A Fresh Take on Shared Security | S8 E7 | Misha Putiatin

Transcript

yeah you decentralize you don't you don't put your faith into any one entity uh that that can be upgraded the politics can change uh and I think that the main goal here is to create uh a system where the greedy parts of our system are like satisfied while doing the right stuff so if we have like uh Network satisfied with the Cost Cuts and uix upgrades stakers satisfied they're getting rewards that satisfactory to them we'll get an actual security that is sustainable hey everyone this episode is brought to you by NADA the shielded asset Hub rewarding you to protect the multichain so not only can you protect your own data

across any asset and any chain but you also get shielding rewards for strengthening data privacy protections for everyone so you can check them out at n.net and follow the domain net launch stick around you're going to be hearing all about them later in the program hey everyone this episode is brought to you by Kinto the safety first L2 which is accelerating the transition to the onchain financial system they've got some very cool features like user owned kyc and Native account abstraction which solves a bunch of the onboarding and bottom back problems that many l2s suffer from so you're going to be hearing all about them later in the program but if you want to learn more and better if you want to join their launch program engine nen you can click the link at the bottom of this episode go check them out tell them I sent you

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another episode of bve today I'm joined by Misha the co-founder at symbiotic Misha welcome to the show hey everyone hey um Misha this is a really special episode I am really excited to get into the ins and outs of symbiotic

which I I think a lot of people are very excited to hear you talk about but uh first I want to actually give folks a little bit of a sense of your background as an OG as it were in the space of shared security and one of the first things that you uh pointed out to me as we were discussing uh you know we've talked a little bit in past episodes about previous iterations of shared security is that I actually got something wrong and polka dot was not the first implementation iteration of shared security and there's it's actually the idea that predates pokon so can you give us a sense of of what that is and you actually worked at on polka do yourself at some point so just give us a little bit of a sense of your history and background and perspective in this space of shared

security uh yeah well the space of shared Security started long time ago I think in 2010 or 11 uh the idea sh security like the the the general idea is pretty simple uh you have some resource that provides security for one network and uh how do you overuse it how do you uh use it more efficiently can you help other networks that are like just starting up to get some portion of that security uh yeah the idea was I think introduced with the the merge mining in

2011 or 11 uh that they they have a lot of implementation it wasn't really successful uh but uh the the general idea is that you have like a lot of hashing power uh or say Bitcoin uh and you use it to secure some some like child network uh as well uh by using inscriptions by using like some nons aggregation or something uh and uh to you get a lot of fashion power and you get a lot a lot of stability uh and that the resources are used uh

optimally uh after the proof of work it went like we went to proof of stake and shared security idea migrated with that as well uh so the implementations were like vared uh we had vol that was doing relay chain where par chains just uh subscrib some like subcrib some information to the relay chain uh and that that's how we they like provided the base layer of security uh after that we had uh like some maybe in 2022 uh we had cross staking from uh like as a continuation of idea of ABC uh

for Cosmos uh IBC yeah and uh yeah after that like every protocol uh like not every but like a lot of protocols have some uh form of shared security uh even if it's like really narrow uh we can even talk about uh the sh sh security being used for like uh other security or safety module uh that's based basically you restate your governance tokens that are already protecting and voting on The governance decisions and you reuse them like again uh to secure uh the protocol against some bad depth or other

eventualities so yeah it's not new uh we first I first came across it when we started developing the liquid staing protocol on uh PKA do uh like we were basically the first ones to use XMP that's protocol that was the killer feature for PKA do the protocol of exchanging messages between par chains and the relay chain uh so yeah we we were excited about that back back then but we were yeah a it's cautious in terms of the demand site for PKA do I I think that's yeah that's that's basically the history lesson of like where it started in my view Misha can can for listeners who

might not be as familiar with the construction of polka dot we've talked about it a little bit at a surface level on the season so far but you are obviously much more in the weeds and directly involved with the creation so can you just walk us through because I think in many ways polka dot actually got an enormous amount of stuff right about just frankly the the Contour of how blockchains are being designed today and shared security so can you like put us in your shoes at that time of actually working on polka dot what were some of the core components of the protocol how did you conceive of uh you know what were you looking at in terms of the shared security design and then maybe also critically what do you think you got wrong with the benefit of hindsight we've talked I heard you just

say something about maybe being wrong on the uh on the scale of of anticipating demand which is something that we've talked about on the show so far but yeah just just put us in your shoes of helping design that protocol back then and explained to us the parts yeah we haven't designed the protocol just to be clear we designed the liquid staking solutional bulka do like we we were yeah so uh yeah for us uh the from from our point of view like I wouldn't say that they got uh like anything wrong for for the time it was really uh something interesting uh then the rollups came along that were like solving a lot of the same issues uh so I

think that was like the the the overall idea that you have one chain that is really simple it's a transactional chain that's going be really secure no no like uh no uh logic that is accessive on it just transfers and like messaging uh and you have uh like logic elements uh uh being done outside uh by every Power chain uh so the power chains were like that they had this architecture of power chains committing information checkpoints designed very but uh some information to the relay chain and then like that this

information can be verified by the validators that are outside of the relay chain so you can have you could have like proof of stake proof of authority some other Primitives that we see uh reoccuring actually now uh The Primitives that uh yeah we don't we won't have any Ed if validators are pool stakers themselves uh yeah this like like this shows like a straight up continuation of the ideas that we saw there being uh reimagined right now I do I do think that they proof of authority you know used to be called something like private blockchains or Enterprise blockchains or

something like that and I I do think that we've gotten a little bit of a a brand uplift and these are now proof of authority chains and people are much more interested uh in the design space of these proof of authority chains I think than they were back then but yeah can I can I add something yeah I I worked like I worked on projects for Quorum it was like another interesting idea like quum was a fork of ethereum for Enterprise it was developed by I think Morgan Stanley or JP Morgan JP Morgan yeah yeah yeah yeah yeah like that they if they got the TM proof Authority back that it would like be much more successful I think they just didn't have the right

