The case: Agoric
The designated venue for the IBC-ecosystem.
The name 'Agoric' is derived from the Greek term 'Agora,' which refers to the ancient marketplace that brought together people from various social backgrounds and different fields of interest and expertise. The Agora in Athens was renowned for hosting esteemed philosophers of ancient Greece, including Socrates, Plato, and Aristotle, who engaged in intellectual discussions and debates on a wide range of subjects. Moreover, the site served as the focal point of Athenian democracy, where citizens gathered to cast their votes and actively participate in the political process. The modern blockchain-oriented project known as Agoric not only embraces the characteristics of the Agora but also goes beyond.
Such as Agora was a marketplace to the ancient Greeks, such a convening spot is Agoric to both the Web2 and Web3 developers. Agoric's competitive edge over other blockchains lies in its capacity to empower developers to write smart contracts in a secure variant of JavaScript. By allowing smart contracts to be written in this programming language, Agoric taps into a potential pool of 19.6 million JavaScript developers. Compare this to the shallow pool of an estimated 21.6 thousand blockchain developers (this includes all the active blockchain development languages such as Solidity, Rust, Cairo etc.). So this illustrates the need, (ant the potential) for Agoric.
Let’s dive in the architecture of this blockchain to understand how this technological marvel is feasible, let’s start from the top of the tech stack and work our way down.
Zoe
At the top of the Agoric tech stack, there is a smart contract framework called "Zoe." Zoe serves multiple purposes, including:
Executing custom code on-chain.
Minting new assets, including fungible and non-fungible assets.
Facilitating credible asset trading
This smart contract framework has a unique feature: it ensures that users can always withdraw their initial funds or the intended outcome of a swap. In contrast, conducting a swap on another blockchain like Ethereum could pose a risk of asset loss if there are code bugs. Zoe, on the other hand, is specifically designed to provide offer safety. Even if a smart contract contains a bug, users' funds remain secure. This is achieved by Zoe escrowing the assets throughout the swap process, similar to an atomic swap, and ensuring that the smart contract never has direct access to the user's assets. As can be seen in the image, Bob initiates a transaction and designates Alice as the counterparty, but he never becomes the custodian of the assets unless he fulfills the deal from his end first.
Zoe provides developers with the opportunity to build their own custom smart contracts. However, the Agoric team recognizes that many contracts follow commonly-used structures. To support developers, they also offer a selection of pre-built smart contracts that cater to various niches. These pre-built contracts cover a wide range of options, including:
DeFi contracts (Automated Market Makers, loans, vaults, etc.)
Exchange contracts (orderbook-based, atomic swaps)
Governance contracts
ERTP
As shown in the image above, Zoe utilizes the Electronic Rights Transfer Protocol (ERTP) to connect with and transfer assets. ERTP is the standard employed for digital assets in JavaScript and bears resemblance to Ethereum's ERC-20 standard for fungible tokens and ERC-721 for non-fungible tokens. In addition to supporting fungible and non-fungible assets, ERTP also accommodates semi-fungible tokens. Agoric defines semi-fungible assets as follows:
Semi-fungible assets have distinct forms which are not interchangeable with each other, but in which instances of a single form may interchangeable with other instances of the same form.
CapTP
Beneath the ERTP layer, the Capability Transfer Protocol (CapTP) operates. CapTP is a secure communication protocol utilized for interactions between distributed systems and other components within a decentralized network. It is constructed upon the foundational principles of "Object Capabilities." Object capabilities constitute a programming paradigm that enables controlled access to objects or resources in a system. According to this paradigm, access to an object is granted only if the user or program possesses a specific "capability" associated with that object. Objects possess state and behavior and may contain references that can only be invoked through a particular set of programming instructions or an introduction. An introduction, depicted in the image below, operates on the premise that objects maintain references restricted to specific counterparties.
