Speaker 1: For the first time, blockchains are going to have access
Speaker 1: to fully verifiable, fully on chain AI agents. What if
Speaker 1: there was a universal mechanism for staking and say I
Speaker 1: can now run one hundred networks on top.
Speaker 2: Of this, Do you think eth might end up being
Speaker 2: a better treasury asset because of the naturally built in
Speaker 2: staking component which generates ye If wall streets isn't hunt
Speaker 2: for yield, this is the better avenue.
Speaker 1: Absolutely. They want to minimize downside risks but still have upside.
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Speaker 2: devices and services, visit the link in the description. Hey, folks,
Speaker 2: welcome into the Thinking Crypto Podcast. I'm your host, Tony Edward,
Speaker 2: and joining me is Siram Kannan, who is the founder
Speaker 2: and CEO of eigen Labs. Rem great to have you.
Speaker 1: Really excited to be here and on the Thinking Podcast
Speaker 1: with Tony executed to discuss all things and crypto.
Speaker 2: Absolutely, and it's great timing because the SEC just recently
Speaker 2: announced updates to how they're treating liquid staking tokens, and
Speaker 2: Eigen Layer obviously doing a lot when it comes to
Speaker 2: staking on ethereum and I'm really excited to dive into
Speaker 2: the details. But let's kick it off with your background.
Speaker 2: Tell us about where you're from and your professional background.
Speaker 1: Absolutely, before I started iving four years back, I used
Speaker 1: to be a professor at the University of Washington, Seattle,
Speaker 1: where I ran the U w Blockchain Research Lab. I
Speaker 1: got into crypto eighteen, like you know, transition, and before
Speaker 1: that I used to work on genomics and AI, and
Speaker 1: so I switched pretty hard from doing that into crypto.
Speaker 1: In fact, I had the opportunity to even write a
Speaker 1: research paper with somebody who won the Nobel Price last year,
Speaker 1: David Baker. So came from a very different genomics related
Speaker 1: background and then like swerved heavy into crypto. I can
Speaker 1: tell you why. But also before genomics and actually even
Speaker 1: before bitcoin, actually I was working on peer to peer
Speaker 1: wireless systems. How do you build like a wireless network
Speaker 1: where you don't have a base station, you don't have
Speaker 1: a Wi Fi access point, nothing, just do I just
Speaker 1: stuck to each other and then create networks. So that
Speaker 1: was what I was working on, and then I moved
Speaker 1: from that to work on genomics and then at some
Speaker 1: point discovered oh my god, bitcoin ethereum, these things are happening,
Speaker 1: and so I switched back into that. So that's that's
Speaker 1: a brief history of from my background.
Speaker 2: And what led to founding eigen layer and you know,
Speaker 2: building this technology and specifically on etheroereum of course.
Speaker 1: Yeah, So what happened was in seventy twenty eighteen. First
Speaker 1: I got interested in this idea that the blockchains can
Speaker 1: solve coordination and trust problems, because you know, people coordinate
Speaker 1: with each other when they can trust each other. But
Speaker 1: if there was a system that didn't need you to
Speaker 1: trust each other, that underwrights trust for all kinds of interactions,
Speaker 1: then we can actually create way more human coordination. So
Speaker 1: that became like my driving thesis, and as I was
Speaker 1: looking at you know, initially what we did is we said, oh,
Speaker 1: but for this technology to scale to coordination problems, not
Speaker 1: just off money or finance, but much more broadly. Right,
Speaker 1: like trust is a kind of fundamental ingredient of all
Speaker 1: of society, and so if you want to upgrade all
Speaker 1: of that, we need much more expressive, much more programmable systems.
Speaker 1: So you need to be able to write, for example,
Speaker 1: an AI inference protocol which is on a decentralized network.
Speaker 1: You need to write like a storage network which can
Speaker 1: store patabytes of data on a decentilized network. You want
Speaker 1: to do all these things. Existing blockchains are not meant
Speaker 1: to have this level of programmability. Blockchains like Bitcoin and
Speaker 1: etherium expanded the amount of programmability of bitcoin. Bitcoin came
Speaker 1: up with this absolute breakthrough concept of you know, money
Speaker 1: that is verifiable, only twenty one million coins, you own
Speaker 1: your coin, right, But then Ethereum took it one step
Speaker 1: further and said, hey, now on top of Ethereum, you
Speaker 1: can write programs that live and run forever in the
Speaker 1: way that you set them up without having to trust anybody.
Speaker 1: And so anybody could come in and permissionlessly come and
Speaker 1: innovate and create new programs. You don't have to trust
Speaker 1: who they are, what their parents are, like, whether their
Speaker 1: friends with JP Morgan or not. But on their own
Speaker 1: individual basis you can say, oh, this is a good
Speaker 1: program that I actually want to invest, to trade with,
Speaker 1: to be my counterparty, to hold my funds, whatever. And
Speaker 1: so that's a really big deal that I saw. But
Speaker 1: that still didn't have enough programmability to say I want
Speaker 1: to start a new consensus protocol. I want to change
Speaker 1: like you know, all the notes, run AI inference, or
Speaker 1: like run some other gaming virtual machine to actually run
Speaker 1: the network. It doesn't have that kind of program really,
Speaker 1: the program really is still very limited when we think
Speaker 1: of blockchains today. You know, in twenty seven when I
Speaker 1: came and people said, oh, if we can build the
Speaker 1: next Uber, next, Twitter, next, you know, Amazon on top
Speaker 1: of this. But simply even today we are nowhere near
Speaker 1: that we've got on like major milestones as a crypto
Speaker 1: community with coin's mainstream defis going mainstream now just getting started,
Speaker 1: but the set of things you can actually build on
Speaker 1: this goes much further. And so that's why Igen layer
Speaker 1: igen in German for your own layer. Anybody should be
Speaker 1: able to come and build your own layer, Like whatever
Speaker 1: you have in your mind, you should be able to
Speaker 1: express it and build that on top of Igen layer.
