ETH2 Staking Community Call #10 - Alon Muroch, Blox Staking - Trustless pooled staking.

Transcript

all right hello everyone and welcome to the e staker community call this is episode 10. i'm michael giesen also known as embedica within the east acre community along with me are a few moderators from the east acre community we have superfiz lamboshi nakagini also known as nolan and buddha we also have our special friend patricio warthalter who's the founder of po-op we'll be distributing a co-op for attending this call to do so you're going to go to the east acre server if you're not already a part of that it's invite dot gg slash east staker you'll enter the po-op channel there and you'll see a message by wolf halter with the name of the po-op bot and then you'll send a direct message to that

pull-up bot with the codeword moon all right so i don't know about the rest of you but i'm incredibly excited about today's call because we have our very special guest alan murock from blocks staking hey how's it going to be here great to have you i'm well running well now with the forthcoming update to ethereum 2.0 one of the core changes is the shift from proof-of-work to proof-of-stake consensus and with that comes staking superfiz actually presented during the ethon line summit on the 23rd and in that talk he mentioned alternatives to solo staking

one of those being staking pools i think why i'm so excited for today's call is because though there are really only two paths to choose when staking solo staking and staking pools there are many variations of staking pool services so with that i'd like with your help alan if you could kind of explain to us that may not already be familiar with staking pools what they are in a general sense and what type of staking pool that blocks staking is sure um and so in general uh theorem staking as you've mentioned is pretty exciting it's exciting for a bunch of reasons which might be even can kind of get into uh but generally speaking uh it's your

ability to take your ether and basically secure the network and also get rewards for it uh but in order to do that uh there's a few uh technical limitations or challenges depending how you see it um two main ones one is you need a minimum of 32 to action stake and the second one is you have to have some kind of a specialized software running 24 7 because um staking in ethereum is very much an active game rather than delegating your state to somebody else um which is very very kind of maybe more common in other blockchains um so those two factors um combined means that um there's a whole different economy of staking and different

services and different ways to go about doing that which were probably you know that didn't need to be exist in existence before but now obviously for ethereum uh they should and so solos taking is obviously just taking 32 ethereums running your software and and that's it and staking pools um is basically lowering the barrier and those two elements one is you could stake any amount you want uh and if built right uh you don't even need to run a piece of software uh as an as an end user um and so that's the the goal and uh maybe the scope of of staking in pools um and of course that's

all of that is uh under kind of the presumption that you're doing it in a decentralized way of course you can always just take your ether put them in a centralized staking service um and they do everything for you but of course you'll lose control over your courts yeah that's a that's a good point so kind of breaking down the different variations of staking pools if we want to oversimplify this we could kind of say that there's uh custodial and non-custodial and everything between in relation to block staking what are the stance that you guys take and how does that work i mean we started working on our staking platform about six months ago and from the get-go i knew i wanted to develop

something i could actually use or i would use um and so for me it's definitely the case where i want something trustless non-custodial that is and might it be a pool or even even just solos taking but it has to be trustless i don't want to use um i don't want to lose control over my coins and what is the minimum amount of staking needed to participate on your service on block staking so blocks blocks in block staking in general has two phases um and again it kind of increments with the technical complexity the first one is of course

just being able to solo stake in a trustless way but without the technical barriers of actually running software running servers infrastructure and so on and that's something we've uh launched a beta for uh about two two weeks ago um it's a beautiful user experience where you set up everything but you don't need to take care of the heavy lifting infrastructure and everything and so that's part one and that's really kind of the building block for um for staking pools because we want to get a big user base which actually does run software which is phase one which can then later uh become node operators in staking pools and basically be kind of the basis for everything

um and so in staking pools if we kind of run into the future a bit you'll be able to stake any amount you want um literally from the smallest decimal point all the way to hundreds of ethers as an end user you will not need to run any piece of software uh you'll actually get a token representing the stake and the future rewards you'll get for liquidity um and you still have those guarantees of of a decentralized and trustless network which for me that's really the the center of everything because you know if we're looking at the future of ethereum staking and what it is um it's it's a it's a great financial instrument that's for

sure but we need to also think that one of the main characteristics of ethereum and all of the work put into ethereum two was to make it as decentralized as possible that was kind of the mantra from the get-go ethereum and i think now it's kind of beginning to realize what's taking um and so if we'll have a lot of staking services which are centralized uh we're kind of undermining the very thing we want to protect um staking pool networks need to have at least uh technically the guarantees that the ethereum network itself has so it will have a staking um a centralized taking service uh might it be as you know solos taking or pool it doesn't

