Hey, what's going on guys? Uh, she's around is gonna be here in about two minutes. All right guys
Do it oh good man. Yeah, yeah, you're king. I'm doing great, bro. This is great man. So this is gonna be the structure, right? Everyone's gonna talk one at a time right we're not really gonna try to talk over one another um
All we're going to do is we're going to speak one at a time. I'll give the introduction and then we'll just have the usual conversation flow and we're going to have one Sheath Year BR support. And yes, your RAM should be coming in here with one other team member.
And yeah, unfortunately since we're pressed on time, I don't really think we're gonna be able to really bring anybody up for questions. So unfortunately, probably one person, man. But yeah, we're gonna run this
for just a little over an hour and we're gonna you know try to get as much jam packed information into the space as possible. Truly a blessed opportunity man this is like a gift from God honestly man.
But yeah, man, Dow, pain, good to see you. And for the individual behind the unsheath account, man, what you guys are doing, man, is honestly quite awesome, man.
I heard you guys speak on a space with the boys over from Layer 0 labs. So, you know, keep doing what you're doing, guys. Appreciate you. Building and all that stuff. Thank you. It means a lot.
Yeah, no problem, man. If you want to give a short introduction, as we're waiting for us to be around, feel free to do so, man, as he comes in with his team. Sure, yeah. So my name is Altair and I'm one of the core devs at Unsheet. Unsheet is
but we like to call one of the first LSD5 protocols. We are essentially trying to rebuild D5 primitives from scratch using LSDs as a first-class citizen. As it were, post Shanghai, we believe that liquid staking is going to become extremely competitive.
and we're sort of here to facilitate lowering the barrier to entry for new LSDs, making it easier for LSDs to compete for market share with our end goal ultimately being to deliver the best yield to our users of state D.
The exciting the whole energy space is so exciting. There's so many different projects to your point like the competition is only getting started and now that the the upgrade has done has worked and even the price of the beef hasn't seem to be impacted negatively by it. I mean the
the interest is going to be insane. The current staking for EF is around 15%, 15% to 20%, and you compare that to any other prophosite chain is got to go higher, because an average is around 40% to 60%.
Next taking and LSD become more popular, more common. All the solution infrastructure around it is going to become needed. Being able to understand the difference between those and the solution. People want to speculate on them as well and set up as liquidity. There's so many things to build around the NFT.
The ability to have it liquid will make a lot more people like invest like it's it's the same principle is like a lot of people wouldn't want to vest you know for an unknown amount of time but don't market by if they know that they can sell at any point so
Yeah, man. Pretty exciting stuff. All right, guys. Sri Ram just came in. Mr. Producer, can you send Sri Ram a co-host and, by please?
Let's go on on Instagram. Good to have you in here brother. How you doing?
Oh, thank you so much. I'm doing well. Thank you for having me on this space with the because with client community. Thank you, man. It's an honor to have you. You should be receiving a co-host in white, Mr. producer. If you can send that over. Yeah.
All right, perfect man. I guess we can get started. Ladies and gentlemen, it is my honor and privilege to present to you Sri Ram from Eigenlayer. Thank you so much, everybody in the audience and for the speech.
for joining us today for this very special episode. If you guys aren't able to stick around through the entire episode, you can catch the replay here on Twitter and soon after up on our YouTube. And today we're going to get to know what eigenlayer is all about.
And we're here with our panel to discuss all things liquid-staking derivatives. And one of the things that I find interesting about eigenlayer is that they're going to take full advantage of the Ethereum ecosystem. Now over the years, if
Ethereum has become to what I believe a worldwide commodity. It can be considered a quality asset that covers all three asset classes. First, as a capital asset, it earns fees for validating transactions and securing the network, making it an actual productive asset.
Similarly, as a consumable and transformable asset, we're at acts sort of as a digital oil that powers every transaction as smart contract execution on the network, which means that Ethereum is used for a wide range of activities, sending assets, borrowing and lending, which is now known as DeFi, and
also executing purchases among others, making it one of the actual assets in the digital assets space that is used most among the 20,000, 30,000 plus tokens that are here in the market. And with recent upgrades, Ethereum has become an actual store of value.
And as you guys know, with the recent IEP159 upgrade, the burning fees and the merge has totally changed the game and how it's issued during the transitions' roof of stake. And that's where Igen layer comes in, right?
3 stages of the blockchain revolution. First, you have Bitcoin, right? Peer to peer, transactions, no middlemen, completely trustless, sensualist resistance, all that stuff. Second, you have Ethereum, where you're able to build application
with the theorem as the base token of value to create things, you know, such as the ERC 20 asset, right? And now you have liquid-staking derivatives and also modular solutions. And this is all where eigenlayer comes in. So, is my honor
to present to you round from Egan layer. Sir, how are you doing today, man? Thank you so much for coming on. Thank you so much, actually. I'm doing very well today. It is from the part of India where I am from today's new year there. So I have been here to anybody else here who might be
celebrating that. It's a pleasure to be here talking to you, Bobby and the rest of the bit because of Bitcoin community. No problem man, no problem. Thank you so much man. Alright, so you know, I can get into detail about all things eigenlayer sir, but I want you
you to please tell us what was the process behind creating Egan layer and what sort of the product market fit that you're looking at to distribute among the digital assets space. What was that spark that created the passion that you guys have behind Egan layer?
