How Jito is Unlocking Restaking for Solana | S8 Finale | Lucas Bruder

Transcript

I think the most obvious at least in like my the world at in where this could be used is me I think you have to be very careful about the way that's designed and yeah it just lets you like move faster and you could potentially try things faster that the protocol can't do salana is a very fast moving protocol so like maybe that is potentially less valid but I do think like you can try things to potentially modify the protocol and see if uh if it works or not without actually spending the time to like bake it into the protocol but there's uh you have to be

careful in like what you're doing and make sure you're thinking about any uh like second order effects of what could go wrong there's certain like doors like that once you open them you can't really close them hey everyone this episode is brought to you by namada the shielded acid Hub rewarding you to protect the multichain so not only can you protect your own data across any asset and any chain but you also get shielding rewards for strengthening data privacy protections for everyone so you can check them out at n.net and follow the domain net launch stick around you're going to be hearing all about them later in the program all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not

represent the views of any organization with which the co-hosts are associated with nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another episode of bell curve this is the final interview episode of the reaking season so we got a really special episode for you joined by my trusty co-host miles O'Neal um and today we're interviewing Lucas Bruder AKA Buffalo um the man himself from jto Lucas welcome man hey thanks for having me yeah good to have you back on the show dude um well we're we're talking

just a day after you unveiled uh the long rumored jto reaking platform so huge congratulations on getting it that out the door and we got a bunch of questions for you just about the architecture of the platform and some of the differences um that might exist in the market for E3 staking versus solry staking but before we get there can you just give us the history of why you decided to launch a reaking platform and where it sits um within the entire Suite because you know right now uh jeto has been incredibly impressive uh in tackling these huge markets there's the me product that you guys have there's liquid staking and now you're adding reaking to that so can you just kind of you just like give us a little bit of a history of you know which problems you

started working on at goo first and how that led to the existing product weet and where reaking belongs there yeah a quick uh history on like jeta how he got here started working on me in the beginning and I think kind of realized pretty quickly that uh we could create a flywheel with jeto soul in the Mev stack so then got into liquid staking and then um I would say like mid 2023 we started kind of ideating on staket which was like our way of decentralizing steak pools on salana and liquid staking tokens um you know for those that don't

know you Sal's delegated a proof of stake and when you run a steak pool you have a bunch of steak you need to figure out where is where does the stake go to which validators there's a bunch of different ways you can do that but we wanted the I guess the main point is that like there's um there someone has to do that or something has to do that and for a lot of steak pulls in salana it's there's just like a a hot wallet that basically does it and we realize that if we wanted to liquid staking to grow and be massive on salana then that hot wallet would kind of be a point of uh concern for potential like security issues um

related to like hacks and things like that so started developing stakenet and then I would say um like late 2023 three we kind of saw what was going on with igen lir and then also like as we started ideating on uh staket more there's a few pieces that even within staket that need to be decentralized there's a few like oracles and things like that and we also saw the kind of uptick and I layer and like how much of liquid how many liquid staking tokens were getting it's kind of like a vacuum for liquid staking tokens and um so you know in the like Spirit of

decentralizing things further on staket and the uh like opportunity for liquid staking tokens started to look into reaking I would say like October November of last year and then I would say like December and January I really started diving into uh starting to like design it and think about it code it um and yeah it's gone through like a few iterations but pretty happy with the way that ended up and the code that's open source I think that whole Arc makes a lot of sense I'd love to get a sense of like what these iterations were um you

know were there like design choices that you felt strongly about you know going into the architecture um you know design process that you've kind of did a 180 on or at least like maybe made less opinionated when you were designing the system yeah um so yeah we the first iteration was um I guess we think that reaking is going to look different on salana than ethereum and like maybe there's some aspects of reaking where you're taking like staked assets like lsts or Stak soul on using it to secure things and

then there's I think a large component is going to be governance tokens or utility tokens there's a lot of activity it's very cheap to send transactions on salana so I think there's just a lot of bots and a lot of automation involved with a lot of protocols in salana and so um you know TBD if freaking is the right word for that but uh that's what we called it um and so like I guess the the goal is like make it flexible for protocols if they want to use lsts they can if they want to use their own governance tokens like how much security does this keeper actually need does it actually need like a bunch of security also if you have a

governance token like you probably want to use it for something utility related um and so like that was kind of the the first thing that we thought about the first system uh I know we talked a little bit about it um the first one was isolated it's like an isolated security model um so basically like every AVS was isolated from each other and um the thought there was like how much security do you actually need uh you know pulled is very risky um if you have like a slashing event it can have massive cascading effects isolated you don't really need to think about that it's like everything

is isolated to its own EVS um and then it kind of mimic the I think the Solano staking model is pretty elegant so I kind of Mimi that in some sense um but then the more I like was talking to people is like if this isn't pulled someone might build like a poed wrapper on it or there might be certain use cases where it's like it kind of fragments the liquidity and fragments the security um so if you have like if there is a world where there's a bunch of l2s that have a bunch of tvl and salana then your isolated model would look weird or like you'd have to have like avss like

merging together to like meet their security requirements so kind of went back to the drawing board thought that pulled is a good option also saw the Lucas can you can you just like say like what's what's an example like concretely of where that might get a little hairy like in a world of like an isolated security world where maybe there are like l2s on salana like what's a real life situation that could happen where like that model starts to break down just to make it a little concrete um yeah like I guess the the instances where like there's an L2 that requires a lot of security and there's another L2 that comes online that requires a lot of security and when you

if that L2 can like if you're in the isolated model then that maybe you have like the L2 vampire attack the other one and the security goes down a lot and then there might be bad ramifications from that got it okay kind of like a it's a cost and availability like Supply availability question right um they like isolated and low liquidity tokens are probably going to cost the most right to to be able to like attract to for stake right and tokens everybody already holds and that are already earning yield um probably the cheapest so I I do understand that yeah

um but uh yeah that was kind of like the first design and then there's a few things that the uh realizing that like maybe pulled isn't that bad if you can have the right restrictions in place and like controls and the risk is e easy to audit and then also saw the adoption of lrts and you know jto soul is a liquid staking token that represents salana stake accounts that are not liquid and um so we were like okay let's like um I was kind of worried if you like release that then there might be um it might not get the full adoption that it deserves

