Agoric will charge fees in RUN, a dollar-stable token, to win over businesses

Ashton Addison: What is the Agoric protocol, and what does it bring to the space?▶ 00:20

Rowland Graus: Agoric is a layer 1 chain launching this year in the Cosmos ecosystem. One of our primary differentiators is that we're a smart contracting chain that lets developers build smart contracts in JavaScript. Because we're in Cosmos, we launch connected to IBC. That means DeFi and NFT applications launched on Agoric have access to capital across the Cosmos ecosystem, on any other IBC-connected chain, whether that's the Cosmos Hub or the Osmosis DEX. Users in those communities can come and use the protocols you build.

Ashton: How will Agoric fit into that ecosystem, and where will it add value for other protocols?▶ 02:08

Rowland: The vision of Cosmos generally, and I'm not part of the Cosmos team but I'll speak for them, is that most Cosmos blockchains are application-specific. Akash, for example, solves one use case: running compute on a chain. Osmosis is something like a Balancer, and that's all it does. Because we're a smart contracting platform, we allow a whole range of things to be built. If you're an Osmosis user with an LP token and you want to stake it for a full year, with rewards that change based on that, Osmosis would have trouble building that quickly. They probably could, and the team there is great, but it would be much faster to build on Agoric. Akash's developer relations team told us they'd like a contract that immediately starts a new lease when a user's lease terminates. That's very easy on a generalized smart contracting platform, but harder for an application-specific chain to do itself.

Ashton: How do you plan to bring developers to Agoric early on, given that most know traditional languages rather than blockchain ones?▶ 04:19

Rowland: You can break it into two pathways. In one, we take JavaScript developers who don't know much about DeFi or blockchain and teach them. In the other, we find crypto-native DeFi developers and have them build in JavaScript. We're going down both at once, though the marketing language has to be very different for each group. Personally, I think the early group is crypto and Web3-aware developers who haven't been able to take the time to learn Solidity, or don't believe it's the right way to go. I've met a lot of them in the Discords of core DeFi projects. They can't take six months off to learn Solidity. We've also put out developer bounties for specific pieces of functionality on Gitcoin, and most of our applicants have been JavaScript developers. Many are generalized contractors with teams that can build in JavaScript. In the medium term, we believe very strongly that the JavaScript fintech developer group will become the core engine, because it is orders of magnitude bigger than the group that knows Solidity.

Ashton: Is Agoric fast and cheap, and how does it validate transactions?▶ 11:28

Rowland: Throughput is fundamentally limited by the consensus mechanism, meaning how distributed nodes agree on what happened in a block. Agoric uses Tendermint right now, so you can look at the Cosmos Hub or Osmosis to get a sense of our throughput. Our blocks may be a little longer than an average Cosmos block because JavaScript has to be computed, but it's still on the order of less than 10 seconds per block. Cosmos chains also have fast finality, which is a nice property and important for many of the DeFi use cases we want to enable. The Agoric VM is technically consensus-agnostic. If a better consensus mechanism proves out years from now, maybe Avalanche's, we could theoretically switch. It would be a lot of work and not something we could do by snapping our fingers, but because we're building for the long term, it's upgradable.

Ashton: Does Agoric have a network token, and what is it used for?▶ 13:58

Rowland: We have two native tokens. The staking token is called BLD, and it secures the chain in the delegated proof-of-stake Cosmos Tendermint way. Two protocol-level DeFi apps are core to our system, and if you squint they look like Maker and Uniswap. The Maker-style vault system lets people bring collateral and mint our local currency, RUN, which is meant to be roughly stable to a dollar. RUN is what pays for transactions. Real businesses find it a huge pain to pay an operational expense in a fluctuating currency, because you have to track taxes on all of it. We also expect RUN to be the primary pricing mechanism, and all RUN has to be minted against collateral. The stability fee on RUN comes back to stakers. BLD also backs the vault system if it ever becomes under-collateralized. In a disaster scenario, the system mints additional BLD and covers its debt that way.

Ashton: Where is Agoric today, and how did it get here?▶ 07:19

Rowland: Agoric is the culmination of decades of work by the founding team and a number of core engineers. The group worked on the first production smart contract and wrote some early seminal papers on smart contracting in the late 80s. The company itself was only founded in 2018. We released our alpha roughly a year ago, the first view of the Agoric VM and the first smart contracts built on top of it. The beta came in early spring this year, with early versions of our core DeFi protocols. Through the summer we ran a long, multi-phase incentivized testnet that brought in validators from all over the globe. In one phase, validators earned staking rewards in the Cosmos way, then brought that token up into the JavaScript layer and traded it on our AMM to buy more tokens and increase their stake faster. Some took that to the extreme and tried to take over the testnet, just to see how the DeFi layers and the core Cosmos layers interacted. The last stress test phase ended roughly a month ago, and we're now full steam ahead on the mainnet rollout.

Ashton: What does the mainnet rollout look like, and when will it be open to all developers?▶ 17:10

Rowland: The first phase, which we're calling phase zero, will likely happen in the next week or two and is blocked only on operational work, not technical work. It's the launch of our Cosmos chain only: a proof-of-stake chain with staking and governance, and none of the JavaScript virtual machine. Phase one has to be voted in by token holders. It launches the Agoric VM, our Treasury vault system and the automated market maker, and the current plan is Q4 of this year. Phase two allows permissioned code on the system, through a governance and review process that's still to be determined, so developers have a pathway to launch products. Phase three is full permissionless rollout, where any developer can build and launch an application. The gap between phase one and phase three is about security audits, making sure the system is safe against malicious code. The plan is Q1 of next year for permissionless mainnet, but given the nature of security audits, that date could easily slip.