EigenLayer: Converting Cloud to Crypto - TOKEN2049 Dubai 2024

hey guys how's it going thank you everyone for coming out today and uh participating for the Igan layer presentation um we're super excited to have a conversation today and uh present some information about where we're at in terms of um our mission our road map as we mentioned um enabling new projects to be able to uh borrow security from ethereum resters uh enable the ethereum operator Community to participate in validating and you know essentially bootstrap these new protocols so let's start by um you know kind of going over an overview of where we're at in terms of um the goals of Ian layer and what we really set out to accomplish so we saw um in the last few years plenty of protocols started uh their own tokens to determine their own security right and what that actually led to was Innovation leaving the ethereum ecosystem as you saw new l1s come new l2s all launch their own tokens you know l2s were at least able to borrow the security from ethereum because ethereum becomes the de facto settlement layer but the reality is you know a lot of the value extraction was moving away from ethereum and The Innovation as a result was moving away so igen layer we viewed ethereum as the public Commons and kind of the center of innovation and economic activity so we wanted to come up with a solution that would enable you know uh ethereum protocols to be able to bootstrap themselves faster but also protect themselves from the reality of death spirals when you have projects that have security that's determined in their own token um when when you need security the most is when it will fail you which which is the definition of the weakest link in the chain so rather than using your own token just for security we wanted um these protocols to use their token for rewarding users incentivizing participation also governance but your security should be borrowed from the ethereum community and um be bootstrapped by the ethereum community so the values of decentralization so let's just look at applications today right um um applications the average web 2 application is comprised of like 10 to 20 SAS modules and yet the reality is the majority of those modules are extracted away from the end user when you interact with payments you're more often interacting with something like stripe or you know some backend tool that's doing the p uh the payment processing when you're doing uh login you're dealing with oo or any of those services but the end user does not experience any of the friction it's all abstracted away so we wanted Builders to start experimenting again as I mentioned and bring that Innovation back to ethereum because the entry cost of capital to build a protocol became so high and so how do we create an ecosystem that has ethereum native value distribution as well as development there's a lot of projects that um you know can create value there's some that capture value that sometimes becomes extractive but the reality is we want projects to be able to create capture and redistribute value and what does that look like is you know in our mechanism it's paying out to the ethereum resters and operators but also it's incubating a ecosystem of builders that will be able to support your protocol for a longer period of time and you have not just like short-term use cases that are filled but also long-term incentive compatibility to enable these projects to stay longterm so crypto brings these native incentives user governance and the most important thing permissionless Innovation right what other industry do you have the ability to just build and deploy and take an idea that you know starts off take take igen layer ourselves right we're a 30-month old company and we went from a bunch of researchers working in a lab uh I was not a researcher full context so a bunch of phds and myself working in a lab for you know eight months in stealth going from a project that was just a sheer idea to now a reaking protocol that has 10 abss live with you know nearly you know four over four million e that's being restake and you know there's the ability to permissionless innovate and execute without needing centralized parties to be involved and so you have essentially um a demand for converting today an our end goal is to eventually start converting more and more applications that are currently being built on the cloud to being able to be built on web 3 and so we essentially look at like there's there's like a lot of applications today in crypto that are uh you know predominantly defi orderbook dexes nfts Etc that have a demand for very high security but don't necessarily have a demand for throughput right uh throughput Network Laten bandwidth these are all attributes of what protocols need to be able to enable more intricate use cases now an example of those use cases like what would it take to a question we like to ask ourselves ourselves is what would it take to Port over you know 5% of web two applications to web 3 what would the infrastructure have to look like and the reality is it's heavily dependent on the use cases because some use cases value and attributes security very highly and some value throughput very highly and that comes around this metric called value per bit if you take out the transaction value divide it by essentially the amount of bits per transaction you can achieve this metric that looks at hey um you know for example gaming doesn't necessarily onchain gaming specifically doesn't necessarily have a lot of embedded value in each transaction or in each bit but the law of large numbers will apply and you can see that the aggregate value of gaming could be very useful long term an example of this is let's just say you know I'm playing chess with someone and we uh you know we don't necessarily need to write every single state update of each move of each player to the L1 right writing on ethereum is extremely expensive writing on um and there's not necessarily a lot of embedded value in each of those transactions but there could very easily be a secondary Market Market that's contingent on the result of that game that is betting on myself and the other player and needs L1 finality to be able to settle that betting market and so now all of a sudden the State updates weren't necessarily of high value but the end result of the game became much more valuable um this this you know could also be applied to onchain social where let's ask the question what's the value of posting a picture today of my pizza on my Twitter versus my you know my my forecaster or My Lens we might not see that today but you know long term we can see the value of building these new native communities that exist on these new protocols and so the question becomes uh Cloud applications needed high throughput but the reality is