and it doesn't necessarily me like the high bar that we want the protocol and products to have so I kind of went back to the drawing board ended up building the lrts into the protocol so the only way to stake is through an LRT and um also ended up adding there's a lot of um bir directional agreements that take place between all the parties involved so you can control the risk and you can actually audit the risk and there's like caps on slashing and things like that so you can actually like fully understand the risk on chain and people have the liquidity of

the lrts and the actual assets that are used for the lrts are like it's kind of up to LRT Creator ABS can decide if they want to do it or not um so that the avss could like support certain assets or they can be selective on the lrts like if they see a LRT is like just dejing into everything maybe they don't want to support that cuz the security could get pulled out from underneath them so the second version is just very flexible it's kind of like a combin combination of a reaking protocol for lsts and then also um just like a generic staking protocol for any type of token on salana

just one one thing to clarify if um let's say one of the vaults supports like three avss um two AV two of the avss are only using you know let's say jetos soul right is collateral and the third AVS is using uh a governance token and jetos soul um is the LRT that is minted from that Vault like if I deposit just goo soul to that vault is the LRT representation of the jto Soul that's been deposited and the you know third underlying governance token or does that have its like a different that would

different LRT okay so the or that' be like a steak token so it's not like you don't just uh mint a derivative token that represents everything that the Vault really is like supporting is that that's right yeah well a vault is uh of all supports a single on Salon they call it a token mint on ethereum it' be like a contract address for like a erc20 um so like you could use jto Soul jto pith you know whatever that is if you wanted to mix assets then you could basically create another token in a different program and like that would be responsible for balancing the assets and

then you would create the Vault and like the LRT with that kind of wrapped mixture token so like if you want to create like a uh like index Soul or whatever where it's like you want an LRT that has multiple assets backing it then you would create like a token wrapper and then you would use that to create the Vault um hopefully like you you don't want to be you don't want to be uh mixing like lsts and highly volatile assets um I mean maybe people do but uh it's like the my current thought that's uh weekly held is just kind of like let the market decide what it wants and like

people will figure it out and like everything will be available on chain so you'll be able to see what's going on yeah and I think one of the challenges with lrts on ethereum is that it's really expensive to like do these rebalancing actions and really expensive to claim token Rewards or to liquidate you know ABS reward tokens to eth um all that kind of goes away on salana which I think is really nice yeah I mean it's like a penny or less than a penny to uh rebalance your your uh Vault and like where it's delegating and you know I think another thing uh we're still thinking about rewards like that hasn't been designed

yet but uh there might be some vaults that want to distribute rewards to stakers and like maybe they're more like aligned where I think like aligned with the uh avss that they're delegating to and then maybe there's vaults that like just want to like sell it and kind of Auto compound it into the asset and uh hoping to like figure out a way that leaves that flexible that's another thing where you can just kind of let the market you know decide right um hopefully the like Frameworks are figured out to where um there's like a few different ways that you can kind of just like copy and paste

of doing it but the protocol tries to like the goal of the protocol I think should just kind of be like let the market figure it out and hopefully there's like a pattern that emerges for these things cool I I I agree um I guess the other major area of like complexity of on ethereum is um has to do with Native stake right so reading um you know Beacon chain balances and communicating that to the execution layer um have you guys have you guys said were doing all lsts um or you know as native was native stake like a consideration for you we

have certainly thought about it it's not actually like built into the protocol but uh like uh as I was talking about earlier like you create a LRT or the Stak asset from a token mint that's not a salon stake account isn't a token mint so you could basically like w St accounts in a token but then you've like kind of created a stake pool there so like you might as well just use like an LS or something makes sense because that program has been audited like that SPI stake pool has been audited like eight or nine times it holds billions of dollars of assets um so yes someone could create that if they wanted to so maybe just Lucas to repeat some of

some of this back that you've said so far like the the history if I'm following this correctly is you know you started working on me realized there was a flywheel with liquid staking the the flywheel being the M infrastructure and a lot of the me that was being generated on salana at the time that you guys started working was relatively immature um and so if you're able to extract more or like build more efficient blocks um essentially or build the infrastructure that allows that type of more sophisticated building that goes into the yield of the LST product and that's the sort of flywheel um and as you built the as you built a lot of the infrastructure around that liquid staking uh and like the staking pool part of your business like notably staket there were these sort of points of uh centralization that you started to

notice and that's what ultimately LED you to the reaking portion of your business which that's the architecture that we've just been discussing right now um and the reason I feel like that's very cool to call out is just because um I don't know I think I I think there's an actually an element of similarity between you guys and igen layer where like a lot of I think the perception of IG lay is they started with the reaking but I I really think what they actually started with was the the data availability problem and then in trying to solve the da problem for rollups they sort of backed into the the backend infrastructure that they would need to do that and then recognized that that would be a challenge for other protocols as well um and so I'd love to get a sense of you know in either the me part

of your business um or like maybe some specific elements on the liquid staking side of things like anything that you can feel feel comfortable talking like what were some of those um sort of points of centralization maybe where you could see reaking making sense yeah I guess a quick comment on what you just said too I think there there's definitely applications for it in me and that's something that is being researched um but yeah like another thing is like we could there's a few things that I'll get into in a second that uh you could add staking and economic security for and like you could go ahead and build out that to be specific for that application like okay we have application or Absa

that needs staking go build that out and you have absb and we'll build out a different staking or maybe it's the same it's like well why don't we just like kind of saw what's going on with igen lay and like why don't why isn't it just more generic than that so spent the extra few months kind of working on something generic and that's how it ended up where it is um as far as the applications go like there's definitely applications in meev that we're researching um and then one is like uh there's an oracle there's some Oracle components in staket that we would like to uh decentralize the the cool thing

about uh salana is that you don't have this like separate uh you don't have like a beacon chain for salana um so there is a lot of execution data and like you can you can derive like how how much stake or you can derive like uh how many like how well is a valid a voting and other information available on salana without needing an oracle you can just like read an account and it's kind of like a you know for those familiar with ethereum you just kind of like read an account or read a a program or call a function to get that information there's a few things that aren't available like that on salana