marketing term that's it uh just a couple more marketing terms in crypto and then up only okay so uh Misha take us through what uh you know from your perspective as well obviously I think polka dot was way ahead of its time in terms of some of these overall design decisions but what did it maybe get wrong in terms of Shar again not to cast any blame here obviously protocols get uh many things wrong but what Why didn't it sort of take off from your perspective well no like again I don't want to be negative negative that the market circumstances change some Protocols are like I think protoc like the the problem there that they were a bit early um and uh in in the demand on

demand side and way too late on the the delivery site uh if I like if I could point out two difficulties that they encounter because they were developing poka do for a long long time yeah uh yeah and when they started the proof of stake system was like super Noel uh and the the basically the secure secure charging that you can call P poka do right uh was the like super Noel ideas as well uh and when they were like when they were actually deploying we had roll up architecture already like being like produced and a lot of other Primitives

that solved for a lot of problems that have changed we had Cosmos like doing a lot of stuff with IBC so they started from the point of like no competition at all and deploy it where there were a lot of compet competing ideas so m i I want to start to you know transition into you know the title of this the title of this podcast is a um a fresh take on shared security and I want to get a sense of what that I want to start drilling down into what that means for you because I think a lot of folks have a a relatively there have been these these previous iterations whether it's polka dot whether it's um shared uh interchange security over in

Cosmos land and I would say the newest uh iteration of this is reaking on ethereum which is sort of pioneered by igen lir and people probably have a pretty specific conception of that and I want to get your sense of zooming out of that what you know what are we doing here with shared security and you know what is your or take on what it overall is and then maybe we can get into some of the specifics about how symbiotic rather the the platform is designed a little bit differently yep uh well we are soon to be out of like prefixes to staking because we we we had like cross taking for customers for a long time then we had reaking now

we what what's going to be next like eaking maybe like electronic staking or something I don't know like words they they mean basically the same thing uh people are trying to solve a problem uh the problem is it's that it's really hard to decentralize uh you go through like you had a brilliant idea you you imagine some system that is going to be really Innovative and will solve a lot of problems but you get to to a point like what's the weakest link in the system and and usually it's operators how do you create uh like how do you create a

system that is decentralized enough and trusted enough in the like trustful part that uh you can get a billion dollars or 10 billion dollars uh secured by it if it's uh proof base you still uh like you're you're still subject to uh to censorship and you're subject to like how do you upgrade your network if you have the upgradable contracts or upgradeable system you need somebody to have a consensus on that so uh from the from the start of the idea to the point where you actually are ready like to to be safely accepting uh people's

funds uh or managing it or like doing some vital Parts like being an oracle it takes a long long time ago well it it takes a long long time to to achieve uh so the idea behind sharing security is how do we make it easier uh the one part is that we can uh provide Economic Security uh how do we do that oh we already have networks that are that that have a lot of uh like monetary value let's reuse their tokens let's provide it to some protocol to start with them and and then move or add their own token if they want to for

like some critical parts of it uh okay this part is easy like you take one token and use it multiple times it's called cross re any other flavor of staking uh the other part is like way less uh pronounced but in my view it's like B more important uh how do you create a pipeline for every participant to be scored properly to to be on boarded properly to go through these hurdles without creating a super sophisticated system in Incorruptible validator Master uh and uh like going through like how do we shorten this go to market by like six to

to 10 months uh without uh and make it safer at the same time this is the actual problem for shared security to solve yeah so basically do two of this Parts okay Misha I want to get into that so when people and again when people think of uh you know I think reaking today they largely gravitate around that first bucket that you outlined which is economic security and that's what all these debates have been had and that's what Anatolia and salana doesn't think very highly of and and Sham they've been going back and forth a little bit but this other this other aspect here which is how do you actually sort of Pipeline and streamline the creation of these these change which

which rely on some amount of uh different operators like that is that is the question that it seems like your conception of shared security is getting at and I think this is a this has been a challenge that folks who are more familiar with Cosmos land are are extremely familiar with right um because there's part of this is hey I and and I actually love that Sam Hart who's been on the show a number of times has talked about this where it's actually relatively it's not super difficult to go out into the world and find people that will actually you know run the B for your particular chain at this point it's not even particularly difficult to go and Source external uh means of value right to secure that chain but then there are all of these other things that are very difficult that need to happen

to make sure that you're getting the right um set of validators that they're incentivized over a long period of time Etc so can we focus on that particular portion of the box here uh or that particular part of this discussion and like let's let's just pretend that you know I Mike and bedo am interested in spinning up my own chain I have some some new idea let's call it blockworks chain or something like that and I need to do a couple of things where I've got some design decisions to make ay maybe I am looking at something like pure vanilla proof of stake or much more likely I would start with some uh probably proof of authority type scheme here which is how do I select my different validators you know what's the different asset that I'm going to use to secure like almost like go through the

checklist here of if I was spinning up my own blockworks chain like what are the different things that I would have to think about and how does this conception of shared security actually help help me achieve that job better yeah uh we talked to uh a lot of uh validators of course we like that that's operators are basically the one of the like re like super important one of the most important participant in shed security because they provided the operator right they have like so the big the bigger one of them have like a really sophisticated system of scoring the networks so uh it's not anything that like you can Google of course it's

uh it's done Case by case uh and that that approach we need to change so we are we are working and uh creating a system for networks to be uh basically allocated to some bracket like I I'll ask you like what's your token model and how it's going to be used uh what's going to be what parts do you do what parts uh does your system have because in symbiotic you you can have basically infinite amount of forets to your network uh some of them might be not slash at all so you have like some uix

liveness part of your network right that's going to be just providing people with some predictable uh predictable outcomes with with for for the interactions with network some of it can sto your money steal your money some of them that can like destroy destroy the whole network so there's going to be different layers and some operators might only decide to operate the the layers that are they comfortable scoring uh then we you like after we understand the token model and the the slashing part that you want to be using or like the punishment part uh then we'll need to understand that that the operator will need to understand uh the

infrastructure that they will need because if you have an oracle system that's completely different to the ZK co-processors right uh and the idea here in where and where the shared security really comes into play is that if you have enough protocol starting and creating the best practices with the like we have a curator uh entity uh our system that basically uh orients the networks and this like and creates a list of protocols with added data not not protocols operators with added data that might be used like compliance even

