Nick Steinhilber, Mike Leach (Wander) - Decentralized Infrastructure for a Utopian Future

Transcript

okay next up we have Mike and Nick who are going to present as a utopian future there we go well thanks everyone for coming before we start um just want to give a quick shout out to eth zaker for putting on an incredible event uh it's events like this that makes ethereum so special uh I'm Nick this this is my partner Mike we're the founders of no set and we're helping to build a decentralized infrastructure for a utopian future all right so I promise this is going to be a relatively positive presentation but first we have to get a hard truth out there for one the ethereum vision is fully inclusive

anyone in the world should be able to use the network to transfer value in the same way that the internet has been used to transfer information for 50 years now however the current design of ethereum's infrastructure layer mostly staking but things like L2 sequencing building searching the list goes on unfortunately it has become very exclusionary in practice so today we're going to discuss the work being done to change that second statement to be just a little bit more utopian we live in a semi- centralized world that is more fragile than we like to admit if an operator with thousands of validators is slashed the web 3 world collectively panics that's not

acceptable ethereum can't take on the world's financial needs if value can be erased so quickly so how do we end up here simply put the ecosystem is highly competitive and requires considerable technical skill high levels of capitalization and Business Development efforts to succeed such significant barriers to entry make it difficult for decentralized actors to thrive I'd like to note that this is not unique to ethereum or proof of stake Bitcoin miners face the same uh pressures as well in the world we live in today these barriers to entry are the cause for centralization as an example because permissionless is susceptible to civil attacks most permissionless projects

rely on cryptoeconomic security also known as bonding to align incentives this means that you need considerable assets to participate not very inclusive is it obviously ethereum is not not a dystopia but it is imperfect ethereum needs diversity to reinforce its credible neutrality which means we need more variety and governance mechanisms client software implementations operator geographic distribution and operator types to fulfill ethereum's Vision so for just a moment let's just imagine that these barriers don't exist uh let's let's imagine a beautiful future a utop if you will what what

would that look like so for one providing infrastructure is still critical so it would still be rewarded really well but what if instead of paying specialized centralized entities we could include absolutely everyone to borrow one of vitalic Dreams the average person should be able to run a validator on their phone perhaps without even realizing it in this world the barriers that currently exist today are gone anyone can help out no matter how little time or knowledge you have and in this world stakers don't need to be Professional Engineers with high availability setups complex expensive Hardware because in this world decentralized individuals outcompete

centralized entities in short the utopian vision is one where web 3 infrastructure is instead subjected to decentralizing forces so let's talk about what's being done done to get us to Utopia and one problem that still remains unsolved First Trust requirements are the most obvious problem with web 3 infrastructure and so they get a lot of attention ethereum's cevs are implementing uh several key upgrades like eips 7002 and 4788 and Apper Innovations like DVT and ZK Oracle systems are attacking this problem higher up the stack when it comes to

education Community organizations like ethereum found and eth Staker are doing a fantastic job providing documentation and guidance to new users on the hardware front there are plenty uh things to look forward to here like State expiry and data availability sampling however this still leaves us with a problem of fragmentation which remains as the biggest unsolved problem in web 3 infra as of now there simply isn't a simple way for projects to hook into a large decentralized group of operators without building their own commity Community from scratch this is particularly problematic for projects that can't afford to incentivize operators heavily yet still have the same critical needs from the other side

operators have to actively seek out projects to provide their services and participation is complex and costly because the operator tooling for every project is unique to fix this we need a way for the average person to automatically hook into New Opportunities what we need is holistic technology platform form to connect operators with projects in conclusion someone needs to build real world relationships between protocols and operators and even more importantly we need an extensible open standard for anyone to benefit from this effort of course it's critical that this remains free and open so that we don't create a single uh sort of centralized entity that's controlling things in

between of course this is exactly what noet is building we made the problem statement now we're going to solve it so an open platform to connect node operators with projects that's what node ultimately represents if you're a node operator you can work with node set to discover new opportunities to earn and if you're a project looking for decentralized infrastructure noet can help you connect to a large network of very capable totally decentralized operators so there are a couple things we want to do to empower the individual operator uh so considering all the centralized forces we previously mentioned we think it's critical to build a platform that caters specifically to the needs of independent operators connecting them to protocols

