Zon - Appchains Are The New Apps - TOKEN2049 Singapore 2025

Good evening everyone. Hope uh all of you are having some lovely drinks and getting a little tipsy for this talk of mine. Today I'm going to talk to you a little bit about app chains. Initia is a network of app chains that are all stitched together and our fundamental belief is that app chains are going to take over the world and every app is eventually going to become its own chain. These days it seems like everyone is building an app chain and you've probably heard of it and some of these that I'm going to bring up.

But you have things like plasma which launched just a couple days ago. They are you know the new payment network that is an app chain for crypto rails. You have things like hyperlquid which is probably the most successful application of this cycle and it is an app chain built for trading. You have circle and large players starting to move into this space too. So arc is a new layer 1 that is built for payments just like plasma.

You also have options protocols that have built entire chains just to service options trading. And you even have things like Plume, which are essentially chains built for RWAS. So all sorts of different applications within crypto that are building chains specifically for one use case and that is the premise of app chains. But why are app chains cool? Why are we seeing all these major players starting to build them?

Well, it's actually quite simple and I think the value proposition will be understood pretty easily. Firstly, sovereignty. So, sovereignty is the idea that as an app chain, you're fully in control of your entire stack from top to bottom. You own everything in between. The second is customizability.

So you can change everything from the virtual machine your chain uses to the info stack underneath to the DA layer that is used or the interoperability standard. The be best thing about customizability is you can change the way that gas fees are used on your chain. So if you are something like a stablecoin platform, you can have fees paid in, you know, USDC or your own native token. Contrary to popular opinion, app chains are actually quite lightweight and inexpensive in modern times. App chains on Initia stack, for example, cost around $2,000 a month to run just on infrastructure.

Uh platforms like the OP stack or conduit or Caldera to run apps on them cost around 6 to 7K a month. Those are probably a little bit more advanced, but you can get quite cheap. But I think the biggest value proposition for building an app chain is ultimately there are more ways for you as a protocol to capture more fees and drive revenue. So let's take Pump Fun as an example. Pump Fun is the largest protocol on Solana right now.

They obviously would not have gotten to where they are without Solana's support, but now that they're so big, they have a new opportunity for themselves. If you look at all of the gas fees that users have spent on Solana and Pump Fund, it has equated to roughly $600 million in soul gas fees just through the pump smart contracts. If pump turned into an app chain, that is 600 million additional dollars that they would be able to use as revenue to drive back into their token as they do now. If you look at uh layer 2s like optimism, base or arbitum, they each make in the order of $20 million a year just in sequencer revenue. There's also fully onchain games like Kamagotchi which make1 to2 million dollars on sequencer revenue as well.

These are just additional paths for you as an app to capture more fees that you would then be able to use for operational costs or putting back into the token. But why do we not actually see a lot more app chains launch? It still seems like the teams building app chains these days are mega corporations or institutionalized products. Well, the major problems are three-fold. The first is cost still has to be driven down.

Uh 2K a month is not that expensive, but it costs 0 to run your app on a monolithic chain where the foundation supports the infrastructure. The second is UX needs to get a hell of a lot better. So if you've ever experienced using five different chains at the same time, uh it's essentially a nightmare unless they're all supported by DBank. And so that experience has to get a lot better, too. And I think lastly, and most importantly, the effort to actually build an app chain needs to become frankly a lot lower.

We need to get to the state where we're able to just vibe code an app chain like you can vibe code a web 2 product right now. But even if we solve all three of these, I think there's something critical that's missing before we get an app chain super cycle and that is network effects. Network effects are essentially a huge driver of usage on any monolithic chain. If we look at Bass as an example, you know, users on base through Coinbase drive additional developers. Additional developers on the platform drive more applications, applications drive more liquidity, and liquidity brings more users.

And it's this virtuous cycle of network effects where there's a positive feedback loop and this gets stronger and stronger. The problem with app chains to date is it looks like this where you basically have these network effect cycles but they're all self-contained within each application or each app chain. You know hyperlquids network effects are trapped to hyperlquid. Plume's network effects are trapped to plume and the same goes for every other app chain. So what we need to achieve is essentially a state where you have app chains with network effects where you have users from Hyperlid that attract developers on Plume and Plume's developers drive apps on plasma and plasma's apps drive liquidity on derive.

