Technical Considerations of Restaking Pools | Rohit Sarkar - InfStones

[Music] all right guys uh thanks for coming to uh The Talk today uh I'm Rohit I'm from INF Stones one of the world's largest note infrastructure service providers and we'll be talking about the technical considerations of reaking pools so um leading up to the launch of igen layer um everybody has heard of the word reaking especially eum ecosystem um and just to make sure everybody's on the same page I just want to go over what is reaking so for various proof of stake networks um they rely on cryptoeconomic security provided by the Network's gas token which are delegated to validators and we can think of these validators as computers that are solving math problems to propose and build new blocks in other words these computers can solve additional problems for a fee to secure additional networks so not only are these validators staking the original Network in this case ethereum but they're also staking other networks that are built on ethereum so reaking empowers new protocols by eliminating their need to establish a robust decentralized network of validators from scratch instead these actively validated services or abs for short can rent a portion of ethereum's existing validator Network so this is where we introduce the infamous and probably the most hype protocol release in recent memory igen layer so we can think of igen layer as the free market coordination engine that facilitates the incentives between Capital aka the stakers infrastructure aka the node operators and lastly code aka the actively validated Services these abs Protocols are critical and require distributed validation um some of them include oracles Bridges um it could be AI uh it could be other kinds of middleware including decentralized sequencers and igen layer is the protocol which secures these AVS built on ethereum by leveraging ethereum's existing consensus layer so igen layer enables stakers to opt in and subject their already stake eth to additional slashing risk in exchange for extra yield or rewards and uh that is for securing these other networks and us as node operators we facilitate the staker's delegation of these assets includ if either native Stak eth or liquid Stak eth tokens by registering and opting to offer various services to these various avss bolstering their security and functionality so we can think of igen layer as a trust Network each of the three parties the stakers the node operators and the AVS protocols they are all incentivized by self interest to trust and work together thereby creating a system that is truly greater than the sum of its individual Parts traditional blockchains lack incentives for decentralization it's a very overlooked aspect in the sense that there isn't any direct incentive to increase decentralization igen layer is novel in this regard because it allows AVS Pro protocols to specifically request a decentralized validator set thereby promoting the exercise of subjectivity in the network lastly igen layer introduces a potential for additional yield for achieving higher levels of decentralization thus directly incentivizing this critical aspect of blockchain infrastructure so what makes igen layer magic is its incentive and coordination flywheel all the parties are incentivized to work together and thereby producing a network effect that builds on each other so the more eth that are delegated to node operators or uh to um people who choose to validate themselves um increases the security for AVS protocols which are building on the network the more AVS protocols there are this incentive I vises DS to use these Lego blocks in order to build more uh robust applications on the network the more D apps there are generating fees this incentivizes higher reaking rewards for node operators to compete and provide as much value as possible in uh addition to the higher yield for the original stakers and the higher the reaking yield the more incentive there is for more Capital to join the network so uh just to kind of reiterate um the AVS protocols we can think of them as Lego blocks upon which other applications which are building on ethereum can leverage to really get a um a better product so Ian layer from a node operator perspective is truly a new paradigm this this platform introduces a dynamic governance model offering an open market for validators to choose modules and abs protocols that are aligned with our risk and profit goals in addition node operators are essential in this framework as we are the ones running the infrastructure that maintains the Network's Integrity with igen layer anybody can take on the role as an operator including yourself at a at home validator there by engaging in the network security um and to kind of get to the me of the presentation reaking pools on igen layer encourage Collective delegation to note operators so once you deposit either your um um liquid stake tokens or you point your existing Beacon chain validator the withdrawal address to an to igen layer um you have to decide who you want to restake with and and if you pick choose to restake with a node operator for that uh for that purpose we consider that a reaking pool and these uh igen layer offers a tremendous flexibility for all parties involved giving people a true free market experience and giving people really what they want so when it comes to delegating your liquid state tokens or your existing Beacon chain validator there's three options to go about reaking you can do Native reaking AKA you're running a beacon chain validator and you also choose to become a re um a node operator on IG layer yourself you can delegate with an operator such as ourselves in stones or you could simply buy a liquid reaking token on the open market and all three of these options have their own pros and cons uh the most important of which is reward flexibility so if you are running your own Beacon chain validator and choose to become a node operator and delegate to yourself you have the most flexibility in terms of your rewards as these AVS protocols choose uh uh the node operators to work with and the node operators choose which AVS that they want to work with you have flexibility to um choose as many abs protocols to work with thereby maximizing the potential rewards for for yourself with liquid reaking tokens because they're a fungible asset the