Speaker 1: So that was the kind of core idea. And so
Speaker 1: the thing we realized is as pretty much all of
Speaker 1: crypto discovered proof of steak or steaking, which is the
Speaker 1: idea that you put down your digital assets and then
Speaker 1: promise that I'm going to run like the eat or
Speaker 1: the sole network correctly. Right, Like, say you take these blockchains,
Speaker 1: promise that you're going to run them correctly, but they
Speaker 1: were still only for that one network, right, So you
Speaker 1: steake Heath and then you run Ethereum, steak Soul and
Speaker 1: you run Salana whatever other network. Right, But what if
Speaker 1: there was a universal mechanism for staking steak heath or
Speaker 1: whatever token and say I can now run one, two, three, four, five, six,
Speaker 1: ound eight, one hundred networks on top of this. Then
Speaker 1: anybody who wants to build a new network can think
Speaker 1: of igen layer as like just like the cloud, I
Speaker 1: just take my program and upload it to the cloud
Speaker 1: and the cloud runs everything. Right. So now instead of
Speaker 1: each person trying to build a whole new l one
Speaker 1: or a decentralized community for every single project, they have
Speaker 1: already you know, fifteen to eighteen billion dollars of steak on,
Speaker 1: I can layer. They already have the two thousand operators
Speaker 1: that exist all around the world. And then you just
Speaker 1: press like you know, take your programs, send it to
Speaker 1: this network. All the notes will now download and run,
Speaker 1: whether it's gaming, whether it's AI, whether it's Mataurs, whatever,
Speaker 1: the new one or the new uber, whatever you want.
Speaker 1: And that gives you a level of control and program
Speaker 1: believe that simply hasn't existed in crypto before. So that's
Speaker 1: the whole idea of iron layer. Very interesting.
Speaker 2: So I want to make sure I wrap my head
Speaker 2: around this and also for the viewers and listeners. So
Speaker 2: you have etherm as a layer one is igen layer
Speaker 2: layer two, and it's pulling the steake eth bringing the
Speaker 2: security elements. And then if I'm uber, like you said,
Speaker 2: building a layer three on top of eigen layer.
Speaker 1: Yeah, I think the layer one, layer two, layer three
Speaker 1: is like somewhat confusing terminology, so I avoid it. But
Speaker 1: what is absolutely happening is iigen layer is a program
Speaker 1: running on top of Etherium, right, so that's correct. So
Speaker 1: you have ethereum, and then on top of Ethereum is
Speaker 1: a smart contract, right, so that's the smart contract that
Speaker 1: holds this whatever eighteen billion dollars of fund and so
Speaker 1: that program basically says, lets anybody else to come and
Speaker 1: create new networks. Right, so you can come in and
Speaker 1: say I want a storage network on Angonler. And then
Speaker 1: when you say that, that storage network itself doesn't require
Speaker 1: all the eath notes to run your storage network. It's
Speaker 1: basically people who have registered on Igonler, they go and
Speaker 1: run it. And all that happens on Etherium is settlement, right,
Speaker 1: And what does settlement mean. Settlement is, Hey, you said
Speaker 1: you're going to run this network, and you ran it correctly,
Speaker 1: so I'm going to pay you out. Or you said
Speaker 1: you're going to run this network and you behave maliciously
Speaker 1: either attack the network whatever thing. Therefore, I'm going to
Speaker 1: slash you, which means take away your funds. That's the
Speaker 1: only thing happening on etherium is settlement, either of payments
Speaker 1: or off like these slashing conditions. So what that means
Speaker 1: is now all these networks are not constrained by anything
Speaker 1: related to etherium. Right, it doesn't matter what the ethereum
Speaker 1: conformation speed is, what the etherium data throughput is, computer programmability, restruction,
Speaker 1: none of that matters. All that matters is you just
Speaker 1: have the same group of stakers and operators, and that
Speaker 1: settlement happens on ethereum. But now the set of things
Speaker 1: you can build are actually much more complex than layer
Speaker 1: one protocols because most people when they build another layer one,
Speaker 1: they just take the existing code base and say, here
Speaker 1: is just a clone of the same thing. Right in Cosmos,
Speaker 1: there are lots of al ones. They're all just the
Speaker 1: same thing, just running another instance of the same protocol.
Speaker 1: Whereas an agon layer people build new and unique kinds
Speaker 1: of networks because that's what So this is part of
Speaker 1: our observation is people had to start a whole new
Speaker 1: layer one ecosystem for every new idea and they just
Speaker 1: fragment it into like, oh, this is file coin, file
Speaker 1: coin storage, but that's all that it does. But is
Speaker 1: it money? Is it like has the best wallet? Does
Speaker 1: it have the best like defile. It's just like five
Speaker 1: hundred things to create to solve a layer one ecosystem.
