignty, but they still care about the ultimate growth of the entire country as a whole. And I think having this federated stance will allow us to build this app chain future correctly at first.

And then in the future, we can think about how to properly decentralize the control of everything. Yeah. I think, like, one of my favorite, you know, things that you guys have focused on your approach is, you know, the target customer in the immediate near term has been, like, definitely deaths, right, building, especially with the flexibility that you have, you know, supporting EVM, MOVM, WVM. Defs can, you know, build using solidity, move, web assembly, right? like kind of anything. But I think what's really cool about it is I think at the end of the day, the end user is going to also like reap all these benefits, right? And kind of curious, like, you know, with Loda kind of get more into, you know,

how the launch went. You guys just launched recently. You know, how did it go? I know you guys launched with, you know, like, I guess like 10, you know, minutia's, like, you know, curious which ones are you maybe not most excited about, but which ones are you like most surprised about coming to market this fast? and which ones do you think are necessary for, like, users who are going to start bridging the initial, like, how is that experience?

And what can they do right now or in the near term? You know, launch is never as smooth as you think it's going to go. Everything always has some problems. But I would say things went relatively smoothly, at least on the L1 side. I think one of the things we've seen in the past is just when anirdrop, happens, chains always break because you have like hundreds of thousands of users just trying to spam transactions within the same like two seconds. And so we built a really nice batching system that essentially just batches requests and then we do one transaction that sends like a hundred

people there, air drop at one time instead of each of those being its own transaction. And so that really helped make sure that the launch went smooth. And then in terms of layered two's, you know, we did our best to have all 10 and their front ends live before the public launch. But I think it was actually around all 10 chains were live, but maybe only around five of them had their front ends up. But over the weeks since launch, all of those have come online now. So we're in a good place, and we have, I think, five or six more roll-ups that will go live over the next month. So that's pretty exciting. And there's quite a few. few things that people have been doing on the chain. The first and foremost is we have the system

called intrine liquidity. We use our inflation to basically build a hub of liquidity on the L1 that's accessible, but you also stake that with validators. And so I think there is like a $15 million in it USDC pool on the layer one that has a pretty good APY. Obviously, NFA don't ape into that pool if you don't want to. But that has been pretty awesome to see just that growing and people actually using the system. And then the first VIP distributions happen within the next three days. I think that is one of the most exciting things to have been watching because there's a

gauge vote on the underlying layer one where stakers vote which rollups they want to receive rewards through the VIP system. and watching that evolve has been really interesting. So right now you basically have people playing some games behind the scenes with these whale stakers to try and incentivize them to vote for their roll-up to allocate them more rewards. And you kind of see a little bit of dominance moving towards the defy applications for these because they obviously are trying to sustain larger amounts of TVL.

But what's interesting still is that even if you're, If you are not a defy application and you still get some of the votes here, that is probably hugely advantageous for you and your users because you're not trying to maintain 20, 40, 50 million TVL in a lending market. You're trying to give a little bit of boost for doing actions in a game and VIP basically just helps you bootstrap that. I think one of the things about bribing behind the scenes is that it's a little bit suss if you don't know the right people.

it's going to be hard to get the gauge vote up. But that is why I'm excited about platforms like Cabal, which kind of make this transparent. I think you guys are investors in Cabal. But it basically allows anyone to, you know, provide incentives to voters to vote for them inside this gauge vote. And that'll be good once it becomes fully transparent. But the economy has been pretty exciting.

I think like, so one of the, but ones that I had point to is Kamagachi. They're a fully on-chain game, which is probably the most cracked game that have ever seen get built that is all on-chain, and it makes perfect sense for them to be their own roll-up.

Because they capture the value from their sequencer. I think in the past four days alone, their sequencer has minted like 15K worth just off of transaction fees. They're like, that's already a very awesome sign, right? There are paths to being profitable as a roll-up because you aren't distributing these fees back to a set of validators. You're just keeping these rewards.

And 15K in four days is like probably enough to sustain your runway for a small team of people. And it only increases as your game becomes more exciting or you get more users. So that's pretty cool to see. and then they also held a public sale. Their token is backed by baseline. I think they raised over like two or three million in that public sale, all on chain. That's pretty awesome for a young, healthy economy. And then a couple of other cool projects that you might want to look at are Eschelon and Inertia.