really matter if that's taking service the bigger it gets the bigger the threat it poses on the ethereum network um then we we're in our in the wrong place right i mean if you'll have a really big uh staking pool which can uh which is technically not solid as ethereum two or has less security guarantees and so on and so forth that can obviously be used for attacking ethereum or just undermining the actual um staking power or staking amount of ethers at stake which secure the network and so those things are pretty tricky i mean we need to make sure that the foundation is solid um it's it's great that we can make staking on ethereum

you know lower the barriers make it more accessible all of those things are really important but it cannot come at a cost of lower security and actually we saw a few examples in the past i mean one of the reasons why ethereum 2 took so long is because they really try to design it in a way that promotes the centralization specifically for the blockchain a lot of other blockchains just took whatever technology was available two or three years ago and tried to implement some of stake concepts and some of them didn't succeed some of them got really really centralized um and and because of technical issues they had so um you know any future solution any future

services we have we must make sure that they are solid um and that's kind of where we come from um i'm i'm a you know big proponent of you know making sure that you control your own private keys i think it's extremely important i think it's in the basis of everything which is crypto and blockchain um and so you know at the end of the day i want to build a service i would feel comfortable using um and so that's kind of you know our philosophy obviously it becomes much harder technically to implement those things but i think that's worthwhile that's why we kind of um in some cases joined hands with the ethereum foundation because you know they have the you know the smartest guys uh working there

um and so um you know it's technically pretty challenging but i think that's you know if i if i need to kind of vision where there's taking is going to um i want to i want to i want to i'm kind of envisioning it as a market you know a money market account where you know you put your money earn interest obviously securing the network as you do but you still have those fundamental guarantees yeah yeah these are make some fantastic points and i really love how block staking is aligning with sort of the spirit of ethereum in you're looking down the road at how this affects when ethereum 2.0 launches and also um trying to mitigate any negative

impacts by by promoting a staking pool so that's that's fantastic i think we'll see um as people adopt cryptocurrency more and um experiment with different staking pools i think the the question on everyone's mind is how do how do rewards work um when staking in a pool so how does that uh work in relation to block staking so it's actually something we we're still researching but i think that we we have a good kind of lead or direction we want to take and so we've looked at a few a few things so let's say you have a staking pool you know you solve all the technical issues that's fine you have node operators which run um the network basically and then you have the end

users which basically formed the actual pools um okay so now what are kind of the forces in play right so uh in order to become a node operator it needs to be economical because your alternative is always just from you know any of these standard um you know prism lighthouse nodes run your own validator that's fine don't don't participate in any um staking network or staking pool network and that's a bit that's kind of a very appealing uh alternative because at the end of the day prism lighthouse those are you know they have the their user base they're you know they have a lot of traction and everything and so the rewards should really reflect the fact that there's a big alternative for

not actually participating as a node operator and that's one thing we any any economical structure has to take care of the second thing is obviously the stakers themselves um and so the stakers obviously will pay some kind of a fee because they're getting a great service they don't need to run anything they're getting the rewards and everything so let's say you're taking some percentage of their uh you know their rewards whatever the percentage is um the question needs to be is that reward enough to actually incentivize the entire network um and now comes the tricky part because the fundamental idea of ethereum staking uh is and i'm i'm saying it in in the

best possible way is low risk low reward that's the whole game in ethereum staking uh it's low risk because it's ethereum uh it's very solid it's it's you know as as long as you your node is operating you'll get the rewards um you you're you do not expose yourself to any other uh coin other than ethereum so that's the low risk part and obviously the lower board reflects the the percentage of reward from the total stake you get so probably the first year it's going to be 10 to 15 but generally speaking we're talking about probably three to six percent depending on you know network conditions um and that's that's enough that's an amazing proposition it's amazing an amazing proposition because

in the world where in the world of crypto where everything is hard super high risk it's great to have a low risk low reward instrument um it's it's the same as you know if you have some money in your checkings account you don't necessarily go and buy leveraged stock right you might be buying some bonds or something like that because you don't want all of your money in high risk um and so having that alternative is is phenomenal i think it's really really interesting the thing is that very property which makes ethereum's taking so good is actually making it hard to actually incentivize the staking pool because if the only thing you're incentivizing node operators or mistaking pool is the actual rewards then if those rewards are pretty small then the incentive will be pretty small

so you have to have some kind of a third party or or an external um economical force um which can drive the network and so you have to have some kind of a token dedicated for for the network itself it's not a new thing every blockchain has it you have to have some kind of an economical uh driver behind everything um and so you need to play with the economics of the token the economics of actually minting tokens as rewards for block producers or operators whatever you want to call them um and and how do you make this economy work and so the way we found it to work is um you'll have rewards taking or fees taken out of the rewards from the

