Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny, sometimes Colorado. Today is April 23rd, 2024. I've still got Blackhawk hair; can't get all that stuff down. It's pretty windy up here, and we have to fix the window.
I wanted to make a video now that I’m back in the saddle. I was down in Dallas at Book IIO, visiting my labs and taking a look at the lovely glowing plants and all the other cool stuff. I wanted to talk a little bit about Pragma U. It’s a new MBO, a new project, and it’s just getting started; it’s in its infancy.
For those of you who don’t know, a consortium of ventures got together, according to this tweet from the Cardano Foundation announcing Pragma. We’re proud to be part of this members-based open-source association alongside Blink Labs, DC Sparks, Sunday Swap, TX Pipe Tools, and Prago, focusing on blockchain software and fostering an open-source ecosystem for Cardano. There’s a nice little link here to the announcement, and the association’s website is here. It’s a members-based, not-for-profit open-source association for blockchain software projects.
The big thing is AEN, which many of you know and love. AEN will be contributing full-time engineers to work on the Aken open-source project under the direction of leadership there. Amaru is the alternative Rust node client for the Cardano blockchain. This client has to agree with the Haskell client, and there have been a lot of questions about how these two are going to get along. Currently, a single source of truth for what is Cardano is not the Haskell code. Normally, if you come from Bitcoin, Ethereum, or any of these ecosystems, there’s typically a dominant client, and the code is the specification. This is not the case for Cardano.
Cardano actually uses formal specifications, which are ambiguity-free. There are legacy specs and future specs. The legacy specs, like the formal specification, are written in Agda, and there’s some legacy stuff in Latch. We have partial specifications, meaning that everything is specified, but some is specified in Latch, which is a formal language for mathematics. There’s a very rigorous mathematical definition for all things, and then Su is actually specified in Agda. In fact, this has never been done before. We wrote a paper that just got accepted at FMBC, showcasing how to specify a blockchain in Agda. This is kind of the single source of truth for the design of Cardano, ambiguity-free, setting how everything should work.
The Haskell node will basically have to be subservient to this, meaning it has to follow the specification. For Pragma to work with the Cardano ecosystem, Pragma has to do the same. All these repositories are actually at the intersect of MBO, and many of the people at Pragma are also members of Intersect. They have access and do all kinds of cool stuff there. You can see all the different repositories; there are 39 of them at Intersect. This is where Cardano actually lives. It no longer lives at the Input Output repos. Things like the Cardano node, the Ouroboros consensus, the API, the CLI, Plutus LSM, UTXO HD, the governance tool, which you guys are using for Sonano Net, Ledger, the formal specifications, TX template, and it goes on and on. Even Nami is currently sitting over at Intersect—go figure.
One of the things that has to be figured out is the development cadence and workflow for those developing alternative clients and how that’s going to work with the formal specification. One of the goals is to have the end-to-end specification done in Agda sometime next year. It’s just a question of what the definition of success is there and what bells and whistles we expect from that, including code extraction and certification. That’s a project-to-project conversation, and it’s a very significant roadmap item that was always a nice-to-have. But now that there are actual competing clients, it’s a must-have because the clients can no longer get out of sync with each other.
There are some baseline issues, like how the hard fork combinator will work with Amaru and what that’s going to look like. The good news is that both sides of the aisle have transitivity; there are developers on both sides, and we all talk to each other. This is a very healthy thing for the Cardano ecosystem. If you only have a mono team that looks at these specifications, you tend to only go in one direction. But now that there are multiple teams, there’s a lot of questioning about how to simplify things, how to improve things, and they help catch mistakes in the specification work.
As ecosystems grow, competition occurs, and that’s a very healthy thing for the design of the system as well as operational resilience. I’ve seen some people discuss whether this means that features will come faster to Cardano. What are the challenges of a multi-client environment? Whether it be Harmon Labs building the TypeScript client, what Pragma is doing with Rust, or what’s happening with HLL, it does not speed up development. In fact, it’s quite the opposite because you’re only as fast as your slowest client. If, let’s say, Rust is killing it but Haskell falls behind, or Haskell is killing it and Rust falls behind, you have to wait for everybody to catch up, and then you all fork together. This is one of the reasons why it took seven years for Ethereum to get to their hard fork that created proof of stake.
This does not speed up feature delivery to the ecosystem; however, it does provide a lot more security, operational resilience, different philosophies, alternative tooling, and in many cases, it allows differentiation for certain clients to be used by certain customer segments. This allows specialization to make it much better for them. Certain pockets of sub-features that do not require a software hard fork may be delivered significantly faster to market, which I’d imagine is the point. If you look at the tool builders behind Pragma U, there are a lot of people delivering alternative tool sets, like TX Pipe, for example, which are quite useful to the ecosystem as a whole.
