Adding Crypto Economic Security to any Existing P2P App - Wes Floyd

Transcript

[Music] thank you guys well thank you for joining um my name is Wes I'm a devil uh person on the igen layer team and I'm very happy to get to chat with you today about reaking I've spent the past few years in decentralized infrastructure and before that in traditional web 2 infrastructure so this is a topic that's really near and dear to my heart uh in particularly people that are building new applications and new infrastructure uh using reaking so please check out the slides here online that'll give you a link to uh to my Twitter profile it's posted up there but really the conversation today is about your project and your project ideas and making them

more valuable to your community uh we're going to talk specifically about decentralization which I think is kind of like the reason that we're all here today uh but we're also going to talk about challenges it is expensive and it is difficult to to decentralize um but we do have a specific solution in mind around reaking well talk about how that works uh and I also want to go through an example kind of a fun side project taking existing P to uh peer-to-peer app that's very popular and making it more crypto friendly more decentralized using this reaking technology so first off um kind of a fun thought exercise would anyone like to guess looking at this chart wager what they think this chart

represents make a guess you can look look at the movement there I'll also give you some dates you probably have some ideas of what it could be good guess good guess that was very close it's actually the market price of decentralization but it's very correlated to bitcoin price yeah so so basically uh the the point I I would like to make with this graph is that you know Bitcoin is a very powerful tool it was kind of the OG of of what got us into this space but Bitcoin is basically a database and it's not very it's not a very sophisticated database it's not a very fast database but what it is is it's very powerfully decentralized and it's the first of its kind so it's extremely extremely

valuable for that reason and maybe a lot of the reason that it's valuable is its decentralization so hopefully this can be kind of a a point to start in thinking about how we value decentralization but also you know from thought leaders uh in our space thought leaders in the Bitcoin Community thought leaders outside of crypto they all sort of value the decentralization component for various philosophical reasons and even you know governments and Regulatory institutions value decentralization if your project is sufficiently decentralized the US government European governments will actually treat you differently in terms of Regulation so there's all these different dimensions of how decentralization can add value to your project so I think we're all kind

of in this mode of thinking that decentralization is valuable but it's hard it's hard to decentralize if you're building something new in web 3 a new database a new uh public goods project it's difficult to fully decentralize those things as far as Bitcoin has and there's some there's some costs to consider the first is capital if you're going to do a proof of State Network and you're going to try to secure your network so that people behave correctly and they don't act maliciously you have to put some stake or some Capital up uh in that Network you have to go and you have to find people and say hey I'm launching my new uh my new coin and my new network would you be a validator for my network uh you might get airdrops you might be a part of our community you it's it's time consuming and all of

these things are outside the realm of your focus they're not they're not the key differentiator of what you're trying to build every web three project has to do this and there's been some powerful uh predecessors that have been able to accomplish similar things but they also often require an app chain or a consensus layer um and often times that's more work than you may need to deliver your service to your user so the way that I like to think about this solution is decentralization as a service you have a fun idea you want to bring it to the service and you want to say just decentralize my service for me and so igir is one uh one version of this new class of reaking solutions and what they're basically doing is they're taking the the the assets they're

combining them the capital for you and the operators for you so you just basically bring the secret sauce of what you want to build you plug it in so that there's validation slashing mechanics and reward mechanics mechanics and you're often running you you do not actually have to maintain a consensus in this which is interesting because you may not need it for for your users and this is one example of of a one of our abss that are building and and their phrasing is it fortifies our Marketplace they're building a Marketplace for abs Ser for for deepend services and it just adds security adds trust for their users so how do we go about this um we use the term cryptoeconomic security very often sometimes that can be a

little too technical but basically what we we're combining is staking of assets some validation that the people are operating your service correctly some slashing if they behave maliciously and then some rewards if they behave well um I also like the term sticks and carrots that's kind of an easy easy terminology but most importantly this way of thinking is true for both new projects we spend a lot of time with people building new projects from scratch but it's also true for existing projects there's many successful peer-to-peer projects uh in social media and file storage and things like this that are that people use but they don't have a crypto economic validation so maybe they're they're missing some of the adoption that they could have and to give you a mental frame of

reference ethereum is actually using the same mechanism it has stake it has consensus execution algorithms slashing and rewards Igan Lay's approach the reaking is very very similar the difference is that instead of maintaining some consensus and like a predefined execution of how the ethereum blockchain will will evolve from block to block um you get to choose you get to choose the determination of what service you run and how you want to validate it so it's kind of a fun New Design exercise for your project and because these services are always being validated on chain we call it an actively validated service so these are the three kind of key entities in this ecosystem you have resters people that want to bring