pools um those feeds get collected into a um you know just a common pool where everyone can stake that uh the specific token for the specific network um and staking that net that token does two things one it lowers um token uh velocity which means that minting new tokens as rewards for the operators is kind of counterpart uh with the actual staking of that token because it lowers velocity meaning you know less tokens are in circulation and so on and so forth and everyone who's actually staking those tokens can get a piece of the rewards or the fees of the network um and so that mechanism works great

because you have the token holders or the the sort of the anyone who stakes getting a great service and obviously paying a fee for it you have node operators which get uh reported uh in in a network token and then the network token holders um actually have utility because they can stake those tokens and get a part of the fees from the network and i think that's uh that's great to have kind of that um you know completed circle between all the major players in that network um and and obviously the market itself can play between how many people want to actually stay can get a piece of the fees how many people don't want to do that and do not want to look

their tokens and so on and it's beautiful because it's also the bigger the network becomes the bigger the fees are and obviously the bigger the amount of people can stay can get a piece of that reward that's kind of the current model we have in mind i think it's going to work as to we still need to run some simulations but it seems that it's a good enough i think economical structure um and and it makes sense for you know incentivizing people being an operator on the network it's obviously the the pool uh the end users who stake in the pools get a great deal and obviously the token holders themselves uh have a network they can be proud of

which whenever it grows the bigger the amount of fees can be distributed to anyone who was willing to stake the token itself um and so that's kind of the model we have in mind um uh yeah i mean i mean we still have to run some tests but i'm pretty confident it's something interesting which could find itself to production yeah absolutely that's that's awesome to hear the full scope of everything kind of zooming in a little bit closer to block sticking specifically i sort of acclimated myself to your services and the website and everything that you guys offer i was really intrigued by the desktop app and how it is you are facilitating

the actual staking on your service you kind of expand on that a little bit more and how everything defaults to the app sure so um maybe i'll zoom out a bit so as we i've kind of hinted before we have two phases to what we're doing phase one is solos taking in a stressless way trusses means we blocks in no shaping or form holds any of the keys which is pretty unique i think offering in this space right now and what it means is basically we'll have a layer of users which use and already are used to running some piece of software in a trustless way and what we want to do uh is when pools is ready convert them or try to convert

them to actually be node operators in the pool's network itself and kind of bootstrap the network itself and so what you refer to is phase one obviously uh the desktop app it was just a result of of you know technical challenges we had we we wanted to have a staking service where blocks doesn't hold any of the keys uh basically all of the sensitive part of staking which is the key is in operating a world which signs those stations and block proposals we wanted that to be completely trustless um and so that was a challenge because every every other service what they do is they hold the validation keys and they give you the withdrawal key

and and call it a day because it's easier to just operate that way right they're running the validators um and when you will be able to withdraw in the future just use your key the issue i have with this is again the bigger their services are the bigger the threat they pose on everyone because the protocol is built the ethereum two protocol is built in a way where if you have a bunch of people get slashed together their penalties go higher and higher in an exponential way by the amount of people who got slashed so you can imagine a service where they hold the withdrawal the validation key if they get really really big

and something happens all of their users will hit will get hit with much higher penalties um so normally if you're a solo staker and you get slash for whatever reason probably you're talking about around five percent uh damage something like that again depends on the network but let's let's assume it's around five percent if you if your stake with a big staking service that could be up to a hundred percent um and even higher but higher is obviously not possible but basically those the entirety of your of your stake and that's not something i want to be in i mean again we're talking about low risk low reward right so and and that's an important distinction because if the reward if the risk goes high higher than

what it is right now then maybe it's not even worthwhile to even stake right i mean if the risk is really really high maybe i don't want that five percent rewards a year right maybe i'll just hold my ether in my ledger or whatever uh security i'm i have not right now and don't stay and so and that's a solid alternative um and we need to keep that in mind so we need to keep the risk really really low now most of the time security risk it revolves around simplicity so you know you take your ledger or your trezor wallet the reason why they work so well is because they're dead simple the technology behind it is really complex uh but the user experience is really

simple and they do it in a trustless way so that's what kind of we try to mimic so in ethereum 2 you need to run some piece of software so what we did was we took a wallet that wallet holds your keys it's a hot wallet because it needs to be hot meaning it's online 24 7. it has internal slashing protection and and and security guarantees and so that wallet has a very small footprint and basically what we do is we take the desktop as you you mentioned before uh the desktop app is just a user interface you choose where you want to deploy that wallet right aws azure in the future will have you know local installation and so on and so forth you decide where you want to install that wallet that wallet has a very small

footprint you obviously install it in your own accounts blocks doesn't have any access to them because the the desktop app is the one who does all the installation automation and all those things obviously it's open source and all those good stuff and so once you install the wallet the wallet does signing right it has slashing protection built in it has the keys uh we're using hashicorp's vault which is really really great uh key management software you know tons of years in production and then we come and give you the infrastructure so we run ethereum two nodes ethereum one nodes we run a bunch of them so there's always redundancy we run prison around lighthouse we do all the heavy lifting the end

