How EigenLayer Supercharges ETH | Sreeram Kannan

Transcript

this could increase the differential reward that a homesteaker gets relative to a liquid staking derivative which is a dynamic we've never had in the history of ethereum is there is no preferential value of decentralization by creating a market for decentralized trust we are letting the market discover the true value of decentralized trust and as opposed to the value of economic cost welcome back to another episode of zero X research presented by Chain analysis and Flipside we are recording this episode on January 9th and we have a great interview coming uh coming at you guys with sriram the founder of eigenlayer incredibly info-packed interview and it's pretty hard not to be

bullish on ethereum scaling after you kind of like hear kind of what eigenlayer's vision is and how they're going to you know really help facilitate that that role-centric roadmap um and you know we're joined in for our intro section as usual by Westie but also a new face has joined us so Rand has recently joined the blockworks research team super excited to have him here uh and he's going to hop right into the fire hopping on the you know an episode of zerox research just one week joining into the team so we love that and as usual we're going to hop straight into our hot seat cool Throne segment uh Wes do you want to go ahead and kick us off yeah I can start us off with the first Hot Seat so Barry silbert and dcg are back in the hot seat this week

um basically there's more developments in the soccer I'm not sure when the last time we talked about it was but basically Cameron Winklevoss one of the winklevi owner of Gemini exchange essentially had a an open letter on his Twitter um to Barry and dcg basically one outing that they had 900 million dollars given to Genesis that they still haven't heard about uh in many weeks as well as outed dcg in that they owe Genesis apparently 1.675 billion dollars which Barry uh denied in his first tweet in a very long time at the same time a lot of these Berry coins as we call them uh the ones that

Barry owned have been getting shorted pretty heavily although this week they've been up like a good amount so that would be what near as a main one uh Zach is another they're doing pretty well off of these short squeezes now we've seen a lot of these assets but yeah I mean I think yesterday was January 8th as of this record wording and that was the day that he was given in that letter to give some feedback and clarification to uh Gemini and so yeah we haven't really heard anything since then so yeah we're just sort of waiting to hear what he has to say but yeah definitely in the hot seat again this week yeah there's so much uncertainty it seems like around that entire situation

with the close end trust trading at such a heavy discount to nav and I see people on Twitter all the time trying to you know jump in on that and call the bottom of the discount and and then ride it back up to par but no one seems to know still exactly how they're gonna you know get through their troubles and if dissolving some some of the trusts is a part of the part of the equation so I don't know if anyone here has any insight on that but that's uh definitely something I'm paying attention to and I have no idea how it's actually going to play out yeah I think someone's definitely making a move today with regards to gbtc if you've seen the discount it's moved from roughly 50 to 40 today maybe it coincided over the weekend of BlackRock announcing that

it's willing to accept Bitcoin for one of its 15 billion dollar funds even though they're only accepting Bitcoin cash set of Futures which is if I'm not wrong with the gbtc or one of the BTC ETFs is based uh not at ETF one of the BTC products is based on no one has a spot ETF yet so those two may be linked and perhaps something is happening behind the scenes with regards to closing that discount and potentially helping dcgl yeah uh you know Jason yanowitz had a pretty good Thread about like the stages of the bear market with the last really being that boring phase and every time I hear Barry silbert like at this point my eyes just glaze over it's very much hitting me on that boring phase like I'm really ready to move past this you know we always talk about all

the exciting Innovation that is really happening in the space right now and I just can't wait for the days where uh we're not worried about which C5 lender or related entities is has to build belong in the hot seat but but ran I'll go ahead and pick on you here who do you got hot seat this week this week I have wire in the hot seat so if you're unfamiliar with wire they're basically a kind of crypto fintech company that offers on-ramping off-ramping kyc vocal exchanges money exchange company and they're sort of more of a traditional Banking Company so to say a lot of large crypto institutions use them for online unmapping and off ramping Services ones that you're familiar with metamask openc

and they've also had several significant Partnerships with fintech companies trying to make strides into crypto such as Visa importantly last year they announced a 1.5 billion dollar deal which would have been one of the largest private aspect deals with boats boat is also a shopper Network company very heavy in the fintech space but that deal fell apart the second half of the year um and after that event a few days ago wire have announced that they are closing down business going forward and they've also limited custom withdrawals whoever users get only withdrawn 90 of their funds on the platform it's a pretty significant uh thing that's happening in the space given that unramping and off everything is still a

very significant part of the user experience for want to access crypto and so it's definitely one to watch where these large platforms pivot to Next in terms of a more stable and perhaps secure on-ramp service or if the industry has other solutions to the problem yeah then 90 number is weird to me it's like what are they what what is what's the speculation around why they're like withholding that 10 is that some sort of underbacking is that some sort of like insurance that they're trying to keep for themselves like any ideas on kind of like what why I choose 90 I don't have a good idea I I agree with you that the 90 seems weird even before there were troubles or they announced that they were shutting down wire did have deity withdrawal limits but they didn't have

any deposit limits so if I had to guess it's just that their infrastructure isn't set to handle that type of volume because if your company's announcing is shutting down I would assume all of your customers will want to withdraw in one go and perhaps trying to process all of that in one or a few days would cause a lot of problems that makes a lot of sense but I agree Dan that was like the first thing that popped in my head I'm like 90 at least this isn't an FTX situation where it's just you know cut the gates like completely closed and you can't get any of your money off so I guess that's kind of a good sign in terms of uh the health of the actual company despite the bankruptcy but that kind of segues pretty well into my cool Throne of the week which is uh coinbase

pay integrating uh with ribbon to make it easier for users to deposit directly into decentralized options vaults and earn a yield on their Holdings I just think any integration that you can do to make onboarding people on chain is is a good thing and then we also saw uniswap Implement a direct deposits into your account into your wallet through Moon pay so that way people can you know kind of skip centralized exchange experiences all around and just get straight on chain into D5 so there's not really a whole lot to say about these two but I just am super excited about the the prospects of improving the user experience going forward and I think that reducing that friction is gonna you know increase uh just people's willingness to self-custody and the more

actions that are done on Chain versus the centralized entities is always better the uni swap one really gets me excited like no thinking like take yourself back to where we were maybe last November Peak bull market everything everyone's trying to buy everything at all times you know imagine just logging pulling up uni swaps uh do you swap interface and just swiping a credit card to buy you know whatever coin was pumping like that's that's a dangerous thing that is jet fuel uh for Peak bubble environments and it gets pretty funny to think about uh what the implications I have now uh if if we're you know run it back and recycle I think that's going to be such a catalyst yeah I've always said that the on and on off ramp was the most

