Initia: Appchains As They Should Be

Why Hack VC Co-Led Initia’s Seed Round

By Sean Brown, Partner at Hack VC

The Issue with Appchains

Over the past few years, hundreds of projects have chosen to spin up their own application-specific rollups or “appchains,” searching for customizable infrastructure, isolated blockspace, and tighter verticalization of value capture. The cost has been escalating ecosystem fragmentation: each chain needs its own validator set, liquidity needs to be bootstrapped from zero, and UX overhead has become tremendous as users juggle bridges and wallets. For private investors and public markets, that fragmentation shows up as deadweight costs – technical lift, incentives, and BD spend are duplicated across silos instead of compounding into network effects. Perhaps even more importantly, teams end up distracted from their efforts to create delightful products, bogged down by unimportant duplicated infrastructure issues and the pursuit of fleeting infra premiums.

The Case for Appchains

Yet we still believe the appchain thesis is directionally correct: specialized execution environments do unlock new markets (think on-chain games, high-frequency perps, payments networks). The missing piece is an architecture that lets those chains share security, liquidity, and users by default while keeping full-stack flexibility. That’s the gap Initia fills.

Interwoven Rollups: Initia’s Approach

Initia starts with a Cosmos-SDK L1 that acts as an orchestration layer and settles a network of “Interwoven Rollups.” Each rollup, called a Minitia, can choose its own VM (EVM, MoveVM, CosmWasm), yet inherits native bridging, oracle feeds, and enshrined liquidity from day one. The Interwoven Stack abstracts away data availability, sequencer, and relayer complexity so teams ship in days or even hours, not months. For us, that means portfolio projects launching on Initia will compete on product, not plumbing, and their success accrues to a shared liquidity layer rather than fragmenting it.

VIP

Adjacent to creating great tech, Initia also is trying to improve on this huge problem of how rollup-focused ecosystems can successfully create structures that align rollups with each other and also the base layer L1 or hub. Ethereum has struggled with this existential question quite a bit in the past years, and the Cosmos Hub (ATOM) never really figured this out (illustrative even if these weren’t really rollups and a bit different). 

Initia’s approach to solving this problem is based on their initiative called Initia Very Important Person Vested Interest Program (VIP). For a full overview of Initia VIP, Chorus One’s article here does a great job of explaining the program in depth. At a high level though, Initia VIP is a programmatic method to distribute INIT rewards in a way that incentivizes increased usage of each rollup and increased adoption of INIT by Minitias. Users are given vesting rewards that unlock only if they continue to interact with Minitias, incentivizing continuous long-term usage rather than mercenary farming capital. A Minitia’s proportion of rewards received is heavily reliant on how much INIT they can attract to their L2 and their alignment with L1 stakers, increasing the demand for INIT and thus likely the value of the entire INIT denominated rewards stream, benefiting the entire ecosystem of Minitias.

An interesting component of VIP rewards is the types of third-party protocols that can and will be built to optimize this system and participate within VIP markets. Hack VC portcos like Cabal and Milkyway are building in this space. Cabal acts as the Convex to VIP by creating a bribe marketplace and more efficient/profitable liquidity direction mechanisms. MilkyWay by creating the first liquid staked INIT token, milkINIT.

Looking Ahead

When we first met and invested in the Initia team in late 2023, they pitched “interwoven rollups” as the natural end state of modular blockchain design. We were sold on the vision but were also at the same time worried about the intense amount of work that verticalizing so many components of the infra stack would take. A year and a half later, they’ve successfully delivered a powerful, extensible and easy to use set of infrastructure that has already attracted a thriving ecosystem of Minitias.  

Learn More

If you are interested in diving deeper into Initia’s technical architecture, take a look at a whiteboarding session that our Research Partner Shane Barratt conducted with Zon, the co-founder of Initia, here. We call these “Gigabrain Sessions” for those who are curious to get a deeper technical cut.

To get started playing around with Initia: https://app.initia.xyz/onboarding

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