where you have to like run some offchain thing and calculate it and upload it and so um that's like a perfect example it's just like something like kind of small where it's like okay this like thing is you know going to control the pool and you want it to be trusted and um so that's kind of like a pretty small application um and yeah that's kind of like something that we're looking into as far as uh reaking goes there's some other Mev ones that uh I'm not ready to share yet but um should see more info at some point so yeah I think it would be it would be

awesome to hear just kind of like the range of of use cases that you've identified um so far and and in particular you know ones that we think are kind of salana specific or like more important on salana than let's say like ethereum ones and so this first one is you know basically identifying like Central points of failure that are um you know controlled by some in some trusted setup right either like offchain or like a hot wallet or something else like that um and I think an interesting point kind of in Solana's broader Evolution uh for reaking to be coming out because you know in ethereum it's like we had already kind of moved towards this roll up Centric modular

road map which fragmented a lot of security assumptions right like different rollups have very different models um and Salon work you know it's still not like super clear like just how uh how much that's going to map over but we are hearing you know the first like mumblings of rollups and you know I think like moving towards that direction so I guess did that also come into your mind as like okay well maybe there's some pretty narrow use cases when everything is on one place um maybe there's not maybe there's more but yeah I'm curious like what you think are the most exciting forward looking uh use cases yeah I think like the most obvious

ones are like oracles um there's several Oracle protocols in salana that you know TBD on what type of security they need I think it's kind of up to them whether it's governance token based or lsts but um like when there's a lot of like salana congestion and things like that the there's a lot of Oracle issues like if you're using any protocols that relied on oracles it was pretty hard like to use them you'd see like stale Oracle data and um and like there wasn't really any like as far as I know like maybe there's stuff going on behind the scenes but the

incentive for those people for those like Oracle providers for the protocols to do better wasn't necessarily there and so like uh we started seeing some of them start to use goto bundles and like they started to change to pole oracles and things like that um but I would like to see like more action and like the best way to kind of encourage action is either Rewards or punishing people that aren't doing well that can be doing better um so I think that's obvious one the the stuff that we're talking about Keepers and things like that those are pretty obvious there's actually a decent amount of Keepers doing uh like oracles and rebalancing on

salana and U like rebalancing liquidity pools and things like that that I think is a good use case um there's definitely a lot of like svm type like l2s coming out um as far as I know like what I think Zeta has announced one yeah um there's uh I don't want to like reveal any information that's not possible all right but uh there's a few others that are coming out so they you know I don't know what their security model will look like but right that's kind of like moving independent of what

you think of that road map um it is kind of funny like there's like people that are like there there a of people are hating on l2s and now they're coming and people are excited and now uh it's like kind of the same with reaking but uh obviously like that's a good use case for it as well the some of the scml2 do you see some path dependency with all right so salana in in some ways is a little bit behind some of like the scaling strategies that ethereum is like l2s right there aren't any l2s in I guess Zeta is live today but um but reaking didn't exist when ethereum was thinking about launching l2s to begin with do you think there's like some path dependency here where one thing that this makes me

think about is basically reaking is kind of like spinning up bespoke you know consensus right um and so maybe actually now that reaking is live um it would be easier to actually start with not just having one centralized sequencer on your l2s because it's really easy to kind of spin up a quorum there and procure security and I don't know is there a path dependency with this side of thing now that reaking exists yeah potentially I mean there's uh there are certainly protocols that are reaching out that were saying they were going to do something on ethereum that are kind of interested in what this protocol is and want to learn more about it um so I think that that certainly is happening and then um yeah I think it

just like it's just one less thing to think about like that seems to be kind of something people are excited about for the L2 road map on ethereum and so um you know instead of like building out this staking infrastructure and security and all that stuff you can kind of just it will exist for you on SOL when you're ready to launch quick question on um two of those use cases you just mentioned so the oracles and the keepers um I'm going to try to like contrast it to to igen layers approach to tackling those same use cases um so one is this you know idea of like who are The Operators um do they have to Salon of validators right or can which I'm guessing today like the

keepers and the data feed providers are not necessarily Salon of validators right and so is that a consideration of like specialized versus you know going to the the Bas layer operators uh they do not need to be a salana validator um for stuff like oracles like I would guess that most of the people running oracles on salana are not validators so that will work for them if that's like a requirement of your AVS for some reason um then you can enforce that for your the operators in your set can't really imagine that many cases where they have to be but like maybe they're maybe there are yeah maybe if you uh

like I think the most obvious use case where it this would be true or it could be true is uh for like me related things or things that are related directly to block space yeah that could potentially be a thing um but the thing salana doesn't have staking or salana doesn't have slashing built in right so like this and it has delegation so like when you slash the validator you are on ethereum you're slashing the delegator but salana doesn't have slashing uh the the Operator validator Operator and salana doesn't necessarily

have to have St on their own validator so it looks a little different but I imagine the overlap between like running a validator and running other types of software that you need high up time on that involves staking it's a very similar skill set so I imagine there will be a lot of operators that want to support whatever protocol it is yep makes makes a ton of sense will be interesting to and you could probably even map over a lot of the uh staket like you know methodologies and and logic to track like the effectiveness of of AVS operators even if they're not also validators but definitely I would imagine there's some synergies there hey everyone this episode is brought to you

by namada the shielded asset Hub protecting the future of the multichain NADA is a chain that's near and dear to my heart because in previous seasons of bell curve we've talked about how the Cardinal original sin of most blockchains is not thinking about privacy from the beginning but also because if we want to onboard a whole bunch of applications it doesn't work in a default transparency setting so NADA not only brings about a better future that we all want but it's going to help on board a ton of new applications so NADA introduces a novel shielding reward system the way that it works is if you hold your assets in the shielded set you help strengthen nada's data protection guarantees and collect nonrewards in returns NADA will initially support IBC and ethereum based assets but eventually

the idea is for this to expand into a comprehensive hub for all assets really really excited about what the folks over at the mod doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is soon TM very exciting tell them that I sent you click the link bottom of the show notes my second question is uh you know in the announcement talking about the Oracle um example you know we're talking about things like downtime or incorrect price submissions and you have igen layer who has put out a whole token right the interest subjective work token to be able to handle these kind of faults um with symbiotic it feels like not necessarily prescribing a way to handle those you know nonobjective faults but you can I they're using an