kyc G separation uh like uh some buckets for uh like what sort of system do they operate do they have experience in that if it's Emil based some like AI uh machine learning uh distributed private execution protocol it requires some different parts to the protocol that's doing um Market making right it doesn't have to be like at every data center every everywhere proxy multiple like 100 thousand times uh yeah so uh for for the network that is coming they will uh with enough scale they will will create uh a

basically a benchmark for them to be proportional to the to the proper and the most optimized bracket like you you need this this and this you have the best practices you can choose between like three four five different models and uh you don't have to like they're going to be battle tested and you don't have to be like an expert in that you can just use uh the Shelf products that are like good for you so basically what we're talking about here is there's this common set of challenges for uh you know Founders that are spinning up a new blockchain and instead of starting from scratch at square one there needs to be this

there's this sort of common set of shared uh basically like almost vendors or outside uh services that you're going to need and there's not really like a common framework which scores them and creates this little like list for you this is almost going to sound like a silly question but what is the What is the ux look like for me as a Founder here is there like how what what format is this information being delivered in like how am I going to see this like list in set of scores and okay let's say I'm going to use a ZK Cod processor instead of an oracle solution right like where am I finding all this information out and then maybe we can get into I'd like to get into the actual design of symbiotic the protocol as well yeah uh first not only blockchains uh second uh

not only you it's the important condition here uh that's why we call them networks because they are networks that's what they are their networks in search of decentralization so it might be Oracle Network it might be uh Market maker Network it might be some threshold cryptography Network or some like any any network basically uh uh so not only blockchains uh and uh not new uh because uh that like the current defy like if is example of that Defy is getting more and more complex so they need uh like parts that are going to be offchain so the

Oracle part the interro part the part of uh like some keeper networks or something like that Runners resolvers um and for every of these like every part of this system the risk are going to be different so we like RIS taking and Sh security is not only before the protocols that are just starting up but they that want to decentralize some part of they already have uh yeah and in terms of in terms of uix well we we'll have to like figure a lot of this out still because we haven't like reaking uh is like a concept at this point we don't have an actual like slash fully production networks

yet but the idea here is to create uh like that because the protocol symbi symbiotic is really really thin in terms of what it can do uh the the market the the ecosystem participants are going to be really important and one of them is yeah Creator stor the the titles might may differ but uh we expect that to be uh like it might be handled by lrts so you you basically go to LRT you ask them do you want to give us like your Economic Security and they will like create a list of their requirements

you you need to have audits you need to have like this this part uh covered by that and that that uh and after that they give you money and they agreed upon list of operators comes to you uh yeah so the the the important part of the design symbiotic is that everything is opt in so every relationship is consensual uh the task of symbiotic is just to uh reinforce the commitments so if you enter into commitment you have like clear rules of what you need to do and like and how you get out this is like the only part that symbiotic is

going to handle that's why like like we designed it in a way to be like really simple uh because like uh because it's Mission lless and you can't do a lot of logic uh in core uh while still like retum the permission part because you're going to limit yourself hey everyone this episode is brought to you by namada the shielded asset Hub protecting the future of the multichain the ma is a chain that's near and dear to my heart because in previous seasons of bell curve we've talked about how the Cardinal original sin of most blockchains is not thinking about privacy from the beginning but also because if we want to onboard whole bunch of applications it doesn't work in a default transparency setting so NADA

not only brings about a better future that we all want but it's going to help onboard a ton of new applications so Nana introduces a novel shielding reward system the way that it works is if you hold your assets in the shielded set you help strengthen nada's data protection guarantees and collect nonrewards in return NADA will initially support IBC and ethereum based assets but eventually the idea is for this to expand into a comprehensive hub for all assets really really really excited about what the folks over at NADA are doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is zo TM very exciting tell them that I sent you click the link bottom of the show notes hi everyone this episode is brought to you by Kinto the safety first L2 with use your own

kyc and Native account abstraction that is accelerating the transition to the onchain financial system now we've been talking about Larry Fink on this program and how he's been shouting the good word about tokenization to all of his buddies on Wall Street this is happening and the very cool part about Kinto is that they are built to accept a whole bunch of assets and a whole bunch of users from the traditional Financial system which current l2s have done an okay job but there's a lot of room for improvement for onboarding so it features very nice things like user owned kyc native account abstraction that solve some of the biggest blockers around mainstream adoption namely security and user experience you can become a founding member at engine. kin. XYZ if you believe in this onchain financial system

join Kino's launch program and thank me later cheers guys and the link bottom of this episode click it now okay M take us this feels like a good time to actually walk us through sort of the different components of the symbiotic protocol and the different layers so you know from my understanding there's five layers here there's collateral is sort of sitting at the top this Economic Security layer there are vaults um which is the staking layer itself operators which maybe you could call it an infrastructure layer resolvers and then the underlying Network um and that resolver is probably sort of a that was A New Concept for me is kind of this arbitration layer um in between operators and the networks ultimately that they're servicing so you just kind

of walk us through the different layers of the stack here and explain the the symbiotic protocol yeah let's let's start with the core the core principles it's not going to take a lot of time and then we will move to the more technical stuff so when when we decided to to build symbiotic we like the idea was to create a protocol with the least amount of friction for the networks to join what that means is that like our main competitor is native launch uh that is long really hard to do and sometimes not safe uh and like a in a lot of ways centralized like you mentioned proof of authority and

everything like that so the idea was to make it easier and to make uh some like basically the default solution to decentralize any network uh and uh yeah we we started with the most obvious F fiction point that is like uh am I doing something wrong selecting shared security versus the my native security right uh like do do does this launch has its own drawbacks uh am I going to be independent like Founders usually start their protocols thinking that it it it'll be like 10 billion 100 billion or

more protocol right and they don't want to be ever starting it in a way that they're going to be subordinate to some other protocol right that's why we have a lot of side chains that that's why we get a lot of uh protocols that are like building overall the same stuff but with at least because like yeah it could have been an up right like but but we've created a whole chain for it that's because the founders that are they want to be independent so we designed it in a way that symbiotic can't change the rules of the game uh contracts are not upgradable and even the surrounding contracts can be made IM mutable if you