and services in need of their skills and compute I want to reiterate we're focused on Independent operators and small medium business entities not globally scaled professional staking providers we see a number of opportunities to empower these smaller entities First Independent operators generally don't have industry reach or the ability to Source Capital at scale we aim to build relationships with protocols businesses and service providers on behalf of our operator base our desire is to unlock access to those for those who don't have the resources to compete second independent operators cannot build differentiated products with Partners via custom Smart contracts

or technical Integrations uh nor do they have the resources for professionalized audits no set is building a robust engineering organ gation to serve this need finally independent operators lack the necessary tooling and automation infrastructure to easily access New Opportunities this limits the potential world of operator participation and artificially restricts operator Supply while many ad hoc efforts are underway across the ecosystem to improve the situation more generally we hope to accelerate this and uh build our own infrastructure if necessary so this is the simp simplified architecture that we have for the operator experience on no set we're

still in the early stages of building out our vision but we ultimately want to create a platform where anyone connect to new opportunities to grow their operation further you can see all those different opportunities down here but realistically the the list is endless um we we could keep going you'll see a little bit more uh a little further down but um after the idea is that after installing hyperdrive our node operator client um this client software will automatically connect you to packages that hook you into New Opportunities uh either with or without your consent depending on how you want to set it up um obviously you're going to have to uh you know make sure you trust the repositories that you hook into if you want to do it automatically uh but the vision is that

straightforward you install a single piece of free and open source software and suddenly you're earning more with the exact same setup as an example let's say I'm a small home Staker with just a few validators and and I'm making a little bit of eth all well and good um but I bought a big disc drive for this currently you need that once State expiry is implemented I now have far more storage capability than I actually need in order to do my validation duties um so simply by downloading hyperdrive now I can hook into a way to fill up my drive with data from protocols like ipfs or we were speaking to portal earlier there's a lot of data availability Solutions out there

that need storage and are willing to pay for it so over time my home operation is now providing numerous services and earning multiple revenue streams from the same device nothing has changed except for I've installed hyperdrive new opportunity no downside the only step that I had to take was installing this thing going through the you know very minimal installation process so for some opportunities it won't be that automatic obviously uh if you want to participate in something that requires user input but you will have to explicitly install that package and you know run through the installation uh but it's as simple as a single command the idea is it should be just like a package manager we expect that anything that has

manual setup steps are probably going to provide higher benefits and uh some of the projects that we're working on are good examples of that we'll get to that in a little bit but the idea is that you can discover these packages on the official no set package repository website or you could just if you don't trust us for whatever reason you could go to some Fork or make your own or again the possibilities are supposed to be endless here so on the organizational side um organizations face their own hurdles when it comes to putting together a decentralized strategy for their products first there is the challenge of access there simply isn't a way to plug in to large groups of decentralized node operators as things currently stand each

and every organization has to essentially scream into the void and hope that someone hears them if they're lucky enough to get operator interest uh they have to think about Community uh building and ongoing management of that Community if you don't have the luxury of time to build such a robust Community Protocols are stuck in the unviable position of enticing operators with large incentive programs and and substantial budgets and of course there's absolutely no guarantee of success we expect platform lock to be a growing issue that uh many new protocols start to face when it comes to Mark when they come to Market and you know our goal is to really eliminate this pain and make it straightforward to Tech technically integrate the no set platform and its

growing population of operators with your protocol or service we should maybe mention that we have currently about 100 node operators and we haven't really advertised at all mostly because it's easy to say hey join we'll give you free eth that's right it's not a scam I promise you don't have to send us one eth we we're not going to send you two back or whatever um we don't know vitalic although we'd like to that's right but you know this will grow thousands of node operators yeah we're lucky enough to be sort of plugged into the rocket bu community and we think that many of the not operators there will be more than happy to participate in a system like this and you know frankly when it comes down to it our the bottom line is that we want to enable protocols to focus on doing what they do

best and really that's building products that Delight their users not focus on recruitment yeah so right now set itself is the only entity building for our platform uh but this is the other side of the equation from the architecture that I was talking about um before it's the same architecture just sort of the flipped version of it um we expect the value of this approach to be pretty obvious to every project if you need a set of operators for your network or your protocol it should be easy to just Define the requirements and then immediately establish those relationships just build a noes set package or reach out to H we'll help you build it um as an example let's say I'm a game I'm building a game that needs some distributed infrastructure or I'd