Yeah, to give you a little bit of background about myself, I got into blockchain space like Final Hat years back, but my interest in peer-to-peer systems
So, for instance, far back, my PhD was in PhD, failed to bear wireless systems. So, all mesh and ad hoc networks are back in 2011 when I did my master's in PhD.
our drawing thesis for log chains and crypto is that just like the internet created this information super highway, log chains create a coordination or cooperation super highway, but you can actually
build things without necessarily trusting the other parties. And one particular way in which this manifested is the idea of permissionless innovation. I think this was really part
the idea that as a creator, if you create a product and pull it on your website, let's say pre-blocking, then what you're basically doing is saying that, "Hey, I'm an innovator, I'll come up with
this really cool application. Let's say it's a comparator to Facebook and then you put it up on your server. You're saying two things like I've come up with this cool idea but you also need to trust me for the continued execution of this service and that I'm going to be executing it in the same
And so what Ethereum basically allows you to do is to decouple, well, trust comes from and where innovation comes from. And so if you yourself don't have to be trusted, then what that does is any
enables many more people to participate in this creator icon. You don't need to be a reputed entity to actually offer services. I think of this as a paradigm shift in how we organize society.
about it like 70 years back, you know, it came up with this idea of venture capital, right, which is separating who brings innovation and who brings capital. And you don't need the double coincidence of the person who has money also needs to have good ideas. But we still continue to have a paradigm where
the idea is needs to be trusted because they are running the service or whatever. And with the pattern of the theorem, basically just expanding that massively to say that if you have an idea, you just write a smart contract, you are going to be trusted, the theorem is trusted and from that.
amazing like paradigm shift but it was also going contra my own experience of building in blockchain which is if you wanted to kind of create anything deeper than like you know a DAP or a smart contract but which involves natively like doing a different way of consensus
or a different kind of distributed validation, which is like validating an Oracle or a bridge or anything, you need it to go and build your own trust network for each of these things. And that's the problem we set out to solve. And in some sense, we didn't set out to solve the problem. We were just in a way
is trapped with that problem. We have ideas how to build consensus and like data availability and various things and we don't have a place where we get the same kind of freedom that adapt build or smart contract build. And I was looking for it and when we found
And this idea that basically staking is the root of Trostovetirium. People put down some stake and make a credible commitment that they are going to continue to validate the TIGM blockchain. And if they don't do it, they are liable or they are willing to give up their stake. So they are getting into an economic
like commitment that hey I'm going to do this otherwise I'm willing to lose my stake. So they're putting their money where their mouth is they're not just saying it they're actually putting up some stake relative to that. So that's why the root of trust is for Ethereum and the idea was if you can take the root of trust
and instead of narrowly supplying it only to Ethereum, you know, Ethereum block production, you can start supplying it to Ethereum services like whether that is Oracle's, whether that is Bridges, whether that is new consensus layer, whether that is new
management, you know, where there's new decentralized sequences. Any of these things, essentially, you can think of them as modules or services. And these modules or services can now like simply inherit portion of the Bithenium security instead of having to go and build their own.
I think the good analogy to keep in mind here is from the cloud era, the idea of software as a service, SaaS solutions. SaaS solutions actually encouraged a lot of open innovation because what happened was you have this thing called the cloud, like AWS,
or other Microsoft as your Google Cloud. And you don't have to, as a creator of a new service like Stripe or Played or Squire or whatever. You don't have to actually think about how do I build the data center, how do I put these nodes up.
how do I do all these things, I just write my one basic component identity, verification, tying to bank accounts. Whatever that one thing is, you just write that one thing and anybody who's building a solution integrates a bunch of these SAS solutions to create
user-facing solution. There are hundreds or maybe thousands of SAS solutions on top of which millions of user-facing applications are fed. That's the same era we want to replicate in the blockchain world, where
have if you have security and distributed validation taken care of then creators can focus singularly on the things that they are good at which is innovating on oh here is a kind of bridging service here is a Oracle Fed service here is a matter was Oracle
which just gets your Twitter and other data into your queries, other servers and so on. And these services all live up to your customer, the Ethereum node. And now anybody who wants to build an application or use a facing
decentralized application can tie up these services together and create what they want. So it allows this notion of high degree of expressivity while having a shaft process. So that's a kind of brief tour of IELA.
Wow, that was an amazing description. Thank you, Sharon, for that quick question, right? Because I hear all the time, I say I get a layer because I think some German, but I heard I, Jen, layer, Egan, layer, uh, what's the right pronunciation and add you guys come up with the name.