want the complete lock on the rules of the game uh so yeah permissionless uh it was a really tough challenge because like it then access every every decision that you make because you need to think about like how is it actually accomplishable will it limit us and you think about every application that might exist and like figure out the game theory that will it limit you or not and uh uh yeah the second one friction point is that we don't need like we should never compete with anyone ever uh from the networks that we are trying to bring on board uh that's why

we should never have native staing uh uh rollups data availability oracles or anything like that that's going to be send in a signal that this platform is not neutral it competes it's a market participant it's not a market platform uh so yeah like we we through out the native stake throughout a lot of other stuff other ideas that we have at at the moment and the last one is uh it needs to be modular uh because the industry has has not been created yet uh it needs to be modular in a way that uh I'm going to be talking uh about like I'll move I'll move a bit to the

technical stuff now oh Misha so I've got one question for you actually on that just so on the neutrality point this is a challenge that I think a lot of infrastructure apps have or infrastructure layers have today which is on the one hand everyone wants to be modular and neutral because the apps aren't here you know we don't know how these application developers are going to want to build and so we want to be maximally flexible to them and we also view ourselves as a platform so we don't want to be competitive with them the the other side of that argument though would be you know there are many instances of hey we are just going to build kind of build it and they will come type deal where you know we we're just going to trust that these de devs actually end up showing up and what some infrastructure

developers have done is maybe like dog food their infrastructure a little bit so maybe you could look at something like uh Ian da is this would just say like hey you know what we're what we're doing here is a very new paradigm and we're not 100% sure that uh you know application application developers maybe need a little bit of help uh you know with almost like jump starting their imagination with like hey here's something where I I could build so how do you view the the sort of trade-off of hey we want to be maximally neutral and not be competitive versus hey maybe application devs just need a couple examples of how this this could work and kind of like dog fooding your own uh environment they there are easier ways to dog F than build and then Market it to people no no

that that that I don't think that's an argument uh we we will have explainers we will have sdks that people can use and I think that's like for for most builders that going to be sufficient we don't need to like create our own protocol that's going to be competing with them to just showcase something okay you can like yeah it's it's going to be much easier uh so yeah neutrality is really important we we see it a lot in like questions that people ask like what's what's going to happen if you think that something is like really really influential or I don't know like really good primitive will you have something like Amazon Originals or Amazon Basics

or something right where they just like take take something great and like reame it Reed to their own design yeah we have Celestia we have a lot of other da solutions that are really great uh so I don't think that we need to enter this Market ever all right fair enough fair enough I interrupted you though you're about to get into the the technical architecture of symbiotic I'd love to I'd love to understand that a bit better no please do uh I'm really question about what we're building so like I can go on and on about that yeah the the modular part and the flexible part it's inevitable in mutable systems because you can't really like hard code everything you need like some orbiting

systems that are going to be used so we abstracted away a lot of things to stay flexible uh one of those things is collateral uh so basically you you can use any obligation uh that that is like obligation of asset it can be off chain it can be on other chain it can be like on ethereum if you like uh what that what that gives you is a flexibility to have any collateral that you want to be slash or nons slash uh to be somewhere else you don't have to siphon everything for to the ethereum the important part

that people need to understand is the ethereum is used as an orchestration layer we just like in our opinion is the better one uh it does not limit anything uh well the the limiting power is really really small uh so like it's not limited to the ethereum finality speed it's not limited to the assets that are on ethereum you can use assets on other chains if they support some like account obstruction or escroll contracts and transport the obligation to the ethereum site so the assets can be still used there they just need to be slashed in a slash window that's the only obligation that in a manner that like a network accepts uh so yeah we abstracted this

way and we already see that this brought a lot of like use cases that we like really happy about if is one of them because you can use any token anywhere governance or non-government uh for for your needs uh so yeah collateral obstruction is really important part of it uh the other that I want to like focus on is uh the resolvers and the slashers uh those are basically two well the resolvers are basically an arbitration layer uh when uh we uh receive when when the system receives an eventuality from the network basically like we this guy is like messing things

up uh the operator uh less punishing in in this amount uh there might be like cascading or like a group of resolvers that are that the stakes uses or uh like a lot of configurations are possible so the resolvers might be uh like fraud proof based systems they might be committees they might be like straight multi as like some systems do use uh it might be like y or anything else the important part like again we are not forcing anyone to do anything we just enforcing the rules of the engagement when when the engagement is

mutual so we already see that this brings a lot of interesting participants uh we uh we received a lot of applications from different proven algorithms uh that are interested in creating resolving systems for the networks like tell tailor mate or like framework Frameworks of resolvers that are going to be protecting the St uh and yeah I'll finish in touch uh yeah because like the worst thing that you can do for the emerging industry is to limit it by One Vision it might be the vision of like multi that is really

stupid and simple it might be some some like really complicated like Ving like uh prediction Market stuff right uh but it doesn't matter actually like the stupid it is or like the smart it is uh still one one size fits all like and and you can't build an industry like just imagine if ethereum had like just one up code uh even if like it like you need to give people like freedom to to be creative Misha let's start with i actually almost want to start with the top of that which is the the collateral layer and this is something that I still

just frankly don't have a super clear mental model on which is how how do you think and I know this is extremely early days here but how do you think that um application devs are going to think about the different collateral that they use within their system and I can think of a couple of different uh like so for instance what you could do um as a as one option for economic collateral to use your own token right which has essentially been the that's been the deao for most app chains today right they've just used 100% of their own uh token I get the benefits to that is one you retain you know however you want to Define this uh sovereignty uh right in a sense that the the downside of this

ultimately is that you know during bare markets especially when people pull Capital out of these ecosystems you have to up the amount of emissions that you're using to incentivize people because the value of your token is falling and it kind of creates this downward W spiral now we've got other options in the form of um in the form of eth as an asset which is uh probably slightly less uh less volatile and there's obviously a huge amount of um basically people that own e that want to supply that collateral so maybe it's like a slightly more stable solution which you you could procure more cheaply um there there are other interesting like frankly this I think symbiotic the platform opens it up to the possibility of something like usdc um as well which is much flatter it has a it has