It’s not clear to me how they intend on funding Pragma. It looks like the CF is providing some funding for it, but nothing was disclosed to us. If I had to hazard a guess, it’s likely they’re going to build some stuff but will probably have a discussion with the Cardano ecosystem about the use of the treasury. One of the purposes of Intersect is to be the interface to discuss the annual budget process for Cardano. We’ve had numerous conversations with different stakeholders, including the CF, about when and how to start that process. It has to, by design, start after the Voltaire hard fork, the Chang hard fork, because that’s when the treasury function turns on.
The idea would be that all the special interest groups, whether they be Pragma, the NFT community, or people seeking USDC support, would basically put requests in. It goes to some form of consolidated budget process where a large group of people discusses it. That’s hybridized with some key D reps, almost like a Ways and Means Committee that we see with the U.S. Congress, and then it works its way through and eventually gets to a consolidated budget. If you look at the current inflow and outflow of the Cardano treasury, taking Catalyst out of the equation, Cardano can comfortably expend at least $100 million at its current level without too much decay in the treasury. I think that gives you a 20 or 25-year lifespan depending upon the price of ADA.
We can comfortably manage a low NF figure budget, which would be more than enough to allow client diversity, continuity of the existing progress and roadmap, as well as some open conversations about funding new vehicles. Intersect was built for three purposes: one was to be a hub to discuss governance excellence, bringing all the different people together, whether it be a civics committee, constitutional workflows, governance tooling, or providing services to constitutional committee members and DSA alike. That was one of the purposes.
The second was to be the custodian of the core project roadmap, having discussions about the specifications, high-level roadmap items, and the translation of SIPs into re-arch into SIPs—translational research and these types of things. It was also built to help manage the budget function because that’s so complicated; there are a lot of moving pieces to it. It does not supersede or replace things like Catalyst but basically acts above that process and provides funding down.
Once that’s in place, it’s easy to imagine that people will start creating members-based organizations for different purposes. For example, Magma was created, and now it’s an MBO for a constellation of open-source projects, which are very cool and essential for the ecosystem. It would be interesting to see how that grows. I’d love to see that participate in the budget process and get annual funding, but I’d also like to see the same happen for alternative clients as well.
Then we have to have a strategic conversation about how many clients make sense. It makes sense to have a high-assurance, rigorous client in Haskell, one in Rust, and one in TypeScript. This effectively covers every modality and every user group, whether it be in the browser, in the enterprise setting, or something for the standard setting in the ecosystem.
This opens a conversation about marketing, growth hacking, hackathons, and the pipeline of projects. One of the things we’ve been doing is experimenting with talking to some of the larger projects in Cardano and getting to know where their problems sit, whether they be liquidity problems like listing, venture capital problems, or technology problems. It would be really cool to develop a Skunk Works in Cardano for white-glove treatment of larger projects, where they have a dedicated group of people to help them in their journey of building on Cardano.
It wasn’t possible to do this without a decentralized government because you’d need a decentralized government to create an institution that’s accountable for that and create rules of the road for how to engage. Otherwise, it would be impossible because it would just be favoritism; whoever’s closest to the core entities would gain an undue advantage, and there would be no democratic oversight of this process. But that’s an example of something that can be opened up and funded in the budget, and many projects would benefit tremendously from this, whether they just need strategic assistance, technical help, market development, or just people to talk to about where they want to go and what they want to do.
There’s also been a lot of conversation about our marketing footprint as a community and an ecosystem. It would be nice to see institutions form for that. We see a lot of neat efforts forming up, like Cardano Girls, and Rick McCracken is doing videos, and you have Cardano Whale doing a lot of really cool and interesting things. There are a thousand flowers blooming, and it would be great to see if all those people interested in these things could come together and actually get an annualized marketing budget to deploy for growth hacking of Cardano. This is yet another thing that decentralized governance brings to the table because now you have a fair and balanced way of doing that with checks and balances that ensure that nothing goes wrong, or when things do, there’s recourse for it.
It’s a very exciting time, and as I’ve repeatedly said, governance is the single biggest advancement for the entire industry. It’s the biggest differentiator between us and everyone else. Things like scalability are very commoditized. When we look at things like Ouroboros, for example, which really push us forward, the publication of that paper is imminent, and it’s going to bring about 75% of solving the blockchain dilemma. There’s still some stuff to go, but it’s a mammoth step forward, and it’s something we can begin rapid prototyping with.
You may notice that Genesis is coming soon. That was built in less than a year for the protocol, so Ouroboros Paris is next on the menu. There’s a rapid prototyping team working on it, and the publication of that paper is imminent. We should have all that prototyping done by the end of the third quarter of this year, and then it can be sent out for a fixed-cost contract through an RFP process. What’s nice about that is if they have delays, it’s on their peril and on their dime. There are strong incentives to get things done within the envelope of cost and time for these well-defined buckets of protocols.
In terms of procurement as an ecosystem and in terms of coordination and collaboration, we’re getting much better. In fact, we’re starting to get to a point where we’re as good as some Fortune 500 companies that move very quickly on massive mega-scale projects. I’d argue we’re actually the best in the entire cryptocurrency industry. We already have all those vendors around, and we now know as an ecosystem how to work with them. We have a whole process brewing through Intersect for that.