They're basically just lending markets, but Eschelon has, I think, maybe like 300-Mil-TL across Aptos. And now on Inisha, they have an early lending market for Init, USDC, TIA, some of these other assets. Yeah, it's, I mean, what have you guys been seeing? Have you tried any of these roll-ups yet? No, yet. Mainly just liquidity providing on 101. Thank you. Honest work.

Yes, sir. I've seen some of these NFTs going crazy too. Yeah, the Stargays team, they deployed a roll-up called Intergays, which is basically just Stargays, but as a roll-up, which is pretty cool, because they are definitely one of the last remaining builder teams in Cosmos, and they have just been launching a few collections, like Tuzis, Raccoons, Anios, those have been fun. Yeah, I mean, regarding the launch, right, maybe one thing briefly to mention, since we have this group together, I mean, we've course, one, right, we've been working with Venetia for a while,

and now we worked also with Delphi, right, to launch. the first Delphi validator. So maybe in Neil, like, what was the thinking for you behind, behind doing a validator for an issue? Yeah, to be honest, Brian's been annoying me for a while to do, you know, to have Delphi do its first validator on, you know, some chains, right? And to be honest, one thing that we always discussed internally was like we wanted to make sure, you know, we feel like it's kind of like a big responsibility of us, like,

you know, tying our brand or kind of like using our brand to kind of like have this boat in confidence. So we honestly didn't really think about it till, you know, we really started getting excited about the initial launch. And, you know, I think we kind of chatted with Brian and said, hey, is this possible? And, you know, didn't even realize how closely you guys were working together. I think it made a lot of sense. I think our team's super excited about that. It's gone like, you know, really well since we first started. It's like a whole different validated business that we've launched. So, you know, maybe we'll do more. But I think for now, we're pretty excited to, you know, see how this one goes. And to be honest, I think Delphi as a whole,

the way that we kind of have like operated and learned in the space is like, you know, rolling our sleeves up and getting our hands dirty. And I think the validator side of crypto has been some, you know, side of business that, you know, obviously with people like Brian in our network, we've been able to learn a lot from. But I think like actually getting our hands dirty and getting involved helps us just understand it way better. And I think initial was the chain that we wanted to kind of support and kind of get like as close to as possible. Yeah. Let's talk about the whole economic model because that feels like one of the most interesting

parts. I mean, I think we on a high level, right, like proof of stake chains have basically so far, right, used their native inflation to incentivize people to stake and, you know, secure the chain. And, you know, that makes sense, right? But of course, if you think of the success of a chain, people just staking and securing it, like it's not enough. And especially, you know, liquidity is such a crucial thing.

And, you know, we've seen bear a chain do something very interesting there with proof of liquidity, which is, you know, we'll see how it works in the long run. But it's definitely, I mean, for us as a validator, it's been, you know, very challenging, but very interesting, right, to really understand how to optimize this and how to generate higher rewards. Now, you guys have done this, like, enshrined liquidity. How have you thought about designing this? And maybe also in reference to the bearer chain model, like, where do you want to differ here in terms of how it works? Yeah, I think the justification here. here is, you know, chains are interesting because of their apps. That's why users come and use them.

So what can we do to ensure and help apps win? And what else does an ecosystem need? Right. Where should inflation really be going in a network? And it's not to staking. Why is that? Well, if you're staking inflation and your security budget is the vast majority of your inflation and, like, one of the highest rewarding things to do, you're directly can't your own ecosystem. If I'm getting, you know, 10, 20% to stake tokens with the L1, which is probably like the most secure and safe thing I can do with my tokens, and a lending market is paying 6%. I'm never going to go lend my tokens there because I'm just going to stake them.

And so I think using that security budget and inflation in a way that actually adds value is hugely advantageous in probably the way that most new chains are going to move towards in the future. You can get to a level of security that is safe enough by using tokens that would otherwise not be able to be used. So for example, in our case, we allow investors to stake their tokens for around the base inflation rate, which is around 2 to 3% APY, so relatively low. The rewards are locked and vested over the same four-year vesting schedule. So you know you're not going to be cheated on. And now we have built up a layer of security and economic stake that is enough that we need.