Thank you for the question. It is eigenlehr and you're right. It's origin is German and eigen in German for your own. For it has multiple meanings but the most kind of primitive meaning is your own. So eigenlehr is
your own layer like we want everybody to come up with their own ideas their own things and then be able to build it. I can there's also kind of like a tip of the hat to several like mathematical tools you know when you create data and do data analysis
matrix, you basically put it into a matrix like the rows and columns and you one of the core features of this matrix is something called an eigen vector. So eigen vector eigenvalue eigenfunctions all of these serve as some of the mathematical parameters that we routinely use including in eigenlead.
But I think the particular meaning we want to invoke in people's mind is the idea of open innovation and your own things you can do on top of this layer rather than being constrained to what the platform offers as a kind of check.
Makes sense and I appreciate the the comparison to AWS right so almost like you're removing the need to create your own infrastructure or backend of validators into you point you focus on Creating user-facing services like bridges, oracles, maybe even the sequencer
for affiliate tools. So I think what a lot of people are wondering is I'm sure there's a lot of engineers talking to you about building on top of the eigenlayer. What do you think is the low-hanging fruit? With the use case, they seem to make the most sense and that's probably going to be rarely available for a test nap and then mean that.
Yeah, so we started building, I guess, one and a half years back. And so we also building the first service on top, which is a data availability service run by Ethereum Stakers. And the data delivery service is pretty simple, you know,
a very simple problem. How much need a bandwidth does Ethereum offer? So before I go into this particular thing, I want to say how we think about, and at least one productive way of thinking about how do you build new services on Eigenlead? I think one way to think about it is
a major missing ecosystem services that a lot of people can benefit from in the ecosystem and then try to build that particular you know service and I'll highlight maybe like five problems in Ethereum and then kind of like highlight
how one could use Agn layer to create services that solve these problem needs. Number one is data bandwidth. Before I get into the five problems, I want to say Ethereum has this amazing layer to roadmap. Actually, I talk
a little bit about permissionless innovation earlier and what the layer 2 roadmap does is it's such a bold commitment like Ethereum Gold is notion of permissionless innovation because you're saying you know many people like when the roadmap
you turn up like three years back, people are like what you know nothing is going to happen on Ethereum, happen on these layer tools, even though actually many people say that right, but the commitment to permissional innovation is in her 20-30 meters that no you know people can build many execution environments, they can build many
different types of cryptographic groups and cryptoeconomic groups like optimistic roll ups and like zk roll ups and this was a kind of deep commitment to permissionless innovation and also of mechanism for scaling. So these two kind of went together. In fact by making it more permissionless
is go up kind of figure out how to do recursive proofs and all kinds of other things that are now going to make Ethereum very scalable. So just highlighting here that idea of scaling is a kind of
second order problem, once you kind of figure out the right economic architecture which is that the code can be does some basic things but a lot of others can borrow the trust and build in a permissionless manner many new things. And I can let us just to doubling down on top of this code ethos. Okay.
What are the problems in this phase and what can the market furnish as solutions to these problems and using, I can later as a kind of core parameter element. One example is the data bandwidth of Ethereum. Even though these are all a lot of computations, Ethereum still
has to do you still have to publish the data to Ethereum why because you know you're offloading computation but you need to copy other people for them to continue computation they need to know either the inputs or the outputs to the computation so you need to have the
the roll ups published the data input or the data output from the computation to Ethereum. So this takes data bandwidth. So the total roll up data bandwidth is limited by the Ethereum data bandwidth is 80 kilowatt's per second.
even if you don't use Ethereum for anything else other than just writing data. So this is from what low and so you know we need a road map to scale it and Ethereum has its own road map to scale it but still the step might have come ahead.
for how scale this is much broader than, you know, only here which has to be naturally conservative because you're moving such a large ship so you want to be careful. Okay, so you know data data availability or data scaling is the first example of a Ethereum ecosystem
problem that we can fix using eigenlead you get a somewhat similar trust network if all the stickers opt in and you get they can basically validate all your transactions to validate your data and then post data commitments only on a theta. So that's a very simple
example of like a ecosystem cap that can be plugged through eigenlayer and we building something called eigenDA just to do that. So just to give a sense of numbers, we're scaling data bandwidth from 80 kilobytes per second which is a theorem today to 10 megabytes per second on eigenDA.
and we have a roadmap to scale this much, much further. The idea is that we are not doing this by asking nodes to do more. We are not asking nodes to like a Salana or something else, want all the nodes to do a lot of work. We are getting this higher performance by having each node
do a little, but a lot of nodes do a little different thing so that together they do a lot. So split the data, each one gets this erasure coded data and cryptographically like field data so they can all verify that they're getting the right thing. So that's the first service we're building, I can do it.
But there are all kinds of other problems on the kind of or market needs inside the thermo ecosystem. And the second one one can think of is sequencing. Roll ups today have a single point sequencer. And if you think about why roll ups need a sequencer, they basically take transactions that bundle
order them. So if you're doing this, you are subjecting all the censorship resistance to go through this one note. There is a mode in many rollups to where if you include a transaction in Ethereum, you can
force included into the roller. So this is why you know the roller is secure even if there is only a single sequencer. But usually the latency of publishing something on Ethereum and then eventually including it on the roller is quite large you know people set it to several hours or maybe even a day.