challenges because it's not a digitally native Bearer asset right so you're dealing with there's some complexities underneath the hood dealing with something like Circle and who actually gets the underlying dollars or like the bonds I suppose that you're that you're actually slashing but can you kind of walk us through like your mental model or how maybe some of the different applications that symbiotic is working with about how they are selecting the economic collateral uh yeah like when we talk about first like qualification when we talk about uh Sovereign sovereignity uh it's not like I'm not sure that you're going to lose sovereignity if you use some other tokens uh when we talk about s Unity we are telling that your your consensus contracts are going to be

upgradeable by multi outside down that it's not aligned with you this is what losing sovereignity looks like uh if if you have like multiple collaterals and one of them goes to zero you don't actually care if if your break if your basket is like stable enough it's going to be perfectly fine for you you're not losing anything here but you can be aligning and this is important uh for for actually like protocols that have their own um tokens with like good circulating numbers and uh good like oracles and everything like that they can use their own tokens as well yeah it's going to be great for them if they want to

decentralize some part of it they can use their own token governance token to do that but the the interesting case here is like we see more and more uh complex structures like super DS in case of like maker I think and a lot of like like AA is doing a lot of stuff in this regard as well they're creating the whole ecosystem of partnering Dows that are doing uh some parts of the protocol for them support auxiliary system everything like that and this might be used as an alignment instrument we see that like being a good a good use of that you can use a basket of tokens to

with one like being the the major one that other networks are going to use mixed with the less less uh stable ones that are going to be just launching and have like price fluctuations and everything like that and for difficult for complex systems you'll have multiple facets of that like again uix and liveness uh the the layer of consensus the layer of like execution or something like that so like layer pipe and you might use the different guardian of uh and different proportion of tokens for each one so here we have like another token that is used like 99% of the time because you need mass for that

here you need like it's going to be proportionally like 30 70 with your own token and like once you go up you can use more and more of your tokens the permutations here are really like like we have a lot of those already uh in in the use cases that are emergent Misha can you unpack that a little that's that's a super interesting concept for me and even to zoom out of shared security and recing everything that we're talking about you know I've always viewed the the purpose of equity within a company as alignment like with within a even within a very centralized organizational setup like a company you actually have these especially as you get bigger these different competing

factions right and like a CL it's the different functions of a company that sometimes have uh like non over like a conflicting incentive so like sales and marketing is sort of a classic example of this or sales and operations or or whatever and the way that you align those incentives at the top is you give leaders of each of these different different functions equity and what that does is it it neatly aligns everyone with like the overall success of the company as opposed to myopically focusing on whatever kpis your department is important for and I want to map that sort of familiar mental modeling concept for people onto this idea of uh shared security within uh within a protocol like maker and frankly

the maker endgame feels like it evolves pretty constantly it is relatively complicated I'm not 100% up on it exactly but you know my current understanding is that maker is a very large complicated Dow it does a bunch of things it has a core thing that it does um and it's actually going to segment some of the like Risk and complexity down into different subd Dows and so I guess kind of like walk us through hypothetically how using different tokens at different layers of the stack here could better align those incentives like I'd be yeah I I'll try to be as general as possible because uh like I'm not sure what's public yet uh yeah uh okay the you have like multiple Dows that that that are going to be

using say your own Oracle Network that is designed for them say you have options that's like just an outside example you have options right for the options uh you might want to use oracles that are going to be like faster than chain L ones uh or have like some mixed of like price fits that are to be composite to every pair to every subordinate product like interconnected between each other and update with like coordination of like signals right when you need to update the first one the second one goes subordinate to that and waits like synchronously waits for it uh every protocol like every Dow can have

its own token but because your token is going to be securing this like the the the major token is going to be securing the major part of this like Oracle Network every other protocol is not interested in attacking you because like they're going to lose the the the the the system that going to be like basis of their function and with every part that needs securing it might be an nchain right where you launch your l3s where you launch your D5 Primitives uh or like any other part of the system that you use for them to actually like start misaligning and like vampiring each

other and like doing other activities that you want to avoid you can use the security part to align yourself in a very like very spec specific way so we we are just starting that uh uh like we we usually like when we started designing this protocol we thought more about uh we we we weren't really thinking about up chains because like that was some Far Away idea uh like we don't have them actually now like in in like in a lot of cases we we have like rollups that are not specific uh but yeah like this is like actually has a lot of use cases because

every protocol again like Aina has a lot of parts that are trustful that need operators to perform tasks either to be like U oriented for people to get results within like specifi time or spe with specify like reliability or they need some like outside feeds and like op parts and and other other Concepts that are just emerging yeah I I maybe just a tie bow on on this part of the conference and I want to move on to the work that you guys are doing with Athena which is uh much more public and we can link uh a Blog in the in the show notes here but I I'm just fascinated to see how the the behavioral impact of that alignment and you in one sense this

is already this already happens a little bit at an ecosystem level within crypto which is like Hey we're all part of ethereum and even though there's no like there's not as much of a direct relationship in between some of the different applications like a Unis swap or a or maker or something like that everyone like the common link there is that okay we're all building on this this shared ecosystem and probably we all own a bunch of eth and you know when our apps kind of create create value it's it's a it's an indirect link but it it kind of creates this um Rising tide fills all boats or lifts all boats type type effect and I would be really interested when you're looking at maybe a a more closed off ecosystem like or a a slightly more tightly linked uh

organization like maker and you have these different Dows that are interacting and able to basically uh mix and match tokens much more freely just the behavioral uh outcome of that I think is that just feels like frankly a pretty novel um experiment and very interesting so I'm very interested to see how something like that evolves over time but yeah yeah I I'm really interested as well I yeah usually usually that would require every every one of these like protocols to build their own chain or app chain or rollup that that would be like secured by the like fragmented tokens because you can't

