The State of Urbit

In 2022, I wrote a few posts about Urbit (1, 2 and 3). I had been interested in Urbit since 2017, but in 2021 I really started to dive in and became fascinated with the opportunities I saw. In the summer of 2022, I decided that I wanted to build a team at Chorus One that focuses on Urbit hosting. This led to us starting a project called Red Horizon, which is focused on hosting Urbit infrastructure. You can read my blog post about it here or our official announcement blog post by Tiller Tolbus on the Red Horizon blog.

A lot of time has passed since then. So I wanted to write an update about what has been going on in the Urbit ecosystem.

1. Red Horizon Hosting. We succeeded in building a reliable, performant and scalable Urbit hosting platform. At the time, nobody had successfully built a hosting platform on bare metal. Our competitors were all building on Google Cloud or Digital Ocean and they were struggling with very high costs per ship. We were able to decrease the cost of hosting Urbit ships far below any of the other companies. And most of our competitors went out of business. Currently, only Tlon and Red Horizon have a meaningful Urbit hosting effort.
2. Red Horizon Fleets. We also built a product called Red Horizon Fleets. Fleets allow a developer to preconfigure Urbit planets with certain applications and group membership. The developer can then create an invite link and anyone using that link is automatically onboarded to a customized user experience. This has made it possible for users new to Urbit to directly onboard onto an Urbit application in less than 1 minute.
3. Uqbar / Kinode. When we started Red Horizon, there was one serious blockchain effort. A project called Uqbar was building a zk rollup on Urbit. Uqbar ended up pivoting for a variety of reasons. They are building an alternative personal server platform / crypto operating system that is a lot less opinionated / strange than Urbit called Kinode. They hope that they can be faster to market this way, achieve greater performance and find easier developer adoption.
4. Nockchain. Fortunately, a number of new Urbit blockchain efforts have sprung up. A company called Zorp, which came out of Uqbar a while back, is building a layer 1 blockchain that uses zk proofs as useful proof-of-work. It's called Nockchain. It's a very radical and unusual way to build a blockchain, but super cool. They are also a very strong technical team that has made major contribution to improving the performance of Urbit. Nockchain is expected to launch this year.
5. Sunny's chain. Sunny Aggarwal, the founder of Osmosis, also came up with a design for an Urbit blockchain. It envisions a Cosmos chain that uses Urbit address space in a number of interesting ways. He gave a great talk about it at the last Urbit conference and work has been progressing on realizing this vision.
6. %chain. Tiller Tolbus, who leads Red Horizon, has been leading another effort to build an Urbit blockchain called %chain. It's also a Proof-of-Stake like chain that uses stars as validators. Among other things, they have been working on an implementation of the Tendermint protocol as an Urbit app. The goal is to launch a testnet for %chain in the next months.
7. Urbit startups. Progress on the Urbit startup front has not been so great. A bunch of projects that were building applications on top of Urbit went under or pivoted away from Urbit. These include Portal, Vaporware and Holium. Some new ones did spring up like Alphabet, but currently there are not a lot of promising teams building applications on Urbit.
8. Feeds / Hawk. However, Will Hanlen, who is a developer at Red Horizon, has actually been developing some cool applications as side projects called %feeds and %hawk.
9. Address space market. The market for Urbit address space has been struggling. WSTR is a fungible ERC20 that can be minted by depositing stars. Liquidity has pretty much disappeared for it. It's not really possible to buy or sell Urbit address space via Uniswap anymore in any meaningful quantity. Also the price at which stars have been trading on OpenSea has been going down. In early 2022, it was around 4 ETH per star and today it is around 0.6 ETH, representing a decline of 85% in ETH terms. However, most trading does actually happen in larger OTC deals and prices there have decreased less. Currently, the price of a galaxy seems to be around $1m, representing a price for stars around $3k or 1ETH (if we assume a $200k price for a naked galaxy).
10. VC Investments. The most promising Urbit projects have been able to raise substantial rounds. Most importantly Zorp and Tlon. The Urbit Foundation has also been successful in raising substantial amounts. From conversations with VCs, it seems that there is a lot of latent interest in the ecosystem. However, there are not a lot of investable opportunities as the number of applications / projects building on Urbit is still very limited.
11. Urbit Foundation. Last year, I ended up joining the board of the Urbit Foundation. The Urbit Foundation has grown tremendously in importance in the Urbit ecosystem. It used to be that Tlon led all the core development, but that has mostly moved to the Urbit Foundation. The team has grown a lot and has been able to ship at a really good pace. Josh Lehman, the executive director, has done a great job in developing the foundation into an effective organization that can drive the ecosystem forward.
12. Tlon. After passing on the responsibility for core development to the Urbit Foundation, Tlon has been focusing on building a Wechat-like superapp called Spot. It had been Galen's ambition for many years to be a more product-focused organization and I'm happy that they are able to focus on that now.
13. User growth. In terms of user growth, the number of ships online has grown from around 1,800 in September 2022 to 5,400 today. . This doesn't mean all these are actually active users. These can just be hosted ships that people aren't actually using. Suffice to say, user growth has been underwhelming so far, which I think is mainly due to a lack of compelling user applications.

Overall, I continue to see massive potential in Urbit, but I'm also more cognizant that success is not assured. I recently had dinner with two VCs who also have an interest in Urbit. One of them said that Urbit is the most assymetric bet in crypto. I think that is correct. If it does end up working out, it's clear that it could be absolutely massive. But it may not happen. We could have that a project like Kinode, Plunder or another one takes some of Urbit's ideas and builds an alternative system that gets rid off some Urbit's bottlenecks and wins. It could be that the idea of personal servers doesn't end up breaking through. Or it could be that Urbit can capitalize on its head start and the passionate community and realizes it's vision.

For me, I feel strongly that the merging of crypto and Urbit is most critical to help the ecosystem break through. We need to make it really easy for Urbit applications to issues their own tokens, distribute them to users or sell them for funding. An Urbit-native token economy that is connected with the larger crypto ecosystem could open up economic opportunities and powerful network effects. Entrepreneurs need to see opportunities to build on Urbit and we need to see a massive influx of capital. For that the merging of crypto and Urbit are essential. And fortunately, there are a number of projects who are pursuing exactly this.