underrated development in crypto because like you said that really is like the biggest onboarding user experience like hack that we've had so far whereas I know when I first got into D5 you had to like figure out what a metamask was and like you had to go from your exchange specifically with like eth or usdc and then Bridge it over and then trade whereas this makes it so much easier and I know look coming back if I had some sort of on-ramp that was super easy with uniswap that would have been onboarded so much easier and I know all of us like once we've used uniswap for the first time or some defy app that was sort of like magic to us right like being able to actually trade an asset that fast um just over Wi-Fi I thought was like

one of the most mind-blowing things I've ever experienced and so if you can do that from your bank into D5 like that quick I think that really brings a lot of people on board because they get to have the experience a lot easier yeah and props to coinbase as well like you wouldn't think they'd want to support a decentralized alternative to themselves as easily like you'd think they want to increase that friction not decrease that friction so I I wish there was a good way to track maybe Dan or Westy or rental will have a good idea on this one but it'd be kind of cool to see how utilized that function is I don't know exactly how you do that I guess you just have to look at coinbase hot wallets and see if there's like an increase in outbound activity um and then you know

if there's trades being placed by those user recipients on uniswap that would be like a signal but probably not an easy query to put together so I'll leave that to you Dan if you need if you want to try that one my weekend's now cut out for me thank you Sam but yeah I know I I definitely agree you know I'm always bullish on increased simplification of crypto right like it's still so damn hard to do anything in D5 so making it easier is just a net good but to move on to another cool Throne you know Xerox research have listeners I've been hearing this one for a couple weeks now as well as block Works research Twitter followers but lsds they're white hot right now that's that's been The Narrative of the past couple days maybe the past week and you

know if you look at some of these uh liquids taking governance token price action Lido up 74 Frac shares up 26 rocketpool 21 anchor 32 stake wise 60. uh if you kind of like compound narratives and go Cosmos app chain and liquid staking and you look at the stride token that's up some 80 odd percent this week as well uh so it's it's it's pretty clear that you know there's going to be almost like these Wesley always calls them like the cartels are going to form uh around around the liquid staking industry and it makes a ton of sense like you have the assets that are you know verifying ethereum and controlling the network so where these assets flow and how decentralized they become are going to be obviously very important I know

that's always a Hot Topic as well but uh yeah I think the the attention right now is really more so around the fact that they're going to be printing money come the next bull market when liquid staking is up you know 10x and the you know ethereum's price starts running then therefore the US dollar value of their revenue is exporting as well yeah I mean this is not Financial advice but you can just look at how ldo traded right before the merge where it pumps absolutely out of nowhere and to a ridiculous amount I think that's what we're seeing now sort of and uh entering into Shanghai and the withdrawals and I think a lot of the price action will probably be the same as well as another Catalyst this year is eigenlayer which sort of increases the value of state to eat and so I think

both these catalysts both Shanghai and eigenlayer both will provide value to it to lsds um and yeah I think there'll be trades for these LSD governance tokens based on both events as we're already seeing I also think a lot of that really has to do with it's just so eat like it's so easy to understand how the cash flow will accrue to these governance tokens right like you know they the protocols themselves are making revenue and then they take a cut of that you know like Lotto takes 10 and splits it five percent to node operators and five percent to the treasury and then of course token holders you know it's a dow controlled by token holders so at some point there will be like that same fee switch uh conversation we see around uni swap but

returning Revenue to token holders um and it's just like a little bit easier of a model to understand I think than something like you know a lending protocol that has creates Revenue but then it's like you know filling its like uh reserves more so than like considering drawing uh value back to token holders itself so I think it's just an easy model for people to understand as well and I just think that goes a long way in in an environment like this yeah something I've been thinking a little bit about is just under the proof of work you know Paradigm you've obviously got four sellers to cover electricity bills and stuff like that but I'm trying to figure out where the new four seller Dynamic comes in a stake ethereum it's like are these big LSD cartels eventually going to try and de-risk from their eath

Holdings and hold maybe more stable coins and if so how do they do that do they become a big structural seller do they return the eth straight back to token holders eventually through a governance proposal and let them decide what to do with it I'm not really sure but that's definitely something I'm paying attention to given the transition to proof of stake I don't think there's any Force sellers because with proof of work like miners basically have to sell their emissions in order to pay off their their hardware and their electricity costs but I do think eventually staking will be used for a lot of people as income especially as as eth progresses and So eventually it'll be quote-unquote like for selling of the yield I think most of the yield that comes from eth will eventually be sold

and so I think that in of itself is the force selling so that would be like emissions that that come from youth staking but I don't think in the short term I think a lot of the people that are staying taking now or doing so for the long term but eventually those will definitely be for sellers yeah going along what Sam said about LSD cartels I think one important thing for us to keep in mind is the degree of decentralization between these LSD protocols we've had some debates where individuals say for example between Lido and coinbase they make up more than 50 of State thief and thus the theme has the Nakamoto coefficient enough to um I disagree but I think for example like naido has to go through a validator like vetting mechanism they have around 29

node operators a day they just added one today block X routes and so yeah I think that these animations that decentralization part we should never forget especially given the concentration of Eve on coinbase which I actually think will increase going forward during the Regulatory Compliance and a small institutional Capital comes into the space along with their custody capabilities yeah ethereum is also adding distributed validator technology and specifically lydos and implementing that as well so if you go down that rabbit hole you'll see that yeah ethereum is going to be a lot more decentralized than it is now or even now like like you said the Nakamoto code of coefficient of two doesn't really tell the whole story of the decentralization

it's only going to get better from here yeah and you know that's I think we can talk about liquid staking derivatives for quite literally the end of time and I also feel like that's you know Justified they're they're the hot asset and they're going to continue to be the hot asset with not only the rest of kind of the the tail end of this bear Market but also pushing into the bowl of the future but moving on to our flip side analyst dashboard of the week this one is built by Jack guy I think this is actually the number one flip side analyst based on their recent rankings so complete stud uh in the SQL dashboard game but it's actually this one is built on Bonk which is the latest meme token of course it's a dog token and this one's actually lives on Solana but

looking at some of these stats it's pretty pretty wild just to see you know what meme tokens still have the potential to do if we look at like the you know price percent change on a daily basis it's got like back to back 100 plus percent price action um and you know activity is still up and looking pretty healthy relatively um of course the as these things generally do they hit a peak and return back to original value and you know never kind of see the light again so um it's always fascinating to watch you know what the latest meme token is and kind of how how it develops but we'll see we'll see how long the Bonk Saga can can carry on for I actually saw something interesting on

this on Twitter today it was looking at um Solana Dex volumes over the last it was like weekly decks volumes over the last year and it's pretty impressive how even before Bonk did launch Solana Dex volumes were increasing despite how negative the the connotation around Solana has been ever since FTX you know collapsed so I thought that was kind of cool um but yeah I'm with you Dan I'd be careful touching this one although I will say I don't think Solana has its own Native dog token that's super successful and you know ethereum obviously has a few that are up there in the top 20 top 15 so I will never fade a dog token yeah and one thing to Just note on this is I've seen a lot of posts on Twitter and whatnot it's kind of