actually like secure different risk profiles with the same token without RIS uh like how would you do that I I just like I will be secure just imagine like let's let's make a really simple example like uh what if we actually have uh reaking for uh for the rollup right with with the centralized sequencer uh we have like uh the centralized sequencer part which is going to be really safe because it's handles scheduling right uh secured by one some like one one rollup token uh we'll have like some uh IM Builder like some PBS PBS version

that is going to be secured by the same token with different like Risk scenarios this part can be slashed really easily because they can like the obligations that they have might be not fulfilled because of reasons outside of their control right uh and you have another one that's going to be pre-confirmation which is like even scarier for a lot of people so uh you can't use like you can't make users and stakers uh optin into the whole back basket you need to abortion and and like restating can be used for that as well and it's really efficient use because like every every layer of this p uh is optin only so some people will tell yeah I'm going to be

securing all of it and some people will say yeah I'm going to be like just on the like on the scheduling level I'm not going to be participating in any risky stuff okay y that brings up a really so one one part of the stack here which I guess we've like Loosely been referring to as like like lrts you know in the vernacular so far today but the way that you talk about this is like vaults which I actually really like as a I I almost think about it kind of like a like a Moro Vault if people are familiar with that as as a rough analog um but who is ultimately going to be making so in that in that exact same scenario that you were describing where there's a decentralized sequencer but then there's

also there's a pre-com Fel instead of having this entire stack which maybe just like secure the entire thing versus like taking different tranches of that basically we're talking about is Ching out risk right um and there's it's kind of like an investment decision at the end of the day which is like do I want to take this whole Blended Blended risk and yield opportunity versus truning out different parts of it and that is the that is the uh Vault layer for symbiotic so how like who are who are the um operators of these vaults going to be and yeah how's that whole layer of the stack going to look for for you guys yeah vaults are like uh vaults are basically uh the the rule the rule book

and the accounting uh so when you create a vault you you say yeah I'm going to be like the stake is going to be accounted like that so like have these sort of tokens and have these sort of like rules about them and it's going to be uh it's going to be uh uh getting rewards in this manner uh and use like the the mechanics of uh like resolvers in this in this manner and if you're like if your vault is set up correctly a lot of networks will join it like and and basically uh uh enable it to be restak through like through the networks because networks are going to

be interested in limiting their exposure as well some of them at least like they don't want to be like if you have Network that uses randomized slashing as like a normal function normal uh function in of business you don't want to be like and it can be 100% with some like probability you don't want to be like using only restake tokens that are restake through that as well you want some other Vault that are going to that is going to be like less more secure so the vaults are basically uh the streams of of with the same rules so it can like so the network can one LRT can have like 10 volts with different like layers of risk and

different modes of of function some of them can be mutable so that that the rules are locked like 100% the only thing that you can do is take out your tokens uh some of them can be like upgradeable and have proxy avability uh depends like if you have like value proposition strong enough it can be upgradeable if you don't have that yeah like you might straighten it up being immutable so uh yeah it's not like LRT vol it's it's just vaults that are like technical in a lot of ways got it just accounts and rules yeah and and

Misha who do you see is setting these these vaults up and like who who's going to be running them alertes operators uh I don't know like curators at some point I think uh when they want to like uh create a vertical alignment right that they have like their own operator set they have their own like Staker set they have their own scoring mechanism for networks to uh to to join yeah yeah every participant can can do the worlds but I think lerts and curators and operators are going to be the ones controlling it in a lot of cases got it got it um okay I I I want to get to this work sorry I keep jumping around here a

little bit but I want to get to the work that you've done with uh Athena as as a really cool example here and then I want to I want to conclude actually just in terms of ethereum because ultimately what we've been talking about uh for the sort of highlight of of this uh podcast so far for me has been this idea of alignment and how reaking can create first of all decentralize uh core infrastructure components within a system but also align the different uh components with an within an ecosystem as well and ethereum is kind of like the the white whale right of uh of where there's a lot of opportunity to decentralize core infrastructure but also to align a diverse set of stakeholders but I I want to focus on Athena here because we've got a lot of really interesting specifics to dive into there so you just for folks who

might not be familiar with Athena the protocol what it is and how it works can you just give us like the high level uh quick summary of what Athena is and then we can dig into the work that symbiotic is doing there yeah a is a market neutral stable coin that is based on like long short long short positioning of uh that yeah so the the idea is that if you are long and short any asset uh you can like basically be always stable uh yeah and it it gained a lot of Direction recently uh I think it was the fastest growing asset or stable coin ever I'm gonna like I'm not going

to talk a lot about that they I'm interested in the other part of the protocol but I think the the approach is really noral and like we we like to help uh yeah and I I think that they're like they have really ambitious ambitious timeline in terms of what they're trying to use so they'll need a lot of supporting systems uh like they yeah like they they basically like that what they're doing is uh they're using options uh to long short and for options uh to on scale uh we like we don't have an infrastructure yet that can support like 100 Bill uh in

in in Long position right or in short position uh so that they are trying to basically help help deup themselves to to any limit that they want to to use uh and for that they need like yeah they they need every every primitive node to men uh like some more than others I think but like again our system is not to analyze uh like if it's going to be successful or not our system is to accommodate that's that the most important part because like if we start to score uh we we will become opinionated and that's like the worst worst thing that can happen but yeah

they have like a they have uh plans on launching I'm not sure it's going to be on chain or up chain well like up chain or not up chain Perpetual dexes uh I would concentrate on market makers uh the part that's going to be really interesting because again you can align them we talked about this uh you you can align it with LP tokens so it the collateral that's going to be uh like might be used uh in aligning the market makers might be LP token with epina on the other on one side and like the other token on the other side uh the

security assumptions here needs to be refined but like our system is designed to create incent alignment structures for that if it's just if it's closed somewhere but it can be still used like uh for providing liquidity somewhere uh and yeah like the other ideas are like a bit uh further away I think like that's my personal opinion it's not the opinion of the company we are not we don't have opinions uh but yeah like uh the uncor uniz Landing is really something then you can use and it's going to be like functionally devoid of operators uh if if I understand like what the possible