result is you're running a very small wallet if you run it on aws for example it doesn't even cost you anything because it's so small it fits into the free tier um so it doesn't it actually even cost you anything um and then we take everything take care care of everything uh else right so if there's updates to the wallet we just give them to you via the desktop app one click you install the updates right um the seed is obviously stayed on your whatever wherever you wanna you know hold your seat that depends on you uh and where ledger and trezor will be ready obviously that could be on their devices um and uh you enjoy you know a really really solid

infrastructure wallet infrastructure from hashicorp which we developed a plugin for specifically for ethereum two and so that setup when we started to think about it it made a lot of sense to me and it was something i was i said to myself it's that's definitely something i would use right i imagine that again with the context of low risk low reward i think it's low risk because it runs on my own uh server on my own cloud uh it's a very small footprint it's used it uses an already established wallet management and wallet software um blocks in even if blocks gets hacked a million times the only thing that will happen is you don't get service from blocks and so you always can get your seed

go to a different service provider that's it and so for me it was a great it was a great solution and so the desktop app have made a long story short the desktop app was really the result of we wanted to do that and via web app you can't really do that because there's a bunch of things you need to do internally so we decided to go kind of the ledger way ledger has their ledger live and so we kind of copied the name we called it the blockslive but basically that's what it does um simple installation great user experience we take care of all of the complexities and you don't need to compromise your keys absolutely that's great um so just going back to the things you

said earlier about non-custodial and custodial i believe that it's very misleading the term in itself because some staking services define custodial completely differently than others do some say oh we don't hold your withdrawal keys that means that this is non-custodial some say or you have all your keys um but you have to use a third-party app and which is sometimes not open source and call it non-custodial that's not directed to you just in general but i believe that that we should generally use a different term when it comes to non-custodial um yeah i actually agree i think that the right term should be

trustless or or a trusted service right so it means that in some part you need to trust some other service for your secure personal security okay um and so yeah i mean and so you're definitely right i mean some people won't be i've mentioned aws and azure some people won't be um won't be comfortable using those and that's fine and in the future we'll have a local deployment where you you know you can run it on your own server there's not no technical limitations on running our wallet on your own server if it's in your house or whatever wherever you want it to um so i definitely agree for me it's i probably will use personally i'll probably will use

aws just because i don't have um you know a local server uh but i definitely respect anyone who you know doesn't want to have aws as uh as a service provider and that's completely fine actually if you think about it what we are offering is uh more of an infrastructure provider which is wrapped around a beautiful user experience but at the end of the day you know you can take our desktop app or wallet or open source you know you can you can do whatever you want with them um it's you know it's not a great business for us but at the end of the day that's that what's what we needed to do in order to promote transparency and so you literally can take um you know your

our wallet in our desktop app and if you have some development experience you can uh use them for yourself uh of course we hopefully you use us but yeah well if did i understand correctly that if a user runs block staking i test it myself today i couldn't try to test it but um i was does blocks around the beacon nodes in the background and the user connects to them or do they run their own beacon nodes that's what i couldn't figure out you mean are do you as a user run the bitcoin node or we run them yeah so is the blocks app uh also syncing its own beacon node or am i connecting to yours you you're actually connecting to our bitcoin nodes so

um we run a bunch of them behind the scenes um and from a security point of view you don't really miss anything because again you have slashing protection built internally to the wallet so the wallet which sits on your infrastructure is the ultimate um authority to if the if it wants to sign or doesn't want to sign so if the beacon chain for example let's say blocks gets hacked uh and and somebody tries to ask the wall to sign something which will get it slashed uh the wallet will simply return an error it will not sign it um and and actually other attack vectors which we kind of discovered along the way so for example an interesting attack vector which wasn't really

known uh was let's say you don't get slashed but somebody asks you to sign in at the station five years into the future so no wallet up until a few weeks ago could handle the situation and most wallets would simply sign the at the station what it basically means is it got you slashed outside of the usual slashing condition because if you think about it once you want to sign the station three years into the future you cannot sign any attestation in between and so you know in a few weeks you'll get slashed because of inactivity penalties and so all of those small things are baked into the wallet and the wallet decides if it signs or doesn't sign

um that's what i said before that if we get hacked the worst thing that can happen is we don't give you service um and so you might lose a few a few rounds of rewards but you can always take your seed uh you know and just use another service if you want um but yeah i mean i mean i know your concerns and we've talked about a bit on a bunch of them um and i'm just asking these questions because i believe that the community cares about them um yeah sure there is another thing that i was curious about so if something goes wrong is there an insurance or anything that covers the stakeholder or do they lose their funds because i know that some staking services have some kind of insurance that