So while it's useful for like, oh, you can exit your money out of the roll up back to Ethereum, it is not enough for several other things. You want to do trades that trades may expire within the time before you can withdraw.
have anything whose action time or response time is smaller than like several hours a day, you need to have better censorship resistance. And one way to do it is get the Ethereum Stakers to create like a new ordering service, transaction ordering service.
And that's something that could be built on top of why and it's called decentralized sequences. And one of the reasons that I think this is interesting is normally censorship resistance comes because the network is decentralized and many, many nodes like contribute into building it. And like some of the good questions there are like how do we encourage
many nodes to participate in this protocol without loading them heavily because if there are thousands of rollers then and if re-node in Ethereum has to download and execute all these rollers then you'll last all the scaling benefits. But the thing to note is for things like roller sequences
We have this notion that what the ROLP node is doing is doing two different things. One is bundling transactions, ordering transactions, and then second is executing them. Executing and proving is the complex, like it requires a lot more hardware and computational power.
Ordering is just like taking a bunch of data and just like putting them in an order. So ordering it's really nice for us that ordering is the contentious process and Execution is the hard process. So the single node can continue to do execution, whereas ordering purely like
bits of data can be done on a more decentralized network. So that's the sequencing as a second example. Third example is the Ethereum's latency of confirmation is 12 minutes. You would have applications like games and others where you want to confirm to the nodes in a few seconds.
So it's possible to build a super fast confirmation layer like this layer verifies your zero knowledge rules and such and immediately sends you like a certificate that it has been verified. So users have a higher degree of assurance that what they are seeing is correct. So that's a latency of ethereum
can be solved using eigenlearn. You can look at how to build bridges between Ethereum and other blockchains. We see a lot of interest in this. Not only between Ethereum and other blockchains, but also faster bridges between rollups and Ethereum because some rollups take seven days to settle to Ethereum. In the meanwhile, if you can still have
productive trade which has lower latency that's something that's very beneficial. If you have all the Ethereum a lot of Ethereum status participating in your service then that's definitely like a huge advantage. So and then finally I want to talk about MEV and MEV is this thing that our eyes is because Ethereum blocks
proposals have freedom to order the transaction which are where they want. But on eigenlays because of their state they can make a commitment that they only order transactions in a certain way. For example, they may say that whenever you trigger, you know, you tell me already that you have a limit order. Like whenever the
goes below this, then do this. And as a regular stakeers was opted into this thing, whenever that happens, I'll make sure to include your transaction. Or like I'll sign off on encrypted transaction and then I have to include only the decrypted transaction. Or I only sell you a portion of the block.
All of these kinds of interesting things can be well known to our audience. So that's a tour of like the types of risk cases that we think could be interesting to build on our lives.
So you're an awesome stuff man. You have gone into an extreme amount of detail and Honestly man, I have faith in what you guys are building and one of the things that I wanted to touch on is restaking right so restaking has been an absolute game changer for sure
I'm really excited to learn more about how you guys are taking it to the next level. So if you'd be able to explain more in detail about how EganLayers restaking mechanism works and also how it benefits heat-stakers who participate. Yeah, so the core idea
that we came up with and it's called restaking is the idea that if you are if you're sticking on Ethereum, can you somehow use that what you're doing is you're putting some money down and saying that I'm making Ethereum blocks correctly? Can we somehow let the same node, same stakers, say
that not only doing Ethereum blocks correctly, but also I opted into these like five other networks, this data network, this MEV network, this new chain, whatever other things. And I'm validating all of them correctly. So instead of saying I'm only doing this correctly, you're saying I'm doing all of them correctly. And that is really what re-staking is. You can think of it as
as you're and as you come to exactly the modes of restake maybe that that helps quite a bit to explain this. So there are two modes of restaking that we have. One is called native restaking native restaking is you go to Ethereum you stake it in the Ethereum contract.
because you want to make Ethereum blocks. And normally what you would do is you would say that I am the, if you were TFI hold the money and I put it in, I would say that I am the one eligible to withdraw, I put my own wallet address as the withdrawal address. But instead, if you have, if you want to
to say that I want to participate in eigenlearn what you would do is you would set the withdrawal address to the eigenlearn smart contracts. Now you've set the withdrawal address to the eigenlearn smart contracts. Now in the eigenlearn smart contracts you can set the withdrawal address to yourself.
So what you're doing is adding on a step in the withdrawal process. Instead of withdrawing and directly going into your account, withdrawing goes to the eigenlare contracts, eigenlare contracts, hands them to your account. So why is this helpful for eigenlare is when somebody is making a commitment that they are actually validates
So now that you've participated once you did this, now you're a participant in the eigenleary custom. And you could say, oh, I've kind of validated this new blockchain. I'm going to validate this new bridge. I'm going to validate this new data availability, which are once you want to opt into. So a core principle underlying eigenlear is opt-in.