circulating like oh so the you know Salon is back like look at all the transaction volume look at all the activity going on on chain and a lot of that is driven by this specifically this Bonk token so just be careful with like you know how you interpret information and having one meaningful meme token on your 100 Network certainly doesn't reflect that you're like a robust ecosystem by any means but that's not a shot at Solana you know just you know something to to be on the lookout for when you see some uh transaction volume charts sorting around in a great way to kind of like dive through and tear through that data is using things like flip side which you know provide the most comprehensive on chain data in crypto and you know give you the ability to determine you know what's what's correct and you know what's inaccurate

um so getting the ability to query this data yourself is just like unlimited potential uh and Flipside just does a great job of giving this data away for free uh with great web tools they've recently launched a new UI I love using their new UI and it's just it's just a breeze and so if you want to kind of get involved in starting to you know work on some bounties we actually have something Linked In the show notes for you and for the opportunity to earn some free usdc I also want to take a second to thank our other wonderful sponsor chain analysis they're providing the tools that investors need to help legitimize our industry they allow investors to track funds on chain with ease in a way that was Prior not possible they also have some great research on their website which is available for free which we'll

be sure to link to in the show notes and they also have some really cool classes that go really in depth on a lot of different in the weeds info that a lot of people don't know about in crypto so I highly recommend checking that out again thank you to channelis for being such a wonderful sponsor and please check them out in the show notes all right everyone welcome back we have a great uh great guest for you today it's sriram from eigenlayer he's the founder so before I kind of get pass it over to yesterday ROM I know I just love to get a a little bit of a background of you know kind of how you got into crypto and ultimately what led you to founding eigenlayer and kind of a brief overview of what exactly eigenlayer and eigen da is yeah thank you so much Dan and Sam for

uh inviting me to be here today um a quick overview about myself I'm sriram uh I've been working on this project I can layer over the last uh more than 18 months and my uh journey in crypto goes a little bit uh further back I started uh working on blockchain technology starting 2018 uh at the University of Washington where I run the University of Washington blockchain research lab [Music] um the my interest in peer-to-peer systems goes even further back my PhD which I started working on 2008 was in

peer-to-peer Wireless Systems so I had like one um journey in the peer-to-peer space and the thesis there was that Wireless Systems are going to be prevalent and can we build these without having requiring infrastructure to to make them decentralized and controlled at the edges and that didn't quite pan out so I got very excited that in 2018 when I learned that there is this whole other Revolution going on in blockchains the ability for us to create self-organizing systems of trust and cooperation is something that deeply attracted me so I got deep into it worked on infrastructure layer basically consensus protocol scalability

when can you get different kinds of features uh accountability all of these things in blockchains and um one thing that I and one thing I was a little bit frustrated with in blockchain was the slow rate of innovation at the infrastructure layer and the if you look at the rate of one of the core value propositions of blockchain is the ability to do permissionless compostable Innovation anybody can come up with a new idea and then go and build it without themselves having to be trusted because they can borrow trust from this massive decentralized source of trust the blockchain

and but that was not quite true if you were trying to build anything at the infrastructure layer because if you want to build a new consensus protocol a new scalability paradigm any of these other things you have to go create your own trust Network which is actually a huge friction it's much much harder than in like a comparable web 2 Paradigm where you say hey trust me and then like you you still need to establish Trust on yourself but it's far easier than establishing a new decentralized trust Network so every new like Innovation at the infrastructure layer needed a new trust Network which is something that I got quite obsessed with this as a kind of fundamental problem and I would say

many years later we kind of figured out this eigen layer architecture the idea that that could be one general purpose trust Network that serves anybody who wants to build new Innovations independent of what layer it is going to be at that's a super helpful uh intro and I appreciate a little bit of the history on yourself do you mind kind of explaining uh the idea of this trustler like so maybe going into like ethereum and how it's how it's secured and then also how you plan to borrow that security through eigenlayer absolutely um ethereum recently uh went through this major event the merge right which moved it from approval work Network to this proof of stake Network and

you know people usually think about proof of stake as oh you know we were burning all this energy into our work and then we're now going to not burn this energy as the dominant feature but I think there is something quite unique and very powerful about proof of stake which is not true overproof of work is proof of stake is entirely in the digital domain what do I mean by that um so suppose you know a node which is participating in the proof of stake system misbehaves okay they sign two things when they're not supposed to sign it they sign an invalid block whatever there is some provable misbehavior that a node engages in and let's compare that

node was approval work node like doing mining versus that node was a proof of stake node where the core idea of proof of stake is you take some amount of digital assets lock them up under the constraint and commitment that you're going to actually perform a certain set of actions that you have committed to which is in the ethereum case block validation you are actually running an ethereum node and uh genuinely participating in Block validation and this is what your commitment is you're making actually a commitment to the ethereum network putting down a stake which is a bunch of digital assets making a claim that you will hold by your commitments let's examine what happens in proof of work when you betray

your work betray your commitments and what happens in proof of stake when you betray your commitments improve of work if you betray your commitments the worst thing that could happen is you may not get your block reward because you know there's a longest chain and you mine something and it doesn't become the longest chain you mind an invalid block other miners rejected the worst thing that could happen to you the worst negative liability that you can face is not getting your reward in a proof of work Network in a proof of stake Network it's not just that you don't get your reward you're going to lose your deposit like you're going to lose uh your pile of like digital assets that you put down

on the ethereum blockchain and this is a huge change in the incentive structure imagine you want to construct uh a digital world of cooperation and in one world the only thing that you have is carrots and no sticks in another world you have carrots and sticks you have rewards and penalties the scope of what systems can exist in one world versus the other world are poles apart like you cannot imagine constructing a society with common law or any other legal system in the absence of negative incentives it's not enough to have positive incentives because your downside is

capped by zero I can do like arbitrarily bad things and what's going to happen like I'm not going to get a reward okay I'll still try it like it's it's going to tempt people into misbehaviors that simply are impossible in approval State Network so proof of stake to me is a fundamental transition from a world where only positive incentives are possible to a world where positive and negative incentives are possible okay so that's a major transition that's what the mud signifies for us as like uh academic researchers of course in addition to like the benefits of not having to uh burn excess energy when not needed but when you think about the um just to complete the story if you think

about trying to apply such a Negative punishment in approval work world what would you have to do there is a minor who is doing some like bad action all you have to do is to go and figure out where that mining equipment is and burn it right like that's really what you have to do to actually penalize that minor it's ludicrous as it sounds that's roughly the effect that is equivalent to what you can do in staking which is slashing slashing is basically the ability to take away your funds when you engage in provably bad misbehaviors so once you have this two Dimensions now what you can do is you can start thinking can I borrow this trust so how is the trust of what is the root of

