Lanski - Taking decentralization beyond current borders: A holistic framework for community staking

Transcript

uh hello everybody I would like to introduce our next speaker this is uh langy from D node he has a proposal on how to overcome the limits of solo staking thank you very much how are we doing um okay so uh you have 5 minutes to go to the main stage where there's Alex Stokes with a fascinating call about me if you're staying here you're either a lios spy or uh or you know me so so appreciate appreciate you being here um okay so

um taking decentralization Beyond current borders when I talk about borders I talk B I talk about borders quite literally um before we can move onto the centralization I think it'll be good to do a big refresher of what the centralization is because we sometimes can get lost about what's important about the centralization whether centralization has value in itself or decentralization is a means to an end well decentralization I like to see it as a gradient with emerging properties what does it mean it means that if you have a

system that's designed for bantine fault tolerance and all of these fancy words that we have for decentralized systems but you have only one node you have a centralized system you have one single point of failure you have one database we have no redundancy so you have basically a centralized system if you happen to have two nodes in that system you got some very very basic type of data redundancy those two nodes could be for example uh maybe in the same house in the same data center so you get like some sort of uh data redundancy but not decentralization yet um if you have these nodes in different locations all of a sudden you have

resilience to natural disasters this is an emerging property that emerges by the fact that they are in different natural disaster in natural uh areas in different areas um if you have nodes in different Power grids you are resilient to the power grid going down if you have nodes in different political jurisdictions you are resilient to government interference meaning that if a government in one of these jurisdictions want to tackle or attack your protocol you don't care it keeps running the protocol keeps running because it's in more places uh nodes in different type of Hardware means that you have resistance to Hardware

vulnerability zero day exploits etc etc different client implementations why do you think we have prism Lighthouse load star Aragon G if there's a bug in the implementation of one of them the protocol will still keep going um and then we have like system specific properties right like uh validator ownership what is the hash rate concentration um you have different needs for bandwidth you have the storage concentration if it's a system that is uh very dependent on storage like uh ipfs filecoin the sort of systems and this is nothing new this is this is not new from the centralized systems these is a concept uh called cmf common mode

failure which in aerodynamics is used all of the time if you have a plane and you only have one sensor that detects temperature and the sensor controls a crucial part if the sensor goes Haywire the whole plane goes Haywire so you need to have different types of sensors etc etc this is not new to the centralized worlds all right we know what decentralization is right now we have like a good understanding and a Common Language a common base uh to start the discussion so let's talk about solo staking who is solo staking in here who has a validator good okay that's we're like two people in the room so two of them staking is

good um I'm exaggerating [Music] um solo staking is considered the gold standard of the centralization it's not the gold standard of performance it's not the gold standard of uh economies of scale or cost efficiency but it is considered the gold standard for the centralization and we have established why the centralization is good because of this previous slide right so Sol solo staking Works in any country anybody can use it uh it works with different isps it works with different Power grids and it is small and Nimble

solo staking favors small and Nimble uh setups uh it favors variety one uh one node caters to very few validators so if one node goes down the person who runs this node will be affected but the network as a whole won't care that much so it's very resistant it contributes a lot of value for the network downtime is Irrelevant for the network and your note going down is not a point of failure for the network and that's why ethereum is designed to be very very permission per um very very permissive with this sort of setups meaning that the downtime is not penalized a lot and what is penalized is correlated penalties meaning that uh if

you have a big operator that goes down and thousands of validators go down at the same time you get correlated penalties and uh you get a big penalty this is meant to disincentivize centralization right so where where has this get us where like we have a system that favors the centralization that favors solo staking and it has gotten us to more than 8K 8 uh 800k validators that's a lot of validators and in 13,000 nodes in more than 85 count countries so overall having a protocol that's geared towards favoring Solo stakers in some

sort of way and these incentivizing um uh big actors has served us well um but let's dig a little bit deeper on what are the limitations of solo staking how many of you know what the Nakamoto coefficient is Nakamoto Co efficient noan that's right it's the Nakamoto coefficient is the number of entities that need to be compromised to compromise the network right and the Nakamoto coefficient uh Sometimes some Puritans

like the Nakamoto coefficient can be uh decided for many many different vectors many different verticals like uh how many uh counries need to go down how many machines need to go down how many entities how many owners of the network need to go down um so tell me a number about the ethereum network what do you think the Nakamoto coefficient is for the ethereum network how like like overall if we take the worst case scenario very optimistic four five very optimistic more than a third of the nodes are in the United States and more

than 50% between the United States and Germany so this is geopolitical Nakamoto coefficient and that's why I mentioned this it is not necessarily A logical or a architectural Nakamoto coefficient it's a geopolitical Nakamoto coefficient and it is of one we don't finalize if we have uh the United States going black for whatever reason right and if United States and Germany go black then we we don't have ethereum anymore basically so so okay so solo staking has served us well and this is arguably a very very very um uh unlikely scenario but it has