Like you don't have to do everything that is happening on Eigen layer, you opt in to whichever one you want to actually participate in. So that's the kind of core Eigen layer mechanism. And why we need the withdrawal to pass through Eigen
is that if you made a claim that I'm going to like validate this blockchain and in that blockchain the basic rule is do not sign two blocks with the same block number but you go ahead and do it we need a mechanism to penalize such bad stakers so the bad stakers get
penalized when they try to withdraw, you know, the eigenlayer contracts will slash or apply a negative incentive and take a portion of the funds and only allow them to withdraw the remaining portion of the funds. So that is the core like restaking mechanism. You said the withdrawal credentials to the eigenlayer contracts, eigenlayer contracts
let's you and you withdraw through the eigenlates, it's a step in your withdrawal process. And so what that does is allows you to like make very credible commitments that you're going to do all these other things correctly. And another version of restaking is called liquid restaking, you know, I know the title of this thing
is we want to look at liquids taking tokens. So the idea is if you have a liquid-staking token already which represents a stake position in Ethereum, you can just deposit the liquid-staking token into the eigenlead contracts instead of setting withdrawals or anything like that. So these are the two different modes of participatory
you can either do natively-staking or you can do liquid restaking. Once you did it, for each of these services, either you could be like running node operator yourself, like you could download the, like you have a get node that you download and run for Ethereum, maybe downloading and running these other nodes
yourself or you may say I don't want to do it, I want Coinbase Cloud to do it or crack and do it or like chorus one of equipment or somebody right like or your friend to do it it's up to you. It's a free market like you can ask whoever your friend or whoever you trust to do the node operation for you. So that is the
the core primitoficulence.
to the other individuals in the panel. I'm interested in hearing more about the progress of the current testnet and I understand there's currently three stages of the testnet. So I wanted to inquire which milestones does I can later hope to achieve in each stage?
Yes, so the launch, you know, because I can lay it is a multi-sided marketplace in some basic sense, you can think of it as a kind of like a marketplace for decentralized trust, right? Just flipping the perspective of the idea is, you know,
The core thing in blockchain is decentralized trust. If you take a solution, you call it a blockchain solution. You remove decentralized trust from it. It's no longer a blockchain solution. If you add decentralized trust to it, it becomes a blockchain solution. So decentralized trust is the essential ingredient for what is called a blockchain solution.
And so, or a crypto solution. So the thing is, I can lay it as a marketplace for decentralized trust. So, and decentralized trust is this marketplace is three sides of participants. One is Stakers, people who are putting in the money and making incredible commitments. The next one is node operators or a technical role.
They actually run like node operations. They could be more professionalized. They could also be like personal homestakers. And the third side is people building these new services like these new SaaS solutions that we were talking about. And the
Launch is therefore also geared towards three steps. Step one is taking. So in the step one, Tassnel that we have running, the only thing you can do is take your stake, whether it is liquid-staking, derivatives or native-staking and set the
re-staking potential into eigenlead that's step one, stage one. And in stage one, essentially there are no node operators so they're not running anything and there's also no services so there's nothing to run.
Stage 2 brings on the next side of this marketplace which is node operators. So there will be a simple service that they will be running which doesn't have to be like a big or complex or highly profitable service but basically to on board this side so we allow for delegation of stake or
to node operators and you know node operators can download and run this simple service so that they know that they are actually participating in the economy. So that's the second set of the market. Then the third side which is productive service is
which have fees turned on and this could be eigenDA, you know, our own service or like other people's services, many of whom we are partnering with, building and launching services. So this is the three stages and we hope to
have the first stage right now. First stage is on test night and every quarter, you know, hopefully move on to the next stage. I wanted to ask you a quick about the the withdrawal penalties for running a node. So you mentioned that
There was like quote unquote bad node operators or bad stakers and they get some kind of penalty for like not abiding by the networks rules and they get punished by the contract. I was just curious if you could elaborate on that like what kind of things like make
someone who's a node operator like a bad, a bad state could quote unquote. Yes, yes, yes. So, you know, if you look at the Ethereum protocols, Ethereum protocol has negative incentives for various kinds of things. Like, you know, you have negative incentives for, you know, if you don't
make a block when you have a block slot. It has, you know, there's something called a sync committee or a light node committee and you have to participate in it and if you do something wrong there, you will, you know, lose some stake and so on. So there are many kinds of negative penalties that protocols
used to constrain the behavior. Because at the end of the day what we're building is something where, you know, I think Ethereum pioneered this idea that when you're building a purely pseudonymous system where you don't
know who the participants are and you have no way of knowing it or no requirement to know them, then you have to make sure that both the positive and negative incentives are in built inside the system so that people cannot come and do extreme things. And that an example of a bad thing that
I can tell you there is designed to be something similar where you can have generic penalties, but the kind of penalties we want to enforce are what I would call "prooable malicious behavior". What is a "prooable malicious behavior"? Prooable malicious behavior is you say for example that you're validating a blockchain
and if you run the blockchain software any version of the blockchain software you will never sign two blocks two distinct blocks of the same block number block number 30 you either sign this or sign that you don't sign both because that that needs to confusion and chaos and it is not a property of
a normal node, it is only a property of like a malicious node operator is trying to manipulate the code in order to attack the system. So essentially you need to have a slashing penalty. Well, if you detect and it is provable on-chain on Ethereum using a slashing contract,
that node must behave then they may be liable to lose all their stake. So that is what we mean by slashing and eigenlare slashing is designed to be very rare and only for people who are clearly like trying to attack the system rather than "oh I just forgot to turn
of the node or whatever like regular things, we have no negative penalties. You just lose rewards for those things. But what would happen is if you turn off, if you try to actively attack the system, the system will like resist the attack by actually applying economic penalties.