trust what are the basis of trust of ethereum is that there is this common layer where like people are putting down a large enough pool of money and they're committing to participating in Block validation and block finalization and if they misbehave in any way they're going to lose this uh money so this is the root of trust of ethereum now you can ask suppose I want to use this same Trust in building other things how can I use the same trust Network in actually uh and take it up to support other things that other people may build and I should say that this is not an

originally new question from us because this is already there in the ethereum landscape and thinking this is the Paradigm the initial way in which this is reflected is the layer 2 Roll-Ups right you have this existing trust Network and I want to run way more computation than what this network is currently capable of so I say hey you just do your computation on your own like personal node or whatever but prove to me that you did the computation correctly and if you can do this then after the proof has been submitted and validated on ethereum you still get the same trust that that is done correctly because the cryptography assures you that the thing you did the computation correctly and the finalization of ethereum guarantees that hey actually

this uh proof was verified by all these stakers and included so you get the same security model in the layer 2 paradigm but the the only things that it allows you to do are to basically offload computation right you offload a lot of computation and you still can kind of get the benefits of the uh ethereum trust in this offloader computation but there is a whole host s are in improving the ethereum protocol for example ethereum takes 12 seconds to make a block and several minutes six to 12 minutes to actually finalize a block so it's going to take you 12 minutes to actually get a transaction in and get

economic finality where you're really certified that you will not break it and if people break it they're going to actually suffer an economic penalty and you may come up with a new protocol such as the ones that some of the new layered ones like Aptos and Suey have you know Naval and Char novel and Tusk or bull shark or whatever sets of new protocols that can actually arrive at consensus faster alive at consensus more scalably do more better signature amortization during consensus have an inherent scalability layer built in you may have like many new ideas for how to do all of these things and it's simply not possible to borrow the ethereum trust Network today to actually go for you to go and do all these things

and our goal at eigenlayer since we as academics worked on questions like this is how do we borrow ethereum's trust Network to do all these other things and if the root of trust of ethereum is the staking which is you've locked on some bunch of stake and then you're going to now hold to your credible commitment which is that I'm going to validate the ethereum blocks the obvious question is can you make this a little bit more of a free market whereas a sticker you don't only validate ethereum blocks but you also participate in my other you know sui let's say if it's building on eigen layer on ethereum and say oh I'm

actually running the sui chain I want to run a consensus protocol I want to arrive at consensus and all of these things so as a sticker I'm opting in to participate in this other service so that's what happens in eigen layer eigenlayer is a marketplace where stakers can express their opt-in interest they're opting in right it's not forced but you can opt in if you want you can opt in to participate in other systems that are then built on top of eigen layer so you can think of eigenlayer as enhancing the expressivity and flexibility of what the ethereum trust Network can do what the ethereum stakers can do today they download and run the

ethereum client but they can also run whatever other things other people deploy to them and the structure of how this works is whenever you want to write a new service that's built on top of eigenlayer you have to do two things one is you have to give a node client for that other system that people can download and run stakers who opt in to your system uh let's take for Simplicity there is a a new chain that you're that people want to run they're going to download and run your software for actually running this new client now what's happening is instead of in every blockchain system today where you have programmability at the level of the virtual machine right you can specify

okay what happens in evm bytecode the ethereum virtual machine bytecode or in some other like C Level or other languages whatever different blockchains have different languages you can on Virtual machines you can specify in that virtual machine how you want to execute like a series of smart contracts but you do not have access so this this code this virtual machine code is taken and mediated by the ethereum or Solana or whatever protocol how different nodes behave at different times how they arrive at consensus what all things happen so you do not have any native programmability at the level of the distributed system you have programmability at the level of this emergent interface what eigen layer lets you do is to give you full programmability at the level of

the node software like it's like running a new network you can just download and run this new node software that each node it could specify for each node what the set of actions is what consensus means maybe there is no consensus you just send a certificate back whatever the set of things is that specifies your particular service you can write that into another software but on ethereum so eigenlayer itself is not a new chain or a network or anything it is a series of smart contracts on ethereum so this series of smart contracts basically lets stakers Express their opt-in interest to any set of new services that are built on top so when you're building a new service what you have to do is to you have to write new

service smart contracts that talk to the eigenlayer smart contracts and these service smart contracts specify who can participate which is entry conditions what are the positive incentives when you participate in validating the chain I'm giving you like okay this this many tokens per hour or like per block or whatever some reward rate it also specifies uh what the penalty system is says oh if you double sign on a block which means you sign on two Suey blocks simultaneously at the same block number which is an Express illegal action and you're doing it to attack it it's going to prove to you on the ethereum smart contract that you have misbehaved and

essentially slash you or take your eat funds out so this is the core primitive so there's a two sides of the marketplace one side is each stakers expressing their interest in opting in the other side is new Services creating service smart contracts and a pal service node that you can download and run as a Staker and that specifies the two sides of our Market I'd love to dive deeper on both sides of those markets and if we start with the each stakers so as an eat Staker like what would the incentive be to opt into this network like what do I get in return for doing so and then what exactly would that process look like right so if you know if validators need to run a specific

software would I be able to solo stake and do this or would I have to use like a specific specific liquid staking derivative or it just kind of how does that landscape look for the stakers awesome yeah so let's go over the sticker side a little bit more so firstly we have many different types of free staking so we call this entire Paradigm restaking because they're using the stake to do additional things and the the way he's taking works is there are multiple different ways of doing restaking the obvious easy simple way to understand is liquid restaking what is liquid risk taking you take you you have already staked in some liquid staking derivative you have a liquid

state token and then you're coming and saying hey I have this teeth I have a coinbase seat whatever other things and then I'm going to kind of deposit that into the eigen layer contracts and specify that I'm gonna and specify who's going to be my operator who's going to run the node for me it could be either yourself or you may want to say hey just let the Lido guys run it or let the coinbase guys run it or somebody else run it right like figment or somebody run it so you can State you you first have like what you're staking which could be a liquid sticking derivative that you're locking on and you can also specify who your operator is which could be yourself or somebody else that you trust so that's up to the

