Why Delphi Researchers Bet on Initia?
Among the protocols poised to take center stage in the Web3 landscape in 2025, Initia stands out. What makes them so special, and why do they consistently capture the focus of top-tier researchers?
Special thanks to Delphi Digital for their comprehensive research on Initia, which forms the foundation of this analysis. This article serves as both a TL;DR of their Initia thesis and includes my additional observations and margin notes. For the complete research, check out Delphi's original report.
Some Context
Appchains were designed to offer customization, scalability, and sovereignty but they have created fragmented walled gardens. Every chain operates in isolation, liquidity is stranded across 100+ chains, and users are forced to bridge assets 3-4 times weekly just to access basic services.
Even worse: "Naked appchains." These chains lack essential infrastructure like oracles, bridges, indexers, and more—they're like cities without utilities, impressive from the outside but fundamentally unusable.
And the user experience remains stuck in 2017: users juggling 5+ wallets and multiple gas tokens per chain, while each new chain resets the experience with different UIs, quirks, and learning curves.
It's 2025, yet interoperability feels like a web that forgot how to connect.
Looking Back: Where Did We Go Wrong?
Cosmos introduced the concept of appchains to empower developers with sovereignty and specialization, but it faced major hurdles:
Validator Bootstrapping: Launching a new appchain required a strong validator set, demanding technical expertise and high economic incentives, leading to token inflation.
IBC Token Fragmentation – Moving assets across chains creates duplicate tokens (e.g., USDC on Chain A ≠ USDC on Chain B), causing liquidity inefficiencies.
Scattered Liquidity: The Cosmos Hub failed as a central router, spawning rival hubs each competing for liquidity, making it harder for any one chain to gain the necessary network effects.
Cosmos was right about the appchain thesis, but without strong incentives for collaboration, these chains ended up competing rather than forming a cohesive ecosystem.
Ethereum's Rollup Challenges
Ethereum's approach to rollups functioning as true appchains shares some strengths but also faces key challenges when it comes to:
Limited Inter-Rollup Interaction: Rollups generally operate in isolation; cross-rollup transfers rely on third-party bridges that fragment liquidity and create inconsistent asset standards.
Reliance on Third-Party Solutions: Critical functions like bridging, oracles, and stablecoins aren't native, forcing dependence on external providers.
The ecosystem urgently needs a solution that:
Unifies different appchains under a single, interoperable standard.
Provides built-in infrastructure (bridges, oracles, liquidity) so each new chain isn’t forced to “reinvent the wheel.”
Aligns incentives so that launching a new chain strengthens the overall network rather than competing with it.
Enter Initia: A Network for Interwoven Rollups
Initia combines the best of Cosmos and Ethereum's rollup architectures, offering an opinionated, full-stack framework that eliminates fragmentation while maintaining customization.
Initia offers a full-stack solution where its Layer 1 orchestration layer handles security, governance, and liquidity coordination, while Layer 2 rollups (Minitias) provide high-speed, scalable execution. Developers can launch customized rollups without worrying about fragmented liquidity or interoperability barriers, making Initia the first truly unified appchain network that delivers both scalability and seamless cross-chain collaboration.
Initia's framework addresses these core issues through four foundational pillars that collectively offer what might be the strongest appchain thesis to date.
1. User and Developer Experience as North Star
The Problem: Current rollup ecosystems force devs to build critical infra from scratch. Teams deploying using existing rollup stacks or RaaS providers receive only basic tools and then face the costly burden of integrating bridges, oracles, block explorers, wallets, and other essential components.
Initia's Solution: Initia flips this model by prioritizing a fully integrated ecosystem before their mainnet even launches.
A complete tooling suite including Initia Scan (explorer), Initia App (portfolio dashboard), .init usernames (like ENS but for Initia), and multi-ecosystem wallet support
Gas abstraction via JIT that lets users pay with any token, not just INIT
Native USDC integration through Noble and Circles CCTP
Standardized cross-rollup communication using IBC and LayerZero
Single Slot Finality for blazing-fast confirmations between L1 and L2s
Enshrined liquidity at the L1 level through Minitswap
This approach means developers can focus on building applications rather than infrastructure.
2. Cross-Rollup Interoperability That Works
The Problem: Moving assets between different chains is a nightmare for users. You either wait days for withdrawals (7+ days on optimistic rollups) or take risks with third-party bridges. And in Cosmos, sending tokens through multiple chains creates different versions of the same token, fragmenting liquidity and confusing users.