I was gonna pass it over to you brother actually so feel free man good to have you up here brother Yeah, I'd like to be here so I had a question regarding the slashing mechanism so it seems to me the slashing is done
by a smart contract, aka on the execution layer. So in that sense, it's probably not even possible to apply a negative slashing penalty because that would have to be done on the consensus layer, right, but on the execution layer. And if I understand correctly, your entire stack is built on
on the execution layer, like the smart contract, you know, EVM layer, not on the layer that's actually doing the validation, is that correct? - That is absolutely correct. So I'll explain how, so, I can add is built purely on the execution layer because
You know, that's the only place where you can deploy programs. You can not deploy programs onto the beacon chain. So how do we do this then? You know, it is it is tricky and that's why probably maybe nobody and I came up with this before the but the solution post factor is not that complicated. It's basically the following
when whenever like you exit your position, so you're a staker, you said the withdrawal potentials to I can have. Now whenever you exit your staking position and like unstake from Ethereum, then all your money like the 32 E that you've locked up now gets withdrawn to your withdrawal address, which
is the eigenlayer contracts and if there was no proofable malicious behavior, we would let you withdraw all your 32 e and all the rewards that you earn through eigenlayer. So that's what you would normally do. But in the attack mode, what happens is like the contract
connected to the eigenlayer contract tells the eigenlayer contract that hey you have attacked and here is a proof and now like when you try to withdraw your eith the 30 to eith goes to the eigenlayer contracts in the eigenlayer contracts some portion of it is slashed remote and then you get back the
remaining. So that's how we enforce the contract. It's because I think Shappelor which happened yesterday was critical because that's when this part has been enforced that you venue withdraw the money goes to the withdrawal address in the execution
So follow up question to that is how problematic would it be for applications built on top of eigen layer if slashing were to occur at the consensus layer
level, extreme slashing. Now let's say your 32-E just gets slashed down to 1-E, less than 1-E, right? How does that affect the security of any application that's built on top of eigenlator?
Yeah, that is a really important thing. That's why it's you know when people make memes about really, really sticking or whatever it's so none of those things actually work. The only thing that works is there is a single place which maintains your entire state about what's going on on anything.
So, I can layer contracts act as the universal sync point across all the applications and Ethereum.
We have Oracle's leading from Ethereum state, the Beacon chain state, and reporting to the eigen layer contracts using, you know, this is coming up in the next launch using zero knowledge proofs what is going on in the Beacon chain. And so we will trigger
like if as soon as you know that as soon as the contract knows that they've been slashed in other layers their positions on the on the eigenlearn is accordingly rebalanced and I want to add something here which I think many people think of eigenlearn
a financial primitive, it's not, it's a validation primitive. People have stayed to do validation and if you've done probably wrong validation in Ethereum, then you don't have an ability to continue doing validation on other things.
as this is very different from a financial primitive which takes an LSD and then gives you a stable coin or something else. So I think the mental models that we have need to be correspondingly balanced to what the rule of eigenlearn is is a universal validation engine.
got it, the other makes sense. So there will be basically zero trust assumptions and whatever interoperability solution you're rolling out to facilitate that reading the valid or state from the consensus layer. Is that correct? That is correct. I mean, it's not
zero trust assumption it relies on the Ethereum protocol has something called the Light Client Sync Committee, 512 nodes which sign off on what the Ethereum stated as part of the Ethereum protocol and there are existing solutions which are already like working on
0 knowledge proofs the most prominent one is called succinct. It is a 0 knowledge proof of the Ethereum become chain state to the Ethereum execution state. But also I want to point out that Ethereum itself is coming up with like upgrades on
native integration between beconchain and execution chain. So that may take a year or so to roll out, but whenever that is there, essentially like from the execution layer, we would be able to be like beconchain status. Okay, that makes sense. Thank you.
I think it's like a very technical conversation, but it sounds like I can lay a few developer right and you're building a user-facing module or services.
It should provide a higher security model than creating your own set of validators, right? But then I wonder if there are existing, let's say, bridges, let's say, oracles of login,
But are there projects that have or have tried to create the O-Set of Eldators that reach out to Aguilayer and say, "Hey listen, this is probably a better model for us and we'd like to transition to your model."
That is correct. Like the successful ones won't say that right? Or the insanely successful ones, but the ones that are next in line and want to compete with the top ones would absolutely say that. And that's what we find is basically.