So instead of using 40% of the supplier to pay to these stakers, let's use it to do something meaningful. And we basically do two things. One is in try and liquidity, and the other is VIP. So Inchrine liquidity is built basically just to incentivize the Initia L1 to be a liquidity hub for all of the roll-ups on Inisha. You know, these, one of the interesting things about Initia is that no team is building a general purpose layer two, right? We think that is like a losing fight. Every layer two on Ethereum is a general purpose layer two, and the difference between them is the color of their apps or their branding. really just not interesting.

We want people to build app chains. Focus on one thing. Go try and win on that vertical. And because of that, you're probably not building a dex on your chain or you're probably not trying to build liquidity on your chain or you don't want to do that. And so the initial layer one acts as the base hub of liquidity for everyone.

And so we repurpose a lot of the inflation for 25% of the entire supply for staking basically LPTO. with validators. This allows us to just build a hub of liquidity for major assets, and because of how interwoven roll-ups work, it's all accessible from L2s. So right now it's just InitUSDC. We might add other pairs soon, probably Init S-U-S-D-E from Athena, and then if there is enough demand for assets like EtherBTC will build for that as well, using the same inflation. Then the second part of inflation, another 25% of the supply, is basically,

to VIP. And this is allocated to users of layer two applications. As mentioned earlier, layer twos get rewards based on how much in it they have, plus a gauge vote on the layer one. And then on each of these layer twos, the team set metrics on chain on what users should be doing to receive these rewards. So if I'm echelon, for example, I need to lend in it and lend USTC and for that reasons those on-chain metrics count for my VIP scoring and I'll get in it rewards based on that and these rewards aren't just distributed upfront and they're vested as escrowed in it and basically the way to unlock these rewards is by maintaining your engagement over time so it's essentially a programmatic air drop system where every two weeks users are being

airdropped rewards, and they have to keep using these chains to unlock these rewards. And is this vested interest program that's happening on the L1, or it's happening on the L2s? So it's based on L2 activity, but you get these rewards on the L1. Directly to a user, so it can't be. The team can't just give it all to themselves and then take some of that. they can set an operator commission just like a validator. Yeah, I think the launch has been pretty cool. You know, we have probably around these 10 roll-ups,

around 30 to 40 million TVL, and all of that is natural. I think one of the things I've seen from a lot of chain launches this past cycle is TVL deals before launch so that right when you launch the chain, you basically have like a few hundred, or even billions of dollars of TVL. But this is an incredible waste of money, almost always.

The vast majority of this TVL has no mandate, so it's just sitting on the chain, or it's in a form that is entirely useless. Not to throw etherfi under the bus, amazing team. We have Weath on the initial L1, but like a weath, ETH pair is probably not going to do much

for advancing your economy on chain, but maybe a stable pair with a native token or, you know, an ETH-USDC pair might. And so a lot of the liquidity is basically just a way to show on DeFi Lama that you have larger numbers. And you pay for that in tokens that were usually at some sort of seed valuation rather than the currently trading price.

And these tokens are kind of phantom tokens. Props to teams like Barra Chain, which did this at least publicly. So everyone knew how much rewards were being emitted for these pre-TVL farms. But there's other teams that essentially just promise investors lock tokens at a discount to bring TVL on the chain. And these tokens just will suddenly appear in the circulating supply because they actually came from something like the foundation. And I think that's a pretty unhealthy habit

that the industry has gotten into. And I'm hoping that we can do things a bit more cleanly going forward with Inisha. Yeah, it's a big thing. You guys have done, I think, done things of the clean way every turn. Like whether going out to community round at the same, or like lower round, actually,

than the last VC round, the way you've launched, The float being transparent about it and stuff. Launching at a lower valuation. I think all these things, you guys have done things the right way. Let's see if it pays off. Hope it pays off. I think like one thing of, we kind of spoke about this a lot leading up.

And when we're advising teams on this is that like there's a reason everyone does things the wrong way, right? Or like the wrong way. Like there are a lot of benefits to launching at a higher valuation with a scamming. me float like all the stuff that you see i think i guess most egregiously in like the movement type situations there are like benefits to doing that um and i i hope that like i think initial is probably the highest quality project that's done things the the right way um there are a few others but you and i'm hoping it can like start a trend because yeah it's it's it's cool to see yeah i mean i think

this is definitely sort of ties into what there's a little bit of a crisis in the industry in I would say at this point, right, where we have all these new tokens launching and people trying to manipulate the price, the FTV, the TVL, and, you know, it works until it doesn't work. And then I think we have seen now that just retail, I think it worked in the past, right, because it looks great and then retail users would buy it and it would kind of sort of of sustained and maybe you could sort of fake it until you make it type thing. But then I think users have woken up to that. And they're like, well, these things are like down only and like,

I'm not going to buy it. Right. And so we see basically almost all the new launches struggling, right? And just going down and not being able to sustain it. And everyone worried about the unlocks that are coming. So I think different ways are needed. So it's very cool that you guys are going that direction. Yeah, I think what matters is just how long do you expect to be working on this project and what is your time horizon. The incentives are just totally not set up for you to be a long-termist in crypto. By no means possible, right?

