Sreeram Kannan - EIGEN: The Universal Intersubjective Work Token - TOKEN2049 Singapore 2024

hi uh hi everybody good afternoon thank you so much for coming to my talk I'm tram founder of Igan lay uh today I'm going to talk about the state of the Igan universe so you may have seen some of my earlier talks where I mostly talk about the future today I'm going to talk about the present and what we've done till now okay so firstly what are we all about the core principle at aan L is open Innovation we want to let anybody who wants to build new Services built on top of aan layer how do we do this if you look at like a blockchains architecture there are four fundamental layers security staking or mining consensus nodes come to agreement execution you run an execution environment like bit Bitcoin script or evm applications built on top and Bitcoin vertically integrated all of these to offer the first decentralized token the Bitcoin you know the main purpose of the Bitcoin blockchain is to send an receive Bitcoins what ethereum did is to modularize this further where we ethereum said hey I'm going to let anybody come and build apps on top of a common trust system so the first modular blockchain is ethereum because ethereum created the idea that apps can be built on as modules on top of a common substrate and so this allowed Innovation and all the smart contracts that we see today is a consequence of this architecture and then you go further and then like what happened was ethereum went into the rollup era in the rollup era what's happening is the execution is also open Innovation anybody can come and build a new execution layer now if you're building a rollup you can have your own execution environment and prove to ethereum that you did the right thing so again expanding the scope of innovation that's why we see a sprawling set of l2s today in ethereum what I is doing is taking this permissionless Innovation and making it even deeper so now even in ethereum today you can't go and change the consensus protocol how nodes come to agreement you can't ask the nodes to store more run different Hardware take a different token none of that stuff and that's what I allows you to do is a common layer of shat security where you can actually run arbitrary new consensus protocols new execution layers and applications on top okay so any crypto service should be able to be built on I ler that's the core core idea so so what is I layer I layer is a four-sided Marketplace I'm seeing three sides here stakers people who bring in money and make promises that they're running the right thing operators bring computational resources to actually run these Services ABS developers ABS is actively validated service any service built on igen layer is called an AVS so these three services come together on the igen layer platform but all of this is only useful if it's serving some end user applications so stakers operators and AVS developers come together to serve AVS consumers so it's extremely hard to build a four-sided Marketplace the first time you know um Chris jury who was an exec at AWS you know when I met him I told him hey we're building this four-sided Marketplace in 2022 and he said you must be crazy there's no way to bootstrap a fored Marketplace and you know he joined us later as coo and you know on this adventure together and the way we do it is go oneid at a time we started on Main net last year June 2023 with staking so stake staking went live then we opened up to operators in November last year on testnet and April this year on mainnet again avss went live earlier this year and consumers are starting to use it so I'm going to explain today what we're doing on each of these sides so you know what we're building so firstly we invented the idea of reaking now it's become a whole industry category furthermore there is a subcategory liquid reaking tokens invented on igel and now you know spreading to all of crypto so even though we have this massive proliferation of the score idea Ian L is the only native reaking protocol till date what does it mean by native reaking you stake in a core protocol like ethereum and then you can also restake which means participate in all these other services without having to trust an ex external operator or a liquid staking protocol you can just do it yourself and this means both institutions and home stakers alike can participate in the agary economy unlike other systems okay so how are we doing on adoption on the staking side you know you'll see news like this that oh the tvl of i l is down by 10 billion and actually let's see what the reality is so here's the plot of the te V the total value logged in Theon protocol over time and what you see is actually you know it's up and to the right and why is this happening so you know you see the it's roughly fluctuating around 5 million e why are these people saying that the T of air is down it's because they're measuring it in US Dollars and E to USD is down so there's nothing to do with air you know I don't know how they do these calculations but this is where the a protocol is on the Staker side so going beyond that one of our core principles is rapid iteration listen to users make things better here's an example of a core uh developer in the ecosystem left terus and you know he was very worried that the I protocol staking and claiming rewards very expensive you know this was back in may he took his feedback we improved the protocol and in September this is left his tweet saying hey you know instead of saying saying hey I'm I'm troubling you guys with all these bad comments we actually improved the protocol invented something really new which reduced the gas cost like 10x so that's that's how we do it we take feedback from the community and then iterate our products so that we can actually deliver really sophisticated experiences operators so we talked about stakers the first side operators operators can now run a variety of nodes which means you know you can run CPU you can run GPU for like AI acceleration or decentralized proving trusted execution environments you can run it on bad metal you can run it on like you know all kinds of different nodes so operators on I layer all the top operators have come together to help supporters starting from coinbase figma P2P Google Cloud all the top operators in the space really glad to have them in addition to home stakers and operators in the ethereum ecosystem okay so talked about stakers and operators let's go to the next side of the marketplace AV s