designs are so like reaking like this is a wild concept by but Shar security can be used without operators at all Misha I I want I want to um so like Athena as a protocol is super interesting and like personal opinions aside I want to get a from from your perspective of working with Athena what are what are the big challenges that they're undergoing especially as like their protocol uh transitions um like what are they either like I don't know strategic drivers for them or especially what are the sort of centralizing parts of their infrastructure today for basically you know as you described like Athena runs a token they basically have a tokenized version of the basis trade um and so the

infrastructure as it exists today is um you know there are definitely parts of it which could be risk vectors right just like any Financial product um and so kind of give us a sense um of like what are the what are the parts of underneath the hood of Athena that um symbiotic can kind of help with and then what is a priority for them to to sort of get more decentralized or aligned on um and then like where is is symbiotic actively helping with that yeah we are starting with interchain uh so this is like the for up Chains It's of like diing your fingers into share security uh yeah we're testing the waters currently I'm not I can't really like say what's the priority under the H

because like we like we're we're in the process of like actually launching the main currently uh from our side so I think the the important part for epina and everyone else is to like get a clear idea on how to go production because we don't actually have like anything that is production yet in in the industry so it will take some time for them to try and do the like the the stuff that is like forina currently they're like looking into DVM it's a like a it's a it's a layer zero concept and we we've received like maybe

three or four other applications for the dvn interrup networks uh it's a really like this concept is on easier side but we need to go through it to get to the card stuff and it's already shows the alignment because like we like our vault of like Yeah you mentioned that like the the stable coin part the alignment with the dollar value for the interop really makes a lot of sense because you don't want want to have like fluctuating assets as or something like something as fluctuated as governance tokens uh securing the most vital part of your

infrastructure like being the the region or inter yeah that's that's one of the challenges of the you know I would guess in terms of what collateral that you're picking it's almost uh I mean there I guess this is still like a big a relatively big open question but you know you you essentially want some amount of security and you probably denominate that in dollars but you know the collateral that we have on change fluctuates quite a bit in in price there so you're almost taking on some amount of like you know I guess what you what you historically categorize as Forex sort of risk um which I guess is the the interesting part about um the interesting part about dollars yeah if you're like if you have a blockchain uh that has uh

CDP uh that issues token based on your governance token and your blockchain is secured by your own token governance token you have zero Forex RIS you just describ the dollar my friend you just described dollars yeah we've actually cracked that yeah like we yeah the risk exists uh but using uh diversification using other Market instruments you can counter that uh but like we are not in search of like uh the perfect solution here we're in search of the solution that is more optimal than the one we have

now uh and that is because like currently you don't you you can't use like you can't switch your consensus model easily you can't uh create a tiered system or it's going to be really hard for you and you're going to be alone in that here like with this in the system that we are trying to do uh the experience of previous people is visible and like the networks it's visible it's like you you have people people that help them already in the ecosystem like resolvers I see that yeah those guys are using these resolvers I can use that as well uh yeah so the the the expert part of it the visible part visibility part

of it is going to be really important but it only works through scale and that's why we try to create the the the protocol with the least amount of friction because it doesn't make any sense like if we have 10 protocols right um M I want to transition you to talking about ethereum in general and you know something that uh miles and I have been talking about on this season is basically is trying to differentiate for folks because again I think there was a huge emphasis for people on this idea of you know using ethereum as security to secure external chains right that was like a lot of how people initially started thinking about this but I think part of the reason why folks on the ethereum side of things

have been really interested is this sort of shift again not really using a lot of the verbiage that that you we've been talking about today but hey there's another use case for um shared security or or reaking would be actually uh ex expanding the scope of what existing ethereum validators can do beyond the the consensus duties that they have today and maybe that can unlock a bunch of cool things and that's roughly what like pre-ms have been right um which is hey ethereum proposers can make these Comm commments and then through this reaking mechanism those can be enforced and that can allow us to do all of these cool things namely there's an enormous amount of focus of uh on uh like L2 interoperability and based sequencing

and that I I think there are some folks which are extremely excited about that the last episode of this show uh that just went live as a discussion between hu and Justin Drake and they had sort of contrasting viewpoints on this uh to be honest and you know they're uh the you know hu was a little bit more the M look pre- comps are definitely very interesting I don't want to paraphrase go back and listen to what he said um but ultimately there's not a huge amount of opportunity to uh for ethereum validators to opt into doing all these other things um and like maybe the opportunity size isn't gigantic there um and also for something like pre-ms the uh the complexity is very high so we have to consider that in terms of what this implementation would be and then uh

you know Justin Drake has been extremely interested in this and his so said hey guys we have this uh this huge problem with the rollup Centric road map for ethereum which is that we haven't we didn't really think about interoperability very much beforehand and we're you know we're fragmenting liquidity and you know transactions between different l2s aren't composable and so this would be a really neat way to to solve that and maybe there are other things that we can ask our ethereum validators to do where where do you fall on on this entire debate Spectrum here I'd be I'd be curious are you you know very excited about the the sort of pre-com possibilities do you think that there are other big categories outside of even pre-ms that we could be asking ethereum proposers to do like what are your thoughts on this

entire general topic here uh I see both sides of this argument yeah like overloading consensus Is Not Great it it brings like the it brings centralization because like the hardware requirements grow grow it brings misalignment yeah but it can like enable really really interesting uh mechanics so like I I see both sides of it most of the application that we receive right now are completely isolated to to validators validators don't do anything like proposers for ethereum don't do anything uh I think that before uh it goes like our system

support is PR like you can use like really customizable collateral as I described right uh you can link them to validators as well uh but I think before the industry comes to some idea of how it's can be achieved safely uh yeah like I don't actually have an an opinion on that like we have guys like Justin and that that are getting paid for that so I leave that to them my my like goal here is really simple to accommodate what they came up with uh that's that's the the whole idea if I had idea about like how to do that correctly I wouldn't be doing