And no, I just think that initially can be huge. I love my team. I love the people that we're working with. And I hope to be working on this for years to come. And so if you have that mindset, I think starting somewhere reasonable and growing with your ecosystem and with the project only makes sense. But we'll see what happens. Yeah. I think like even the most long-term teams that we work with on the venture side or even the consulting side of Delphi, like, you know, once you have a token live because of the short attention space,

band that, you know, the community and like a lot of, you know, people just within crypto has, there's just so much pressure. I think, like, we really loved how long term you and Stan have been thinking about initial and, like, you know, just the amount of time you put into even the launch. Like, I'm curious, you know, one year after main net, like, what's like a single stat that will tell you and this is like working or not? Like, what, like, for you guys, like, what are you guys thinking about, you know, long term? Obviously, not, you know, price or anything like that.

but I'm curious what you think about. Yeah, I think a number of roll-ups is a great thing. But I think it's very easy to be. Number of roll-ups doesn't actually matter. What matters is probably more so like... There's a well-known ecosystem with over 100 roll-ups. Yeah, exactly. I think all that really matters is a few applications.

So rather it should be metrics like revenue generated by roll-ups, stuff like the fees that are actually generated are these teams making money. Like how profitable are these roll-ups? Users that are cross-pollinating, that'll really show if, you know, this interwoven thesis is working out, where you have all these app chains that users can move between very easily. And then probably TVL is just a standard metric to look at across the roll-ups.

But I think the biggest one is, really just revenue. One question I have. It feels like Initia and the app chain thesis generally is like a bet on crypto innovation, right, that hasn't happened yet. Because I don't know if you agree with this, but to some extent, like if sort of Anatoli and some of the Solana people are right, that the only use cases are minting and trading tokens, then I think Solana or something like it is probably the right design, right?

like a monolith with shared state, like all the defa applications share state and stuff, is probably the right design. So I think to believe in the app chain thesis in an initiate, you sort of have to be bullish long-term, like, crypto innovation. And I'm curious how, yeah, how you feel about that? And also, also the other two, like, yeah, how do you guys feel about that? Are there, are you bullish at this point? Or are like, what applications, like pockets are you most interested in?

and especially for you on Initia, Zun. Yeah, I think, you're right, it really just depends on, like, how hard are people going to start tinkering? Are we going to start getting some interesting experiments? I've been thinking about it, like, when a new PlayStation comes out, you know, you get some of the same games that you had before,

but then a few years down the line, people start taking advantage of all the specs of the PS5 and you get the fucking most awesome games possible. like Eldon Ring. And so I'm thinking that's, you know, it's a similar bet here with the App Chain thesis, right? That now that it's actually easy to do this, teams will spend a bit more time

and want to control their stack and we'll build something super interesting. The problem is what is going to be built? And the spectrum is so huge in the design space. And I think the Inisha team itself has a range of ideas that we want to experiment with. But it's hard to say exactly what will be done.

And what I think is also interesting is these new virtual machines that are opening up the design space too. Like Move has only been around for so long, but it is a phenomenal language to work with. But I think the viewpoint that new virtual machines will unlock net new applications is totally wrong. Because based on examples, We haven't seen any net new applications on APDERS or suey.

We just see the same things written in MOVE. And I think that's just about expressivity as a developer. And so I am bullish on experimentation, but I totally think that it takes time for those experiments to play out. What about you guys? Curious? Yeah, I mean, I do think there's strong evidence that, you know, defy or financial use cases

is just is the thing that like blockchains are incredibly powerful for. And I think that's also where the blockchain advantage really comes in, right? Because the composability in defy is just amazing, right? You can do something and then it leverages this protocol and then use a token some other protocol and maybe borrow against it and do something again.