like it to be distributed ideally so that it doesn't go down and all my players hate me um I have some incentives to attract operators but my requirements are easy um although they're although they're easy they're relatively specific uh they need to store a few kilobytes of data okay that's not so bad uh but they also need to respond to requests within a 100 milliseconds otherwise the state is stale and and that's you know know not not no longer useful um the game has moved on at that point so today I would have to use a centralized provider I have no other option because sourcing multiple operators with the ability to provide that kind of service and writing tooling for all of them and supporting that it's just it totally infeasible um

so I just have to accept as a game you know okay maybe if I'm Activision Blizzard then I can you know figure it out but realistically um you know every game is going to be using AWS or some kind of you know centralized architecture and they just have to accept downtime as part of the equation um but with no set everything changes I can create a simple node set package in this case just a few lines of code to Define my requirements and the incentives provided if you don't send your request back within 100 milliseconds you don't get paid simple as that and you get paid just a little bit every time you do it's very simple straightforward I'll write this thing up I'll publish that package to a repository and any operators who

meet my requirements will automatically come online and start providing services so moving on to uh some things we're currently working on as of now we have two major projects in development and we're very excited for both of them um primarily our Focus right now is on the staking realm but as we've discussed and as we've shown here the possibilities are endless um so first coming up hopefully in December we'll be providing Integrations for statewise V3 Vault administrators uh who are interested in decentralizing the operation of their vaults the first example of this is a partnership with gravata which we expect to be live by the end of these this year so if you haven't heard of them gravata is a D5 protocol that allows you to borrow a

stable coin against your lsts um and with the stake wise V3 Vault we're building for them uh we're really excited that we can provide them a new and unique way uh to integrate a new type of collateral onto their platform which benefits from the security and the redundancy of notes as operators and our second second project which is our primary project that we're working on is called constellation uh constellation in short is sort of a layer two protocol on top of Rocket pool U we've seen some of the challenges that rocket pool's had with scaling uh due to the bond requirements and we think that we can leverage the entire rocket pool node operator base uh to through through our system to basically grow rocket pool far more aggressively enabling it to compete in in the market against

projects like Lio um so this is a pretty large project and we've been investing in it heavily uh we're hoping to have that on testet early next year with the mayet release soon thereafter so obviously it's very early days for us but uh we love for you to check out our website stop by our Discord or you can follow us on Twitter and stay up to dat as for the future like I said before plenty of possibilities we've been having so many Fantastic conversations with teams here over the last three or four days and we've been getting a lot of interest in in partnering in the future um obviously we can't promise anything in particular and even if we don't build all of these things ourselves we're really looking forward to working with others as they begin to build on top of us in the future um so

yeah we're very excited so we believe in a totally Cooperative approach because ultimately we all own eth or at least probably most of the people in this room and watching the stream um everyone benefits When a project in this space succeeds so we should make more projects succeed uh if you saw that last slide and thought man I'd really like to have my logo on that list well I have some good news uh you can if you're a project looking for decentralized infrastructure to power your next great idea we want to help you and we would love to talk to you and on the other side of the equation if you're a node operator you have really no reason not to join um you like earning

more eth I I mentioned this before it's not a scam I promise um on you know I'm I'm going to go way out there if you're a Dev out there that thinks oh I'm going to watch them and I'm going to force and I'm going to do it awesome please because that's what open source software is about and the thing is that when we build something that makes the entire ecosystem more successful everyone benefits remember we all own e right so please we want to talk to you doesn't matter who you are it's really about prioritization ultimately we have small team we're trying to grow um so please come talk to us and thank you for your time really appreciate it

questions hello how can not set help rocket pool with the bond requirement and scalability sure so we are building some liquid staking tokens for that protocol basically the node operator Bond consists currently of eight ether and 2.4 eth worth of RPL the liquid staking uh deposit pools will ingest assets and then distribute it to existing operators who we've onboard and eded uh that way that they can basically spin up additional validators without having to provide a bond uh themselves one really nice thing about this that um if you're if you're technical in nature you might have heard of the uh nothing at

stake problem that's generally the issue when you want to scale something by give just giving people assets and have them stake because why wouldn't they just grief it you know and slash it intentionally or something like that um the nice benefit of the system is that everything we're building is non-custodial we you know have essentially a rule that we don't build anything that's not a smart contract um so you'll know in advance obviously what you're agreeing to but beyond that um operators have a lot more to gain by being part of the network and earning more in the future uh and so if they were to get slashed you know we have hundreds of node operators it would just be a very very tiny portion um and they they don't really have a great incentive to to do that unless they want to be really mean and they would never be able