that that's very fair uh what about just just looking around at at ethereum and the various different sets of stakeholders today and do you see opportunities for uh like do you see like interesting opportunities for leveraging um symbiotic that might not be obvious today so proms obviously something that people are extremely excited about but one of the aspects around uh reaking to me that I I feel like is exciting is taking is looking at different centralizing parts of infrastructure that support these different blockchain ecosystems and trying to make it more decentralized right like bringing it back to your point about this is what we're ultimately trying to do here so when you look at something like ethereum and that

could be something around like the MV supply chain or different uh pieces of core infrastructure like uh like orle networks that maybe defi relies a lot on like what are some of those areas where you can look at this and say man this is just a huge screaming opportunity to improve the decentralization of the protocol yeah like all all of the above yeah we yeah basically like every every part of it uh like without being negative to any like current market participants uh we are lagging in terms of decentralization uh this is the important part of the system like when we stop doing that like once every couple of or three years we get Tera or

or we get like FTX or we have get something and and people are saying how would we PR like how how we can avoid that yeah you decentralize you don't you don't put your faith into any one entity that that can be upgraded the politics can change uh that's why we had like a boom of uh you you probably like 100% remember the rify like uh boom where you got like 15% on your stable coins uh and you never knew like where they went yeah people were like fine with that they had like the bigger of them had like billions in in tvl and that's how like how how how many

times do you need to repeat that before you learn like decentralization is important uh and I think that the main goal here is to um for us is to create a a system where the greedy parts of our system are like satisfied while doing the right stuff uh so stakers are rewarded like well networks get their security cheaper than they would before and while doing that they can decentralized like actually decentralized safely so if we have like uh Network satisfied with the Cost Cuts and U upgrades uh stakers satisfied they

they they're doing like they they're getting rewards that are satisfactory to them will get an actual security that is sustainable so I completely agree with that sentiment and for folks who are out there who are listening and that message just resonated you I would like I I would personally be I would love to see some of the the core parts of the the valy chain on the the M side today decentralized so if anyone's out there who feels like they have an interesting um you know an interesting idea for how they can apply the symbiotic platform or or reaking generally to to decentralize some of these core components I highly recommend that you go talk to to Misha or talk to to me you listened to the Meb

season on this podcast before and you know I'm happy to make connections I just want to I would love to you know have an impact there uh personally but I just also care about that quite a bit um M I've I've got one more uh you know maybe we can conclude here and I I would love to to get your sense around how you view the do you view the different networks uh that symbiotic is already supporting and going to continue support as an ecosystem itself like one way that you could look at this is just to say hey there are these networks that need uh almost almost like a backend kind of setup right they need uh they've got a very specific configuration that they're going to want around their tokens the different operators and services that they opt into and that's what symbiotic

does we orchestrate an line all of those different things the the other way that you could look at is say hey actually eventually we're going to have a number of different networks that symbiotic is uh supporting and hey wouldn't it be cool actually if we provided uh Services between these these networks like maybe being a little bit more prescriptive about what interop could look like for instance um or something like that so are are you viewing these networks as kind of Standalone entities or are you thinking about creating an ecosystem with value added services for the networks that you're supporting yeah the second one uh uh like we we don't know what Ser security is like we have some idea right uh we understand that yeah there might be some like Synergy between networks if they launch on the same

platform right there might be something else that they they might be uh I don't know like the service like the scoring Services is like a low low low hanging fruit but we don't know which time which once we make this pipeline of launching and decentralizing networks uh visible like actually ible we don't know what there we find we'll have we we already have some ideas on how to uh how to create even more added value after we have like some uh mass of networks that are launching this symbiotic but yeah this remains to be seen like our goal is to be like is to be really flexible on designing the

rules and designing the interactions because once we get like something extra this extra will will uh restrict your movement after that so we need to we are in a lot of ways like building our own like like ethereum in a lot of ways like you need to like be really careful about like use adding some functionality so uh at least for the first version uh we will Outsource all of it we'll help users we create use cases but we are not going to be doing it ourselves we going to support the builders but yeah this is like the the the bush side of the Dark Forest

growing I we all love a dark force analogy on bell curve Misha uh fin give us a sense of what the timeline looks like here so uh obviously symbiotic has already been active today you've got some great launch Partners but like when uh you know when can we expect this to be fully live and and operational yeah uh well the optimistic uh uh the optimistic uh timeline that I have is that the core contracts everything uh will be ready uh somewhere around end of Q3 so quite soon uh wow yeah we we we have a really great engineering team so like we we expect to move quite fast

most of it is ready already uh the core part is being audited as we speak uh but because it's immutable it will take a lot of audits and a lot of like verification and even contest uh for us to just like make sure that everything is 100% like not 100% but it's sufficiently secure awesome well congratul that's a extremely fast timeline so uh congratulation I mean we'll congratulate you you know when it launches uh but that's really exciting and for finally for folks some who might be you know have been listening to this podcast and they've got a network Des maybe an existing Network um where they feel like they could use symbiotic or they're

thinking about launching something new and this has resonated what's the best way for people to either find out more reach out to you or connect with uh the good Folks at symbiotic about what you're doing yeah we we have a head of a consistent fix push which is like quite a known figure in our uh industry uh but we for for people that don't know him uh we have an application form on our websites and we try like it will take some time for us to get back to but yeah yeah like reach out we are happy to help awesome yeah Felix is a friend of the show he's been on a couple of times I believe uh that he's got the god the moniker Godfather of liquid

saking he was actually fun fun fact for listeners who skipped That season he wrote the original paper on what he called delegation vouchers I believe back in 2019 or something so um awesome Isa well I really appreciate it uh super excited for the work that you're doing at symbiotic uh I appreciate you coming on the show to to talk to our listeners about it and yeah we'll have to do it again sometime soon yep hopefully on the lunch date yes yes soon soon TM all right my friend talk to you soon cheers hey everyone hope you all enjoyed today's episode wanted to give a final shout out to namada again a team that is near and dear to my heart they are building the shielded acid Hub which is protecting the future multi-chain talked

a little bit about how that works in the mid roll but for now what I would highly recommend that you do is go check them out they're in their main net launch phades you can follow along with everything at n.net you can start rewarding Yourself by shielding your actions and strengthening data privacy for all across the multichain so thanks again NADA for all the great work that you're doing