So I think if you compare like the traditional financial system, and the on-chain system, then I think that kind of composability and defiant innovation there does feel like really the unique superpower. Now, of course, I think what it does open up is now you can maybe financialize and incentivize like a much wider range of stuff than you can in the traditional world.

You can start having maybe, you know, social networks that have some kind of incentive component or games or now, yeah, I mean, I think social networks to me has been one of the things where, you know, even from the very beginning, I felt like if you look at something like Facebook, right, Facebook managed to get this enormous scale. But, you know, the users who, you know, the power users who really like helped make it a success, they didn't benefit from the success. So I've always felt that like if you could build something like a social network type thing where, you have much more of an incentive alignment and the people actually driving it forward can benefit and you have sort of markets

that actually work, you know, that could be like extremely powerful. I don't think we've seen that yet, right? I mean, you had some brief spikes with like friends tech and, but like, you know, it didn't really make sense. They weren't well designed. So I think that is one one example where as a category I feel, you know,

very bullish on in the longer term. gaming I don't know as much about but I could see that also being one but yeah what do you think Anil? Yeah I think you know obviously within Delphi we talk about this question a lot and I think like when it comes to app chains

we you know to your guys point I think we really seen specifically not just defy but like perpx is kind of be like the biggest winners in this like app chain pieces whether it's DYDX hyperliquid etc I think more broadly, though, you know, the way that I see crypto, I've said this a bunch is just like humans, like most powerful human coordination tool, right? And I think that actually becomes more and more useful with kind of like all this abundance

that's created with things like AI going forward. So, yeah, I'm still very bullish on a lot of these huge cases that we have been investing over the years, even though, you know, something like gaming, obviously we were, you know, big investors and big proponents of like Axy and, you know, Louis-human stuff way back in the day. I do think games have like this big potential of being this like, you know, every, I think year in crypto, you always, you know, are hoping for, you know, one, two or three, like big, you know, mainstream applications that kind of like not just, you know, show off the power of this technology, but also on board a lot of the masses that maybe aren't in crypto yet. And I think games are still like a bet that our team still, it's very hard to make that bet because I think a lot of them won't work out, right? But I think we've invested in a lot of like really strong teams that have to think about this in like the right way. And, you know, we're all obviously hopeful that like one of those works out.

I think when it comes to like, you know, defy and its place in crypto, like I think I go back and forth on this honestly. I think like when I first got into crypto, I was super excited about defy for sure. but I still thought that there was this huge potential for, you know, a majority of like long-tail use cases. And defy would not be like the biggest portion of this. I think over time, I've kind of come to realize that defy is kind of like the backbone of all these other use cases anyway. And what percent is that? Is that like 50, 60 percent of what crypto will actually like enable is like 80, 90 percent is the thing I kind of go back and forth on? And I think like is like the question of like, you know, us doing research, us building us,

investing to, you know, figure that out. I think the next big boom for applications will be once ZKTLS is like here and ready, right? That's, you can just bring anything from anywhere on chain and create primitives for it. And that just widens the scope of what we can bring on chain by like, you know, trillions, right? Right now, it's actually still pretty hard to bring you assets on chain, whether those are like RWAs and no one cares about like a wine bottle but once you have like

the ability to bring someone's gaming data on chain or like their scores and stuff or their medical records. These are all things that ZKTLS just like enables a lot quicker. And I think that's when you have the next boom

of crypto and I'm pretty excited for that. So just ZKTLS basically means right, like you have some sort of web session and then you can verify the results from that to write it back on chain. So let's say if I, the medical record thing, I log into my, I don't know, medical website and then you can verify some data that it shows there leveraging SSL, right?

And then you can verify it on chain. Yep. So I think like, you know, ideas like medical records on. on chain have been always one of the things that people have said blockchain is great for and theoretically it makes sense we've just never gotten that which is kind of crazy and like no one has done it well yeah and so maybe zKTLS will make that easier but you know i'm just looking for more fun things to do on chain and i think you know like allowing people to bring their you know world of warcraft or their league data on chain and start trading stuff

or the ways that we can start to stack financial primitives here. Maybe I'm lending against some of my skins or who knows what can be created. But the design space just becomes so much bigger. My kind of take, although is that basically crypto is in the trough of disillusionment stage.