Governance is the big differentiator because it allows us to engage in areas that we feel will allow competitive excellence, help us grow in the market, and get resources into the hands of people who are actually building. Just look at how incredibly decentralized the ecosystem is. The entire Pragma MBO was constructed, and I wasn’t even aware of it until just a few weeks before they made the announcement. That’s how decentralized Cardano is now; even the core entities don’t know certain things, and there are parallel initiatives going on. Every day, there’s stuff happening—lots of cool cross-chain stuff, a lot of cool collaborations, and we’re all talking to each other now. Even the Ethereum people are starting to get more comfortable with Cardano.
There’s still some friction and challenges with Bitcoin; those are philosophical and unfortunately universal to the industry. It’s Bitcoin versus everyone else because of the language they use and the approach they take. But for the rest of the industry, Ethereum on down, I think 2025 is going to be the year of grand collaboration. There are so many areas where we can all get along and build amazing things. There are a lot of real-world assets to bring into the ecosystem and many tangible practical problems to solve, whether they be in healthcare or microfinance.
As I’ve mentioned repeatedly, I have a portfolio of six companies, all of them trying to build something on Cardano. This brings a lot of utility into the ecosystem because it’s best in class to do that. We really are going for number one, the largest ecosystem in the entire cryptocurrency space, and I think we have the right foundations for it. I understand there’s some friction and challenges here. You know, when Coinbase has been replaced with Circle, everybody wants scalability—better, faster, cheaper now. But when you widen the aperture and look at the horizontal stuff, like near horizon and mid-horizon, Hydra is advancing rapidly. Plutus V3 is going to bring all kinds of great capabilities for rollups. There are already projects like ZK Fold trying to exploit that. You have partner chains coming rapidly, and that’s best in class.
There’s some amazing technology hybridizing with what the Polkadot community has created and what we’ve created. It’s really a marriage made in heaven for those things. The R&D has never been more aggressive; we have 209 papers, and the translational research of taking the papers into SIPs and protocols is moving faster than it’s ever moved before. Competing clients are now coming, which speeds up some of the backlog, particularly for example, the formal specification work, which will improve the security of the systems and the testing of our systems. This means our software will continue to be best in class in terms of reliability.
The budget process is going to start the minute the government fully turns on, and the entire community can talk about our priorities and who the special interest groups are that should be listened to, whether they be NFTs or DIDs. Of course, on our part, we’ll continue reaching out to major projects. We’re probably going to hold an Oracle Summit here in just a little bit. It was really enlightening talking to Book because they have a lot of scalability questions due to their huge NFT drops in the system. Plus, they bring in a lot of stuff, and there’s a cross-chain project. It was great talking to Mickey recently about U World Mobile becoming a partner chain and all their needs and how we’re going to accommodate and get those things done.
We’ll work our way through the book and get things done throughout the summer. It’s amazing to see it all come together. The final thing to mention is the constitutional convention is still on target and on schedule. We sent our first delegation down to Argentina. I want to give a special shout-out to the LATAM community; they did an amazing job interfacing with our people at IIO and treated them with the utmost hospitality. It’s a very safe, wonderful country, and it’s incredible to see how passionate people are. I cannot wait to have a convention, so I will go down personally, probably in July. We’ll send a few more delegations between now and then, and we’re going to try to bring a few institutions from Argentina, both academic and government, into the process as well to help smooth out some of the friction and add their own flair to it.
It’s going to be fun to watch all those delegates come from across the world to Argentina and help sculpt the final form of the Constitution. The interim Constitution is still under heavy construction, finishing up the guardrails, and it’s going to launch in tandem with SIP 1694 in the Chang hard fork. That Constitution has 131 guardrails written in Plutus, showcasing the new Plutus high-assurance workstream we have. It’s a smart contract written with all these advanced tools using formal methods to verify it’s right. This is the first example of not only on-chain governance but on-chain governments, where the members of the governance set are constrained by an on-chain Constitution. There are programmatic guardrails that prevent constitutional committee members from doing foolish things, or at least as many as can be plugged with a smart contract. That’s a super powerful construction.
You have this free-floating liquid democracy with all this magic, an amazing governance tool that continues to evolve very rapidly, a great constitutional committee concept, and all these things. There’s training happening on a pretty regular basis, teaching people how to do things. I still owe you guys a video about how to use a YubiKey and combine that with a FIPS-compliant storage device, so we’ll get that done here in a little bit.
We’re firing on all cylinders. Everybody’s a little tired; you know, I woke up early, jumped on a Blackhawk helicopter, and flew down from Wyoming to Longmont. We’re back in the office, ready to go, and worked all weekend to get it done—lots of speeches, lots of hands to shake. I can’t wait to keep traveling.
All right, that’s all for me. I’ll keep this one short and sweet. Thank you all for listening, and I’ll keep you guys in the loop. Cheers!
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