Initia’s Fix: Liquidity enshrined at the base layer.
One Token, Many Chains: Initia L1 acts as the central hub, standardizing assets across all rollups. Send ETH from an EVM rollup to a Cosmos chain? It auto-converts to the right token standard (ERC-20 ↔ CW-20) without third-party bridges.
Instant withdrawals: MinitSwap, a built-in AMM on Initia L1 lets users exit rollups instantly. No waiting 7 days for optimistic rollup challenges. Need to cash out? Your L2 tokens swap seamlessly to L1 INIT via Peg Keepers, maintaining a 1:1 peg.
3. "Opinionated" Interwoven Stack for Rollups
The Problem: Current rollup frameworks force teams to make dozens of infrastructure decisions: which DA layer to use, which bridge provider to trust, how to handle interoperability, and more. These choices typically lead to incompatible standards across rollups, creating fragmentation and poor UX. Meanwhile, teams waste precious resources on infrastructure decisions rather than focusing on what makes their application unique.
Initia's Solution: Initia's "opinionated" stack standardizes the core infrastructure components while allowing customization where it matters most:
Fixed Components: Initia enforced high-quality defaults—native oracles (Connect), an enshrined AMM (InitiaDEX w/ Minitswap), unified bridging (IBC + LayerZero), Celestia for DA, CometBFT for consensus enabling 10k+ TPS and 500ms block times.
Flexible Execution: Developers can choose EVM, MoveVM, or WasmVM based on their familiarity and needs
Configurable Sequencing: Centralized by default, but supports multiple sequencers via CometBFT
Advanced Features: Native integration with Skip protocol's POB (Protocol Owned Builder) for MEV capture and Protorev for non-toxic MEV extraction
4. VIP (Vested Interest Program) Aligning Incentives Across the Ecosystem
Ethereum’s appchains leverage Ethereum’s security and brand but contribute little back to the ecosystem. Meanwhile, Cosmos chains, while sovereign, fight over liquidity and users like rival tribes. The result? A fragmented landscape where chains prioritize short-term token pumps over long-term collaboration.
Initia’s Fix:
1. Vested Interest Program (VIP): Rollups earn esINIT (escrowed tokens) based on two metrics:
Balance Pool: Tracks the total value of INIT tokens locked in their ecosystem (TVL).
Weight Pool: Measures user participation via governance votes (e.g., users "gauge vote" for their favorite rollups).
Rollups can’t just cash out and leave. By tying rewards to long-term vesting, Initia ensures projects are financially incentivized to stick around and grow the ecosystem.
2. Cabal Governance : Rollups "bribe" INIT holders (via tokens, perks, etc.) to vote for them in governance. The more votes a rollup gets, the more esINIT it earns from the VIP program.
This creates a flywheel: Better apps → attract more users → users vote for them → rewards grow → apps improve further.
Ex: Imagine if Uniswap had to lobby Ethereum holders (not just UNI voters) to earn protocol rewards. Cabal forces rollups to collaborate with the broader community, not just their own bubble.
This approach ensures that rollups are rewarded not for operating in isolation but for contributing to the network's overall growth and liquidity.
What’s Next?
Next Big Milestones (Roadmap)
Mainnet launch expected in the next month (March 2025)
Deployment of the first wave of Interwoven rollups immediately following mainnet
Expansion of the VIP program to incentivize ecosystem growth
Integration with additional external chains via LayerZero and IBC connections
Funding
Raised $2.5M in public sale (Echo)
Series A at $350M valuation, with participation from Delphi Ventures
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Ecosystem Apps Going Live
Blackwing: Leverage trading with rapid TVL growth.
Milkyway: Liquid staking and restaking marketplace with strong growth.
Civitia: Gamified on-chain social platform for land and yield.
Echelon: Lending protocol with high TVL aiming for multi-VM support.
Intergaze by Stargaze: NFT launchpad for the ecosystem.
...and many more
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Initia's ecosystem follows a strategic cycle addressing key appchain barriers:
Infra → Apps: Pre-built tooling provides developers everything needed from day one, eliminating infrastructure barriers.
Apps → Users: Grants, cross-marketing, and liquidity mining bootstrap user adoption, helping projects gain quick traction.
Liquidity → Network Effects: Enshrined AMM and VIP rewards consolidate TVL across the ecosystem, creating a self-reinforcing loop where growth in one area strengthens the entire network.
If Ethereum is the “World Computer,” Initia is the “World Orchestrator” the layer that lets appchains sing in unison.
Mic drop. 🎤