covers the loss yeah so if you're sergeant how does blocks handle losses yeah so if you using a centralized service which holds your validation key i would definitely expect it to have an insurance uh because we do not hold the keys um we don't have any way to know if what happened was happen for whatever reason is you know personal error hour error anyhow any other error because at the end of the day you were the one controlling the keys and we never saw them um and so there's no real way to actually ensure that because there's you can never know the fault um of of anyone right i mean uh because blocks

never saw the keys if we were a custodial service uh then definitely obviously the responsibility is on us because we are the one holding the keys um it's it's kind of if you think about it it's kind of like asking ledger if they have insurance on the ledger which is in your house um and obviously the answer is no because they can't really ensure such a thing yeah would it be fair enough to just to say that that your service is a beacon chain service rather than a validating service isn't that so yeah i mean provides chain services rather than you know it's a chain service not a yeah not the other services yeah that's what kind of i've mentioned before if you think about it we are basically

an infrastructure provider the thing we did uniquely was to wrap all of the solution where you know you get all the bits and pieces to set up your actual validator but because it we don't hold the keys at the end of the day once you actually install the validator we just provide you the infrastructure um of course we developed a wallet we developed a desktop app we combine all those things together together uh but uh yeah i mean you could say that definitely i mean at the end of the day we're a very specialized infrastructure provider for ethereum just taking yeah okay do you have a fee structure figured out yet and can you explain how you actually

collect those fees yeah we have a fee structure uh it's not finalized yet what i can say is that it's a per validator uh monthly cost and the monthly cost is a fixed amount so it's not a percentage of your rewards or something like that it's kind of a fixed amount whatever you you earn is yours um uh yeah i mean we will probably finalize it in the next couple of months um but that's that's the structure the structure i don't have the numbers like how much it's gonna be per validator but that's the structure is it priced in uh dollars or ether it's priced in dollars with the equivalent of you know the payment in ether the moment

you do the payment yeah and that is that like a separate payment that people have to send yeah um yes it's funny it's funny you should mention because it's literally what we've discussed the best two days in the in the product discussions we had um yeah so you'll basically if you think about the journey a user does um it comes to the to the to the two blocks downloads the desktop app it installs the wallet and then obviously it needs to the user needs to do the deposit right so you'll have two transactions one transaction is a deposit to the deposit address the ethereum official deposit address and the other one is the fee address which is up to our own contract okay has anyone run simpleminer it makes me think of simpleminer like um

it's an old gpu miner like it's a boot up disc and it has the interface and you you mine directly through their service but you pay them a separate fee and i love that that that you had set a shared validator key the keys are entirely owned by the end user do you have a multi-sig in there or it's it's entirely like the end user holds the the seed phrase they alone can generate the keys and they're paying you separately yeah they're alone generating the keys and again that's that's what you've mentioned before at the end of the day we're an infrastructure provider so if you deposit and do not pay us you'll simply don't get a service

um and but the city is still yours i mean you know the deposit is still yours we have no way to do anything with that uh the only thing is we can give you or not give you the service if you paid or not pay the fee that's that's about it okay i have two more questions yeah sure does those blocks have their own beacon node implementation or do you guys use lighthouse or prism so we used lifelong lighthouse and prism but uh what we did was and it's kind of more towards the pools um project we have so the pools uh it's actually let's call it the pools network because it's really it really is a network of its own the

network has two basically two parts on the pull the pull level itself we use something which is called secret shared validators um which is uh an effort we did with the ethereum foundation to basically answer the question how can you take one uh validated one private key and split it up in a kind of a multi-sig way uh between different different entities uh and and so it's a multi-sig but it's a multi-sig with a consensus layer on top of it for uh for robustness and everything and so that's that's part one the second part is how do you connect all of the pools together for rewards penalties

all of the things we've talked about before and for simplicity sake what we did was basically use um the beacon chain structure so the beacon chain has behind the scene it works on the casper and ghost protocols those are the consensus protocols for ethereum two what we did was um and that's a project i personally worked on the past two weeks was to take just a consensus layer out of the beacon chain in a way that uh i can then use it to actually implement the consensus layer for the pools themselves and so it's one to one identical to the spec

to the ethereum to spec uh for ethereum to spec phase zero because when when we go to phase one it's it's less relevant for us at least um but it's identical to that so you literally could take that code and run it as a bitcoin node but it's not gonna be a really good beacon node because all of the optimizations you know the teams at prism and lighthouse did but on the protocol level it works the same um and so we did that just for the pools network i literally just tweeted it um and so and so yeah but but it's it's not an implementation of our own what i will say is that we do have an implementation for uh the engine behind the validators