Capital they're looking for yield there's lots of folks like that in the crypto ecosystem there's professionalized operators or individual operators people that want to run your service in exchange for some reward and then there's the service Builder so that's you you have your project your existing team your Dow your community uh but you want to run it as a more decentralized service lastly there are the users who's actually going to consume this service the ABS consumer and so there's a couple actions here the the reaker is going to stake they're also going to delegate that stake to an operator now this operator has all this delegated stake that has been entrusted with them and they need to run their service correctly so they're going to allocate that stake into a service an ABS the ABS is going to have predefined logic so that if the

operator performs the service well they get rewarded and if they behave maliciously they get slashed or they just simply get ejected from the operator set if they uh if they behave maliciously and there's an important value flow here so stakers are uh contributing the stake operators then allocating that stake rewards are flowing back to both members of the community so it's sort of a virtuous cycle sort of a three-sided Marketplace or maybe a foursided Marketplace if you consider the um the consumers so what does this look like approximately if you go to app. ion. XYZ you can get a sense of how much Capital exists today and that capital is there because they really want to they want to earn yield they want to be a part of the

community that's securing your services they're ready to contribute that community to Services they're going to pay rewards but as a builder instead of going around having to raise a lot of capital let's say from a VC or some other mechanism that capital is ready to go you don't have to raise it they're they're eager to to um to stake into your project um and it's entirely permissionless so most importantly uh you do not simply have to stake ethereum or some LRT or erc20 you can stake your Project's token and it's an extremely valuable component because you know previously if I'm launching my own coin I'm going to launch West coin as an example uh West coin on its own doesn't necessarily have value it could be a

meme coin it could be shallow in terms of it's value or cruel but if West coin was used as the collateral to secure a very important service that a lot of people use now west coin has real utility to it real value to it um so there's tons of benefits for the project in terms of locking up that and aligning that value uh and lastly The Operators they're ready to go as well so if you go and check out our Network here you can see we've got hundreds of operators that want to run your service they're very actively looking for projects that are building abss they want to run great Services they want to earn the rewards they're very effective at at following the rules that you set for your service um and also actually I didn't include this here but we have a bunch of ABS

abss live so if you go to app. XYZ you can get a sense of about 20 or 30 abss that are live on mainnet and then a few hundred that are still in and test net on heski so rewards distribution is super important we've just added some new features for flexibility for rewards payments so that previously there was a static amount of rewards that were paid to operators and stakers now you have flexibility in how you pay different operators for different tasks and different behaviors so lots of programmability lots of flexibility and how you pay those rewards and slashing slashing is the big final component to our protocol slashing is currently in testet and we're working as quickly as possible to get that launched to mainnet um hopefully end of this quarter maybe

early next quarter is is our approximate timeline um so that you can slash uh if you're ABS service bill you can slash those operators what we find that's interesting at least in the ethereum ecos system is that Simply Having the mechanism of slashing in place really drives correct Behavior among operators you actually don't have to slash that often or for that much to get people to behave properly because they want to maintain their Capital at all costs so it's a very effective mechanism regardless of how much you use it just to have it in place all right so uh at the end here I want to cover um an idea of an example uh peer-to-peer project and how to make it more valuable for the crypto

community so has anyone in the room worked with ipfs before any ipfs fans okay fantastic all right so I used to work at protocol Labs I'm a huge ipfs fan U I think it's got so much more opportunity for the crypto space but even when I talk to to engineers in my company I say hey let's let's store so many intermediate files on ipfs they say ipfs is great but I need to also be able to depend that the file is there I need to guarantee that it's there that it's been pinned and there's varying degrees of of of success in the in the ecosystem with that I mean ipfs is a is a protocol so on its own it does not have crypto economic incentives to maintain the file um you can self-host your ipfs server if you choose to uh there's lots of very

