Sunny Aggarwal has vivid memories of some of the worst days of his life earlier this year. The blockchain co-founder and his Osmosis protocol were hit hard by the Terra\u2013LUNA collapse and are still recovering from its fallout today.<\/strong><\/p>\n \u201cThe Terra crash hit us incredibly hard because we were one of the biggest DEXs for providing liquidity to TerraUSD and Luna Classic,\u201d he explains, \u201cAt one point, it made up over 50% of our liquidity.\u201d\u00a0<\/p>\n \u201cI always tell people that the Terra Luna protocol was created by someone with either an IQ of 50 or 150. And frankly, I can\u2019t tell which one.\u201d<\/p>\n Aggarwal is a co-founder and leads the development of the $225-million Osmosis DEX, which, at one point, eclipsed $2 billion in TVL before the coming of the crypto winter.<\/p>\n Osmosis is a decentralized exchange (DEX) operating on Cosmos, the creator of the interblockchain communications protocol (IBC).<\/p>\n At the time of the last bear market, the development of interchain technologies, allowing users, data and tokens to port between chains, was close to being on the edge of the unknown.\u00a0<\/p>\n Laser-focused on price movements of tokens, few traders were across terminology, such as IBC, Tendermint or Cosmos. But fast forward five years, there are now nearly 50 blockchains using IBC to conduct more than 10 million IBC transactions daily across the ecosystem. And it still has more than $1 billion in total value locked across the protocol despite the market sell-off.\u00a0<\/p>\n Apart from his work in blockchain, Aggarwal is known for his eccentric selection of hats.<\/p>\n \u201cA good friend of mine walked up to me and said, \u2018Did you know that Dogecoin just sponsored the Jamaican bobsled team?\u2019\u201d he recalls. \u201cAnd I was like, \u2018What the hell is Dogecoin? What does it even mean?\u2019\u201d<\/p>\n Aggarwal first became aware of crypto\u2019s existence during his senior year at Bridgewater-Raritan High School in New Jersey. At the time, crypto was a relatively new phenomenon and there were no extracurriculars or school clubs about the subject. Instead, the idea of blockchain spread the old-fashioned way.\u00a0<\/p>\n \u201cThat sentence didn\u2019t make any sense to me,\u201d Aggarwal tells Magazine. \u201cBut I\u2019m always fascinated by what I don\u2019t know, so I went home that night and looked up Dogecoin for the first time.\u201d<\/p>\n Like many others, Aggarwal found the idea of Dogecoin interesting and quite funny but did not really expect the coin to evolve into a billion-dollar-market-cap asset with celebrities fussing over it as it has.\u00a0<\/p>\n Instead, Dogecoin became a gateway token for Aggarwal to explore the vast realm of digital currencies. And so, during his freshman year majoring in computer science and political economy at the University of California, Berkeley, Aggarwal joined a small blockchain club and began teaching the subject to a class of roughly 80 students in his first semester.\u00a0<\/p>\n \u201cFor me, the best way to learn something is to teach it. At Berkeley, there\u2019s this cool concept where students can teach courses as long as it\u2019s backed by professors. And so, my computer science professor Dawn Song gave us the green light.\u201d\u00a0<\/p>\n From the pool of students who attended his \u201clectures,\u201d Aggarwal invited them to a new club he founded called \u201cBlockchain at Berkley,\u201d which is still ongoing and has since evolved into an award-winning blockchain consulting and development team. After learning the required knowledge, Aggarwal interned at Consensus, the creator of the popular MetaMask wallet, after his sophomore year in the summer of 2017.\u00a0<\/p>\n \u201cAll of us in the club were pretty much Bitcoin maximalists at the time, but we felt like something was missing in the ecosystem,\u201d he says. \u201cAt that time, Ethereum was gaining a lot of traction, and I wanted to learn more about it.\u201d<\/p>\n Contrary to expectations, Aggarwal did not find Ethereum to his liking. \u201cIt just didn\u2019t click for me, and there was no roadmap as to how the network could have worked out in the long term.\u201d But the experience turned his attention toward a novel mechanism called proof-of-stake consensus.\u00a0<\/p>\n And so, Aggarwal went out and read all the proof-of-stake white papers he could lay his hands on. \u201cOut of all of them, it was the Tendermint piece that I liked the most,\u201d says Aggarwal, citing the protocol\u2019s simplicity. \u201cDevs could build this in, like, a couple of months if we all wanted to.