actively validated Services you should think of avss as the heartbeat of a reaking or an of the IG ecosystem why is this AVS is where like some developer comes in and is building a new breakthrough service on top of wagon layer and to when you're choosing a platform for building your service you want to make sure that the platform has enough robustness enough rigidity that when you're building it it's going to last for at least four years so it's a very hard choice for developers and as leaders in the ecosystem we've actually cultivated this new category creating a category is very very difficult we've done this many many times till now in the AG ecosystem and one of the things we see is this idea of actively validated Services now being used all over the industry and here is an example from our friends in salana oh oh finally a real use for reaking in the salana ecosystem distributed policy enforcement know the squads protocol which we really like is using it and they were saying oh you know this is something new that only invented on salana actually EOS one of our protocols on agair invented this idea of the decentralized policy engine you know back in February and what we see is basically innovators inventors coming and inventing some of the best coolest stuff in crypto on Ian and many many such use cases I'm going to talk about a few here uh I gave a talk on what is an actively validated service what are the categories of new things that can be created when people think about reaking they think oh go run a new chain that's not interesting actively validated service means you can think of any offchain service that you can offer with high trust guarantees that's what an actively validated service is on AG you see like a massive category of avss so the idea was that hey we should let the ecosystem create these categories one year back and then what we see today is in every different every one of these categories rollup Services whether it's sequencing bridging me watchtowers co-processor AI inference Linx running a linx node databases ZK PRS all these categories we see there's at least one many in many of these categories being built today so AVS is actively validated Services they bring the Innovation The Invention into the ecosystem uh today there are 18 on Main net 40 on test net and 100 plus projects built on I in various stages of development they have gone beyond what we proposed last year in inventing and defining new categories this is the thesis of open Innovation who would have guessed in 2014 when ethereum launched what applications will become popular nobody knows because when you make permissionless Innovation easy many people come in and invent and that's what we see happening through rup Services we see deepen we see new cryptography like fully homomorphic encryption if you look at all computation today it's all you know in blockchains they're all done plain text but you want privacy so can you do computation on encrypted data directly so fully homomorphic encryption we see ZK TLS which is basically the idea that I can log into my Uber or my Bank of America or PayPal and prove to a blockchain that I have a certain balance or I have a certain credit history any of these things into uh you know I L and ethereum D you know intelligent defi is a new category that is being created which is when you're running your D protocols can I bring additional intelligence AI co-processors all of these stuff to bear on you know your main net operations pre-confirmation when I'm running an ethereum node can I promise to you that I'm going to confirm your L2 transaction before an ethereum block is made really breakthrough stuff all happening on agon so when you have all these different sides taker operator abss how do you bring them together and create a functioning economy that's something we put on a lot of thought however our original model we had this idea of Shad security Shad security means if you stake and opt into 10 avss all your e or whatever tokens could be slashed by any of these avss so one of the problem with this you know one of our community members and Founders in our spa in our ecosystem Jane observed that hey you know when you do this what happens is there is no incentive for an AVS let's say I have $10 billion of stake and there are hundreds of avss why should I pay a lot to grow the stake because you know it's all common stake so this leads to the tragedy of Commons so what we did is we took this feedback not only from Jin but from the broader Community actually invented a new mechanism called unique Security in unique security what happens is when you're staking you promise that a portion of your stake can only be slashed by a certain AVS so if you're an AVS you're like hey I want high quality assurance then what you do is you want more unique security so now for the first time what happens is avss want to pay so if there is 100 avss each of them want $1 billion of stake together you get1 billion of stake so this is a re reimagination of the core economics of ion layer and we go back and see what our ecosystem members say a smile found of lrange building on a you know says hey actually this solves our fundamental problem of how to do payments in such a way that we guaranteed a unique portion of STI okay so another issue that came up when you think about aen layer you know earlier we had this model of Shad security when you have Shad security if one AVS goes berserk and slashes everybody then you're in deep trouble the protocol is in deep trouble because there's a contagion risk and so what we did did is we invented with the invention of new unique security we said now you don't need a permission committee to decide whether slashing is valid or not so there's no veto committee anymore and no permission for an AVS to build on I layer anybody can come and build whatever they want so you know here here's uh Shapiro um you know a super lawyer in the crypto space they said hey you know I slashing is all social slashing this is back you know several months before and then after he saw our new proposal it's like wow and just like that I L fixed most of its issues so we we're not only building a protocol based on ideas that we already have but listening keenly to our users and the community to see how we can improve it Beyond Igan layer we're building a product called Igan da which is a hyperscale data availability service many people wonder why is the reaking protocol building a data availability service what is reaking reaking is Economic