Speaker 1: So instead we said, don't worry about all that. Build
Speaker 1: a new and productive service that grows the net market
Speaker 1: gap of crypto itself. And so that's what people do
Speaker 1: on top of Igon layer. But the layer one layer
Speaker 1: two is kind of right, but we don't use that
Speaker 1: terminology because it's confusing. This is specifically what happens.
Speaker 2: So with the let's say we have Uber, we get Apple,
Speaker 2: we get Amazon. A bunch of companies looking to build
Speaker 2: on Eigen layer. Tell us about the freedom that they
Speaker 2: would have. Do they have full autonomy to build what
Speaker 2: they need to do, have the security, privacy and these things.
Speaker 1: Yes. So one of the things we obsess about is
Speaker 1: full programmability, which means you should be able to express
Speaker 1: anything that you could do. If you build your own
Speaker 1: new Layer one, you'd have exactly the same amount of
Speaker 1: control on Igen layer, except you don't have to worry
Speaker 1: about issuing your own new token. You can if you want.
Speaker 1: In fact, igen layer allows not just taking EAT but
Speaker 1: any token that you want. So you say, oh, I
Speaker 1: don't want EAT to secure it or Egen to secure it,
Speaker 1: I want my own token to secure it. Absolutely can
Speaker 1: do that. But you don't have to on day one
Speaker 1: need that in order to just launch your network. You
Speaker 1: can use you can use iagend these already there on
Speaker 1: the network. There is people staking and running operators for this.
Speaker 1: So when you come and deploy your service you can say, yes,
Speaker 1: it's running, and then you build a certain amount of
Speaker 1: market momentum before you launch a token or whatever other
Speaker 1: things on top. So when somebody like Uber is coming
Speaker 1: in or ideally a competitor to Uber, like Uber takes
Speaker 1: right now like fifty five percent of the fees paid
Speaker 1: to like taxi drivers, just like so unfair. In the
Speaker 1: large scheme of things we in crypto space, we talk
Speaker 1: about removing the intermediary, right, and there's no intermediary like this,
Speaker 1: like taking food. I mean the guys like sweating driving
Speaker 1: his car, and then like somebody comes and takes some
Speaker 1: favors and I mean it's just a completely different magnitude
Speaker 1: than even payments. People say Visa takes one two percent
Speaker 1: or three percent, right, and this is somebody taking fifty
Speaker 1: five percent. So when somebody else wants to come and
Speaker 1: compete and build a competitor to Uber today, what happens
Speaker 1: is you have to write like a competitor to Uber
Speaker 1: on an etherium or a Solana smart contract, and it's
Speaker 1: just not possible. It's completely impossible to do that because
Speaker 1: Uber has you know, you have maps, you have like
Speaker 1: data storage, you need like right matching at like you know,
Speaker 1: speed of thought. Right, you can't wait, you don't want
Speaker 1: to click and wait for like, you know, twelve minutes
Speaker 1: for some finalization to happen. But that sell out of
Speaker 1: programmability that you get on Agen layer is you can
Speaker 1: actually do like a pretty high level of programmability. In fact,
Speaker 1: what I didn't talk about earlier is we did this
Speaker 1: recent umbrella branding called eigen Cloud. And so the idea
Speaker 1: of Eigencloud is to say, hey, there is iigen layer
Speaker 1: at the base which is providing shack security. Right. It
Speaker 1: is a common security layer, and the security layer is
Speaker 1: built on top of ethereum and it inherits you know,
Speaker 1: some of the trust properties of ethereum itself, but the
Speaker 1: layers are built on top. We built a layer called Igenda,
Speaker 1: which is a data layer, so you can write data
Speaker 1: to it at the highest throughput in all of crypto.
Speaker 1: We just launched last week on main net an upgrade
Speaker 1: which takes it to one hundred megabytes per second. It's
Speaker 1: faster than so long, it's faster than anything else out there.
Speaker 1: So that's a throughput layer. So now when you're building
Speaker 1: your applications, you don't have to worry about where do
Speaker 1: I write or publish all my data for anybody to
Speaker 1: access it. It's already there. It's called igen Da. It's
Speaker 1: the fastest throughput in all of crypto. You can just
Speaker 1: like write data to it. And then we're building another
Speaker 1: service on top called I can Compute, where you basically say, oh,
Speaker 1: run any computation. You don't need to worry about, like
Speaker 1: how to build a decent lized network, basically abstracting more
Speaker 1: and more components inside the IGON ecosystem and then saying
Speaker 1: it take a kind of software package, give it to
Speaker 1: I didn't compute. It will run everything. It'll put the
Speaker 1: data on iigen Da, it'll do settlement on iron layer,
Speaker 1: everything so you don't need to think through all these things,
Speaker 1: just making it easier and easier for developers to build
Speaker 1: these complex functions very interesting.
Speaker 2: So Ethereum obviously has the first mover advantage as a
Speaker 2: smart contract platform has the security hasn't had any downtime,
Speaker 2: It's had incredible uptime compared to some competitors. So with
Speaker 2: eigen Layer, you know, sitting on top of it, is
Speaker 2: there any concern that eigen layer may have downtime or
Speaker 2: is that all being.