oracle are they okay cool who's who's securing that Oracle I'm just kidding um but uh yeah exactly I'm curious how you're thinking about that or like if you um you know thought about other ways to to be able to support something like downtime yeah I mean I think it goes back to the the point earlier where it's just kind of let the market decide that's I'm sure like if you have stronger opinions then reach out to me if you're watching this uh on like how that should be handled but um the current thought is like let the market decide um the like the possibilities of what you can do with the system are kind of

like up to you like it doesn't put any restrictions into place I think that was the one thing that I wasn't the biggest fan of with Dion L design where it's like eth like every ABS is going to have a token and they want to use that token obviously like they're do working on Dual governance and whatnot and like that will somewhat address for that but uh from the beginning kind of just want to let the market decide and so like for slashing um it's pretty flexible like you could imagine I mean maybe uh you have like some lsts and something with a lot of security for very cheap doing like if there's like a bad price that gets uploaded and it has a large

impact you slash that or if they have downtime for like six hours then you slash you can also have them people stake their governance token and they slash that you can even have like a third or fourth token like you know it's kind of up to you on what you want to do so you can um there's I I think does symbiotic have like um I think I think they have like a slashing window or something as well in like um where you can like reject slashes from like committees and things like that right it's like a a bring your own veto committee kind of thing which again like Anan layer kind of had put

forward their own veto committee I don't think they're thinking about doing that anymore but I think it reflects um it's really interesting when Igan layers sort of go to market was a little bit more supply side oriented right it was it was about uh let's get you know export the trust of eth right to to other networks let's get value flowing back down to eth validators and stakers um you know as a lot of value capture actually goes up to roll ups right um and it feels like your counter positioning or symbiotics as well is is much more demand side Centric um kind of put out an extraordinarily flexible sort of platform and let you know the AVS side use it however they

want um I think feels like you know that you probably was a good second mover advantage that you guys had yeah I think like for how do I say this uh we I can uh engagement bait on like ethereum and other protocols and all that stuff on Twitter and I think a lot of people do but there is a lot to learn and I think we've learned a lot from a lot of protocols that have kind of LED um and like hoping to take those learnings and kind of like chart your own path um I think that's like can be Value First mover can be valuable in

certain cases but not uh always the most valuable Lucas we we've sort of been dancing around this or like talking about this um in an indirect way but you you you you said at the top of this episode that you think that the Dynamics of reaking are going to play very differently in salana than they did in ethereum and some of that has to do with Solana's architecture maybe and you know there's not like separate consensus and execution layers so so more data things like that but what are some of the big differences that you see and you know I'm reminded of the conversation that we had on during the liquid staking season where you know liquid staking and has has played out in almost mirrored like very different ways in ethereum versus uh salana it's like you know very poor

staking ux at the beginning um led to very high penetration of liquid staking whereas in salana you know there was delegated proof of stake from the beginning so very high stake rate but very low penetration of liquid staking and I'm curious what what are some of the similar Dynamics on the reaking front and how do you see that the market sort of playing out differently yeah salana is very fast very cheap um it's very low latency um not like computes cheap storage is like relative cheap can't store a movie on there but like you can store you know kilobytes or megabytes of data on there there's a lot of system calls that are built into salana like

you guys have probably seen the uh there's like some I'm not a ZK expert but there's some ZK related uh system calls or um yeah system calls that are built into salana so I actually think like where uh restak on ethereum it's really about building things offchain and as far as I know like correct me if I'm wrong here but we haven't really seen anything that is actually built on chain for reaking or even like I guess like like on L1 I think I mean the the pre-m stuff is

still like kind of in the work so I would say maybe yeah that's not necessarily like built on the like that will be like off like that won't be like transactions as far as I understand it won't be like transactions it'll kind of just be like there will be like another gossip L you know whatever it's it's not happening on chain totally um I think this I think on salana there will be a lot more of this activity and networks and avss running on top of salana and so uh like Oracle is a perfect example like you can run you can have people stick to oracles maybe their price is a stake weighted average of

what the price they upload and how much stake they have and um like you can basically have something on chain where it's like if they're uh if they haven't uploaded something in a minute then they get slash like $10 or whatever um and so that's like an example of an ABS running on chain there's um some of like the staket stuff that we're talking about that's Stak Net's fully on salana um some of the other things that were talking to others about and looking at internally or just using salana transactions and like using a program that requires multiple operators to like come to consensus on data or keep some

data fresh and so I think this is uh it's like the the thing that toally talks about is like all the stuff all the uh transactions and data and transfer of data between like servers is going in blockchains is like going to Trend towards zero over time and so I think like transactions on salana will probably Trend toward zero as the uh transaction rate increases so you'll see a lot more things happening on salana hopefully that results in more priority fees um for like certain use cases like maybe slashes they use priority fees but should be just like in general more

activity on salana which will hopefully make valers more money and sakers so like the difference there is that there's like an oracle on ethereum that's operating offchain is like coming to its own offchain consensus and then posting one kind of result back on ethereum right to reduce those costs um with you I I guess more more types of faults can be like locally observable because they're actually posting results back on chain it's not like you're you know posting an attestation of like a signature for work done you know on some separate Network right um I don't think that actually came through to me until just now yeah I mean you can have that if you want there's uh you know there's

a there's a signature verification method staket actually uses it but uh I think at least for like the beginning there will likely be a decent amount of avss that just run fully on on chain and like they have programmatic slashing that you can actually detect on chain um TBD on how that changes over time but I think it's kind of a like the uh you can just focus on like building your actual application logic and EVS like you don't have to if you're going to build an oracle on ethereum with all this stuff like you have to build all this other infra and uh don't have to really think about that Lucas what do you think about the supply side

of salono reaking so you know this is where you know you hear people talk about the the moneyness of the base asset right and uh how much and that you hear this a lot in eth liquid staking is that it's it's a money and people use it in Defi and nfts and things like that and that's a huge portion of the reason why the liquid staking adoption is so high I do think there's again the big path dependency confounding variable there of the the merge right um and no in protocol delegation so so I I would just be curious you know um okay so there are slightly there's this sort of very different different onchain versus offchain um kind of dynamic in in salana but also there the architectural choices