Staker because they're putting their money in and they're taking a risk they have a flexibility in specifying who's doing the operations for them okay this is one mode of restaking we called native liquid restaking so you take a look who's taking derivative and then you restrict but you could also be restaking what we call performing what you call native restaking what is native risk taking a NATO is taking you are exactly like Dan asked you are a home Staker or a solo sticker or a rocket pool sticker or some uh you know you don't have a lot of operational infrastructure and you want to participate and also you don't already participate in a liquid striking derivative and you want to participate

the way you can participate with eigenlayer is by setting so normally in uh setting your withdrawal credentials to again I'll explain what the withdrawal credentials are normally when you're speaking you can specify who you're in on ethereum you can specify who is running your node responsible for operations right what their public is and so on you can specify who the fee recipient is who's getting like fee and rewards as well as who has the power to withdraw the stake these are three dimensions when you're staking and the way we engage with solo stickers and others who don't participate in liquid striking derivatives is by asking them to set their withdrawal credentials to the

eigenair smart contracts I'm a homesteaker I set the withdrawal credentials to eigen LED smart contracts and it's it's not the same as a liquid staking derivative because for ethereum they are running their own node right and even after they set the withdrawal credentials to eigen layer what they're officially doing is that giving withdrawal powers to the eigen lab smart contracts and what the eigen layer smart contracts would do is they would let you withdraw the stake whenever you want if you have not misbehaved on eigen layer but you have if you have misbehaved on eigen layer then you cannot it will not let you withdraw all the stake because it will slash a portion of the stake and then only let you withdraw the remaining

portion of the stick which is not slashed by the eigen layer contract s so essentially what you're doing is you are giving you're just adding on this process in your withdrawal pipeline that you have to go through eigen layer eigen layer will double check that you have not misbehaved only then you can withdraw and what this does is this gives you uh and and inside eigen layer you can because you're the solo sticker and you want to participate only in Services where uh you are yourself the operator right like so there are two degrees of freedom now as a solo sticker you could say hey I want to run ethereum node because you know it's you know it's something that I'm contributing to censorship

resistance and I'm very passionate about it and I want to do it but I don't want to run all these Services myself the other services on eigenlayer myself I could Delegate for those services so that's a possibility but it's also a possibility for you to say no actually this service is lightweight enough that my solo staking rig is good enough and I'm going to run these Services myself do you have that freedom do I either say that you know for all these other services you're yourself the uh delegate or you're delegating to somebody else to actually then validate it so that's the degrees of freedom on eigen layer is there is liquid restaking you can take your liquid staking derivative and restake on eigen layer you can be your own operator you can be somebody else

some you can delegate somebody else to be your operator if you're a homesteaker you have full control and you want to be your own operator on ethereum and on eigen layer or you can be your own operator on ethereum but somebody else can be your operator on some eigen lab services so that's the full Suite of degrees of freedom for a Staker all right that's that's a great high level overview there do you mind explaining in what event a malicious actor would actually be slashed and then to piggyback off that um how does the ethereum protocol itself know when uh I guess you know users of eigenlayer are slashed in what event does slashing happen slashing happens only if there is a brewable

fault on as communicated by the service contract so essentially when you're opting into a service officially what you're opting into is the slashing conditions of a particular service contract and a service contract may have for example if you're running a chain the service contract will have a mechanism where like if somebody submits a proof that you signed two different block numbers right like as a validator in the sui Network you actually signed two different blocks at the same height it's a simple proof you just include the two block headers and your signature along with the block header and you know you can ethereum can then validate that

you have actually misbehaved on it and so that could be an example of a service contract but service contracts can have very general slashing conditions for example somebody May write a service contract which says that if this Dao says that you misbehaved I'm going to slash you we don't want to encourage these kinds of things but eigen level is a permissionless system so there is a scope for people to write very general slashing contracts for example if you want to run an oracle service which is nominally decentralized you have like all these people participating and so on but when but how do you know whether there are you know people gave wrong Oracle inputs maybe one way that people do and right now chain link for example as a proposal

which is that there is a backstop Oracle which is you get like thousands of people who are community members and others and whatever to like vote on what the whether the Oracle input was right or not and if they vote that your Oracle input was wrong you may lose your stick so this is like having a backstop layer of course you're trusting the backstop layer that's obvious but this lets you opt into that nuanced slashing condition which you know maybe Dan is okay with but Sam's not okay with and I'm okay with right or it may be that you get slashed if like a coinbase if an aggregate of a coinbase binance and a some other feed disagrees with you so what slashing conditions you opt into is up to your degree of Freedom right like

that's what it is in general but of course we want to Steward it in a way that like we don't get into contentious flashing conditions so initially our idea is we want to have objectively verifiable slashing conditions not subjective Dao based slashing conditions so that's that's the one that is safest for everybody to opt into we're also thinking of building uh subjective veto like a like a dow comprised of reputed members from ethereum and other other community members building stuff on top who could the only thing they can do is to veto a slashing and the reason you

and only if a majority of them vote on it they can veto a slashing and the reason you want it is what if there is smart contract programming errors in the slashing contract because people are writing slashing contracts and they may intentionally are most likely unintentionally create bugs in the slashing contract you do not want an event where like all of it is restaked and then they all get slashed in Mass because somebody forgot to check an if condition or something so we have this so essentially you can think of slashing an eigen layer is designed to be only in the extreme cases and it needs to go through two steps one is there's an objectively verifiable contract that

certifies that slashing has to happen and a committee agrees to that only then slashing happens so we're just trying to create uh frictions on slashing so that's the structure of slashing on eigen layer and the second question that you asked is uh how does ethereum get to know that slashing has happened and here you can segregate it into the two demographics that I talked about the number one demographic is liquid restaking in liquid risk taking there is no need for ethereum to know anything it's the liquid state derivative they're just changing hands from one person to another person so it doesn't affect the ethereum protocol and as far as people setting withdrawal credentials the ideal thing for to

happen on eigen layer would be instantly as soon as slashing is triggered on eigen layer the thing that happens is eigen layer contract goes and triggers a withdrawal of that money instantly because you know that you know whoever has staked they have misbehaved so you can actually go on withdraw it instantly and then slash them so that would be uh the protocol for slashing on on uh the protocol for ethereum to get to know when slashing happens on eigenlayer but this is this technical feature is called smart contract triggered with Royals in ethereum it's not yet there in the the upcoming Shanghai upgrade but it

will be eventually uh there there's a lot of other people for whom this is relevant so we are hoping that this gets implemented but immediately for the short term the way it's going to work is validators when they trigger the withdrawals only then they'll basically get slashed but the reason we don't think this is going to be serious is firstly the up eventual upgrades will be coming which has the smart contract triggered withdrawals and in the meantime anyway people are not yet uh we expect a lot of the initial adoption to come from things like liquid staking derivatives because right now even withdrawals not you can't switch withdrawals without friction so if you can't sell we love data here block reach