Speaker 1: Secured by eth easing question? So igen layer actually is
Speaker 1: a smart contract round over tum. So there is like
Speaker 1: as long as the theem is running, I can layer
Speaker 1: itself will run, but your particular network may be secured
Speaker 1: by some set of operators. Right there could be like
Speaker 1: five operators, ten operator, one hundred operators stall there are
Speaker 1: two thousand operators on igen layer. So depending on how
Speaker 1: much you're willing to pay and how much you know
Speaker 1: decentralization that you want, you can inherit that level of
Speaker 1: decentralization for your protocol. But if you if for your
Speaker 1: protocol built on top of Vining layer, you only had
Speaker 1: one operator opt in, of course, if that operator goes
Speaker 1: down then your service might go down. But one of
Speaker 1: the things that we have in addition to just decentralization
Speaker 1: is strong economic incentives. When you write your protocol, you
Speaker 1: could say, oh, it's just one operator, but they have
Speaker 1: to put up one hundred million dollars of steak, and
Speaker 1: if they go down, they're losing one million, two million,
Speaker 1: ten million, one hundred million, and so that's going to
Speaker 1: put a lot of pressure on them to make sure
Speaker 1: they're keeping their job straight that it doesn't go down.
Speaker 1: But this level of control, we hand it to the
Speaker 1: protocols rather than we are ensuring that every operator is
Speaker 1: going to be alive all the time or whatever. It's
Speaker 1: up to you to decide as a protocol designer. It
Speaker 1: goes back to programmability and control. Right, you can come
Speaker 1: in and say I need five hundred operators, but you
Speaker 1: have to pay five hundred x to fees of course, right,
Speaker 1: but I need one operator, but I want them to
Speaker 1: put up one hundred million dollars of steak. That's up
Speaker 1: to you. We have the operator backing. We have the
Speaker 1: most you know, two thousand operators. We have the steak,
Speaker 1: you know, eighteen billion dollars of steak for people to
Speaker 1: operate as long as there is incentives in your protocol
Speaker 1: to do it. It could be using your own new tokens,
Speaker 1: the incentives could come from actual fees paid by people
Speaker 1: writing this new uber. All of those things actually work.
Speaker 2: That makes sense. You know you mentioned eighteen billion in
Speaker 2: restake eth over eighteen I read there's going to be
Speaker 2: some people watching listening who don't know what the hell
Speaker 2: resteake means. Maybe you could break that down, what is
Speaker 2: restaking and then who are the folks who are you know,
Speaker 2: restaking their eth? And that number hitting eighteen billion etherium.
Speaker 1: So you asked me earlier why we built on ethereum.
Speaker 1: We looked at both bit coin and ittherium, of course,
Speaker 1: the two biggest sources of trust and network in the world.
Speaker 1: So obviously that's the tool that we looked at, and
Speaker 1: we decided to build on ethereum for two reasons. One,
Speaker 1: it's fully programmable, so any of the kind of slashing
Speaker 1: or payments and all these things can be done much
Speaker 1: easier on top of ethereum than on bitcoin. So the
Speaker 1: programmability is number one. Number two, Etherium is a staking
Speaker 1: network itself, right, So people stake in ethereum and then
Speaker 1: keep the network running. And so this concept of restaking
Speaker 1: people get confused. So what it is is something really simple.
Speaker 1: When you're staking on Etherium protocol, what you're saying is, hey,
Speaker 1: I'm locking up my eth and I'm going to run
Speaker 1: the Etherium protocol correctly. When you come to eigenlayer, what
Speaker 1: you do is you say a little bit more. You say, well,
Speaker 1: I'm locking up my eath to run both the Etherium
Speaker 1: protocol and the Uber protocol and the storage product. You
Speaker 1: choose which other protocols you're opting into, so you as
Speaker 1: a staker. You're a staker, So who's the customer type
Speaker 1: is I'm already staking on Etherium? So I say, oh,
Speaker 1: instead of just taking on ethereum and promising to run
Speaker 1: the yath note software correctly, I'm going to promise to
Speaker 1: run the eath note software and a set of things.
Speaker 1: I choose, Well, how am I opting into those things?
Speaker 1: I decide based on am I getting paid enough for
Speaker 1: the risk I'm taking? Just like anywhere else, Right, So
Speaker 1: you go and play in a DeFi protocol, you're basically saying, hey,
Speaker 1: is the risk? Is the reward worth the risk that
Speaker 1: I'm taking? But here the risk is somewhat containerized because
Speaker 1: the risk is you just need to run the note correctly.
Speaker 1: Unlike in a DeFi or like a financial protocol, you
Speaker 1: are underwriting financial risks which are very different. Right, this
Speaker 1: is just operational risk. You just need to be not malicious,
Speaker 1: don't attack the protocol, keep your uptime promises. You're not
Speaker 1: going to lose your state. So it's a much lower
Speaker 1: category of risk than pretty much anything existing outside. But
Speaker 1: because we have the scene in which hundreds of new
Speaker 1: networks are being built, you can earn rewards from all
Speaker 1: of them and stack your yield.
Speaker 2: And are there institutions that are mainly resaking or is
Speaker 2: it also retail?
Speaker 1: How does it split up? Right? So when you're talking
Speaker 1: about like a you know, eighteen billion dollars, you absolutely
Speaker 1: need institutional grade like opt in otherwise you don't get
Speaker 1: to these numbers. And so we have basically uh institutions,
Speaker 1: whether it is like a coinbase, binance, okax, all these
Speaker 1: different kinds of like exchanges as well as custodians like
Speaker 1: anchorage and you know bidgo and all these guys support restaking.