of ethereum you know we talked about this at the top of the program has lent itself to a lot of offchain infrastructure which might need economic like could benefit from using Economic Security so I guess like order of magnitude wise how does that impact I guess the demand side relative to something like the eth and then do you think that there's going to be a bunch of salana Supply that comes online and says hey I want to opt into this same you know additional yield generation opportunity yeah um yeah I think the the supply side there is a lot of avss on ethereum that are offchain that need a lot of security just because of what you just mentioned um I don't know TBD unlike if salana gets to that point or not it

seems like there are a lot of l2s I think I can probably count of like four or five salana l2s that are being built that will need some form of this and so the supply might be small in the beginning but I think we're counting on salana uh just being the best place to build and the best place to do execution and then svm is like I think the gold standard in Virtual machines and there will be people that want to customize it and maybe they want different fee mark or whatever it is and so uh there will probably be some form of l2s that do certain things that um that will like continue to grow over time I don't it's

not going to go down like it's only going to go up from here yeah wanted to get your thoughts on on slashing quickly um seen like toi and S Ram kind of going at it uh which has been fun to watch and I do think there's probably different considerations for like slashing in the context of base layers versus Slash in the context of more narrow sort of like local specific use cases um yeah right with like when say like we were talking to tog girl and sunny last week and we're talking about when let's say it's like a bridge operator or like a market maker for fast bridging and you're relying on that one market maker to fill the order right then it's probably good to have slash collateral right um it's

quite different than a base layer then there's the second question of what to do when there is slashing what do you do with the assets should you burn them or redist you know redist distribute them to harmed users and I'm curious where you fall on this and like how you're thinking about slashing within um you know the context of of reaking on Solon versus and how it might be different than Bas layer slashing um yeah right now it just goes back to the thing that we were talking about earlier like let the market decide um I just like I think if you there's chances that if you like encode things to happen a certain way it might limit the use cases of what can be built

on it and so that's something that I think uh people should be like aware of however at the same time like there might be uh there might be like strange incentives that pop up if you let that happen um where like there could be incent to get slashed if you're not burning it or redistributing it um so yeah I don't know like that's something we're thinking about a lot and like that is a question that comes up a lot um but yeah I mean I think like the set the types of avss that we're going to

see are going to be a little different and there may be uh I think there will be a lot of abss that use lsts but there also be ones that use governance tokens and they might want a little more control over what happens to those assets and So like um right now the the protocol doesn't really care and I'm hoping that like I think this will happen there will just be like kind of a pattern that emerges like maybe uh people build in like people someone builds a resolver program where you can like slash something and the fund sit there and then you uh you can like C imiz this resolver to like send funds back if it was a um if it was

an accident or something um but like if you feel strongly against that let me know but uh I think like there will be some patterns that emerge and like I guess say uh I feel like it's so early that like I don't know like as far as I know like Igan lir is still changing the way that they think about slashing um I don't really know what symbiotics up to and like uh I guess I just get nervous if you like encode something to happen a certain way then it will limit the use cases or someone will like Fork it or something and so like maybe once there's like an obvious pattern and that emerges then you can

kind of take that into the protocol and let everyone get access to it maybe provide better guarantees but um I think it's still like well it's been there's like I don't know how many avss are actually alive on ethereum right now and like it's been kind of it's seems to be like a newer or newish area of research and like people are still undecided if the Bas needs slashing or not so uh it's kind of just like let let's see if there's a pattern that emerges and can take a look at that Lucas what do you think the dynamic is going to look like for reaking Market places are they going to be isolated to an ecosystem are we heading towards a world where there's an

eth one or two eth reaking platforms and one or two salana reaking platforms or you know as we I guess one of the this is how it's largely played out in liquid staking right um and I think there are a couple different reasons for that um but one part of that is that it's very core to the protocol and I think there are almost Strate this is the whole alignment debate right um I don't know um uh but but it is right it's really critical to the the the base functioning of the protocol um so I think there's a lot of good reason for that for that alignment debate to be taking place but that's why we've SE that's part of the reason why we've seen liquid staking kind of be pretty isolated but if if we move from let's say one of the things

that we maybe falsely assumed because of igen lir in the it's more of a demand Market than a supply market and suddenly it's less about like you know acre you know native value rewards back to Ether soul stakers but it's much more like hey I'm a protocol I need to arrange my security apparatus here and I want to do a lot of that using my own token suddenly in that world I'm not actually sure the same Dynamics are going to apply and it's like yeah you know what I mean there's not as much of a reason for these reing platforms to be siloed into different ecosystems what do you think about that yeah uh yeah I mean I think that's why I think if you like it's all about the as's like yeah doesn't really matter

like cool you have like a bunch of tvl but like if there's limitations in the platform and what can be done and assets that can be used and like how slashing works and how rewards work and all these things work it's like they're just going to like go to build their own platform which is like maybe kind of what we did for the use cases that we see or they're going to go to a platform that's pretty flexible and so like I think it's better for it to be more flexible and more generic and like I think the the ones that are more flexible will end up winning and um I think that's like I think uh enir is going to have to

like rework some things if they want to continue to maintain the lead and I think that's like that was a a good second mover advantage to symbiotic it's like hey let's just like kind of let they take some opinions but like let's let the market kind of decide what we want to happen but if I had to put a gun to your head on an answer here do you think 5 to 10 years from now is it going to be like jeto is the reaking platform of salana igen lay symbiotic eth Etc or do you think they're going to be more cross ecosystem uh like within each ecosystem will there be more than one yeah like will jeto you know will like the jto reaking platform have like maybe some portion of its businesses like eth based

abss and Salon based avss and yeah or do you see it being ecosystem siloed we haven't really I I'm going to say like ecosystem siloed I think we haven't really seen like what the first example that comes to mind for this is like magic Eden but like what and like there might be exceptions to this it's still pretty early but uh like what what protocols have been successful expanding to other chains where it's like increased their uh like success it like it's really magic eeden magic Eden is is a pretty interesting example kind of the the interesting example also about magic Eden is that