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sticking stick liquid staking uh landscape today right so we have you know some Market Leaders with Lido being a large percentage of the liquid state eth outstanding uh you mentioned coinbase as well that's kind of they fall in that that second place uh position is there a point where you're going down that list uh where you feel like uncomfortable using a like a particular uh a particular provider's uh staked eth derivative right I mean that's a great great question it's like this huge risk associated with like uh eyeballs coming at them to to come exploit the eat there so I'm curious if like certain derivatives would be uh whitelisted or what that process looks like yes so zooming out a little bit I think what is

going to happen is and then in general I think for blockchains uh there are things that need to be subjective and this is a great example right like which liquids taking derivatives need to be like allowed right and our general thesis for these highly subjective things which impact things like trust and risk and other things is the Paradigm we call intersubjectivity inter-subjectivity is you're trying to push the agency to the edges as much as possible okay so what is the edge in our Market is instead of eigen layer dictating which like um erc20 tokens which is what these like

liquids taking derivatives are can be acceptable and which are not acceptable in some kind of like a n Mass scenario each service each service like a data availability or a new chain or whatever can specify which erc20 tokens they want to accept so we push that judgment which is a dynamic evolving thing to the edges to the middleware so you are running some gaming service and you don't care you just want to maximize like all the different people that participate you may choose something different or somebody who's very conservative on the extreme end of the decentralization spectrum they may choose something completely different in

fact they may choose to not accept any liquid striking derivative say that only homesteakers everybody else not allowed in fact we think eigen layer by providing this expressivity can actually increase the can actually let the market discover the price of decentralization the value of decentralization and for example you could come in and say that hey only homesteakers can get certain rewards because my service needs to be run on a fully decentralized Network I do not want any centralized operators to participate and you know that's something that you should be able to express and this could increase the differential reward that a homesteaker gets relative to a liquid staking

derivative which is a dynamic we've never had in the history of ethereum is there is no preferential value of decentralization by creating a market for decentralized trust we are letting the market discover the true value of decentralized trust and as opposed to the value of economic Trust which I'm not downplaying for example there may be 20 billion dollar or 15 billion dollar on highly centralized taking derivatives and it's totally okay for that for people to Value it because their system that they're building depends on economic value because they know if even if it's just all held by one entity if they misbehave they're going to be able

to slash that 15 billion dollars that is the root of trust that somebody will operate on some of the services will require native decentralization because they do not have slashing or they cannot have slashing for example transaction inclusion is you know or transaction exclusion is not a slashable event like when you're constructing a chain you know Dan may say hey I saw this transaction and I included it and Sam will say oh no I didn't see it I didn't include it like but he may have actually seen it like censorship is not a provable violation so you cannot slash for censorship and so somebody may say no actually census because this is very very important to me so I'm going to go to the edge and say that I'm going to

run it on the most decentralized Network possible and my rewards only are true to those that I actually led to participate in my system why are they participating they're participating because your new chain or new service has some its own incentive mechanisms which maybe it has its own token and it is giving a fraction of those tokens to these guys it may be that it doesn't have a token it just has a mechanism by which fees paid to that system accrue to the stakers a fraction across to the Staker the fraction are cruise to the innovator or the Creator so it is up to each service to come up with like what the incentive mechanics is and then up to the stakers to then react to it by opting in or not opting

in that is one of the more interesting Concepts I have heard in a while that's super exciting to think about actually like seeing a market price for a decentralized you know validator set essentially um but I I want to move on to uh ask a question I've been wondering which is what what is the difference in security between a roll-up that you know let's say isn't using eigenlayer for anything and it's just settling to ethereum versus a side chain uh or a commit chain like polygon like at this point it seems kind of convoluted as to what security model is the best yeah no it's I okay I think it's clear that the role of security is higher than a commission security not bringing eigenlayer in at

the moment right the role of security is better than eigenous security once Roll-Ups are well developed and actually the contracts are returned there's no governance Hooks and the fraud crews are working and the like whatever like you have a whole bunch of things to get to that but suppose we get to that then the role of security is better than the climate change security so where what is the scope of like a restrict chain on eigen layer like what is the security model that that uh you will inherit okay so the way I like to think about things like chains is instead of thinking of at instead of thinking about security as some abstract concept you can ask what are the particular features that you're

asking in your uh security and I'll list four things I think which are possibly the most important when you're running a chain you want censorship resistance that's one kind of security that you want you want reorg resistance somebody claiming X is a chain and then later Y is a chain that's not that's not valid you want um uh data availability which means you want to make sure that the claimed data is actually published and people who wanted it could have downloaded it at that time and then you want validity right you want to make sure that the data the claim the state transitions are actually true

so when you're building something on eigen layer you have to write specific slashing conditions for each of these things things like censorship resistance don't have slashing conditions because it's not provable unless you want to trust a doubt to like approve uh you know censorship uh slashing but you can look at the other three which are resistance reord resistance is one of those things which is very easy to slash because if somebody did a reorg it's very provable in a finalizing protocol you should never have two blocks at the same height you can ask why did these people sign on these two blocks whatever and then you can go and slash them

and then you can look at data availability which is a little bit more intricate and the way we would suggest if somebody is building on eigen layers is use eigen da which we haven't talked about till now which is just a data availability service run by each takers and one of the key defining factors of eigen Da is that it doesn't require all the nodes to download all the data it is a fully sharded fully horizontally scaled system where every node only downloads a very little portion of the data still you get the security of the entire system and so you you'd want to use something some service like that so that you don't have to to do it just for your chain so it's automatically modular but the most

important thing I think comes on validity because right now what's happening is a roll-up mixer claim and then that claim uh has to be proven onto ethereum before you know that that claim is uh acceptable with the full security what you can do on eigenlayer especially if you think of things like zero knowledge proofs which are basically just Val I think more more correctly just called validity proofs we're just doing validity proofs uh what you could do is instead of having to for a roll up to wait for that validity proof to be returned to ethereum why are you waiting you're waiting mainly because you want to there's a cost of checking even the validity proof on ethereum you know it

may take like a 1 million gas just for that and you don't want to pay it every block you'd rather paid every hour right and so because gas price on ethereum is expensive and and throughput so scarce you want to do this but instead on eigen layer what you could do is you could have like all the eigen layer nodes check the proofs instantly and send you a certificate that the proves have been checked and this could be done at like native latency it could be like 500 milliseconds before which you got this certificate from this committee that actually it's valid and you have that much Economic Security backing it which is measurable right it may not be 20 billion or whatever the ethereum Securities but you know exactly how much has opted in to your particular

like service of validity proof checking and then you got the certificate and then you know people outside right like your roll-up clients have an instant confirmation with very high Economic Security which is not at all dependent on your roll up token or anything like that so this broadens the design space so zooming out broadly what I'm saying is the way we think about things built on eigen layer is not like just take a cosmos SDK and dump it on top of eigen layer I think that's not a necessarily an optimal way to build things you want to figure out like each module like where does it sit best and so and and then compose these modules in the right way in order to get extract

the most power and most scalability and least cost from the eigenlayer Paradigm and the way I think about it is just like dapps on ethereum had a huge composibility premium right like you had you know you have the unit Swap and then you have the uh the stable coin and then you have the RV and all these things composed with each other in some beautiful way what we want to do is to provide this common process Network on which these distributed systems that people are building for sequencing for um for various things for data availability and for validity proof checking all of these things compose to create new chains and systems as emergent behaviors so that's that's our