good services like Pata and web three storage that exist um some of them may not be as crypto native you may not be able to invoke crypto payments and get the same crypto guarantees as you might want so all in all ipfs just has not had it its level of adoption of web 3 that I I think it should have so can we take cryptoeconomic security and reaking and slap it on ipfs and make it more crypto-friendly I think we can um and by the way this is just a fun idea which actually there's some other protocols that are implementing a similar idea so if you're passionate about this please take it and run with it um it's kind of a fun uh side hobby project but let's say we're just going to take the

existing ipfs binary minimal effort minimal coding and we're going to add shared security with Igan layer and we're going to make an ABS out of it and if you go to chat GPT and you say come up with a funny name for a project that involves ipfs pinning and crypto economic Services pin setion is the name that comes back so that's how I got the name for this ABS but basically like you know let's just take ipfs Kubo as as the binary and what we're going to have here is on the right hand side we're going to have this operator code uh we're going to write just a little bit of JavaScript to orchestrate with the Kubo binary just to communicate on chain with it and take the off-the-shelf docker container now this could be Docker compos kubernetes you

could run anything you want this is basically the binary that all of your operators would run the AVS service with and um and that's basically the architecture we will write an ABS contract that will represent our ABS it's called perception and it'll interact with iig a contracts for staking and slashing and things like that so I actually have a longer demo of both of these what I took I started from our hello world ABS implementation and if you're interested in running just a very simple example of an ABS this is a great place to start hello world ABS on IG layer GitHub um it's got a couple simple scripts to run it's very very easy and it's it's basically just message passing as the work that's done for the ABS it's the simplest example we come up with so for perception my goal

is to take that and then just make a few small modifications to make it a functional decentralized ipfs uh abs and so that's what it is and there's actually a demo video right here on uh on the website you can go to and you can actually see a end to end demo um in the interest of time I probably won't crack open uh the IDE here just cuz it would take us a lot more depth uh than I think is is good for this talk but please do go check it out and also hit me up if you're interested I'm happy to walk you through the code in any amount of depth um so for next steps uh this is your journey this is the this is where we're headed to the promised land decentralization maximum decentralize of all the things that we can uh but it

takes some work to get there and we are on board to help you on that Journey so please uh Next Step go check out the hello world example um check out our docs building an ABS if you want to set up a call with us there's a link there you can get in touch with us with our for and we also have a community called build on igen we'd love to have you join and participate with other builders so that is all I have for today thank you very much cheers thank you very much Wes cool I think we have a short time for some Q&A if there's some question in the public I don't see any but anyway I think you're going to be around I'll be around and I do have merch also I brought a bunch of caps so if anyone would like to merch please hang out and

uh take a cap oh you have a question yeah so do you think it's also like an economically prodct to build you Combs and actually build it build a product out it because I actually do think it is thank you for that yeah so that's that's actually a really good question one of the nuances is that you know anybody building an ABS it's great if you can have real end user demand lined up and

that's always kind of the struggle is like you know that's a fun technology project but we really need people like like you guys who can actually use the project and so for me like you know the side time that I've had I haven't had been able to kind of put together the the the Nexus of enough like demand of people that want to run on ipfs but if we can get enough people that want to build it it's a great Community project I've tried to design as much and kind of give it out to the community and the in the ether as possible there's also another project that's probably going to be implementing a very similar design on their own anyways I won't spoil who it is but that'll probably be available in the near coming months so ping me if you're interested in learning more so I

think the universe is going to manifest something like this either way but thank you for the question yeah please did you mention swarm Network already has its in swarm ethereum swarm is that right yeah that's a great point so I'm actually not as familiar with ethereum swarm I should probably hold off on any commentary you know about about their Technologies for per say first of all I think it's fantastic what they're doing like anybody who's building the space is wonderful so I I fully support it sometimes you know if a project already

has a good e economic incentive and a good operator Network they may not need this technology like they've kind of built it themselves and they're already past that stage and and that's okay um this is more I guess for people that or other projects in general that do not have that yet and that want to bootstrap it quickly so that's a good that's a really good clarifying Point yeah thank you yeah cool so if there is any other question I would thank you again thank you thank you cheers [Music]