when it expanded to ordinals it also then grew its salana nft market share as well because the the common denominator there was like nftg Traders and it's like well if I'm already if most of the trading is happening here on ordinals then and it's also supported on salana like I might as well also trade my salon nfts here and so I do wonder you know that's where I think the the supply side of this Market actually might be decently important here um and it's like maybe people have a strong preference for reaking salana or ethereum or usdc uh right that's like the like dollars frankly is like the uh the other thing that might yeah can trip everyone up it does feel like the aggregation layer is

like already kind of happening on the supply side like you mentioned you're talking to lrts that are coming over from from e um I just question I think you know what like it's seems very complex uh to be working with like the switching costs seem high from the ABS side uh seems really complex to be running an ABS that leverages two different reaking platforms with different slashing and different assets just seems like why are we doing this um so yeah yeah I'm I'm a bit skeptical on that but I think people will try yeah I mean yeah I think we like I started think that svm will be the dominant virtual machine in the future

um just from like a performance standpoint everything's going towards performance if you're not you're going to be left behind and so like I think I'm betting that if you have a bunch of whether it's running on Salon itself or you're like building an L2 then uh if you're not looking atvm then I think you're missing out and so if you're building on svm like you might as well go to uh the base L1 that has svm as well because you're already kind of familiar with it and you know the intricacies um maybe some people disagree with me because like eth has a lot of security I don't actually like I think there's probably too much security

given the current avss um there's just a lot of like billions of dollars to security for protocols that are kind of just bootstrapping and so um I don't know we'll we'll see what happens but I think salana has a good shot at being used for reaking matching the supply and demand and pricing that appropriately seems to be a big challenge for a lot of e like we've talked about this in the early days of polka dot like polka dot got something pretty close to the right um end State Design what they maybe messed up was not making it permissionless and making you know making the assumption that people would pay a lot of money um for essentially that that security and

it wasn't necessarily correct or there El also like you had to lock off for a certain amount of time and stuff like that but um that's the challenge so i i two two more sort of lines of questions for you here Lucas which is one I think one of the things that um you know people are excited about on the ethereum front tog girl talked about it in our last episode is if you imagine um a protocol like salana or ethereum as an AVS or just a network in general like reaking can unlock um some features uh for these even like big l1s over an ethereum land that's pre-c confirmations that's what everyone's sort of excited about and so maybe this is another point in the camp that these reing platforms are going to remain siloed because

that's extremely core to the underlying like road map uh design of the L1 um but I I think that's part of the reason why uh some folks over in ethereum land are much more like positively predisposed to igen lir than it looks like looked like there were going to be a year ago because it's kind of like hey actually if we can do something like Pepsi which barnabe was was leading and very excited about maybe we can actually like move faster on some of these um protocol improvements that otherwise would have taken an enormous amount of time to push through the EIP uh process and so I'm I'm wondering if you see the same opportunity on salana right like do you see restating being like some sort of driver to the salana road map and if so you know where is that yeah I think

think the most obvious at least in like my the world that I'm in where this could be used is me um I think you have to be very careful about the way that's designed and um yeah it just lets you like move faster and you could potentially try things faster that the protocol can't do salana is a very fast moving protocol so like maybe that is uh potentially less valid but I do think like you can try things to potentially modify the protocol and see if uh if it works or not and kind of a uh without actually

spending the time to like bake it into the protocol but there's uh you have to be careful in like what you're doing and make sure you're thinking about any uh like second order effects of what could go wrong and like uh there's certain like doors like um that once you open them you can't really close them like uh I mean there's a lot of path dependency in PBS but uh that's like kind of a door that isn't like you can't close that door that that that's long gone so like yeah I think there's opportunity for it but uh hopefully like people that are building things like that really think about the impact of them um

so that it doesn't end up being something negative right we were talking about that basically in the context of like um on ethereum a proposer could sell you know future blocks right um maybe somebody comes along and buys five blocks in a row maybe that has like much worse you know consequences than uh current state and really hard to put the genie back in the bottle um yeah so makes sense yeah yeah stuff dealing with uh block space and me is a very difficult area to be in it is man um and then maybe like to to close here I think one of the

differences between jeto and how all of these problems are being handled on the ethereum side is there's know jeto does you know this is like the common tagline right it's like flash Bots and Lio and Ian L all rolled up into one and I'm curious like what what are the um what are some of the iies that you see you know in in with these different lines of business right like I'm imagining there's a certain line of of logic here between there was like tension even in between Lio and igen layer there's like coopertition right because at any one given point someone could try to go Upstream of someone else and um you guys don't don't have that issue you there's there's one entity so what are some of

the advantages I guess of that structure U that you see like for instance right the I guess the one of the tensions was like which when when igir opened deposits which lsts were they going to accept right and so and you know because the idea was well hey a bunch of people already hold Ste so maybe Igan l or Lio just decides to open up a module in their staking router which would be a reaking module right and so there's this kind of tension and it ended up working out but I could see for instance because you guys are the ISS of the largest LST you could just kind of direct that you know that could be another source of demand um for the LST if you kind of make it the default

in the staking platform like just synergies like that basically um I think liquid staking tokens and raking go hand in hand so there's certainly like a flywheel that you can get there the protocol is like doesn't really care about what assets are used so it's not like you can like choose uh like you can't really enforce everything is geeto soul based or any at one LST or another it's kind of up to the protocol um so yeah I would say like the liquid staking side is definitely one of it and then there's definitely a lot of applications and like research that's going on for

reaking an me and um that's kind of another area that I think can potentially uh create like more utility than would exist otherwise cool um well Lucas uh I guess last very high impact question for you here is who is going to be representing jeto at the golf scramble in this year uh yeah Justin's really a killer played golf with him in Austin Brian as well I'll be there um how's the handicap looking these days oh dude not good um just about having fun out there

you know yeah about the score uh yeah I mean every time I go golfing it's like you want a beer and then you're on the 18th hole and things are uh you're having a good time I'll say that but there's a there's actually a bell curve there's a beer Parabola when it comes to golf I really do think like two to three beers I actually feel like get better and you some line and it's like yeah it is downhill when the transfusion comes into play I think same I agree yeah like once you get over the uh can I hit this to like I'm gonna like whack this thing and I have the confidence to like use this tool properly like like your skis or