crypto applications need um this infrastructure to be built so that we can eventually support new use cases Downstream and so igen layer is designed for building a shared security platform where all of that Innovation can be brought back to the ethereum community and they can repay ethereum stakers and operators to be able to support this Innovation but also um you know the amount of restake is the the value of restake is applied to all of these Services rather than fragmenting security where in a modular ecosystem every module is uh has its own security component and now you're only as weak as the security of the weakest mod modu you have this aggregation or like essentially this hardening effect of security where it's much more difficult to corrupt 20 billion doll Stak versus $200 million Stak right the cost of corruption must always outweigh the profit from corruption that's one of the core mechanisms by which um you know you want to be able to enable this um and so you essentially can buy a certain amount of slashed stake to be able to protect like Insurance to be able to protect yourself from these slashing conditions which is how uh attributable um conditions where projects misbehave can be applied and you know enables a a robustness of the security and so each of these Services go about building their own slashing conditions and um the slashed funds will be used to be redistributed to the ecosystem and so now you can use uh igen layer and eventually we will have igen insurance specifically but you can think of this as a Insurance module for attributable security and so we can achieve a certain levels of economies of scale Insurance because you know if an app uses five Services all of which are fully restak then the aggregate security becomes much more robust rather than the individual security of each and so right you end up with this scaling ability for security so we want to enable This Cloud era of crypto and what does that look like right um igen layer becomes the Baseline shared security system and you can build essentially this plethora of services and bring the Innovation across all these layers so we see that you know the endgame to scaling um in ethereum has moved to rups and we have optimistic and ZK rollups and we're starting to see different strategies across both but the reality is that's just one attribute of how scaling needs to work and we need to build a lot more modules to build a lot more robust scaling ecosystem so what does that look like right we have Bridges we have meev services but you know a couple of the abss that are building are doing decentralized sequencing shared sequencing we have Watchtower networks we have projects who are building um you know VM Cod processors so what can we do to deploy uh web two applications natively using co-processors or compilers to be able to Port applications much faster from Web Two to web 3 right what does it take to build uh far more robust cryptography methods whether it's trusted execution environment it's fully homomorphic encryption and the reality is all of these projects would be go about innovating in their own ecosystems and their own silos but we can aggregate them and bring them all to the ethereum community thereby increasing the robustness of all these scaling Solutions across ethereum so there's there's a certain like Elegance to the solution where ethereum becomes the public common for Innovation whereas you know each of these projects can go go ahead and build their own individual ecosystems and like build a far more robust system so we're starting to see a bunch of applications that are being built and you see underneath IG da and igert those are specifically applications that we're building internally Igan da is a data availability service that is focused on you know scaling throughput for the ethereum ecosystem we're at 10 megabytes per second today and our goal by the end of 2024 is to reach 100 megabytes per second um you know we have some goals eventually to be able to scale to one gigabyte per second by by increasing the operator set that participates and keeping the per node footprint very minimal so yet again you can ask yourself what are the use cases that get enabled by one gigabyte per second throughput on decentralized systems right um let's imagine you could eventually host a fully onchain game with that's uh actually let's take it a step further right we could host the World gaming championships of a fully onchain game on a fully live chain live onchain streaming service with a live secondary betting Market that's all settling instantly all based on this like one gigabyte per second throughput like capability so and that's the reality of the internet that we all experience today on web to if you're watching the world DOTA gaming championships for example with $150 million prize pool right why like why do we experience any of the frictions that we do in web 3 today on web 2 the reality is the infrastructure is so robust that we can all uh get to experience the benefits of this right and so we want to enable just a fraction of these use cases at some point on web 3 and so the infrastructure must proed this um igert is a far more Technical and specific use case for uh signature aggregation on ethereum the cost of BLS aggregate signatures gets really expensive when um projects are required to sign and prove that they were storing some data or doing some actions and we want to build a service that not only helps us scale that operator set for Igan da but also enables all other rups to be able to use this and scale or you know go expand beyond the rup ecosystem and the ABS is these actively validated services that are building on the shared security system to be able to scale and so you know eventually um and you know I briefly had this custom staking thing on the previous slide let's see if I can go back lovely um so right now we have ethereum that's being rested uh to support all these protocols but eventually what we want to enable is custom staking so rather than just paying for the security in eth you can eventually pay for the security in eth equivalent emissions of these individual tokens so what does that look like right um let's just say rollup a is using igen da and they need to pay for da gas fees and currently those da gas fees are denominated in eth the rollup might be launching a token and those tokens might have a certain value and so we can essentially attribute um you know with that 100 Gig 100 megabytes per second we can fractionalize that into reserved bandwidth instances similar to AWS and now you can have very specific bandwidth certainty and price certainty of what your daes are going to look like so you're no longer fluctuating to the gas of ethereum but also you can now pay for that in your own token rather than paying in eth