Speaker 1: And so what that does is when somebody comes and
Speaker 1: deposits eat and wants to hold eat there, they say, oh,
Speaker 1: I also want to restake on a can layer, right,
Speaker 1: So that's like a level of service that they offer.
Speaker 1: In addition to that, we have, like there is this
Speaker 1: concept of liquid staking protocols or liquid staking tokens where
Speaker 1: what they do is this, you go and deposit the
Speaker 1: eat into that protocol, and the protocol says, We're going
Speaker 1: to take care of steaking for you, and I'm going
Speaker 1: to issue you a receipt token that you've deposited one
Speaker 1: eat into the protocol and so I meant one. We
Speaker 1: have a protocol called Renzo. We have a protocol called
Speaker 1: Ether five, which are building liquid staking on top of
Speaker 1: igon layer. Because it's built on top of restaking, they
Speaker 1: call themselves liquid restaking just a nuance, but it's basically
Speaker 1: the same as liquid staking. And so what this does
Speaker 1: is it basically steaks and promises that like, oh, will
Speaker 1: take care of all the abstract things for you. You
Speaker 1: just deposit eat and then get this receipt token easy
Speaker 1: eat eat or whatever. So that's the ecosystem. So lots
Speaker 1: of retail people also participate in some of those protocols.
Speaker 2: Since you mentioned liquid steaking, the sec recently came out
Speaker 2: I think just this week. If I'm not mistaken, I
Speaker 2: give you some clarity saying some of these protocols and
Speaker 2: activities are not securities. What are your thoughts on that?
Speaker 2: What does that mean for Eigenline.
Speaker 1: It's a huge, huge thing that the SEC would come
Speaker 1: out and say these kinds of things, because precisely this
Speaker 1: time last year they'd actually go after anybody who's doing
Speaker 1: anything in this space. And it's kind of surreal to
Speaker 1: see that the SEC come out and give clear guidance
Speaker 1: on what it means for a liquids taking protocol and
Speaker 1: why it is not considered like issuing a new stock
Speaker 1: because it's not right. It's just a wrapper programmatically created
Speaker 1: and the programs all like verifiable, immurable on chain with
Speaker 1: like high degree of decent lized governance. What the SEC
Speaker 1: has come out and said is people, you know, programs
Speaker 1: can create these liquids taking tokens, and so these liquids
Speaker 1: taking tokens do not come under the regulation of issuing
Speaker 1: new stock, like you know, it's not like issuing an
Speaker 1: IPO for Google or anything. So they've come and clarified
Speaker 1: that in the large scheme of things, it's an obviously
Speaker 1: correct thing that the SEC is saying it, but it
Speaker 1: was not clear, and like it opened up. When the
Speaker 1: regulatory thing is not clear, institutions detailed. Maybe they don't care,
Speaker 1: they'll just operate, you know, all these things. But institutions
Speaker 1: are very careful and thoughtful. Institutions will say, I don't
Speaker 1: touch any lsds, they may be legally risky and all
Speaker 1: these things. With the opening up of this regulatory clarity,
Speaker 1: we expect the biggest grade of institutions, whether it's a
Speaker 1: black crock issuing an ETF, to participate in staking and
Speaker 1: restaking because now the opportunity is open. The other big
Speaker 1: institutional aperture is the digital asset treasury companies, right, so
Speaker 1: like starting with you know Michael Saylor and the og
Speaker 1: micro strategy to now we have a whole category of
Speaker 1: etherium treasury companies. You know joel Ubin, Tom Lee, you
Speaker 1: know Kathy Woods investing in it. Like it's a big
Speaker 1: perio thial mesting and some of these things. So it's
Speaker 1: the big trend of hey, we need to actually open
Speaker 1: up access for crypto assets to the institutional market in
Speaker 1: a way that you also get the yield of these
Speaker 1: systems because that's a big value proposition that we have
Speaker 1: in the EATH and the DeFi ecosystem where you can
Speaker 1: get yield in size. I think if you look at
Speaker 1: protocols that can actually deliver yield at like a ten
Speaker 1: twenty billion dollars of scale, there's maybe three protocols. There's
Speaker 1: like our Waylido ey can Layer. So and we are
Speaker 1: very happy with the SEC guidance because we have the
Speaker 1: top Us protocol right in terms of the total value
Speaker 1: locked even including things like Salana right, so we have
Speaker 1: higher value locked than pretty much anything else, you know.
Speaker 1: So that basically means we have like an opportunity to
Speaker 1: engage with the broader ar you know, institutional ecosystem. Yeah.
Speaker 2: Absolutely, So you know you mentioned the treasury companies, you're
Speaker 2: seeing more, but he's adding ETH And do you think
Speaker 2: ETH might end up being a better treasury asset because
Speaker 2: of the naturally built in staking component which generates yel
Speaker 2: But you can do additional things like restaking, like participating
Speaker 2: on a prodocol like eigen layer, and much other and
Speaker 2: other defian activity. So it's almost again if ball streets
Speaker 2: in hunt for yield, this is the better avenue.
Speaker 1: Absolutely, And if you look at the profile of people
Speaker 1: who want to invest in like a BTC or a EAT, right,
Speaker 1: it's basically people, at least on the institutional sides, they
Speaker 1: want to minimize downside risk but still have upside, right,
Speaker 1: Like that is the kind of like based portfolio. And
Speaker 1: so if you look at that and look at compared
Speaker 1: BTC versus EATH, BTZ has the upside and of course
Speaker 1: you know, getting adoption, but EAT has both the upside
Speaker 1: and has the kind of like yield, So that gives
Speaker 1: you like a base layer of like you know, return
Speaker 1: while also potentially having like the possibility of the upside.