\u201d\u00a0<\/p>\n That summer, Aggarwal reached out to the Tendermint team, which is the core developers of the Cosmos and IBC ecosystem, and asked if any positions were available. At the time, the would-be Osmosis co-founder didn\u2019t even know that Tendermint was behind Cosmos. But after hearing about its projects in development, such as IBC and cross-chain bridges, Aggarwal felt that the ecosystem was a perfect fit.\u00a0<\/p>\n \u201cEverything just clicked. The idea of Cosmos solved all the issues I saw with the Ethereum model. So, I dropped out of UC Berkeley that September and began working on Cosmos full-time. I\u2019ve been doing it for the last five years.\u201d\u00a0<\/p>\n According to Aggarwal, what really fascinated him about IBC was its scalability on both the technical and social levels. \u201cJust take a look at Ethereum,\u201d he says. \u201cIt has gotten so big to the point where there\u2019s tens of thousands of DApps building on it. And that, in my view, means that technical advancement on the blockchain grinds to a halt.\u201d\u00a0<\/p>\n Subscribe<\/p>\n The most engaging reads in blockchain. Delivered once a Aggarwal explains that it\u2019s simply unfeasible to consider all Ethereum projects\u2019 needs, given the sheer numbers. \u201cThings would be much simpler if instead of you had fully vertically integrated app chains that could iterate the protocol layer very rapidly like IBC.\u201d In addition, the history of Ethereum hard forks further solidified his belief in IBC.<\/p>\n \u201cEach application and community should have sovereignty over their own system. We can\u2019t fork a blockchain every time there is a disagreement. If one application wants to fork, that shouldn\u2019t cause my application to fork as well.\u201d<\/p>\n Users of the Osmosis DEX can make use of 89 cross-chain bridges across 45 blockchains on Osmosis. That means one can swap in and out of connected tokens in a noncustodial manner, as well as earn swap fees for providing liquidity.\u00a0<\/p>\n Like most co-founders, on an average day in Osmosis, Aggarwal spends most of his time taking calls and coordinating the team\u2019s internal focus. About 25% of his time is devoted to coding and the remainder is spent networking with stakeholders in the ecosystem and with those looking to join.<\/p>\n But the event made Aggarwal and his team think long and hard about the protocol\u2019s vulnerabilities. \u201cExperiencing two tokens making up over half of our liquidity crashing to zero in a matter of days made us implement stricter safety controls.\u201d On Osmosis, bridge rate limiting is now in place where, for illustrative purposes, a pool containing $100 million of digital assets can only have $5 million or so moved across an IBC bridge every six hours.<\/p>\n Moving forward, Aggarwal sees himself working for Osmosis in the next five years or so. \u201cWhat Osmosis means will change over time; will it always just be a DEX, or transition into some other element? I can\u2019t say for sure.\u201d But it\u2019s Aggarwal\u2019s firm belief that most crypto projects will be built on Cosmos \u201cin the next decade.\u201d \u201cHence,\u201d he says, \u201cI can definitely see myself working on this stuff for the long term.\u201d<\/p>\n As to his ultimate vision for DeFi, Aggarwal says it all boils down to one catchphrase he\u2019s polished over the years:\u00a0<\/p>\n \u201cIt\u2019s all about enabling privacy for the individual and transparency for the system.\u201d\u00a0<\/p>\n<\/blockquote>\n He points to the example of Robinhood and the firm\u2019s practice of selling customers\u2019 order flow to big hedge funds to make a profit: \u201cThat\u2019s why we want to build a privacy-enabled DEX where none of that stuff happens. But at the same time, we want the system to be accountable. We want users to see, for example, how much overall leverage the protocol has. And not some clouded manifestation like in CeFi. That\u2019s the vision I want to give.\u201d\u00a0<\/p>\nThe rise of cross-chain bridges\u00a0<\/h2>\n
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The meme that started a crypto career<\/h2>\n
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A lateral path toward the interchain\u00a0<\/h2>\n
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Reflections and the road beyond<\/h2>\n
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