limitations why this concentration in these countries well these countries um are countries that have disposable wealth meaning that people can take risks with their money cryptocurrency is still a very risky Affair and uh people in rich countries can afford to invest on cryptocurrency and put 32 e in there there's also a lot of availability uh of information in English and rich countries tend to use English English as one of their main languages most people T to tend to speak English and be able to read this information uh cryptocurrency evolves very fast and information often is only available in English because it's produced in English and by the time it's been translated to

another language there's already a new paper in English that disproves the first paper so to speak or a new EIP or a new or a new discussion the discussion the evolution of it happens in English and finally um the the rich countries have trustworthy internet connections and power grides so we have the concentration so people tend to trust their validator setups a lot more if they are in rich countries now solo staking has limitations but traditional pools are not going to help us because they're based on the same countries we have Lio and coinbase having more than onethird of the ethereum network so the Nakamoto

coefficient when it comes to entities is of two now Lio over there will tell me yeah but Lio what can Lio do what can Lio like it's it's very secure it's different uh different validators sure but politically they are still controlled by two entities and if there was an allout war on crypto that would happen I hope it doesn't happen now a little intermission of why am I talking about solo stakers and why why am I bashing on solo stakers on a solo Staker uh conference like I'm not I swear I swear I'm not yeah there we go um it's ah I I made them freak out with this it's a it's me it's my it's my

slide um yeah so DAV note D note allow so basically why I'm bashing is because I think we can overcome these limitations while becoming we're making ethereum even more decentralized and here is who I am I am Lansky COO of dab node and dab node is a free open source project that allows you to run validators and other nodes with one single click privately on your own machine and without any technical knowledge uh DB node comes in two flavors plug andplay Hardware that's pre-installed with our free open source software and of course the free open source software that you can install anywhere where you want this is how it looks um we have a DB store where you can install all of the DB stores lsds

rocket pool Hopper privacy networks Road key for your accounting uh Avalanche and op node Etc you can you have this dab store which is the centralized is the Smart contract on ethereum and the distribution of the package happens over ipfs so you never control you never connect to to a server that we control and then we have like nice UI things that we have developed like these stakers UI where you can choose an execution client a consensus client the keys on the web designer you can choose which Rel layers whether you want ofac compliant or not and all of this without touching any sort of uh command line so da note is great for non-technical users because you never

need to touch command line it's open source it has a permissionless SDK where you can create you've seen all of these apps like Rod key and stuff you can create if you have your own chain you have entty chain then you can you can create a package and put it on the DAP store uh permissionless with our SDK uh it has built-in tooling like a VPN to connect to your dap node from wherever you are even if you have this server in your own home you don't need to deal with IPS or networking we take care of this with a wire guard open source VPN as well um it is great for POS staking and runs great on normal Hardware you don't need anything special a nuk uh and we have an amazing community that will help you debug or troubleshoot or anything

anything weird now ethereum uh a little bit what happens or with ethereum um we don't know how many dap nodes are out there and we don't know how many validators are out there we have no idea we have no way to know because we have no Telemetry when you run DB node you run it in your own machine and there's no Telemetry you this is you install the software from GitHub and you put it in your machine but when you use dab note the default validator graffiti is validating from dap node and from this we can extract unchain data of all the validators that have left the graffiti without changing it and these and then we come to a minimum of

3,376 validators as of yesterday self-reported as using dap note which is around $228 million of solo sakers using dap node so that's I mean with this Authority if this is any Authority um I think we provide some value and this is how we want to provide a little bit more value by moving beyond solo scker I we see the limitations for it and we want to move Beyond it one last thing and I got a shield that because we secret launched our smoothing pool a smoothing pool for any solo stakers that don't need to have tap node so solo stakers here um you are subject to a lot of variant when it

comes to me rewards and when it comes to high fees and when it comes to block proposals so you don't know when are you going to propose a block and if you're lucky you're going to propose more than three if you're unlucky you're going to propose less than three so subscribing to a smoothing pool allows you to earn rewards consistently and smooth out these rewards same for periods where the fees are High um maybe you propose three blocks but they're all at at moments where the fees are really low um and uh finally the me Lottery uh you don't know if you propose three blocks a year on average which is you take you get to this number by multiplying uh the number of validators now between the amount of epics sorry of slots in a year and you

get that you get three of them um so uh it's very rare that with three blogs you'll get a lottery blog they're called Lottery because they are rare So subscribing to mvbs clothing pool can substantially reduce this VAR these variants and for most people that will make them more profitable so the launch the official launch will be next week but it is already live since yesterday and you can already subscribe to your validators by going to smooth. dao. and this is the alpha if you do that we are currently donating you see this donate button over there this is a public goods funding mechanism every single you can donate

directly to every single solo Staker by donating to the pool every single solo Staker that subscrib to the pool of course so when we have critical mass of solo stakers subscribed to the pool we can literally incentivize solo stickers and bump up their rewards by donating directly to the pool so not only it's just beneficial and you will get more rewards but we will do campaigns as a community to get people to donate maybe a gcoin Grant maybe a giveth Grant to donate directly to all of the solo stickers that are in the smoothing pool now enough with the intermission now you know where I come from so now you know the problematic and the good news is that we