Speaker 1: That's one thing. The other thing which is going in
Speaker 1: favor of the EAT ecosystems is the stable coins being
Speaker 1: issued on top of etherium and all the other layer
Speaker 1: twos on top. And people think, okay, now that stable
Speaker 1: coins are issued, is the stable coin company is going
Speaker 1: to get most of the value. And there is some
Speaker 1: truth to it, because the stable coin companies are keeping
Speaker 1: the treasury another yield coming from these stable coins, so
Speaker 1: they are actually having like a pretty smooth business model today.
Speaker 1: But as more and more, as the stable coin regulations
Speaker 1: come up, there's going to be more issuers and people
Speaker 1: are going to compete to offer the field back to
Speaker 1: the users, so that margin is going to get tinned.
Speaker 1: But also because all of these build and settle on
Speaker 1: top of ethereum, there is other really solid value propositions.
Speaker 1: For example, as stable coins go from like a single
Speaker 1: USD stable to maybe a euro stable to a you know,
Speaker 1: UoN stable and a rupee stable and like this much
Speaker 1: broader category of assets. Because for many other countries, while
Speaker 1: today it is the USD going on chain is opening
Speaker 1: up access, right, which is a really cool thing, but
Speaker 1: for the country at the sovereign level, it's actually at risk.
Speaker 1: The risk is the rug risk from US back to them. Right.
Speaker 1: So if you're a different country and then you think about, hey,
Speaker 1: what happens if US suddenly you know, gets into a
Speaker 1: trade war or something, and then bans every USD held
Speaker 1: by our citizens. Suddenly all your citizens liked USDC or
Speaker 1: whatever thing goes to zero. This is a huge rug
Speaker 1: risk for those countries. So the counter response that I
Speaker 1: envision is the country is going to have like their
Speaker 1: own stables on chain number one and regulate the usage
Speaker 1: of these other stables to like some kind of constraints
Speaker 1: per person holding all these things, and once you have that,
Speaker 1: you're going to see that at the center of all
Speaker 1: these assets is a decentralized rug resistant asset EAT. So
Speaker 1: when I want to switch from a USD to a
Speaker 1: roopee or you on, you go from USD EAT EAT,
Speaker 1: you on you go USD EAT eat roopie. So this
Speaker 1: is the programmable money thesis of eth sure, which is
Speaker 1: by enabling a big programmable economy, there is a central
Speaker 1: token and currency which is programmable, decentralized, unruggable that actually
Speaker 1: gains value over time. And I think that's the thesis
Speaker 1: that we are very bullish on EAT as programmable money
Speaker 1: and BTC as digital gold. Right, it's simple, it's gold.
Speaker 1: It's like you hold it, it's solid. We're not going
Speaker 1: to change it all that, Whereas there is a whole
Speaker 1: other element of like programmability of the system's stable coins
Speaker 1: defy other things built on top and EAT as the
Speaker 1: natural source of like decentralized asset securing or like interacting
Speaker 1: with all of that.
Speaker 2: You know you mentioned, you know with liquid staking in
Speaker 2: the clarity, A lot of folks are waiting for staking
Speaker 2: to be added to the theorems botytfs. Do you think
Speaker 2: that maybe the liquid staking clarity was the last hurdle
Speaker 2: in getting that approved and that might increase inflow significantly
Speaker 2: to eat spotytfs And I would.
Speaker 1: Hope so, but I don't have inside information to share
Speaker 1: on like where the staking idea of approval is getting
Speaker 1: held up. But absolutely I would expect the level of
Speaker 1: statements coming from the government, from the SEC Commissioner saying
Speaker 1: Project Crypto, we want yous to dominate in the crypto
Speaker 1: markets is the polar opposite of we want to extinguish,
Speaker 1: we want to choke the crypto markets. So I think
Speaker 1: it's just you know, so what happens is the regulatory
Speaker 1: apparatus takes time to catch up with the President's directives, right,
Speaker 1: So we're seeing, you know, in August the SEC Commissioner
Speaker 1: issuing Project Crip proved as you know, the precedent issued
Speaker 1: it like in early January, right, So there's just that lag.
Speaker 1: And I think once that lag clears off, you're absolutely
Speaker 1: going to see this And that's really what the arbitrage
Speaker 1: already the treashery companies are playing with, right because they're saying, hey,
Speaker 1: we can engage in if you see every one of them.
Speaker 1: They're saying staking, restaking, defile every single one of them. Yeah,
Speaker 1: because that's the things that you can do and eat
Speaker 1: at low risk compared to anywhere else. Right. So of
Speaker 1: course you can take a BTC and like do lend
Speaker 1: borrow on centralized exchanges, but the amount of like trustless
Speaker 1: financial products sitting and engage with with EAT is much larger,
Speaker 1: specifically staking, restaking at the lowest level of risk and
Speaker 1: then adding on top other defive financial positions. So I'm
Speaker 1: very confident that that's absolutely going to happen, starting with
Speaker 1: the treasury companies and then expanding out to ETFs. And
Speaker 1: basically you will see ETFs issued different levels of like risks.