view on how eigen layer can can plug into the modular Paradigm do you mind elaborating a little bit more on eigen da and how it kind of differs from I guess Celestia or polygon Avail like what's unique about your design choices yeah um I think the most important thing the most obvious thing is that it's run by ethereum stakers so you're inheriting aspects of the ethereum Plus network so that's the obvious thing but there are fundamentally different design choices that underlie uh and Engineering architecture that underlies eigenda as opposed to some of these other systems um

the next I think most important thing the first one is that oh it's run by ethereum stakers and the reason this is important is imagine you're an ethereum Roll-Up there are two aspects to why you want to be a roll-up you want to borrow security that's one aspect the second aspect is you want to be aligned with the ethereum community and the way you you know the the way alignment is created and totally permissionless systems is by aligning economic incentives right you're basically saying hey I'm a roll-up I'm actually paying a certain fee to the eats takers and eat holders and so on so they are actually getting a portion of the value from me running the system because there's in a totally permissionless system there is no way to

go and make a deal with the ethereum company and get alignment the only alignment happens out of permissionless economic alignment because you know the economics of the system basically align itself with the ethereum ecosystem now imagine you're a roll up and you want to use a data availability system and the the structure of a roll-up is that the dominant aspect of the fees go to the data availability system the dominant aspect of the fees don't go to settlement because in settlement you're just taking one validity proof but the data availability is linear in the total number of transactions that you have actually uh you know executing on your rollup so the dominant fraction of the fees go to

the data availability layer and if you're basically paying all that fee to a different ecosystem right which is not ethereum then you are much more in the economic sense uh a Celestia roll-up or a polygon available than you are an ethereum problem so today pre-eigon layer pre-igandda the only way that you have to be a pure you know to have full economic alignment with the ethereum ecosystem is by actually writing data into the ethereum like protocol which is you know as call data into transactions and so on and with the upcoming upgrades of eip4844 which is called protodon sharing

and downshotting you this capacity increases and we're very uh favorably uh inclined towards these upgrades because these provide the full ethereum security as well as enhancing the data availability capacity but from our own uh you know team perspective we are actually way more bullish on crypto than that is implied by the data bandwidths of like 4844 and uh dangshotting you know having tens of kilobytes per second in 4844 and maybe a megabyte per second in dunk sharding over a several year period we think it's not enough there's going to be very

sophisticated expression of digital platforms like fully on chain games fully on chain social and things like that and like we're building the substrate for the metaverse we need to make sure that there is much more data bandwidth that is available and identity is taking a view that we need gigabytes per second or maybe even a terabytes per second in like a five to ten year period and we're starting with a platform that can already handle like 10 megabytes per second so eigen da is uh so that's that's a economic alignment so the first point I said is the uh ethereum stakers are being uh participating which means you get economic alignment right that's

the uh it's a long story for that but the second one that you get with something like eigen da is it is the only thing that happens in eigen da is data availability this is very different from uh other systems that have been built like polygon Avail or Celestia and so on where you have a new trust Network which I already talked about but you also have a consensus protocol running on top of which data availability is running because they're building new ecosystems they have to do everything right they are new trust Network they have a new consensus protocol on which their data availability runs eigen da is a pure data availability system there is no consensus which means you know consensus the the formal way of

defining consensus is a total ordering of events and there is no total ordering of events happening on I get da eigen da is a pure data availability system and this actually provides insane amounts of scaling and latency ability okay because you're not totally ordering events what could happen is let's say Dan and Sam want to write a huge amount of data into eigen da Dan sense is like whole bulk of data into he opens separate connections sends the data to the eigen DA system he gets a certificate immediately saying his data is available and Sam in parallel is doing this and the system that there is a complex process in the distributed system if two things happen simultaneously how to

resolve the ordering among them is a very complex process which is what takes up pretty much all of the latency and overheads in a consensus protocol is the full ordering of events but in eigen da what we would do is we would just give Dan a certificate saying his data is available and Sama certificate saying his data is available how these data availability guarantees are ordered is not up to eigen da it's up to our mother chain ethereum so when these certificates then roll back into ethereum that's when events get ordered so what this does is this breaks the the latency requirement for when you can get a data availability certificate which is a pretty insane thing like on eigen da you could get a certificate for

data availability in 500 milliseconds you send the data to the DA system you get a certificate I'm just talking about the theoretical limits right like you can get a 500 milliseconds and you're not waiting for this to be returned into the ethereum block you can write it later but you who got the certificate the Quorum certificate immediately know that the data is available with the eigen da security which is this is a superpower in designing things like I want to build an Mev system where one of the things that the Mev relay does today is it guarantees that the block Builders data is available it is a single point of centralization and we talk about a lot in the theorem ecosystem like how much this is a

problem but you can completely decentralize the relay using something like eigen da so the scope of what can be done when you have a data availability system with ultra low latency is actually quite Broad and the reason we can do it is it is not a chain it is not a chain it doesn't give you any guarantees of relative ordering but that's exactly all you need like the block proposal in an Mev system needs to know that the data is available they don't need to know oh whether Builder wants and their data first or build to Center data first that's not the claim that they're verifying so by breaking everything down to their atomic features the only certificate that idea is giving is that of data availability rather than

an ordering among all data availability certificates actually gives us massive scope to innovate on the architecture both scaling latency I just highlighted latency but I you know there's a whole other reason why similarly throughput can be massively turbocharged because the only thing it does is data availability it doesn't do anything else and because it is so native to the ethereum ecosystem because it's run by ethereum stakers and so on it can participate in the Mev management and other things that are part of the ethereum ecosystem it'd be rather weird that you know to do an Mev check on ethereum I have to go to some other ecosystem and get it checked and come back it doesn't really make sense so that these are some of the benefits of

