EigenLayer Overview: Decentralize Your Web3 App With Crypto Economic Security & Staking | Wes Floyd

[Music] Good Morning eth Denver hello everyone thank you for coming out my name is Wes Floyd I'm a member of the devil team at Igan and I am super excited to chat with you today about decentralization uh it's a topic near and dear to my heart been spending a lot of time in this space you to be uh proof of work minor pre merge uh and then working on decentralized Computing infrastructure for the past few years so I'm really excited to chat with you about this and particularly how reaking uh will help your Ambitions for apps web 3 apps to make them more decentralized and more valuable for your users so first we need to talk a little bit about decentralization why it's valuable I think this like Bears repeating uh as as the crypto space grows and there's various new projects that come along some are more centralized somewhere less uh and we'll talk about the challenges a solution that we have with reaking and then we'll also talk about an example taking an off-the-shelf peer-to-peer app that is not really decentralized but slapping some decentralization on it to make it more valuable for web 3 so uh first of all let's just kind of like reiterate the reason why we're here at eth Denver decentralization is really the value driver for everything that we do uh everything that we do could be done easier faster less expensive if it were not decentralized in web to uh so this is really like a major Focus area for us but also the market has valued this you know if you look at the market cap of crypto over the past 10 15 years uh this has really been the killer use case so let's think about how we can add more of this uh as we're building new projects and you know you think about new projects like decentralized social media decentralized AI decentralized Finance these are all fantastic and today you know people have to start building these projects with somewhat limited tools web 3 technology beyond the evm is still in its infancy and so our focus is helping build these Advanced uh infrastructure offchain systems but with all the goodness and benefits of decentralization so the decentralization is fun and it's fantastic but it's also expensive it's very difficult to build fully decentralized systems uh there's a couple reasons for this if you want to build a new decentralized app you you will need to raise potentially a significant amount of capital especially if your app is supporting a large amount of capital if you're building a bridge that secures a billion dollars worth of assets you're going to need to have a lot of assets at stake in a proof of stake system to secure it if you're going to run a network from scratch you're going to need to spend time recruiting those operators you're going to have to find a community you're going to have to incentivize them do you have an airdrop this is timec consuming and it's taking time away from your key Focus which is that specific web 3 app that you want to build and really like these things now are sort of commoditized every project has to do it right um in the past there were some uh smart Solutions like pokedon and Cosmos that allowed you to do this but they also required a consensus layer you had to make maintain consensus among those node operators uh which you may not inherently need or want to have to maintain so the solution is decentralization as a service plug in your idea to the existing service you get centralization for for whatever cost is worth it to your users uh so this is an example of a group out a consensus in fura Den decentralized infrastructure Network and they're using it to make their service more permissionless they're taking their decentralized web 3 app they're integrating IG lay for reaking and they are inherently making it more secure for their users so let's talk about how we do it Ian Lair decentralization as a as a service really provides a couple things it provides the capital the staked assets that are then delegated to operators uh it provides you the ability to not have to focus on building that operator Network because operators ready to go uh it also allows you to stake your token in combination with other erc20 tokens so when folks are staking assets for your service they're not just staking raw eth they could be staking your token and this helps bootstrap the value of your token over time so it's a good alignment of interest and ultimately gets your project to Market faster so how does it work so the key here the key term is cryptoeconomic security which is used many other places in crypto it's not exactly a new idea but it is generalized in a very special way so when we think about cryptoeconomic security we're talking about those staked assets we're talking about some validation and this is a really fun uh creative part of the exercise where you get to come up with your own validation algorithm slashing for misbehavior and rewards for positive behavior and sometimes we just refer to that as sticks and care carrots programming your own sticks and carrots for your network and the term that we use a product in the ecosystem that we refer to this is autonomous verifiable Services they run on their own they don't need you or your team to maintain them so they're more secure inherently they're verifiable because there's some verification that happens on chain you get to choose and design that verification and they run as a service so you have resters which are the capital operators which want to run the service on your behalf and then you as the person designing this uh verifi service and the fourth term we use is the consumer that's the person who's actually going to end up using the service and the way it's going to work is the Staker is going to bring in some Capital they want to stake into the ecosystem and the protocol they're going to delegate those assets to one operator that operators then going to choose from a variety of abss you know all these folks want to earn yield and uh rewards for their efforts so they're going to choose abss that are valuable that are that are meaningful that are paying rewards and they're going to run it at the best of their ability and if they do it properly you as the ABS Builder will pay them rewards for that effort and if they can um if they perform maliciously they will be slashed now the reality is all these folks want to behave correctly so they're going to try their best to do it but you're building a protocol a permissionless protocol a validated protocol and so this is where a lot of the uh the fund creativity comes in place it's very similar to the way that the core ethereum protocol works except rather than having a fixed algorithm for consensus and execution uh you get to design your own validation mechanism and your own work for the offchain operators so think of iig L protocol as a blank slate for a web 3 builder we bring the capital we bring the operators but you are bringing the real secret sauce and the secret sauce is how do you validate so if you wanted to build let's say an AI Network an offchain AI Network and you wanted to run inference on that Network and you wanted all the operators to help you run inference you get to design and think about how you want to validate that inference back on chain if they're going to run this autonomously for you what techniques should you use should you use trusted execution environments maybe you could use some ZK proving for your specific algorithm uh maybe it's optimistic