Speaker 1: Some will just say it's just a bad ATF, some
Speaker 1: will say it's a steake DTF. Somebody will s staked
Speaker 1: and the stake DTF, right, and so like you will
Speaker 1: have this like dial to tune up and down the
Speaker 1: risk for VOT curve.
Speaker 2: Oh for sure, I think you may have answered this,
Speaker 2: but I wanted to ask because I wasn't clear. So
Speaker 2: let's say we go back to the example of Uber
Speaker 2: building an igen layer who pays the gas piece or
Speaker 2: which token pays the gas use or is it eth
Speaker 2: is it iigen layer token if it tell us bit about.
Speaker 1: That, Yeah, absolutely. So when somebody is building these new
Speaker 1: networks and services on igon layer, these are called ABSs.
Speaker 1: We call them a BSS for autonomous verifiable services, right,
Speaker 1: so these are think of these as we don't think
Speaker 1: of chains as the base unit. I think like this
Speaker 1: has been all of crypto. Like in fact, if you
Speaker 1: look at at crypto today, you will see two big
Speaker 1: tcs fighting with each other. One pieces is the big
Speaker 1: chain thesis. Oh eaight is Ethereum is going to be
Speaker 1: the big chain or Solana is going to be the
Speaker 1: big chain. Big chain which congregates all the activities and apps.
Speaker 1: So that's one thesis that you see in crypto. Another
Speaker 1: thesis that you see in crypto is the app chain thesis.
Speaker 1: None of these big chains going to matter. Is basically
Speaker 1: application specific chains like BTC like hyper liquid that are
Speaker 1: going to win because they actually build the application and
Speaker 1: they want to own the infrastructure end to end. And
Speaker 1: what i can Layer is building is for the third
Speaker 1: thesis of crypto, it's totally different from the first two thesis.
Speaker 1: It's neither the big chain nor the app chain. It
Speaker 1: is the cloud thesis of crypto, and what if the
Speaker 1: cloud thesis is actually if you go back to ninety
Speaker 1: ninety five, you will see this is the same question
Speaker 1: that people were debating about web applications. Is there going
Speaker 1: to be a hosting service where everybody hosts their website?
Speaker 1: Is there going to be every app runs its own servers.
Speaker 1: So it's exactly these two thesies and neither of them
Speaker 1: actually correct. The correct thing was the cloud thesis, and
Speaker 1: the cloud thesis is there are layers, each layer basically
Speaker 1: doing something specialized. Like the cloud is, oh, here's a layer,
Speaker 1: we take care of all the hardware. You don't need
Speaker 1: to think about hardware. Just deploy your software here and
Speaker 1: then you can build it. But it didn't end there.
Speaker 1: On top of the cloud. There is the biggest economy
Speaker 1: of SaaS software as a service, right, so each SaaS company.
Speaker 1: In fact, if you take the last twenty years, the
Speaker 1: most profitable investment sector, the VC investment sector is software
Speaker 1: as a service. And why is it? It's because each
Speaker 1: of them specialize in something unique. Is like Mango dB
Speaker 1: is a database company, Snowflake is a data you know,
Speaker 1: data lake, and each one you know Stripe is a
Speaker 1: payments company, and PayPal is a peer to peer payments company.
Speaker 1: All these kinds of things just building very special specific
Speaker 1: things on top, which basically meant any application just mix
Speaker 1: and match these services so they don't have to build
Speaker 1: any of these services themselves. Okay, so that's the kind
Speaker 1: of like the what happened in the cloud, and Eigen
Speaker 1: is building for the cloud. Piesis of Crypto, which is
Speaker 1: a third and unique these I think only we are
Speaker 1: pushing forward with because we think this is what's going
Speaker 1: to happen. And so what happens is we have iigen layer,
Speaker 1: which is basically the like the shared data center. We
Speaker 1: have the shared security layer, which is IGON layer on
Speaker 1: top of IIGON layer, just like on a cloud you
Speaker 1: have the storage services. We have Igenda, which is a
Speaker 1: data service on top of igon layers. So you have
Speaker 1: high throughput data service on top of agon layer, and
Speaker 1: then people build other services on top. We have a
Speaker 1: thriving ecosystem of one hundred plus services built on top. Okay.
Speaker 1: So now answering your question, because this context is important
Speaker 1: to understand. Answering your question on what is the currency
Speaker 1: of payments, who does it go to? Now it depends
Speaker 1: on whether you you're building a service or using a service.
Speaker 1: So if you're building a service, then you decide what
Speaker 1: token of payment goes to that service, how that fee
Speaker 1: is routed into eat stakers and iigenstakers and your own
Speaker 1: token stakers, so you can decide all these parameters. Whereas
Speaker 1: if you're using a service, you comply with the service
Speaker 1: economic terms. For example, in the Eigenda, which is a
Speaker 1: service we have built. Because we build the service, it
Speaker 1: is value across to the eigen tooken. The iigenstakers get
Speaker 1: the fee, some fee split goes to eat stakers, and
Speaker 1: the fee payment has to happen either in eath or
Speaker 1: igen So that's our economic terms for the eigen Da.
Speaker 1: But as you go upstream, so we have our own
Speaker 1: service I mentioned called eigen Compute coming up. It will
Speaker 1: be similar because it's a service we built and we
Speaker 1: are going to specify the terms. But there are all
Speaker 1: kinds of other services other people have built with their
Speaker 1: own financial terms, and so part of what we're doing
Speaker 1: now is standardizing a lot of this so that it
Speaker 1: is not a headache to mix and match these services.