protocol um which you are buying the liquid reaking token from they are the ones who get to decide which basket of ABS protocols you will support meanwhile no operators um we will be able to offer multiple packages of AVS for a custom solution that meets both your risk and reward profile uh with smart contract risk obviously for delegating yourself it's very it's like the least risk if you're buying a liquid reaking token you're adding multiple additional points of failure and with smart Contra uh with uh pooled reaking AKA delegating to an operator um you are introducing a new point of failure when you engage in the oneclick reaking um with regards to counterparty risk because you are responsible for picking all the AVS yourself vetting them it is the highest risk when um delegating to yourself whereas if you are delegating to a node operator we vet and uh do research on all the AVS uh based on their business models their uh sustainability their uh maliciousness for you and that makes it a much less risky option when it comes to counterparty um so with regards to um some further topics um with Native reaking you have to run your own Beacon chain validator and as a result you have to have multiples of 32 e whereas with both pulled reaking and liquid reaking tokens there's no minimum as long as you can pay the gas fee setting up your own reaking module uh setting up your own validator node requires a lot more technical skill than delegating to a node operator or simply buying a liquid reaking token where we uh guide you and hold your hand through each step of the process and lastly with regards to custody in crypto it's not your keys not your coins um with a liquid reaking token you are simply buying um the right to redeem your eth from the node operator whereas with um p reaking and Native reaking you control your keys and you're able to withdraw and maintain full custody of assets so with I layer launching mainnet very soon there are dozens of operators that will launch on day one and it might be daunting from an end user perspective to decide which one am I going to pick so this is where the technical considerations come in and you must include the risk profile of the ABS protocols a node operator are supporting and this is similar to assessing corporate bond yields in traditional Finance uh when you're investing uh with for example um a a Asset Management Service so as an enduser you have to make sure that you understand the key risks of restating are the slashing risk that could impact your principle if slashing rules are violated by these additional AV s protocols the liquidity risks of introducing lsts in the pool delegation and lastly the concentration risk from heavy investment in a single AVS by the node operator so what are a we node operators doing to mitigate this risk well we are optimizing the individual AVS parameters including tvl caps slashing rules and fee distribution for the end user safety and we're also diversifying across multiple AVS protocols to mitigate any correlated risks so in uh to add to the um analogy above with traditional Finance um basically we are emphasizing the Strategic allocation and risk management necessary for Effective reaking by the end user in essence selecting an operator involves balancing the potential rewards against the operational and financial risks inherent in reaking within the igen ecosystem so imp Stones us as a node operator where we shine is our experience uh we have an ex extremely experienced and technically Adept team trusted by industry leaders since 2018 we proudly stand as an exclusive node operator for sw's liquid reaking token and we maintain exclusive Partnerships with Ren out entities like binance and M token we've been deeply involved in all the ethereum staking Lio liquid staking and igen layer reaking ecosystems from day one we have an impeccable validator track record with 100% liess and 98% Effectiveness rating and lastly we've already partnered with several of the initial showcase AVS projects and we'll be supporting them on mainnet from day one these various AVS projects are not obligated to work with every single node operator in fact us we are putting ourselves in a position uh for future promising AVS projects to want to work with us and our expanding research team heavily vets each potential new AVS to ensure sustainable Partnerships useful software sustainable business models and avoiding any malicious actors so to kind of wrap it up um igen layer is one of the most most exciting things to happen to ethereum since its exception um we're introducing a whole new primitive and we anticipate a robust and healthy ecosystem with hundreds of innovative new AVS projects in the coming years um aside from just Bridges or um oracles or decent sequencers igen is innovating in terms of the feature set that they allow AVS protocols to have two recently uh announced projects are one Athos which is a decentralized policy engine for governance and two ritual which is a machine learning model that can be used to estimate real-time parameter values for various applications like Unis swap that are built on ethereum so um with ritual for example Unis swap has to calculate in real time values of their functions and that can be automated with this abs and it'll calculate the values for the function using real-time orderflow data so we're only limited by our imagination in terms of the Legos and building blocks that we can build with igen layer um igen layer um if you guys haven't heard yet um is having a a point system for delegating to their protocol and we recently released an article about how to potentially qualify for that airdrop and uh you can visit inst stones.com to read that article so uh just to kind of wrap it up if there's any questions um inst Stones we are one of the largest node infrastructure service providers in the world uh our four products are safe stake uh where you can safely stake on the world's leading proof of stake blockchains with with us power node uh you can deploy blockchain nodes across more than 80 networks with one click our Lightning Fast API access to over 80 blockchains and and lastly blockwatch where you can get Lightning Fast API access and command and control your services 24/7 uh thank you guys for coming to the presentation today I really appreciate your time and look forward to next time have a great day guys