Sunny Aggarwal has vivid memories of the worst days of her life earlier this year. The blockchain co-founder and his Osmosis protocol were hit hard by the Terra-LUNA collapse and are still recovering from its effects today.
“We were one of the largest DEXs providing liquidity to TerraUSD and Luna Classic, so the Terra crash hit us very hard,” he explains.
“I always say the Terra Luna protocol was created by someone with an IQ of 50 or 150. Frankly, I don’t know which one.”
Aggarwal is co-founder and lead development of the $225 million Osmosis DEX. This DEX surpassed his $2 billion in TVL before crypto winter came.
The rise of cross-chain bridges
Osmosis is a decentralized exchange (DEX) powered by Cosmos, creators of the Inter-Blockchain Communication Protocol (IBC).
At the time of the last bear market, the development of interchain technology that allows users, data and tokens to be ported across chains was approaching unknown limits.
Few traders focused on token price movements, but used terms such as IBC, Tendermint, and Cosmos. But fast forward five years and there are nearly 50 of his blockchains using IBC to execute over 10 million of his IBC transactions daily across the ecosystem. And despite the market plunge, the total value locked across the protocol is still over $1 billion.
Apart from his work in blockchain, Aggarwal is also known for his quirky selection of hats.
The meme that started my crypto career
“A good friend came up to me and said, ‘Did you know that Dogecoin sponsors the Jamaican bobsled team?'” he recalls. “And I was like, ‘What the hell is Dogecoin? What does that mean?
Aggarwal first became aware of cryptocurrencies during his senior year at Bridgewater-Raritan High School in New Jersey. At the time, cryptocurrencies were a relatively new phenomenon and there were no extracurricular activities or school clubs on the subject. Instead, the blockchain idea spread the old-fashioned way.
“That sentence made no sense to me,” Aggarwal told Magazine. “But I was always fascinated by what I didn’t know, so I went home that night and looked into Dogecoin for the first time.”
Like many others, Aggarwal found the Dogecoin idea intriguing and highly entertaining, but did not expect the coin to develop into a billion-dollar asset market cap like celebrities. I did.
Instead, Dogecoin became a gateway token for Aggarwal to explore the vast realm of digital currency. So, during his freshman year at the University of California, Berkeley, where he majored in Computer Science and Political Economy, Aggarwal joined a small blockchain club of his, a class of about 80 students in the first semester. I started teaching this subject to
“For me, the best way to learn something is to teach it. Berkeley has a cool concept where students can teach a course with the help of a professor. Dawn Song gave us the go-ahead.”
Sideways to Interchain
From the pool of students who attended his “lectures,” Aggarwal invited them to a new club he founded called “Blockchain at Berkley.” The club is still ongoing and has evolved into an award-winning blockchain consulting and development team. After learning the necessary knowledge, Aggarwal completed his sophomore year in the summer of 2017 before doing an internship at his Consensus, creator of the popular MetaMask wallet.
“At the time, everyone in the club was Bitcoin maximalists, but it felt like there was something missing in the ecosystem,” he says. “At the time, Ethereum was getting a lot of attention, so I wanted to know more about it.”
Contrary to expectations, Aggarwal didn’t like Ethereum. “It didn’t suit me. I didn’t have a roadmap for how the network would work long-term.” But the experience led him to a new mechanism called proof of stake consensus. I paid attention.
So Aggarwal went out and read every Proof of Stake white paper he could get his hands on. “Of all of them, my favorite was the Tendermint piece,” Aggarwal says, citing the simplicity of the protocol. “A developer could build this in months if we all wanted to.”
That summer, Aggarwal reached out to the Tendermint team, the core developer of Cosmos and the IBC ecosystem, to ask if there were any vacancies. At the time, the would-be co-founder of Osmosis didn’t even know that Tendermint was behind Cosmos. But after hearing about projects in development such as IBC and cross-chain he bridges, Aggarwal felt the ecosystem was a perfect fit.
“Everything clicked. The Cosmos idea solved all the problems I saw with the Ethereum model. So I dropped out of UC Berkeley that September and started working on Cosmos full-time. I’ve been doing it for the last five years.”
According to Aggarwal, what really fascinated him about IBC was its scalability on both a technical and social level. “Look at Ethereum,” he says. “It’s gotten so big, with tens of thousands of his DApps built on top of it, and that means, in my view, technological progress in blockchain will come to a halt.”
The most engaging read on blockchain. Delivered once a week.
Aggarwal explained that it would be impossible to consider the needs of every Ethereum project given the sheer number. “Instead, things would be much easier if we had a fully vertically integrated app chain like IBC that could iterate his layers of protocol very fast.” Further, Ethereum’s history of hard forks reinforced his belief in IBC.
“Each application and community should have sovereignty over their own system. You can’t fork the blockchain every time you have a disagreement. If one application wants to fork, that will fork mine too.” It is not.”
Osmosis DEX users have access to 89 cross-chain bridges across 45 blockchains on Osmosis. This means that connected tokens can be swapped in and out in a non-administrative manner, earning swap fees to provide liquidity.
Like most co-founders, during an average day at Osmosis, Aggarwal spends most of his time on the phone and coordinating the team’s internal focus. About 25% of his time is spent coding and the rest is spent networking with stakeholders and those who want to participate in the ecosystem.
But the event prompted Aggarwal and his team to think long and hard about the fragility of the protocol. “He, who makes up more than half of the liquidity, had experience with two tokens going to zero in a matter of days, and had to implement stricter security controls.” increase. As an example, a pool containing $100 million in digital assets, he can only move around $5 million across the IBC bridge every 6 hours.
reflection and the road ahead
Aggarwal expects to work at Osmosis in the next five years or so. “What we mean by osmosis changes over time. Will it always be just DEX, or a shift to other elements? We can’t say for sure.” Aggarwal firmly believes that cryptocurrency projects will be built on Cosmos. “Therefore, I am confident that I am in this business for the long term,” he says.
As for his ultimate vision for DeFi, Aggarwal says it boils down to one catchphrase he’s honed over the years.
“It’s all about enabling individual privacy and system transparency.”
He cites the example of Robinhood and the company’s practice of selling customer order flows to large hedge funds for profit. But at the same time, we want the system to be accountable. For example, we want users to see how much leverage the protocol has overall. And not cloudy symptoms like CeFi. That’s the vision I want to offer. ”