whatever it is um yeah that's where the magic happens but uh I think we'll have to find a fourth person for our team so so uh we'll keep an ey out for that person all right cool tryy outs tryy outs um Lucas I appreciate you coming on man and uh and educating the audience you guys are doing uh just a phenomenal job at at jto so yeah keep up the good work um what uh if folks want to find out you know if they're a networker in ABS and they're they're interested in um finding out more about the reaking platform what's the best way to get in contact with you or someone from the team yeah go to the GTO Network blog and there's

the restak announcement at the bottom there's a Google form so if you are a potential operator or an ABS or an LRT or just want to find out more fill out that forum and someone from the jet foundation will reach out to you beautiful all right Lucas appreciate you man about to do it again thanks yeah that was awesome thanks Lucas all right buddy great episode um this was a fun one to do with with Lucas I know this has been a long rumored yeah project launch so we we were just hoping that like we could talk about this within the com like within the timeline of the season and fortunately uh got there at the 11th Hour um so yeah it was great it

was great great chatting and I think we have a lot to talk about so what do you how did you leave this conversation thinking about what the market dynamics are going to be for reaking in ethereum versus Salona so I think the um so we talked about this a little bit on the episode but you know I think like security um properties of different systems on ethereum um I guess security levels and security models it's far more fragmented right because so much more happens offchain because the L1 is just so expensive and unusable right in a lot of cases um and so I think instead of looking at like fully offchain systems

and figuring out how to leverage you know the base a base asset of ethereum to like help decentralize them and help them you know kind of also like this alignment angle right like driving value back down to the base layer um you know I think I think it was really like kind of like a supply side original value PL prop for ethereum um it was saying okay these are you want to using all these applications and stuff like that um also there's a lot more offchain networks that should be able to exist if you didn't have to spin up your own new staking token for them right um with salana there's so much more that

can happen directly on the L1 and there and and frankly like that's that is the stated purpose of salana that's where the road map you know is focused on it's not necessar where the market is always focused on like they have LDS coming as well but I do think it's more like looking uh internally at what exists today and what are some Central points of failure that can be decentralized to improve those systems um versus like ethereum where it's like what doesn't exist today that could exist if we could basically export you know the base layer security right um and so I think that's where start on on salana um it's also

very interesting I mean salana has always been more of a demand side aligned chain I feel like they you know had no focus on like uh you know like a burn or like you know kind of like ultrasound money or anything like that it cre like Direct Value away from applications and users and to the Bas layer token that's always been their approach it's more like let's build the best possible platform to to to develop applications and value will just naturally acre if we get tons and tons of usage of it right um that seems to be reflected in in J's approach right um it's called the reaking platform but it's not

necessarily a reaking platform it's just a programmable staking platform um which you know I think all of these things are kind of like a like going towards that direction use any asset right like including your own right so talk about like these governance tokens are not they're not and like derivatives of them are not lrts they're just now adding staking utility right to um to the governance token and and to whatever product and system the the application has um yes okay so I think this is getting at the Crux of we'll probably talk about this in the wrap-up episode which is our last one of the season but I've you know we started this whole season by drawing

these we had these two different buckets of reaking use cases and we called it external and then we sort of settled on feature Edition as our other bucket and the external is what everyone thinks of reaking now is you know you re hypothecate your eth and you use it to secure these other l1s or app chains or whatever and you get yield and then there's this other bucket where actually looking internally at ethereum you know within the the operator set that it has like how can we create a Marketplace for opting into additional slashing conditions and Performing other stuff and it looked very separate but I I don't really view it as being separate anymore and I think this a symbiotics point is that those aren't separate really what you're talking about is like stop looking at this as just look at

each one of these things as a network and each network has a very similar challenge which is what does my staking like what does the apparatus look like for my for my staking and what should the role of my work token be within my ecosystem and that is what these different reaking platforms are trying to solve it's about alignment and security and the role of the token and so I I think that I think that this is maybe like the symbiotic insight and it feels like that's how Lucas is thinking about things and it feels like a more fund like to your point a more fundamentally demand oriented approach than a supply argument um that said I do still think that you know I'm curious

about I guess you know it's hard to pin down right like what is the uh okay what is you know however much tvl there is in igir today I know it's been down a little bit but I think it's still around 13 or 14 billion order of magnitude where are we heading in terms of you know Soul um I would guess lower um I would guess probably lower than that by a decent decent margin um well it be yeah could be interesting to see if like the tvl AL look at the proportions of tvl based off of what tokens rep like make up the tvl right maybe maybe like goo's reaking platform has 10 billion of tvl in a year but 50% of it is not like

salana based tokens it's like governance tokens and stuff like that right where whereas like Ian Lair is really trying to drive home sort of like the the the benefits you get from the for the demand side you know by by really doubling down on like the the core base asset and the amount you know is it's the most ubiquitous it's the cheapest etc etc um it's so it's an interesting like I guess there's challenges on both sides right like my my sort of gut sense is that there's going to be less interest on the supply because of this demand side posturing and because they're leaning in from day one you know accepting different assets like I think they're going to do probably better on maybe

better on the demand side of things but get less on the supply side on the other hand and um you know igen has this massive head start they're the clear category lead that everyone thinks of reaking they think of igen lir but they're going to have to work through you know they've got 13 billion dollars worth of you know security tvl and they're probably not going to have the demand side to match that no totally they also had like um you know they tried to get the flywheel going with the supply side right right if you get a ton of Supply uh the de you know you'll draw mine share right then the avss will come um and of course a lot of the supply side you know Intrigue is because Ian

hadn't launched a token yet right so there was uh and the lrts hadn't launched tokens yet so there is a lot of like I would say um a lot of the ROI from that like you know supply side value prop is it's kind of a point in time thing uh whereas jto doesn't have that right jto has a has a token out there the LRT is coming to support it may or may not have tokens already um and it is you know I think they're focusing a lot more on the demand side first which would be super interesting to see how it plays out because as great as it is to have like that 20 billion dollar you know supply side Head Start that also makes you need to make up a lot of ground in terms of you know yield to support that longer term um with with

