Agoric: First Look

Parker Feierbach
July 14, 2021
3
minute read

What is Agoric?

Agoric is an ease-of-use Layer 1 protocol that focuses on composability in a Javascript working environment.  While most other protocols are built on less web-common languages, Agoric’s approach is to get more Web 2 developers into the Web 3 development space through increasing the usability of their platform. They intend to reach a state of “exponential composability” - where the ease of construction that Javascript provide will result in steady development, hopefully leading to a massive increase in development within the protocol.

What does ‘Composability’ mean, and why is it important?

One of the great advantages of traditional Web 2 development is the ease with which developers are able to “plug and play” the infrastructure necessary to power their applications. Within the Web 3 framework, this is hindered by a certain level of complication with protocol-specific languages and the lack of composable ‘pieces’ that can be used to build different applications. 

Agoric aims to garner quick adoption of their protocol by placing the most web-common language, Javascript, at the core of their development environment. To incentivize development, early developers on the platform will be rewarded for their work with the native BLD token. Since the Agoric model is constructed around composability of network tools, the creation of off-the-shelf DeFi components will lead to a comfortable bootstrapping curve for network construction as incoming developers can continue to work with the open source code.

The Team

The Agoric team was founded in 2018 by Mark S. Miller  (Google) and Dean Tribble (Microsoft). Agoric quickly garnered director level support from the likes of the Electric Coin Company’s Zooko Wilcox. Initial funding for the project came from behemoths such as Outlier Ventures, Lemnis Capital, gumi Capital and others.

Internal ‘local’ economy - BLD and RUN

The second defining feature of Agoric is the construction of a deflationary ‘local’ currency pair economy comprised of:

  • BLD - Agoric’s native capital token - holders of BLD take part in securing the network through governance and as collateral for the stablecoin economy. 
  • Staking BLD pays out in the form of RUN, which stakeholders can then use to buy more BLD.
  • RUN - Agoric’s native USD-pegged stablecoin - This token is used to pay fees within the network, which will be recycled into Agoric’s AMM to generate more RUN for the economy. 
  • Consumers can procure RUN by either minting it as a borrowed asset against a held BLD vault, or by trading  tokens from outside the network.
How to Take Part in a ‘local’ economy

The way that CEO Dean Tribble wants us to see the Agoric economy is similar to visiting a foreign country - you’ll need to trade into the local economy to use a local currency. Since the local currency is stable through a USD peg, you don’t need to worry about the fluctuating cost of gas seen in other protocol economies. RUN is usable in exchanges outside of Agoric based on its collateralization in the form of BLD in vaults on the Agoric network.

Staking Dynamics

Capital holders of BLD can delegate their tokens to validator pools and take part in governance, either by backing a validator through the contribution of their BLD to a staking pool, or by applying to become a validator themselves. BLD holdings by validators helps weight governance decisions, and validators are rewarded for good governance in the form of RUN. The stablecoin rewards can in turn be used to purchase more BLD.

Slashing Conditions

As with most protocols, validators who participate in double-signing or equivocation will have their staking pools slashed, with repeat offences resulting in the removal of a validator. Unavailable validators will also be removed from the validator set if they continue to be unavailable for a governance-determined percentage of clocks within a sliding window.

  • Equivocation and double-signing penalties are 5%
  • Unavailable validators penalties are 1%

The Current State of Agoric

Agoric is currently in a bootstrapping stage, with mainnet slated for launch mid-July. Upon launch of mainnet, developers using the platform will be allocated BLD for their efforts on the network. This will provide an incentive for developers to learn how Agoric is built and take part in the initial stages of the economy.

Agoric will be connected at launch to all Cosmos-connected networks via IBC.

The Future in Agoric

Agoric aims to have a thriving ecosystem of DeFi components available, all built on a web-common language, so that the protocol is easy to enter and scale. In due course, the protocol will expand as incoming users build on the work of previous developers. Agoric’s relationship with the Cosmos network will help the protocol’s internal economy grow as other projects enter the Agoric ecosystem to meet all their DeFi needs.

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