execution you let them run as they want to but you let your users raise fraud proofs there's just a ton of flexibility in how you design this and when you put these together you have a beautifully decentralized web 3 service this is what we're trying to uh to enable for the community so if you go to app. .xyz you can see the uh the assets that are Stak in the protocol today this is the shared security that's available it's a mix of native eth uh could be from retail it could be from institutional investors and a mix of erc20 tokens you'll have the ability um if your token is not listed to add your token it's a permissionless protocol so you can say you know West token let's add West token as the as a stable token if if that's going to be your protocol that you're going to launch and then when you launch your abs you can require those operators to stake a mix of both native eth and your token which means they have skin in the game for your protocol and it also transforms your token instead of being like a let's say a a less valuable erc20 to being a meaningful value align token that is actually securing your own network so it increases helps ACR value to your token over time as well and then we also have hundreds of operators ready to go some of these are professional shops some of these are individual um solo operators but they're ready to run your service they're excited because they they're professionals at this and they want to earn rewards and they want to do a good job so that network is ready to go so I'll give you just one quick simple visualization especially for folks that are going to be building abss it's a good kind of mental model to start with at the heart of igen layer is this AVS contract this is a contract you implement it extends the IG contracts and it connects to all the staking and operations on the back end now this is a very simple small contract and it's very open in terms of what you can do all the slashing goes through here all the rewards payments go through here but beyond that there's a tremendous amount of flexibility the igen layer protocol itself is very open in terms of how you build it very often over here on the right you'll have some set of operators and they would love to receive from you some simple binary package they can run like maybe a Docker image or something and they just want to run it they want to do a good job if you give them instructions on how to monitor it they'll do that as well uh but they want to make it as simple as possible that's not exactly required there's some folks that have different organization structures and different ways there's a thousand different ways to kind of split this out you can have aggregation nodes is fun complexity you can get into there but at the end of the day the consumer is initiating some work for them either directly to the operators or on chain and they're getting their result after the fact all right so what are folks building on I there over the past year there's been a lot of investment and I would say almost ethereum native services so a lot of rollup Services mvs Bridges these are folks in the community that were already Building offchain Services but they were underserved in the sense that a lot of what they were trying to build there weren't native easy ways for them to validate them on chain so we're very proud of a lot of folks that have been building these systems on igen layer and if you go to app. .xyz there's a tab for uh abss and you can actually see the folks that are live on mainnet today going forward though we are seeing more traditional forms of compute like AI inference database compute storage it's very wide space of of innovation for people to build new technologies so if you have an idea for a service that you think could be useful this is a great time to start building on IG ecosystem and then you know beyond mainnet we have a lot of folks that are building in testnet or folks that are in development so the ecosystem is fortunately growing very quickly um on igir so let's give an example you know igir could be for the new project that you're trying to build but also you could apply this same reaking technology to an existing popular peer-to-peer app so for reference sake this is a fun example ipfs I had the good pleasure of working at protocol labs for about a year um a couple years ago and we were building the centralized compute on top of ipfs quick show of hands does anybody know what ipfs is anybody work with ipfs okay all right nice we love ipfs it's fantastic um but it was built so that it does not inherently natively have incentives for proper behavior and sort of you could run there's great services like pinata and web three storage uh you could host it yourself but none of these things are crypto native in the sense you would just send currency to some wallet address and say pin this file uh and then it automatically be pin on the back of again and as a result I mean you could argue that ipfs has not gotten as much adoption one of the engineers on a team that we work with I asked them you know they have this intermediate data that they were storing and I said why don't you store it on ipfs why are you storing it on S3 and they said well you can't rely that it's going to be stored or available on ipfs um which may have been a misnomer but it says something about the community's perception uh of ipfs so how can we make ipfs great again let's take ipfs let's slap some crypto Economic Security on it and let's create a new project so this project is an example project is called pin setion that's the name when you ask GPT for a fun name for a decentralized ipfs pinning service that's what you get so let me show you an architecture what this looks like so going back to the similar architecture here we have an ABS contract for this thing we call it pin setion we take ipfs binary off the shelf meaning it's really lift and shift we're not we're trying to do minimum amount of additional coding possible we run that binary and we add some additional logic in just JavaScript typescript go whatever language you choose that listens on chain for some new task to be pinned and then invokes the existing binary ipfs binary to say go pin this file and if you give that to a larger number of operators and you crypto incentivized them to run this you now have a decentralized network of ipfs pinning Services uh so lightweight code off the-shelf Docker container and then you can orchestrate it to make it as easy as you like for these folks and this code is actually up and available please do check it out uh at uh GitHub uh search for pin setion it's a fun example built off of our hello world example for Ian all right so just to recap everything you decentralization is a journey and I think you know folks building in the space have fantastic ambitious ideas please don't think of decentralization as a binary thing it's a it's a process you know ideally you'd have a road map for decentralization you start doing the best you can and you add in pieces ize them over time uh and we want to be a part of helping in that Journey so if you're interested in taking next steps we have a really nice simple hello world example you can run on GitHub it's available we've got docs you can start building your own ABS you can reach out to us I'd love to chat with you if you have ideas about building abss uh and then you can sign up for our community at build Onan and that is all I have for today thank you guys so much for having us good luck building cheers [Music]