and it would just be the equivalent so we want to enable these like um High modality systems to exercise like subjectivity um there's objective faults and there's subjective faults right objectively attributable slashing is where we can identify a clear um you know party that's misbehaving and we can directly slash them now subjective slashing becomes far more interesting and far more difficult to do because it involves social consensus and we've run into issues um along that in various parts of the ethereum ecosystem but now we're starting to see um some potential solutions that we want to tackle that with and you'll be seeing that in the next couple of weeks next couple of months from the igen team here shortly so yeah we just launched on mainnet um it's been you know a crazy journey and now rakers can delegate to an operator of their choice and operators can register and opt into specific abss um the abss are an actively growing diverse set of projects and they're you know actively um we're actively expanding those sets of abss we have uh eight to 10 of them that have gone live already we have a bunch in the pipeline um shout out to our ABS ecosystem team that's like actively growing and incubating these we have projects that um we're building for the last few years and recognize that IG layer could be a security as a service module for them so they've adopted the igen layer standard and there's also projects that um are native homegrown incubated abss that we've taking a lot of time to involve ourselves in the protocol design even and so um interesting we don't have the list of abss that are live but off the top of my head um Omni lrange uh W uh near witness chain these are all protocols that are actively deploying right now so witness chain for example a watchtower Network like I mentioned earlier Omni and interoperability protocol um we're actively seeing Bridges uh a lot more solutions that are coming live into the ecosystem and so kind of going back to you know converting Cloud to crypto and emphasizing this uh need for Consumer use cases we're starting to see the rise of a lot of app specific use cases because the reality is um like I said users can be abstracted away from the uh enduser experience of crypto um users don't necessarily need to know that this is happening on the back end uh similar to similarly to how like a lot of SAS modules you're interacting with but you don't even recognize and so sequencers on rollups can give instant confirmation for app specific rollups so now you can behave very similarly to a web to centralized ecosystem you have um general purpose VM So eventually we could deploy games and you know VM code processors that will enable the porting of games nearly uh with far less development work required and you know we can eventually do gasless no wallet usage for authentic iated users we can introduce kyc and we can introduce like far more interesting robust security modules that enable um a future of crypto that has far more consumer use cases because the reality is right now we have a lot of defi we have a lot of um NFS order book Dees but we're just starting to see the uh Market of onchain gaming onchain social enter so there's a lot of interesting that interesting things that we can do with exactly composability where we have the security that comes from igen layer as well as um the rise of lrts liquid reaking tokens that enable far more liquidity options for these abss to be able to deploy native liquid staking tokens far more quickly or to be able to bootstrap themselves on day one with x amount of security that's uh bootstrapping their protocol so um you know I want to touch a little bit on some of the problems today but we can go a little further into what are the dominant costs right um there's shared security which is the security is a service which will reduce the capital cost of Entry rather than these projects having to go out and bootstrap their own tokens and create their own um you know create their own market cap for security uh paying for security as a service similar to you know compute as a service is a far more scalable model for enabling the uh ecosystem much faster right better distributed systems things like igen da which have much more throughput where the per node footprint is far more minimal reduces your operating cost dramatically and then right we talked about reservation we can reduce congestion costs we can eliminate gas as a concept and the reality is you know blockchain developers today um are restricted by block space they're restricted by throughput and they've been building for so long that to some extent the creativity gets limited by the inherent limit limitations of the ecosystem system so if there's one thing that I want the crowd to think about is what are the use cases that you could build on crypto when block space is no longer a limitation what are the use cases that you can build when gas gas fees and constant fluctuation is no longer um adding price uncertainty to your uh to your costing and so these projects can have far more robust um you know forecasting of their their security their costing um their operating costs and so you have a much much lower lift to be able to come and enter the ecosystem and build right um classic you only have a certain amount of money that you want to attribute to security or your compute or you know specific attributes and so you want to make sure that you're not um limited by the resources I know we're running low on time here so I want to skip through because I've already touched on some of this um but yeah we want to enable these l2s to be able to eventually outrun l1s because the reality is today um RPS don't have the block space that enables them they don't have the price uncertainty they don't have the exchange rate risk because they can't necessarily uh have uh uh they have price attribution between their rollup native token and E and so by enabling these you know custom staking models and things like that we want to enable a far more robust uh security platform to ig l so um IG L is focused on you know enabling shared security and bringing these new services to rollups um and you know we can really go beyond the space of just rollups with oracles Keepers zkp fhe we talked about a few of these things so you know the end game is what would we build if block space wasn't a limitation what would we do if security was no longer the barrier and now that you're no longer worried about the constant debt spiral and you know the limitations of your own ecosystem and you can drive this Innovation back to ethereum how do we drive ethereum to be the center of economic activity for the next you know foreseeable future and bring make an actual dent in the adoption of crypto and ethereum as an as an overall entity thank you very much