Yeah, so essentially, you know, if you wanted to build a new Oracle bridge, whatever other things and the incumbent says that, oh, you know, we have a X billion dollar of security like how are you going to get X billion dollar of security and it's possible
you get borrow that from I can layer you don't have to create that again and again is a year on token value for each application. So this gives a competitive advantage to new innovators who want to come and propose better solutions. So this is
our driving value is to enable more permissionless innovation and anybody who has good ideas and can execute and build on top of it should be able to borrow trust rather than having to themselves be trusted.
question to the right to mention, Aguilay is almost like a market place for trust, right? Obviously there's different models of restaking and different stages as well that should mention, but it is the most likely scenario, most popular scenario is for validators to have
increase in the yield of EF or is it for them to have the regular yield from validating and MV but also receiving a different token from the projects they're building on top of EigenLayer. Did a many different business models
for projects to build on top of a regular. One model is the least crypto native model, but also quite interesting is you just have a company. This company builds a new article and then says, you know, the fees for like this article or every time you do a query, you have to pay one eighth and
the one-eat like point eight teeth is divided to the stakers and then point two eat goes to kind of my Oracle wallet, whether they know we created it. Okay, so this is one example of a business model. So now the stakers opting in have to calculate how much fee revenue they're earning.
But there are also other models where the Oracle could say no payment for this service is happening in our own token and initially there is a fraction of inflation of our token where that goes to the Stakers, you know the Stakers want to
opt into that, you know, they can do that. Or there may be another option might be that the builders of this new project have
required dual staking, they require Ethereum staking separately. There's a group of nodes staking Ethereum. Maybe there's a new token or like an existing bridge or Oracle token and they have to stake it separately and these two groups have to ugly only then the input is considered valid. So they're all
of interesting economic models to be built around Eigenlear. But as far as the stakers are concerned, they need to look at what is this new project, is it legitimate, does it have, what is the slashing contract that it has written, does it make sense, are there
If the contract has bugs, what is the governance structure, what is the additional operational requirements do I need to have a 64 core machine or what gigabytes of RAM do I need to have to run this all of these things and
And I think if the operational cost and whatever additional risk is smaller than the fee paid, which may either be in fee revenue directly or in new token or some other thing, like they just have to evaluate that, whether that makes sense for them.
I do have a follow up to this conversation. I know we were discussing more about the security aspect and all those things. I do believe that it is important to address any potential risks.
had on. So, you know, I'm curious to know how Eigenlayer would address the various risks as far as like smart contract risk and market risk and things of that nature.
Yes, so you know initially the way we are launching it is that is a slashing veto committee which basically is comprised of like broader Ethereum community members and eigenlearn community members which basically essentially allows a veto of slashing which which means like any con any
When you opt into any of these services, if they they they slash you, then the committee has to essentially approve the slashing only then the smart contractors to approve the slashing and the committee has to approve the slashing otherwise the slashing doesn't go through. So this is a double buffering for the stickers. So, you know,
the stickers get slashed only if the stick sticking contracts slash them as well as the committee agrees to it. So this essentially creates a layer of protection between the for the stickers. So that is the security model
trying to minimize any kind of security risks. Other security risks in the contracts or also, you know, the way we think about it is that, you know, smart contract development is not at a place where, you know, you can just formally verify a contract and be sure that there are no
bugs. And so we want to have like as many layers of protection as possible for the users. And one more layer for protection in this not contracts. And the ideal is not to contact stem cells is that, you know, whenever you withdraw, this is true in any staking system, right, when you stake when you're
you don't get instantaneous exit. There is a way period, you know, of a few days. Only after that you'll be able to get your unstaked position. And this allows us to make sure to slow down time so that if there are any bugs and other things, you know, we can kind of handle that in the contracts.
So that's the high level security mechanisms in addition to, of course, trying to do as good a job as possible of smart contract audits, bug boundities, all the usual best practices in the area. Part of my interaction, I do have to hop off
right now to start our Twitter spaces, which starts at 4pm about 2.5 minutes. Thank you for answering all of my questions very well and for shedding light on the roadmap of eigenlare. Super excited about you guys and I hope we cross paths in the near future. Thank you.
Thank you so much. We're gonna have you up here man. If anyone wants to come up we have about like three or four minutes left. If anyone wants to come up and ask any questions or give any last statements feel free to do so. I've posted on the nest a link to all of I
and what they're building so feel free to give through Ampholone also Eigenlayer followed to keep up up to date with all the innovations that they are onboarding onto the Ethereum ecosystem and very interesting stuff here and I really enjoy how Eigenlayer
is really designed to enable individuals that are staking with Ethereum to participate in all the validating novel models and really protocols that are built on top of the eigenlayer system. And through this conversation, you know, we've learned that Stakers can provide an additional layer of security by offering
and re-staking their eith. And that essentially allows the end user to leverage Ethereum's robust infrastructure. And I really agree with what Sura Ram said. As far as Bitcoin was being limited to peer-to-peer payments and required a new
for each new decentralized application. I find that I can lay really goes in tandem with what the current like, you know, eth landscape looks like as far as modular blockchains goes and really allow for dApps to build on top of its own trust network.
as we ram it set earlier, the coupling innovation and trust which in turn would make it easier for developers to create new decentralized applications. So before we wrap up, I don't see anybody coming up to speak. So we're going to finish off with pain, pain, go on ahead, man.