Speaker 1: Just like on Amazon, you can go in a single
Speaker 1: website and shop like whatever things you want. We want
Speaker 1: to have the idem cloud console where you can come
Speaker 1: and mix and match all these services.
Speaker 2: Got it. That definitely makes sense. And know we're coming
Speaker 2: up on time, so I'm curious what's on your ropemap.
Speaker 2: You know what can we expect in the coming months.
Speaker 1: The big thing that happened is this year has been
Speaker 1: a major year for us in terms of shipping and
Speaker 1: delivering all the things we said early this year, we
Speaker 1: delivered slashing on mainnet, which means now not just staking
Speaker 1: and operators are there, but you can actually write slashing,
Speaker 1: which means anything goes wrong, you can slash the eat
Speaker 1: or eigen staked on the platform. Then we launched redistribution,
Speaker 1: which is don't just slash and burn the money man, like,
Speaker 1: give it back to the people who got hurt and
Speaker 1: harmed because of this something bad. So that's a feature
Speaker 1: called redistribution that went live like within the last twenty days.
Speaker 1: When you're building a service, it's not just burn the funds.
Speaker 1: You can actually if something went wrong because your your
Speaker 1: node went down, if they have staked like one hundred million,
Speaker 1: now slash one hundred million, distribute to the app. Users
Speaker 1: who got harmed or liquidated or whatever happened. So very
Speaker 1: very powerful. Primitive doesn't exist in any of crypto today.
Speaker 1: Then we launched on Igenda, a ten x throughput increase
Speaker 1: relative to where we are at like one hundred megabytes
Speaker 1: per second. This is last week, so again ship this thing.
Speaker 1: Now looking forward to the rest of the year and
Speaker 1: next year, what is happening. We have i can compute,
Speaker 1: which is this service where you can run general purpose computation.
Speaker 1: You're not constrained by the virtual machine inside like a
Speaker 1: block chain. People fight and debate whether EVM is better,
Speaker 1: or the Salona Sea level virtual machine is better, or
Speaker 1: some other new suiz move VM is better or whatever.
Speaker 1: And we create a VM agnostic so you can write
Speaker 1: in any program that you want, just like you would
Speaker 1: write on top of a cloud and send it to Iigencompute.
Speaker 1: This hopefully will have it on MAInet by the end
Speaker 1: of this year. So that's coming up. That's called iigen Compute.
Speaker 1: And when we're talking about iigen compute, one of the
Speaker 1: biggest things. So if you look at cloud, the biggest
Speaker 1: demand driver is AI same thing we think of eigencloud.
Speaker 1: The biggest demand driver is going to be AI and agents.
Speaker 1: So and you cannot write an AI or an agent
Speaker 1: inside a smart contract or a blockchain today, but you
Speaker 1: can actually write a full AI agent and deploy it
Speaker 1: on eigen Compute, on Iigencloud. So what that means is
Speaker 1: for the first time blockchains, Ethereum and all other l
Speaker 1: tools and other blockchains included are going to have access
Speaker 1: to fully fiable, fully on chain AI agents. This was
Speaker 1: a mata in the last like I think one year back,
Speaker 1: when none of the infrastructure was there and people ran
Speaker 1: fully centralized, non verifiable trust me bro agents. That's what
Speaker 1: happened in like last cycle. And then like people are
Speaker 1: like oh, then they realize, well that's what's happening, and
Speaker 1: then everybody moved on. But when you have AI agents
Speaker 1: that are fully verifiable, just like you deposit eighteen billion
Speaker 1: dollars in the eigen layer contract, you should be able
Speaker 1: to give an AI agent tens of billions of dollars
Speaker 1: once it's trustless, secure on chain. And so that's what
Speaker 1: we're looking forward to. So as the as we deploy
Speaker 1: i can Compute, we expect a whole category of verifiable
Speaker 1: AI and verifiable AI agents to be built on top
Speaker 1: so that's our biggest you know, that's what's coming up
Speaker 1: on the oadmap.
Speaker 2: That's exciting, really great stuff. See, I'm I love what
Speaker 2: you guys are doing and it's exciting. I'm looking forward
Speaker 2: to the future updates. I get some wrap up questions
Speaker 2: here for you. First, if you could create your own metaverse,
Speaker 2: what would the theme be?
Speaker 1: If I could create my own metows, it would absolutely
Speaker 1: be an agent only matovers, an agent only metaverse, no
Speaker 1: humans please. Rapid fire questions.
Speaker 2: Favorite food.
Speaker 1: Favorite food is dosa from the southern part of India.
Speaker 1: Favorite musician or band Okay, I have to say my wife.
Speaker 1: He's a musician from the Indian classical tradition. Nice favorite movie, matrix,
Speaker 1: favorite book you all know, AhR Recipiens.
Speaker 2: Interesting. And then when you're not working on Igen Layer,
Speaker 2: what are you doing for fun? I like meditation, very
Speaker 2: good stuff as here. I'm like I said, absolute pleasure
Speaker 2: and I would love to have you back on as.
Speaker 2: There's future updates on Egen Layer. But thank you so
Speaker 2: much for joining me.
Speaker 1: Thank you so much, Tony. Really pleasure to be here
Speaker 1: and buy to all the things in podcasts. Listeners