EigenLayer’s endgame: ‘Dissolve into Ethereum itself’
“We all become more specialized in what we create and more general in what we consume”
sdecoret/Shutterstock modified by Blockworks
As Sreeram Kannan describes it, EigenLayer is a “marketplace for raw, decentralized trust” — the fundamental resource at the heart of blockchain technology.
Ethereum has already created such a marketplace and acts as the “natural source” for the “raw material,” Kannan says, but it has limitations. “I can only consume it if I write a smart contract on top of this platform.”
“For many reasons, I may want to access more raw, decentralized trust,” he explains. To do this, one would normally need to create “a whole new network of nodes as well as a staking token of value.”
“We were forced to actually think about, do we want to start a whole new layer-1 with its own economics underpinning it?”
Speaking to Blockworks on the Bell Curve podcast (Spotify/Apple), the CEO and founder delves into details of the smart contract middleware and what he foresees as EigenLayer’s “endgame.”
Anatomy of EigenLayer
EigenLayer is not a new chain or a new layer-1, Kannan explains. Instead, it is a system of smart contracts that allow ETH stakers to “opt in” to serve other systems, called “actively validated services.”
Any protocol that needs nodes to talk to each other and come to consensus can be built as an actively validated service, Kannan says. Such a service would “talk to the EigenLayer contracts,” he says, specifying who can register, payment structure, slashing conditions and other selected parameters.
“If you’re claiming that you’re storing data relative to this hash,” for example, “I may ask you randomly to reveal portions of the data on the Ethereum chain and if you don’t, then you may lose your ETH,” he says.
“You’re working with the raw aspect of decentralized trust and you can allow people to build arbitrary protocols on top.”
Kannan envisions a crypto world that operates similarly to modern web application development. “You have AWS, which is the cloud,” he says, “on top of which, there are a lot of SaaS services,” for functions such as authorization, payment, and databases.
SaaS, or software-as-a-service, apps in the Web2 world allow for “open innovation,” he says. Anyone can be “hyper-focused and specialized in creating a certain utility” instead of needing to build out a “whole new world” from scratch.
“We all become more specialized in what we create and more general in what we consume.”
Kannan points out that any given Web2 application might integrate 15 or more SaaS solutions. Crypto applications reflect a similar need for a range of services, he says, from trusted execution environments to private messaging, data storage and availability, oracles and bridges, guardian networks, and so forth.
“You can dream up whatever you want and build on top of it,” he says. “Open innovation is our core value.”
EigenLayer’s endgame
With the focus on decentralization, Kannan says “protocols should minimize subjective decisions.”
“If protocols are not expressing subjective decisions — and there are definitely subjective decisions to be made — then who expresses these subjective decisions?”
“We want to be as close as possible to the Ethereum staking layer,” he says. Ideally, Kannan says EigenLayer would become part of Ethereum’s staking layer, whether through a protocol upgrade or an Ethereum improvement protocol, or EIP.
While the platform is currently undergoing an “initial shepherding process” with whitelisting for “cautionary” purposes, he says, it will eventually be a completely permissionless platform.
“Our platform minimizes its own subjectivity. We are not going to be playing this role of deciding, is this good or not good? It is up to the market to figure that out,” Kannan says.
“Open innovation is best built on top of a credibly neutral layer. This is why we like Ethereum, and this is why we want ourselves to be as similar as possible to Ethereum and even at one point, dissolve into Ethereum itself.”
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