Security you promise that if something goes wrong any harmed party can trigger slashing and force the correct economics however for a slash party to enforce the economics they need access to the data I don't even know what the data is how am I going to challenge that this computation is wrong so if you're running an AVS if you're running a cryptoeconomic security system it's only as secure as the data availability layer that it's built on and you know all the copycats of like reaking don't understand this because they're not thinking from first principles and what happens is unless you have a hyperscale data availability system you can't just offer cryptoeconomic security so but it raises a new problem you need a da a data availability system where you can publish data and anybody can access it which is more throughput than all these Services put together how do you build such a thing seems like like impossible if you think of each AVS as like a chain I have to run now like many many chains on top of a common system and that's exactly what we did with Igan da so here's the reason experiment we did we IG da is a service you know we built running on mainnet and you know this website www. da. WTF you can go and check out what what is going on what we do is we crawl every chain all the top chains we can get our hands on and then write the data to Ian da and even so we've only been able to fill half of the througho of Ian da and we're improving it simultaneously what chains am I talking about am I talking about just like low throughput chains like Bitcoin no this is everything this is Bitcoin this is ethereum this is Celestia this is Solana this is optimism arbitrum base everything that we can get our hands on we write to Ian da why are we building a DA like I said da is the Kingpin to make sure your cryptoeconomic security actually works because if your data is not available nobody can challenge it so this is the only why are we able to do it when nobody else is able to do it it's the only horizontally scaled system what do youan what do we mean by horizontally scaled system it means as you get more nodes you get more throughput we have many partners which are adopting it both you know chains like cell which were an L1 and want to come to ethereum use Igan da but also new projects like magga want to build hyperscale uh rollups they build on igda so I serves another purpose to the igen layer ecosystem which is to bootstrap consumers imagine like there are many app rollups using Igan da then it's very easy for them to integrate other igen layer Services consume other avss so there's a cross Network effect between end da and avss and in fact we have a cryptoeconomics where like when you want to consume multiple avss your costs actually lower so that's the four sides talked about stakers operators AVS developers consumers it's extremely difficult to bring this ecosystem together and yet here we are today where each side is thriving and there's something really interesting going on here at the center of all of this is the igen token which is the coordination mechanism to align all these different parties to work together and one of the things we figured out is what is this igen token is it just a regular erc20 token sitting on ethereum no the igon token is designed to uniquely promote more innovation in the igon layer ecosystem and what is this new innovation for so if you think about what I L is is like people stake eat and then make a promise that they're going to run a service correctly but if you want to slash them you can only do it for onchain observable tasks but there are many tasks which are not onchain observable but only human observable think of poly market and you want to bet on who wins the US Presidency how do you know how does the blockchain know whether Trump won or Harris won how do you know that how does the blockchain know you have to either have like a you know token group of token holders vote on it but what if they all lied what if a majority of them colluded and gave you the wrong answer you put in a committee you don't want to trust a committee so what we do is we invent a new mechanism M called slashing by token forking where if a majority of these token holders collude and make invalid promises then they will lose their value by forking the token but forking the token should not be done lightly because your token may be on coinbase your token may be on trading on a de it may be in a lending platform and you want to make sure that you can actually work all of these work together correctly even though your tokens forking and that's exactly what the igen token does that's why we call it the universal work token and it unlocks much more Innovation than what I layer was originally possible to do now when you know normally on I ler if you want to write a service you need to write a fraud proof and a slashing contract but for many many things imagine I'm building a game I need to write a fraud proof for a game very difficult databases me engines all of these things are very difficult you can do all of them with igen staking and human observable FS that are Falls that we pointed out earlier that simply cannot be observed on chain like data availability sequencing prediction markets AI huge category can be built with igen staking finally the our vision is not just to build a reaking platform our vision is to try to build Humanities coordination engine what do we mean by that if you look at any successful complex system like take the USA for example you have this underlying layer of coordination like the Constitution like the government and on top of it there is a of innovation the free market where you know people can create and trade goods and services freely and when you look at the what technology has done it has massively accelerated The Innovation layer because technology is leveraged to the free individual however coordination mechanisms are all centuries old think of gold think of money think of common stock Corporation think of Double Entry accounting think of the Constitution and Tech platforms are no good they're all autocracies run by single monarchs what do we do we want to provide an alternative and aan is here to build Global Internet native self enforcing coordination systems coordination systems which do not trust an authority which do not trust a majority which do not trust a committee they enforce themselves correctly that's what we're here to build and we're really glad you're here with us on this journey to invent thank you