because we build a system which is a bit different from the validators uh in prison or in lighthouse because we needed uh to separate the signing from the actual logic of how the validator gets the different duties it has and how do you do it in scale how you do it in a way which is more robust with retries and so on and so forth so we kind of implemented a different validator engine um but yeah i mean i mean it's it's a very involving i guess project because of the pools part uh there's a bunch of things which are very similar to ethereum two and just for simplicity's sake we kind of decided to use those things because they already work um and they're already

uh in place all right and my second question or me i don't know if it's a question but i think at its core the blocks app is a key management tool isn't it because if you run it locally there is no need for you to run the block software if you can just run the node yourself because the blocks software has to be online 24 7 anyway so you could instead just run the prism or lighthouse client instead well just to clarify when you say the blocks uh software you mean the desktop app yeah right so the desktop doesn't need to run 24 7.

it's just for setup and user user interaction what what runs 24 7 is the is the wallet we call it key vault that piece of software yeah i mean you don't really need the desktop app to run it i mean at the end of the day you can compile it and use command line for it uh obviously we built the desktop pack for just to make it easy okay okay yeah thank you kind of talking about the desktop app i noticed that um i couldn't download on on linux you've got windows and i know we tried coming down the road though definitely i mean we tried it today kind of hack things together um linux is not tested yet i mean we have uh we have a version which compiled and

kind of works but us it's buggy um but because we learned a bunch of people from from the community who really want linux that's probably gonna be on the roadmap for the next i guess two weeks something like that um so yeah i mean definitely i'll ping everyone you know when it's ready and hopefully you guys could test it out um but yeah i mean um by the way if you have any if if you have another machine um you can i mean windows or whatever os six um you can use it there uh windows and app and macs are production ready um at the end of the day the security is always at the wallet level right so the wallet is is installed on

on a linux machine obviously i'd say you're you're hitting a sweet spot because so many users are begging for windows resources right now everything works just fine on linux so to have that switch might be might be a great opportunity yeah the only other question i've got here is you and you've touched on this uh on one previous question but i'm hoping you can kind of expand on it more is exactly what cdt is and how it functions within your platform yeah so when we talked before um about the incentive mechanism inside the pool's network right where you have uh the fees which get collected and then

you have a mintable token as a rewards for the block operators and then anyone which is a token holder can stake and get a piece of those rewards um i i just didn't want to mention it but uh we basically were talking about our own token as uh as a token which will uh incentivize and really um make pools become a reality because otherwise it's just not economically feasible um and so and so that's the ultimate goal we see for cdt uh for phase one what you'll do is uh the fee you'll pay is actually it's not a payment you're actually behind the scenes will be buying cdt um on uni swap or whatever other decks there is

and those tokens will get burnt just as a precursor for how it will work uh in the pools network um so we're always looking to how because of the technical limitations in creating pools right now um we're trying to have the first phase really as a way to bootstrap the network uh once it's you know operational and ready and so we wanna kind of you know uh draw the line between what we have now and how it works now and how it will work in the future um for me it's really exciting because i think that's that's a token model i'm not we've thought about a million token models for the pools network and this one i really

feel comfortable with on the technical level on on just uh you know just rationally i think it's it's a great combination absolutely i have a question uh i'm curious who do you see is your biggest competitor in the staking space and and how would you say that you're different or better than they are so i think that we are the only ones offering a service which doesn't hold any of the keys i'm not aware of any other service which does that um i think the biggest worry i'll have is really just to understand the market obviously the market is not there yet because we haven't launched but where the market goes i really want the

market to go to a place where people hold their own keys and do not you know put their faith in centralized services i think it's paramount i think it's a key to the success of the entire um you know ethereum two kind of concept and project and so i think that's the biggest challenge i have i think that you know we don't know how the market reacts we don't know if binance and coinbase come tomorrow and offer staking services and we'll take 70 percent of everyone's taking i literally don't know um and again just to kind of remind everyone what's what what's at stake literally the stakings

the staking protocol in ethereum requires less than third of the of the entire staking of ethereum to be honest what honest means honest means that they are following the protocol that's less than a third right if two-thirds if more than a third of the entire stake is controlled by one or two entities literally those one or two entities can dictate to everyone else why because when you have more than a third the chain doesn't finalize right they can start manipulating the the chain itself and so that's exactly what at stake i mean if we get to a point where more than a third of the entire stake is held

by you know just one or two or maybe three staking services um that's really undermines ethereum especially because um unlike proof of work where you know improve work you still have mining pools and everything but it's very easy to get out of a mining pool because you're literally holding the hardware in staking you cannot move the tokens uh at least for until phase probably one or 1.5 uh and they're literally controlling the the uh the stake itself and so it's it's much lower tolerances in terms of uh big players taking a big chunk of the network uh for me that's definitely the biggest um