I don't have too much else to say, I just want to say thank you so much for coming up. I'm very excited about LSD's and I think that people don't understand the potential of your collateral earning yield.
I think that it's very understated just like how much that's going to impact not only the crypto ecosystem but the broader financial ecosystem. And I think that the people building protocols like these right now are going to just
be the biggest benefit series of that. And I'm super excited for what I can layer is building. So yeah, thank you so much for coming and saying your piece and, you know, giving us all the technical knowledge and answering everyone's questions.
Thank you so much. We really, really appreciate and enjoyed the range of questions in this call and looking forward to engage with the, because of the coin community.
That we're right on the head of the enemies. Yeah, well that question because I'm sure by now everybody's super excited by eigenlayer So you hear everybody being excited about your project, but what about you? Is there a project that you're excited about in E for crypto general?
Let's go. Many, many, many projects. That was a great question. So the innovations happening in the layer 2 landscape is something that I'm like following.
very closely and very excited about both then. And they are seeing different models play out and I don't know which models will win out but they are all like really good experiments like for example just the business model of optimism versus arbitrum. arbitrum building a little bit more close
stack but putting in a lot of engineering firepower behind it and optimism building it everything in the open and having a completely open stack that anybody can forward convert their roll-ups. Both are really interesting experiments with their own rights and
There are other projects, you know, that there's also a ripple of the same thing in the ZK roll-up space where in a Starquare may be taking a little bit more of the arbitra matter approach. Wait, I'm sorry to interrupt you. Did you say ripple?
There is a similar thing happening in the ZK Rollup space where Starquare is taking a more like company type approach and you know there is this video taking a much more open up to have they have
Same kind of stark way fire stuff will hopefully find anybody to fork and nose and I think these are all like really interesting experiments and you know on the other space of course, you know very excited about all the different variations of experiments like you know, you know people say they're Bitcoin magic
I see new things that make sense. And it's the attitude to have. I think so many people get stuck in a mindset of only this one thing can work or
You know like you know if it's if it's not broke don't fix it right but it wasn't broke don't fix it you know we would still be riding horses yeah exactly it's always it always pays off to experiment with new things and try things out move fast break
things. And so yeah, that was a great quote. Yeah, yeah, totally. So the thing is, you know, on the LSE space, like, you know, you have the Lido experimenting in one on the diet and rocket pool experimenting with a little bit more decentralized structure. There's also new things like into fine
and buffer which are experimenting on different ends of the spectrum and you know all of these are really interesting and I am very excited to have the opportunity to engage with some of them. On the sequencing side, decentralized sequencing side we have Espresso which is you know build of
some of the best academics who are now like focusing on building a solution to odd the sequencing problem for roll ups. So yeah, too many things to be said about. So looking forward to interact with several of you here in the call who may be interested in building your things.
Thanks very much for your time.
for engaging in productive constructions. It was an honor man, it was truly an honor. I want to wish you a great weekend. God bless you, your family, your friends, and looking forward to all the innovations that Egan Layers is going to set
upon the overall crypto ecosystem. I'm really bullish on all things LSDs. I'm bullish on you guys and I'm bullish on also Oble Network. I'm really excited also about Expresso. I heard that you mentioned them just now. So with that being said,
I want to thank all the individuals here in the audience that have participated in this amazing conversation between Sri Ram from Eigenlayer and the individuals that are up on the panel, including on Sheath that is hosting up their space. So feel free to tune into that as well.
And if you guys enjoyed this conversation, my name is Wabi. And I host spaces like these really throughout the week here at Because Bitcoin and you can find like founders just like St. Ram up here. We've hosted Saga, we've hosted Say.
a ton of stuff on Arbitrum. So if you enjoy this kind of content, feel free to follow us here because Bitcoin and turn on bell notifications so that you can be made aware of when these spaces go live. We'll be back later on today at APM East with Joe Carlos there for our Bitcoin edition spaces. We're going to talk about
about the global commoditization of Bitcoin and all the current developments on that space. So look forward to that. And take care, and Sri Ram, I look forward to speaking with you in the future and truly in honor and I look forward to the future, man.
you all so much. Thank you, thank you, thank you. I am more bullish than ever. Let's go. And yeah, it was great. It was great to have fun time here and we had some laughs and all that stuff. And some really educational tidbits here. And that's what I strive to do on this platform.
You know, I hope I made you guys proud. This was truly a once in a lifetime. You did great. You did great. Wamy. And thanks trying my best, man. Thank you so much, Robbie. I really enjoyed it. Take care. Take care. We'll see you guys at eight. Yeah, thanks for having us, man. Take care. Take care.