AVS you know reward tokens um this makes me think of babyon on still um where I think that challenge is even going to be potentially higher because you know if it plays it that's why I think the marketplace question is an important one to ask are these going to be cross-chain marketplaces or are they going to be siloed I maybe or I could see a future where you have much larger dominant applications and you know and then I could see a world where maybe it looks a little bit more cross chain but for the immediate future like the next five years I just I find it very likely that it's going to be siloed same way it is in liquid staking right

um and so yeah for something like Babylon it might be a little challenging um I don't know I do feel like uh it will just look at the assets themselves like Bitcoin we see exported to many different networks in terms of rap rap Bitcoin ethereum we see you know exported to a lot of different networks especially like Cosmos right kind of like in between they love Bitcoin and ethereum and that's a you know I think like a good exporting sort of path where I do think salana is more like um kind ofp what's the market cap of rap Bitcoin I I didn't think it it might not actually be that big now that I think about it but um you know what I think that that where that could actually happen the most um I know everyone's

sick of this debate right on Twitter but it it would be interesting if like a big eth rollup or something decided to settle to another L1 and took you know 10 or 15 or 20 billion dollars worth of eth over with it I I think that I I honestly I'm I think that's pretty unlikely but that's how I could see that actually happening oh and the equ the equivalent would be like is um you know Eclipse gonna secure itself with restake e or with restake so like something like that um I think that's that's another question but yeah the other thing I've noticed is again like uh symbiotic um you know saw the Athena announce ment right their partnership um and with jto

we're talking about like again like much more of a focus on governance tokens it's kind of you know looking at existing projects and saying how can you find some you know can you improve your product and your system with staking and does that have like Downstream benefits to your token right now your token has a reason more more of a reason to justify value capture um assuming that the token holders are taking on some kind of risk with this you know staking operation and um you and I were talking about it beforehand we saw like a is working on some new tokenomics um they were like you know one of the only I would say major D5 protocols do have a staking

token uh you know have their governance token have some sort of staking element right and that was an insurance pool that backed up the protocol um you know and if there was ever a case of bad debt and I'm very curious to see how many of like I think everybody like the general sort of um belief is that if you're if you can transform your governance your useless governance token into a staking token that's probably good for your tokens market cap um now how many of those protocols that really want a staking token for the want to make their stake your governance token a staking token have like a good reason to actually like come up with some sort of staking um for

it I don't know but we do now have like a way to make that very very easy where you don't have to you know build inhouse like this whole staking setup which is probably super non-core to to your business like sure that was resources that a could have directed towards the core lending Market um instead they had to you know engineer this like you staking system um so yeah I think that's that's just one other thing I've noticed is like um definitely becoming more of a TR the and something that we were also talking about is that maybe it's just different customer segments uh and those have very different you know BD

approaches so I could imagine like the way that we've been conceptualizing reaking is hey you know there are going to be these interop protocols or layer twos or like da Solutions or whatever that just want to purchase a whole bunch of you know cheap e security um and these are new protocols for the most part that are spinning up for the first time but then there's another category of protocols which like imagine if Igan L symbiotic you know was working with a on their sort of staking redesign totally right probably should be probably yeah um and uh although I will say I got a shout out a here I think the design change uh to Umbrella which is the name of their new uh their new architecture is is pretty elegant it's a

good it's a good solution um a is no longer the token of Last Resort which they have to sell to meet any bad debt they're just you users can opt into making their a tokens essentially act as the last resort so you're matching your assets and liabilities and then you can just burn and if there's bad debt you can just burn it uh whoever's opted into those additional uh basically slashing conditions and rewards um but anyway besides the point so that is the opportunity and so I I do wonder if for some of these maybe it's the jetos or the symbiotics or IG layers of the world if you want to pursue these types of engagements that I I would actually have to imagine you set up a really sophisticated BD team um and like protocol engineering team where you know if you're going to be of any use to a in

this situation you have to be extremely sophisticated and so I think that's going to be a big part of the opportunity um but I also see why you know Igan Lair describes this as Cloud it's like really backend stuff it's like how it's it's just backend um that you're fixing here so yeah totally and um you do notice like Ian L yes it did say permissionless Innovation like that's been their Mantra from day one but they are the inventors and so they're naturally a little bit more opinionated um in putting out the like solutions to the market right they put out the inter subjective work token they've seems like they backpedal on the veto Council I don't think they were

ever like you know really you know uh I guess set I don't think that was ever really set in stone as like you have to use this but definitely have like back backed off of that you know they have like come up with steak shirt put it out into the world like maybe here's a way to in self insure and to redistribute you know do do more with less basically for for for uh security collateral um and you know I think there's been good and bad parts but they invented the word AVS right um and in kind of creating the category right and creating and inventing these Solutions associated with them um you know I think it's it's it's drawn a ton of Mind share to to aan

lir and to reaking but it's also created an opportunity for counter positioning where you know again like Lucas was saying let the market decide let the market decide like let's make this thing as flexible as possible um so I do think that's where everything is kind of converging on these will have very similar designs uh the only differences in the designs across symbiotic igen Babylon goo is just stuff that is based on the nature of the L1 where the logic sits right um I think they'll all try to be as flexible as possible they'll all go after like slightly different use cases but um you know does feel like this uh making the going from like reaking to just this programmable

staking platform is kind of where they're all converging on um and yeah I think it'll just be super interesting to see if uh maybe the feature set are designs you know diverge again based off of like the use cases that they really end up getting a lot of traction for individually cool man all right I think we got to wrap it here uh big shout out to jto honestly one of the more interesting frankly protocols in all of crypto right now just they're doing an enormous amount um of really critical work over in Sala I think yeah they're crushing it looking forward to see what they continue to do miles all right buddy this has been a fun uh this has been a fun season this concludes the interview portion of the

Season uh we got a wrapup episode um we'll answer all of your questions and probably just ramble honestly probably ramble probably just ramble something like that awesome man um yeah have a great weekend see you too dude bye hey everyone hope you all enjoyed today's episode wanted to give a final shout out to namada again a team that is near and dear to my heart they are building building the shielded asset Hub which is protecting the future multichain talked a little bit about how that works in the mid roll but for now what I would highly recommend that you do is go check them out they're in their main net launch phas you can follow along with everything at n.net you can start rewarding Yourself by shielding your actions and strengthening data privacy

for all across the multi chain so thanks again to Mada for all the great work that you're do but