And like, I don't know, I've been speaking to a lot of teams recently that have sort of like been building for a few years. years and are now seeing like big upticks in and this is everywhere from like sort of world coin to like stuff in the energy space like the decentralizing grid stuff that we've talked about for years like all these things have been building in the background for like sometimes seven eight years and are really starting to see like upticks and I think eventually almost all the things that people imagined in 2017 will end up happening it'll just take much longer than everyone expected

kind of like how it happened with the internet, right? Like all the most ridiculous, like, laughed at ideas that people had in the late 90s ended up happening. They just happened, like, way later. So, yeah, I don't know. I think the same thing is going to probably end up happening in crypto. It's just tough because at the same time, there's a lot of very overvalued, like, vaporware because of just the nature of public market, like giving public market liquid

liquidity to early stage things. And so you have like these these like two forces happening at the same time. Yeah. But I'm pretty bullish on a lot of these different applications like coming to market. And I do think it's kind of a no brainer to me that like every pretty much every asset will end up on chain. Like you're already seeing it and like stable coins. Anyone who's ever owned a stable coin for a sufficient amount of time just knows it's like you'd rather have that than a fiat dollar in a bank. account. It's just better in in every way, right? You don't have like a bunk bank like cucking you

every time you want to make a transaction or asking you to go into the asking you and go into branch. Like, yeah, it's seamless like interoperability with any anything you want to do with it. So I just think that's going to be the case for like every asset. And you're seeing it with stocks. I think Superstate just announced today they're like bringing stocks on chain. You know a few people working on that too. Yeah, I, I'm pretty like, Yeah, I'm pretty sure on that one. And that's just like the defy use case. Like I'm, I sort of think there's no way to put the cat back in the,

cat back in the bottle. It doesn't sound right. Jeannie back in the bottle. Yeah. Don't know why you'd put a cat in a bottle, really. Yeah. I think it's, I think it's going to happen. I think this goes back to like what we were saying earlier about like patients.

Like I think the crypto industry has this kind of like mental illness of just like wanting everything to be done like ASAP and now. And I think like one thing I always think about is taking a step back and thinking about how far we've come, even since like when we've got it into crypto, I think, you know, a lot of like the successes and headlines that you're seeing week by week right now or would be things that like you'd be in disbelief in that we would even have the opportunity to see even like six, seven, eight years ago. So yeah, I think like to your point and and to Zon's point, as you bring all these assets

on chain, I think another cool part. is like all this, you know, experimentation, all these maybe dumb games that people view as like not value productive at all have actually been, you know, making the end for more robust, have made like a lot of these mechanisms and design decisions like way clear. So when these assets do get on chain, we have like, we're not starting from zero and have to go and work through all those things while we, you know, bring these assets on chain. So, yeah, I mean, I'm super excited about that. I think like, you know, one thing I've learned, you know, building the

if I at large is just that like you just got to be patient this stuff doesn't happen overnight um but you know if you take a step back like progress is being made i wanted to ask about one thing that maybe goes a little bit more technical regarding initial so if you think of the app chain i mean one of the big struggles if if you look at cosmos but if you look at app chains more generally has been, you know, the fragmentation of user experience and the challenge of liquidity as well, right? So you'd have basically a nice thing in Slana or here, you have all of these liquidity, everything is there.

Now you have different chains, it gets fragmented out. You know, you guys are addressing that, but like how exactly are you guys solving that problem? So assets are all issued on the initial layer one, or the vast majority of them, and then two and from roll-ups. There's essentially two ways to bridge, but to simplify things, let's just say they all use IBC. And so if you have USDC on one roll-up and you want to send it to another roll-up,

those tokens transfer through the layer one. Because IBC has pairwise dependencies, If I went from roll up A to roll up B directly, I'd get USDC 1. And if I went through the layer 1 from roll up A to initial layer 1 to roll up B, I'd get USDC 2. And so what we do is we essentially route all transfers through the initial layer 1 and access this hub because that's where all the liquidity is. And because of that, you can have fungibility of these assets,

where if I'm sending USDC from one roll up to another, I'm going to get the same version, and we're not going to get any new token standards. Essentially, that's just the key way that we avoid liquidity fragmentation. Cosmos was created as kind of a web design, but really it should have been more of a hub-and-spoke. And so we just said, let's hub and spoke this thing. That was kind of, like, the original, actually even design and idea

around the Cosmos Hub, was that you would have this kind of hop and spoke, IBC routing thing. Then I think it was just a sort of, to some extent, it was a failure of execution, right? That that didn't happen. And that you ended up having more of these like pairwise, IBC thing and then that, you know, didn't end up working.