The eigen Da system that we're building yeah it's it's so like I hope uh our producers like just cut to my face smiling that whole time because it's it's the value prop is really exciting uh and it's kind of really pushing ethereum uh pushing it further along in its scalability roadmap so super exciting to me and when I think about you know so like my understanding is again d a is going to be a use case built on top of eigenlayer and if we think about like what is the scalability limit or capacity of eigenlayers so can one like let's say you know it relies on state staked teeth to be restaked to each different use case that's built on top of eigen layer so can one staked eth be restaked to multiple different use cases or am I like limited by the amount

of total native stake teeth a great question so in fact all that I do is every unit of stake is restaked on every service that's not ideal okay why am I seeing this and it it triggers some alarm bells in people's head they're like oh man this is over leveraging stake across all these things and so on let me make an analogy which will make this maybe much much more uh analogous to an existing situation that exists today every unit of stake supports every dap built on ethereum every unit of stake supports every dab

built on ethereum okay and oh my God it's over leveraging it's not going to work it's not new people said this about ethereum when people talked about you know having a common platform you know from the Bitcoin days when you first start talking about a universal platform on which all the different apps are going to live people said hey how are we going to have enough security to support all these dabs the apps are going to keep growing and then like what happens you know guess what happens eat grows in value that's what happens and because you know go back four years right ethereum had like maybe you know imagine it was proof of stake just for Simplicity it's the

same story for proverbs uh four years back the total like uh available staking on ethereum was the total available uh total market cap of ethereum was maybe a few hundred million right and it was supporting like few hundred million worth of debts and if somebody came and told you no no ethereum is going to support like 300 billion dollar worth of dabs sitting on top be like you know that doesn't make sense it's super over Leverage is kind of crazy it's gonna blow up but it didn't blow up and the reason it doesn't blow up is eth has grown commensurate in value to the total applications built on top the same Dynamic is is possible on eigen layer eigenert is funneling most of the value back to the eat and heat itself grows in

value relative to every application that is built on top and just like ethereum created this massive pool security network effect as you have more pool security it attracts more applications to be built on top because you know I don't have to go searching for security I have a place of security that I can come to it's the same thing that can happen with eigenlet okay having said that let's say you are very concerned that okay if I tell you hundreds of these different distributed systems are relying on the same ethereum security well it is large it is 20 billion or whatever that is supporting all these things but you're like hey but I don't know how much personal security I'm getting okay then actually the same answer same question

you can ask us a Dap and you don't have an answer to it right you may want to note that but let's say I want to give you an answer and the answer that we'll give you is you can buy insurance bonds on slashing okay so because I have 20 billion risked on eigen layer 20 billion can be redistributed when there is slashing and where when when this 20 billion dollar Quorum misbehaves not only on one service but on tens of services then there is a contention all these services are asking who's the slash money going to go to and the way we resolve it is you have pre-bought insurance bonds against slashing so you can say yeah actually out of this 20 billion I'm running a bridge and it's

very important that I have more uh slashing bonds than the amount of value I'm transferring every hour or whatever and I'm going to basically make sure that I buy insurance bonds and insurance bonds of slashing will be on a market that you can actually buy so what's happening is you are getting the benefit of pooled security right because to attack your service it is not sufficient to attack your service it is the guy has to coordinate across all these 20 billion dollars of capital and try to attack 30 other services which is already a huge bar and and you have over security for many applications but no you want more we can actually give you more by actually selling your insurance bonds on the particular slashing priority that you get so you will be guaranteed like that amount of

slashing insurance bonds no matter what happens so that's the Dual model of uh Security on Ireland that's a lot to digest there so it sounds like a really ambitious uh road map I guess what is the timeline for these things like what order are you building them out and then also I didn't know if you had any update on mantle I saw bit Dao is working on a module L2 that's going to be with uh both eigen da and eigenlayer so I was curious how that was coming along yeah we're very excited about uh mantle and uh uh the uh new Innovations they're trying to build bring into the role of Stack where they're plugging into things like eigen da using eigen layer more

broadly across the across the stack you'll see more announcements on this on that coming up you know we're doing a giant Twitter spaces later this month um beyond that as far as a road map uh our vision of our you know project is basically to maximize the surface of permissionless innovation like I told you the reason we got into this project is we were kind of frustrated at the rate of innovation at the core infrastructure layers and we think these an amazing amazing value proposition of blockchains which not enough people have

understood is that it enables permissionless Innovation and it's such a powerful thing if you think about it right like the innovator doesn't have to be trusted and so our goal is maximizing the service area of this permissionless innovation um but to do this we need to have enough trust in the system we need to have enough restate so we're trying to bootstrap the system by initially building one service ourselves which is the eigen TA but also bringing on a few Partners to build services on top which are you know which we work together closely so that we can actually monitor how Integrations and other things work and then eventually so we hope much of this will happen this year

eigenlayer eigen da get launched on mainnet maybe some partnered Services get launched and then after that what we want to do is to open up the platform so that anybody can build any service on top of eigenator which is really the core promise of the system all right sure um the people want to know the people is probably me but this just sounds like such an attractive value proposition um you know increasing the service area and design space for developers is something I'm super passionate about and I'm really intrigued by and as well as improving the the scalability of ethereum ethereum and if we also add to that now this Marketplace for bonds you know I see a lot of value being thrown

around in this ecosystem so I'm curious like how is that going to flow back to eigenlayer itself and like is their plans to work a token into this or is this more of you know like a public good type design yeah so there are certain governance levers that are needed to maintain the system like for example I was talking about a veto for uh for slashing that could be either run by the Dow itself and we don't like uh having uh a tokenized Dao fundamentally running things like a slashing veto because what if you buy a majority of the tokens and then you can attack the system so there's a clear crypto economic cost whereas I think you know getting reputed members of the community

is a much more solid way to actually man a Dao like that so we're working through various aspects of governance but uh we do want to decentralize for example how do we elect the reputator right like is it going to be just us it could be in the beginning but eventually we want a governance mechanism for things like that um as far as you know value accrual I think the core idea is simple you know a fraction of the fees paid to the stakers is taken by the the eigen layer system this is required for not only maintenance of the operations which is for example there is fees to be paid there is heat gas to be

paid for like updates to whenever you write like a quorum signature to ethereum we have to pay a fee and all of these things so there is concrete operational expenses as well as the expense that goes into development and Innovation on this platform so that's really the core model is you know take a fraction of the fees that goes to the stakers got it now that's honestly a perfect spot to to wrap it up but I do have one more question and thank you so much for being so generous with your time but um something I was meaning to ask was uh I feel like Bridges and oracles are too kind of really important uh parts of crypto and they're also probably the least secure You could argue so have you

talked with any current projects in the bridge or Oracle space that are interested in you know integrating with eigenler and if so are you able to share who we are talking to people I'm not able to share who but you can expect some some information on that in the coming months yeah there is a lot of so just to highlight that a bit it's a little difficult to build slashable oracles on a restaking paradigm because you know who is what is the ground Truth for like how how do I objectively prove that Bitcoin to USD is not one dollar but twenty thousand dollars right like it's not an objective fact it is relative to something

happening in the real world so there is a lot of intricacies in designing careful articles but Bridges is one thing where actually you can potentially do it because it is claims about another blockchain and a blockchain itself has like an execution semantics it has a consensus semantics you can create slashing conditions relative to them so that's the space of uh things that uh that can be built but there are you know oracle designs like the chain link 2.0 Oracle design can be adopted on something like eigen layer oh I'm excited to keep tracking I can learn closely we're gonna have to have you come back on in like three four five or six months because I could sit here and talk to you for a whole another hour

absolutely love to do it this was such an awesome conversation yeah thanks so much we'll see you we'll see you next time