have the solution already the solution is already exists we just need to put the pieces together so number one we need liquidity if we need to put more validators in places that are not centralized that are outside of the US and in Germany and Europe and the Western countries what we need is liquidity um we need permissioned and permissionless models to accept new node operators um these new models usually currently require either a bond like rocket pool you would need a bond of 80th or a DVT which is not clear how this is going to be or what Bond you're going to happen you're going to you're going to need but uh but liquidity but you you got to convince these people you

got to convince these people the liquidity providers the people that have liquidity like Lio Lio gets a ton of liquidity uh ether do5 has liquidity uh steakhous has liquidity a stake wise V3 will create vaults that will be able to aggregate liquidity um so all of these have the liquidity but how should they trust a node in Kenya the other piece of the puzzle is communities communities that are uh groups of people that translate the language that try to overcome this language barrier that we were talking about uh people that have ability to pull economic resources and people

communities that already exist and that already are embedded into the ecosystem we have eth kipu uh eth KL we have like a bunch of uh different communities all over the world that that could go to these liquidity providers this liquidity aggregator so to speak and and say hey we want to run validators for you and this is where Lio Community model uh module is going and where the volts of uh um St V3 is going and where the operation s Staker from either f is going etc etc and now finally but okay so even then if I am a community in Kenya it's going to be hard for me to convince a liquidity provider that to to put liquidity in my node because it's

not going to be reliable so here's where the the pieces start coming together you need Hardware infrastructure that thanks to the software layer all the DVT all the DVT Solutions have um you can run it on different Hardware that because of the qualities of DVT you don't need even to have it 100% up time you don't you don't need to have these nodes up all of the time you can have lower performance because if you're part part of a group by the way everyone aware of DVT if you've been listening in this conference you probably have heard of DVT yeah is there anybody that doesn't don't be afraid of raising your

hand okay everybody knows about DVT perfect um so yeah thanks to DVT it becomes like basically you can these communities have the power to organize and offer performance that's very similar to a professional operator and in any case even better than a solo solo Staker if you were saying that solo Staker was what the protocol was designed for and the protocol was very permissive and accepted um the the the fa tolerances or like the the little ups and downs of a solo Staker when you are a community Staker this is these variant is even less so you're even uh better than a solo Staker so we have the four pieces we

have communities that can run Hardware infrastructure that runs software DVT and that can that has the ability to running all of this stuck to present themselves as trustworthy node operators for liquidity providers so they are able to attract liquidity and become node operators for these liquidity providers or for personal entities or for even for themselves so this is not fantasy this is happening there's the DV stakers group uh that reached out to us and said like hey can we put a dab note in Kenya

and we said yeah and uh and we put a we put a dab note in Kenya and it's uh there's like a bunch of uh DVT notes with operation solo Staker uh we're building a block with eth kipu h here e kipu there we go uh we're building a note with e uh a community note this one is in Kenya uh this one I don't know where that is eon of Africa but yeah we have like nodes all over the place that all of a sudden they couldn't participate in the network directly because they didn't have the eth and they didn't have the reliability and now thanks to that four layered stack they can so communities are spread out all

across the world they can gain access to revenue from the Bas layer that is nonc speculative Revenue if you believe in eth um it is low investment but you get high high high exposure to the upside of collecting this base layer this base eth and it can be very useful for redistribution of wealth as well for the decentralization of the network it can be very very beneficial for the network and for breaking through this Nakamoto coefficient of one so one of the things that we are considering a DB note this is not a satanic pentagram um this is a

cluster of five nodes and when you have a cluster of five nodes you don't actually need them to be running full nodes you don't actually need really beefy machines and everybody to run a really expensive machine you actually would need only one or two beefy machines that are able to run a full note an ethereum full notes and the other one could be the backup and the other ones could be like armm raspberry pies really low powered machines that really only have like a key share and they keep signing these attestations and they keep signing these proposals um and they connect for Beacon and execution they connect to these two so we get a setup that overall the cost is not much higher not a lot higher than what we had before for solo staking and it's a lot

more resilient it's a lot a lot more resilient do you get a coordination layer based on the community that can also coordinate and Aggregate and be able to attract liquidity because they are semi-professional they are Community they are new class of stakers they're Community stakers um and with something like this uh it can become a reality real quick so who thinks the bull market is coming so it's some people think that it's already here beautiful that's perfect so don't be the Virgin defi crypto bro don't be ex liquidity don't like ta is not a thing all right I love

this meme I made it myself um and uh what you should do is be a Chad Staker stack lsds on your machine like their pancakes and this is uh a very very attractive non-speculative or at least not that much speculative option that you have for this new bull market and capture all the fee Revenue that will happen if you want a DB note hit me up and you can install it it's free open source software and I can teach you how to do it you can go to our website we have tutorials we have everything db.com um there is the Twitter for DB node you can change Twitter for letter X apparently I heard and uh and follow

this Paul Lansky that's me and join our Discord to have some proof that we are not coming out of the woodwork we we were there and we are uh we in fact have a really strong community thank you very much thank you very much Lansky uh we have a few minutes for questions if anybody has one I feel like the president now all good okay thanks you again perfect thanks to you guys you missed a really good talk on the other on the other