Everything was a bit too permissionless. Yeah. You got to start off a little bit permissioned. You know, bring the thing into the world the way you wanted to be brought in, grow it a bit. And then you can start to give it. the reins. It's like having a child. So it's kind of, it's kind of where Ethereum probably is maybe trying to go towards as well in their very slow methodical researchy way.

The nice thing is you have everyone using the same standard, right? Whether that's to get into Initia you use layer zero and then around Initia use IBC. All the standards are the same. And that means we're going to have consistency of assets. But we're all. also going to have consistency when it comes to trust assumptions. So as an asset issuer, if you trust one roll-up, you're going to be able to trust the other roll-up in the same way. You're not going to have to look into the details and see, like, how is this roll-up run, what's its sequencer set up? Do I trust this bridging or not? Because they're all going to be the same. And those are going to be enshrined at the L-1 level. And once you have this consistency of shared standards, we can start to build a lot

of better UX experiences over all of this. I think the UX that we have right now is not bad, but there's definitely a lot of work to be done. We're currently going to do a full redesign of the Inisha app. The Inisha Bridge page is going through a change. We're going to change a bit of the way that you connect to wallets. It's already nice that you can use EVM wallets on any virtual machine chain. I think that's just the biggest blocker for getting anyone into Cosmic

is they have to download a Cosmos wallet. So I'm never going to switch from my Rabby wallet. And so I need to ensure that would work on Inisha as well. And so slowly we'll make this user experience better. We have the assets all nice and unfragmented. And the economy is just getting started. And I'm excited for where it goes. So maybe final topic with Delphi,

you guys are investors in Nisha right now. You guys run valid in Nisha. You invested in a bunch of Inisha projects. I think you guys have done some research reports, right? On Inesha. So a lot of involvement already. I don't know. Is there anything on the lab side you guys are also doing with Inisha?

Not right now. Probably a bit early for that. We could maybe do something in the future. future. But yeah, not right now on the lab side. But yeah, as you said, pretty active on the ventures and research side. Yeah, so people should definitely check out that research report. I think if people want to go deep on Initiat and that's probably the best place to go. Yeah, I think we'll make it public actually for this pod. So we'll drop it in the show notes and everything like that. Cool. So Zon, maybe to end off, what does the roadmap look like?

So if you think of like the next two years, what are the most important? I can tell you the next two years, but I can probably tell you the next six months at least. Okay, let's do the next six months. Next six months is getting more roll-ups that we are already working with live and out to main net, adding more assets to enshrine liquidity,

revamping the initial app, bridge, and wallet widget to have a better U.X. and then probably tweaking Inisha VIP. So VIP is great in the way it is right now, but it only allocates rewards based on the gauge vote and the balance pool. And I think more interesting ways to allocate these rewards will show up over time.

And so we want to make sure that we're consistently evaluating and adjusting our economic models. I think people usually don't change the parameters of their chain after it's live, but these are totally things that you should tweak. It's basically like changing, you know, the Fed rates, whether you want savings or people spending. And so we're going to continue to adjust these things.

And that's probably what the next six months looks like. Awesome. And then like what about, you know, devs and users, like, what actions should they be taking? It does want to build on an initial. Like, what's the process of that? And then, you know, if users want to get set up and everything like that, what's the process for that?

If you are a user looking to get in, go to initia.xyZ slash onboarding. There's a whole flow there for connecting your wallet, bridging in funds, seeing what apps you can play with. I'm just getting in there. If you are a developer, docs.inisha.xy, that's your place to go. Or my DMs, if you want to yap. You can hit me up at It's Always Zani on Telegram or Twitter. if you have an interesting idea.

Always love to chat. Cool. Well, thanks so much, Sam, for coming on. And thanks so much, Anil and Jose for doing this episode together. It was really fun. And I was super excited how this initials is going to play out.

And what's the impact going to be for, you know, sort of the larger way of how people build in crypto. Definitely. Yeah, I appreciate you guys. There's nice to be on. Yeah. Yeah, thanks very much.

Thank you, amigos. Thank you.