Object A has the ability to communicate with both objects B and C, whereas object B lacks the capability to communicate with object C due to the absence of an established reference. This restricted access configuration adds an extra layer of security within Agoric's communication layer, aligning with the Principle of Least Authority (POLA). According to POLA, only the necessary access required to accomplish a task will be granted, ensuring that objects have limited and controlled communication capabilities for enhanced security.
Endo
The name 'Endo' is an anagram of the words 'Node' and 'Deno,' reflecting its current work-in-progress status. Endo serves as the runtime environment for secure communication between objects in JavaScript. It is built on SES, a hardened JavaScript environment, and integrates most existing JavaScript libraries. SES ensures local integrity and mitigates supply chain attacks using LavaMoat. LavaMoat comprises a set of tools that enhance the security of JavaScript dApps without requiring a complete code rewrite. It allows for the creation of code with an initial security baseline, bolstering the overall security of JavaScript applications.
Hardened JavaScript
Hardened JavaScript is a secure and deterministic subset of JavaScript's strict mode. This means that additional restrictions have been added on top of JavaScript's strict mode, which already has been stripped down to address potential security concerns. Some of these additional measures include
Removing Input/Output objects
By removing these objects data exfiltration out of the hardened JavaScript compartment can be prevented.
Lockdown mode that freezes the shared intrinsics
This prevents bad actors from replacing their methods or otherwise being able to manipulate them.
IBC-ecosystem
This remarkable protocol is powered by the Tendermint consensus mechanism and natively incorporates the interoperability of the Inter Blockchain Communication (IBC) protocol. As of the time of writing, there are bi-directional channels established with eight other protocols in the IBC ecosystem, which are listed below:
Not widely known, the Agoric team is actually a co-developer of the IBC protocol, further showcasing their remarkable capabilities.
Tokenomics
The Agoric blockchain hosts not just one, but two tokens. The first token is the BLD governance token, which exhibits similar functionality and properties to other blockchain-native tokens. In addition, Agoric is also the home of the 'IST' stablecoin, which holds significant potential, particularly considering the early stages of DeFi within the broader IBC ecosystem.
BLD token
The BLD token serves as the governance token of the Agoric blockchain and can be staked to provide security to the chain. Stakers who participate in this process will receive inflationary rewards, along with fees generated by the Inter Protocol.
The Agoric investors bought the BLD token at these terms:
The pie chart presented below illustrates the allocation percentage per stakeholder in Agoric:
The graph provided below depicts the total quantity of circulating tokens per month, spanning until November 2024. Following this period, the token's inflationary nature will persist unless decided otherwise by governance.
Inter Protocol
When launching a new blockchain, it is equally, if not more, important to establish a vibrant ecosystem rather than solely focusing on building a technologically superior product. Within the broader IBC ecosystem, there is a noticeable absence of a reliable stablecoin that can effectively support a flourishing DeFi ecosystem. While there initially was the algorithmic UST stablecoin, but we all know how that went …
Subsequently, Agoric took the initiative to develop their own governance tokens, known as 'BLD,' and introduced the 'Inter Stable Token' (IST) issued by the Inter Protocol. The IST stablecoin is overcollateralized and can be minted by locking up assets such as ATOM, ETH, and DAI. The purpose of this stablecoin is to serve as a reliable anchor amidst a cosmos filled with volatile assets and it has the additional utility that IST can be used to pay for gas fees on the Agoric blockchain. What makes IST particularly appealing is the absence of significant stablecoins released on the Agoric blockchain and the broader IBC ecosystem. The exact backing and total outstanding IST tokens can be viewed on the dashboard here. To solidify its peg to the US Dollar, the Inter Protocol will include an integrated Automated Market Maker (AMM). If the price deviates in either direction, the price can be arbitrated back to peg by market participants.
Team
Given that a protocol encompasses not only the technical aspects but also heavily relies on the individuals responsible for coding and project development, it is imperative to consider their previous accomplishments. When assessing the experiences of various team members, it becomes evident that they are an one-of-a-kind team in terms of proven track record and experience. Let’s examine the notable achievements of some team members prior to their involvement with Agoric.
