Takeaways from the Cosmos Interchain Conversations Conference
We spent the last two days in sunny Berlin for the Interchain Conversations Conference put on by the Cosmos/Tendermint team and the Interchain Foundation.
There have been presentations from various Cosmos stakeholders: the Tendermint core dev team, Interchain Foundation, investors, validators, and zone developers.
As I’m digesting the various conversations and new ideas, the big theme that jumps out to me is the challenges of creating a new zone and the importance of working on the experience for both Zone Developers and Validators.
If the Cosmos Hub and ATOM are to become valuable, the individual zones need to flourish and transact with each other.
Challenges of Creating a New Zone
As a zone developer, you, of course, need to create a compelling application that provides value to users, and the Cosmos SDK is a great launchpad.
However, there are many additional activities that a zone developer must consider:
- Recruiting validators: today each zone must convince validators to spin up servers for their zone. This often means that a validator needs to spend resources through months of testnets in hopes of finding delegations if/when the zone launches. The validator will then earn a token (through block rewards or fees) and the token may or may not have value, liquidity, or even be available on exchanges. It’s a long and uncertain investment of time and money. Ideas like “shared security”/”interchain collateralization” could help with this in the future, but they introduce a different set of challenges: validators will still likely need to spend money and “invest” resources ahead of time.
- Token mechanics/economics: a zone developer must decide how their zone’s token will work: inflationary vs fixed size vs deflationary vs. something else. Staking token? Fee token? Payment token? And what is the economic model for the token to have value? What will the velocity of the token be? Etc.
- Token distribution: how will the zone developer get the token into stakeholders’ hands? How will validators get it? End users? Investors? Airdrop, WorkLock, Lockdrop, reverse dutch auction, <insert your new distribution method here>?
- Securities/regulation: if selling the token, is it a security? In which jurisdictions? How will you handle accreditation? How will you accept donations/investments? Into what entity?
- Payments and Fees: how will users pay for transactions? In which currency/token will they buy goods/services? For example, Althea users need to pay for Internet bandwidth, ideally in a stablecoin.
And Don’t Forget the App!
If you get the above sorted, then you can get to the challenging work of creating a novel/useful app and attempting to find users. Life ain’t easy for a zone developer!
There was even a Zone Developer + Validator speed dating session during the conference to try to match up both sides.
This tweet below from Jehan Tremback (Althea zone developer) and the replies from Validators summarize the tension nicely, I think.
What To Do About It?
It may seem like I’m complaining, but I’m not. I think this is a hugely valuable opportunity for the community to work on together. Especially validators and zone developers, since both want the same thing: successful zones and a buzzing Cosmos Hub.
Theory: @cosmos validators have an incentive to overstate the difficulty of validating on a new zone as a way to implicitly avoid the perception of their services as a commodity.
— Jehan (@JTremback) June 14, 2019
The experience of creating a new zone today is similar to wanting to deploy a web app, renting a VPS, and starting at a command prompt with a bare Linux install. Can we make spinning up a new zone more like using Heroku?
To get there, there is likely going to be a larger discussion with some technical solves and some social solves, and bringing all parties together this week in Berlin helped shine a light on the work to be done.
Addendum: A Different Approach
At the last talk of the conference, we learned that Preethi Kasireddy from TruStory has built their application on the Cosmos SDK and has been running an alpha with a live user community while operating an internal four-node network. In this way, they can rapidly iterate the application and focus on creating user value before having to consider the challenges of creating a zone listed above. A wise approach.