challenge um if the entire network is diy and everyone is running prism and lighthouse nodes that's great that's something i can you know i can you know you know make my service better make my service quicker make my service more sexy and you know just make it better and hopefully i'll get those users but if everyone goes to coinbase in binance it doesn't really matter if i'm doing a trustless service because i you can never compete with uh with that um and so i think that's the biggest by far the biggest challenge i really hope that you know at least two-thirds of the stake are in the hands of people who are control in control of their keys i really hope that that's the case and

if that happens i i'm pretty sure we can offer a great service that people find valuable does anyone else have any questions at all can you compare your service to something like rocket pool um i think rocket pool has its technical challenges um again i don't want to pinpoint i don't think it's fair um but at the end of the the way i look at it is you need a service which has at least the guarantees of ethereum which means that if it gets really big it doesn't threat its users or the

or ethereum itself um and i think on that regard they probably have some challenges as we do um but i think their design is not exactly 100 compatible with that okay and do you think after transfers are enabled it'll be easier for them to match what you're doing uh currently no because i don't think their problems is are is in in in how they construct withdrawals because that's something which they can solve technically um there's a bunch of other things which their design doesn't really solve it doesn't really matter if you have withdrawals to contracts and everything else

again i don't want to pinpoint because it's not fair they're not here to respond but uh but again they have their challenges and there's a reason why we we've showed this design we chose and there's a reason why it's more complex um yeah i actually have a question how did you guys start a community i mean it's one of the best communities i've seen by far um you know if you have like a few minutes to tell the back story how did it get started how do you get got here um well i think it was really super fizz that got it

uh really off the ground um we were um go ahead go ahead i started i was an olympic miner on ethereum one and i enjoyed it but i really felt frustrated that there was no community cohesion we had a reddit thread and we were back and forth a little bit but i didn't really feel connected to the miners and being a very social person i sort of said to myself i would i would do better if this happened again um and i didn't really see all of this unfolding but um at about the time that um the first um

the first iteration of the 1 500 ether deposit contract was scratched was about the same time that um i decided to leave my job and be a stay-at-home parent and i really just saw that opportunity to follow the development of ethereum two and plant seeds to grow the community um and it it's taken a a lot a lot of time of foundation work um but i would say about a year ago was it about a year guy i messaged lamboshi and said hey you want to uh you want to be staking buddies and then that was the first link in the community and

you want to take it from there yeah we met because we both bought like unnecessarily powerful servers like big rack mount servers so i was like oh okay this guy he seems like a good guy could be friends with him it worked out yeah yeah that's something we've just really been uh been putting a lot of time into allowing staking to be a social event rather than just a purely technological event because um by building the community we can now onboard people who have absolutely no

previous experience with staking we can make them feel welcome and we can help them prepare to be solo stakers on their own and that is our act of decentralization by supporting other users we decentralize the network by empowering them to stake i mean i think you're spot on because i think one of the only main factors that really distinguish ethereum for any other blockchain project anything i've been involved in in my entire life was is definitely the community i mean the amount of talent the amount of um you know just the will to contribute to make a difference to do something is on you know it's unparalleled to anything

other i mean it's really it's really amazing it's we have a ton of people who want to contribute and that's that's one of the things that really makes it successful like we have a lot of ideas and then we have people stepping up to say hey can i take care of that can i help with that um and so it it really does help us um grow and develop and expand so i'm really happy with the way things are going right now yeah it's an awesome community definitely thank you sort of like uh anybody in the chat have some questions oh yeah good idea i haven't seen any come through yet while we're hanging out we have just a

minute um yeah and it could be a very good time um for presenting what are those many initiatives that we are working in yeah and so the first thing that we should bring up would be uh the poep for today's call if you haven't claimed the poe app um michael do you want to talk about that and then i will jump into the quiz game and the other things we're doing yep yep so uh for those of you who aren't aware of the eve stake or discord you can uh join by going to invite dot gg slash eath staker and to claim the pull-up you'll enter the co-op channel and you'll see a message there by warfalter and uh in that message you'll see the direct at for the poet bot you'll simply send a

direct message to that bot just send the word moon m-o-o-n great uh and so i want to talk about two initiatives and then i'm gonna pass it back to michael because he's he's actually developing another one for us um the first thing that i'm most excited about right now is our quiz game um i'm having it's it's getting off the ground actually this week it's really taken off um in i know this is going to be dated and i'm sorry but on sunday of this week i believe that's november 1st we're going to hold the first ethereum quiz game that is open participation to anyone in the community all you have to do to get in is submit questions we have a form