to earn anything for the future and you know like we've mentioned there are a lot of projects on the horizon so your your earnings will grow over time um many people say oh there's nothing at stake though but there is actually it's your future income um so if you decide to go against your own interests then um you know you can but the network isn't harmed very much when that happens uh so iel like that's an important addendum a lot of people think like oh there's you know you're doing something that should be illegal right but um it's not hey there uh congratulations that that looks really really cool um the so so from from DB node we're no

strangers to to free open source software that that people can use to deploy whatever infrastructure it works so definitely let's talk uh right after I I didn't I didn't really know I thought you were rocket Pool Guys why why didn't we talk about this before but uh I've been meaning to find you actually for a long time we I like we talk to everybody and we can work with everybody like I said so it up back to back but yeah we'd love to T Chad amazing it's a fair reception we are rock and pool guys at heart so that's how we met we were originally Rock and pool node operators and you know we we just thought oh wow there needs to be more opportunity here you know uh my question was uh when so when dealing with this type of software you mentioned

that you would like to cater to um small node operators and mediumsized node operators but um we kind of find like the same problem every time we try to Target a specific user or limit a specific user um from using dap node or incentivize a specific user from um using DB node it gets quite complicated to make it not gameable so what are your ideas on um trying to limit the participation of big pools cuz if it's profitable they will so this is something that um I'm extremely passionate about and um I I referenced the game idea I used to be a

game developer um I know Game Theory really well there you're right ultimately so the only way to fix this is having a permission to set a node operators um and so there's what we what we talked about today noes set doesn't necessarily have to be a fully permissioned set of node operators but it can be so if you're a game developer you know that example I gave earlier uh and you only want to have small independent people operate with you um then you could individually permission these node operators yourself one thing that no set is doing for our constellation uh on top of Rocket pool is we are independently verifying that these are you know we're Cil checking everybody we're you know

we're going through that whole process not every project that exists on top of noes set has to do that some of them could be permissionless uh but it's really that that's the whole you know the idea of the system is that it's highly flexible so the person who wants the operators defines their requirements and they say you know if I'm willing to go through the effort to gate it and stop these people you know ultimately you can't know if a Lio node operator signs up to your service and they just hide it from you right there's not really much you can do right yeah the back exactly yeah but there's one thing I'd like to add there is you know

our goal here is to really scale horizontally as aggressively as possible which means that the total allocation of validators per entity ideally goes down over time and so for a large Lio operator is it worth spending the time to try and game our processes and systems to receive 15 validators 20 validators maybe you know 15 validators across four different protocols for a total of 60 or something and of course they're only getting a sliver of the you know of the commission so is that worth their time even if they decide it is because they just want to do it you know ultimately this is only for the validation side of things that we have the centralization concern right um a really really large existing node

operation can provide ZK proving Services just as well as an independent operator so ultimately like I said it's sort of up to the requirement ments of the individual application as to what they want to do to gate the node operator Community um and obviously no set one of the you know services that we can provide uh is we we do this sort of checking of individual node operators um and you can use that set if you want you know we can um go all the way from you know permissionless all the way through to you know kyc and do all sorts of crazy things if you really need that for your large institutional ETF I have to say that because that's the buzz now right um whatever it is you know we can help out with that um but ultimately you

can you can also Define those requirements too it's so um it sort of what I'm saying is is a non-answer which is it's up to you as the application developer to decide what requirements you want um but we also aim to from our position as people developing the tool set and products for this tool set first um give anyone who wants to build on top of it the necessary tools they need in order to define those requirements more explicitly and um so you know we'll have an account infrastructure that people can give us as much information as they want or not if they don't trust us and that might you know be passed on to people who want to use the system to gate their applications and things like that or not um you know it's really up

to both sides of the equation you know and the key here is that we can't really step in the middle U and we we referenced this very briefly but uh one thing that notet is not trying to do is be another centralized point of failure for the chain um it needs to be something that accelerates everybody on both sides of the equation and not something that you know is just another sort of thing that everybody has to be starting to be worried about you know when we come to these conferences is is no set too big you know we don't we want to design away from that from the start it's a nice problem to yeah it would be okay thank you so much uh next talk is at 1 so feel free to

grab some food