Dean Tribble; CEO
Dean played a significant role as one of the co-designers of the pioneering smart contracting system known as 'AMiX'. In the past, he held the position of Chief Technology Officer (CTO) at a startup named 'Agorics', which was later acquired by Microsoft. Following the acquisition, Dean joined Microsoft as a Principal Architect, where he contributed to the co-design of a distributed object-capability operating system.
Mark S. Miller; Chief Scientist
Mark, serving as the Chief Scientist, holds a prominent position within the organization and deserves great respect as a highly esteemed computer scientist. His visionary thinking in the domains of incentive engineering and distributed systems predate the release of the Bitcoin whitepaper by two decades. Mark's impressive track record can be traced back to 1988 when he authored his initial papers, and since then, he has continued to contribute to the field by (co-)writing over 10 technical papers up until the present time. These foundational papers, crafted over 35 years ago, form the bedrock upon which Agoric stands today. In the paper ‘Markets and Computation: Agoric Open Systems’, Mark elaborates on how agoric systems can be utilized. I quote:
“If used as the basis for large, distributed systems, open to the human market, agoric systems can serve as a software publishing and distribution marketplace providing strong incentives for the development of reusable software components.”
While not explicitly mentioning blockchain, Mark's concept of agoric systems shares certain similarities with aspects of blockchain technology, particularly regarding decentralized, open, and incentivized software development and distribution. It is important to note that agoric systems and blockchains are not synonymous, despite their commonalities. Agoric systems extend beyond the scope of traditional approaches by blending market mechanisms and computational processes to create open economic systems.
For the sake of the article I will refrain from covering the backgrounds of other team members since their extensive experience is simply too much to cover but feel free to take a look at the team and their experience here.
Backers
Great products are rarely built by oneself and Agoric has some credible names to back them up. Their backers include over 24 well known industry backers and are amongst the likes of:
Furthermore, Agoric has established integrations with other projects within the IBC ecosystem, including Iqlusion and Keplr. Additionally, Agoric has fostered relationships with RMIT University as well.
There is a partnership that pleasantly surprised me, one that I did not anticipate, namely the collaboration with MetaMask. What I find particularly neat is that both teams have been actively engaging in vulnerability assessments together with interesting outcomes as a result.
Roadmap
The launch of the mainnet is structured into four primary stages and is following a sequential numbering system up to stage 4. The mainnet was officially activated in conjunction with the introduction of the BLD governance token.
Mainnet 2
Agoric is currently in Mainnet 1B, and preparations for Mainnet 2 are already underway. Mainnet 2 revolves around two key topics, which are:
Scaling
The existing setup offers an adequate throughput for the early majority; however, it must be scaled up to ensure long-term sustainability.
Engineering
Prioritizing business development (BD) efforts and engaging in initial discussions with potential ecosystem projects.
Docs are being updated to attract ecosystem developers
There are currently 5 applications actively developing on top of Agoric (excluding Inter Protocol). These projects are:
LH2 Staking
KREAd
Crabble
AgreeWe
Calypso
Recognizing that this ecosystem may not attract a significant number of enthusiastic blockchain users, the team has placed a higher priority on ecosystem development. Given their ability to deliver impressive technical achievements, I anticipate the team will also excel in handling business development efforts with ease and eventually will be able to attract bluechip projects.
To close off this article, whereas the Agora of ancient Greece symbolized the intellectual exchange of ideas and the promotion of democracy, Agoric brings the spirit of collaboration and progress to the modern blockchain world. With its solid foundation and vision, Agoric has the potential to play a significant role in the evolution of blockchain technology. May this article have sparkled your interest for both the history and the technology and you’ll be deeming this article enlightening.
Thanks to 3xNot from Nitro Finance, Joey Roth from Dyad and Chadnik from Sending Alpha for providing feedback on this article.
Disclaimer: Nothing in this article is financial advise and solely serves educational purposes. As of the time of writing, the author isn’t in possession of BLD tokens however this might change in the future.