um it's a post on eatstaker if you have trouble finding it just message us in the discord or wherever and we'll get you to that form basically you just submit questions and that submission gives you the opportunity to participate in the quiz game and if you think that through the more questions you submit the higher the likelihood that you'll win the quiz game uh the prizes are a little in flux but we have several ether to spread out and my minimum guarantee is that the 20 people who participate will it get at least one tenth of an ether so that's about forty dollars just for playing the game um what we're going to do is record that and then put it up on youtube and it will give the opportunity for

people who are interested in ethereum to watch that back and learn as they go if it goes really well we'll talk about making it a monthly initiative but right now it's it's one standalone game um enter questions join us it'll be a lot of fun um and so i want to talk about one other initiative it is the uh collaboration groups and that is um again you can find us at east at east staker uh you'll sign up and our friend jared jh will assign you to a group with four other people so you'll be in a private chat with five people where you can kind of develop a relationship and talk about staking talk about

your experiences in ethereum so that you have your own little core group to work with and i really hope that by doing that some of those core groups will grow and eventually begin giving back to the community i know that's how a lot of how we started how our core group started um and i i believe that if we can replicate that model then we can really develop the community and our biggest initiative lately has been the ethereum study master michael can you uh take over yep so like superfish said we have the ethereum study master that can be found at ethereumstudymaster.com essentially what that is uh the pilot if you will started on reddit uh

where it was a vehicle in order to learn all things ethereum 2.0 with this new update coming it's sort of increased in scope to the point where we'll eventually be hosting individual courses ranging from the history of ethereum how to stake your own validator and everything in between so we'll expand as new things come out within the ethereum world in each course that you complete you then get a custom co-op proving that you've done that and i do want to mention that in addition to earning co-ops for or in the ethereum study master so are the other two programs that super fizz mentioned so

the collaboratives program has a po-op and so does the quiz show so if you're if you're hunting for them if you're trying to collect these these are the things these are one of many things that you can do to participate in to collect and i just remembered that we deployed a new sticky on reddit.com eatstaker so the top post is our new sticky and it has links to all of us all of that information a welcome video um that top sticky is really the best place to go for everything all right anything anyone else want to bring up at all yeah we had a question in the chat um from ben he says the issue of client diversity is floating around

but it seems this issue is slash will be strongly affected by large-scale staking services if they all choose to deploy prism this could lead to an unhealthy situation does anyone on the call have a view on this so do you have i mean client diversity is extremely important um are you you're so you're just going to be running like multiple nodes and if one of them yeah we currently run in production we run uh five prism nodes and one lighthouse node we need to make some changes but i think we'll ramp it up and probably have around five and five we still didn't get to a point where we actually

run different versions of each of those clients which is also important uh but that's the end result i mean yeah i think the best thing you can do is have two or three clients at least maybe two main versions uh one latest and one maybe one before that and i think that covers a lot of it and and obviously have some kind of um a health check between them so you can actually know if something is wrong right maybe if something goes wrong all right i think we're going to get yelled at if we don't tell you to run teku as well i just saw it i mean for me it's the the more the merrier i mean obviously

we have the capacity for our dev team but i think that taco is actually doing a great job i just saw the latest uh if you um note called uh the community call and they have some major uh things on their way i think turquoise also did if i'm not mistaking a simulation for ethereum for um if one shot in instead in inside ethereum two you know i'm correct can anyone double check that which which by the way that's really really exciting i think they did i'm not entirely sure if that if that's them but um that's definitely exciting we'll we'll get there i mean we'll we'll run them definitely so once the if2 standard api is released and also used for the

clients will it even matter which client you're on so if you could you spin up a stack of node um in your back end i mean i hope i hope it will get to that point but kind of from you know from if i go to ethereum one even though ethereum one does have um some standards you you do see differences between parity and and for example go ethereum small stuff like how do you set up a static node or static pier it changes a bit some sometimes the logic changes of course the you know the longer we run them obviously those those you know differences will will uh will just disappear um there's another question

yeah the answer kirk the answer is yes i mean we could we already run um a load balancer so you could do uh so when when your wallet gets um a request to sign that request is is atomic for a specific node because of various technical needs for example to subscribe to a subnet which is specific for your committee uh but what we can do is we can load balance the calls themselves so for example if you set it up you know thirty percent prism thirty percent third third of the calls prison third of the call lighthouse third of the call taco uh you could do that so then randomly you'll you'll get um

diverted into the into a specific node yeah anything else reminding anyone all right well alan uh i really want to thank you for uh taking the time today this was incredibly informative um do you want to sort of chill out any anywhere where people can follow you uh before we leave yeah i mean blog staking check out our website um i can give my twitter if anyone is interested i write a few some sometimes a few things there which might be interesting um let's see

so yeah i'll just write it in the chat itself okay and blocks staking of course and boxtaking.com yeah i mean just check us out and let us know what you think absolutely well thank you very much thanks everyone appreciate it yeah thank you thanks for coming out thanks bye-bye bye everyone