A way where all of these app chains feel like one network and they can share users and liquidity very easily. And that is essentially where Inisha comes in. Initia is a network of app chains that is built to drive network effects across them all. And how do we do this? Well, right now we have around 14 app chains on the stack as well as the initial layer 1.

Uh they're all live and in production. We launched around four months ago. Um and the product offering is three-fold. Firstly, the infrastructure stack. It is incredibly flexible.

It uses the Cosmos SDK underneath every single chain. That means you can fully customize it from anything from transaction ordering to the virtual machine you use. So, we support EVM, Move VM, and COS and WASM. All the app chains use the exact same messaging layer and that's IBC. So you essentially have fungeibility of assets from one app chain to another despite what virtual machine you're using.

They all have native USDC access and pipe in the same Oracle data and they all have the same data availability layer with Celestia. And having this shared commonalities for this infrastructure layer allows us to begin to build the building blocks of how you create network effects across these app chains. when you then move into the product stack. So the product stack is what sits on top of infrastructure and well-built product hides infrastructure. And the product stack we take a lot of inspiration from Apple's design philosophy.

So we have components that basically every app chain uses so that end users are Initia customers and despite if they're on one chain or another chain on Initia they get the exact same user experience and they can see their assets across all 14 chains currently live extremely easily. So there is the initia app which is all things to do with the entire ecosystem. the initial wallet which lets you bring any EVM wallet, any Cosmos wallet and connect to any app chain despite what virtual machine it's in and see your assets across them all, bridge across them all on ramp to any of them. Basically do anything uh that you would need to on any app chain. There is the initia bridge which lets you bridge from any chain directly into an app chain or directly out.

Um and you have essentially access to Salana, every EVM chain, apttodos, uh and every other app chain on Inisha. There's Initia scan which is our block explorer system which powers the block explorers for every one of the 14 app chains. Uh and then there's initia usernames which is basically an ENS equivalent that spans all the chains on our stack. And the last piece of the pie is the incentive program. So, Inisha has something called VIP.

And what this essentially does is it gives app chains a reason to integrate the native in it token and drive value to it. And in uh and if you do that, the initial layer one essentially drives value back to you as an app chain as well. So let's take a quick case study in terms of revenue generation and why app chains make sense. When we're in a state where app chains are simple and easy to build and cost effective, you are able to drive more revenue if you actually have users and believe that your users care about your app. So Kamagotchi is a fully onchain game built on Inisha stack.

Right now they're an EVM rollup. Um, and every single action in the game is a transaction. They use ETH as gas and they've customized their gas fees to be pretty low. But even so, because of such demand to actually play the game, they have generated about 65 ETH per day just in sequencer revenue. As a small fully onchain game of around four people with pretty minimal burn, they make around 25 ETH a month in revenue.

That's almost a h 100k just based on sequencer fees. That's over a million dollars a year that they can drive into their game or to fund themselves. And that's not including any of their in-game fees for buying assets, minting the NFTts, doing any trading. A second case study is Echelon and Milky Way. These are two app chains on top of Inisha that are built for DeFi.

one is a lending market, one does LSTFI. Um, and one of the advantages of using Inisha and the shared network effects is that if you look at the data, you'll see that 90% of Echelon's users uh coincide with Milky Way's users. So, as a user of one app chain, it's very easy to get pulled over and use another and we want to promote that cross-pollination. So the second piece is both of them leverage a shared liquidity layer which is built on the initial layer one and this allows them to really easily tap in and build new liquidity for their assets or perform things like liquidations. And so ultimately Inisha wins when app chains win.

And our entire goal is to build a network of thousands of app chains where network effects allow them to communally grow just like they would on a monolithic chain, but they get the superpowers of being their their own chain. If you want to learn more or if you want to try out any of the applications on Inisha, feel free to scan one of these um or message me on Twitter at it's always like it's always sunny. Sweet. Thank you.