How Restaking Could Reshape DeFi and Infrastructure with Mirko & Felix

Transcript

this year like there was actually surprising even for me surprisingly a lot to talk about like Bitcoin sing not just like Bitcoin saking but also Bitcoin potentially moving to proof of stay so that was actually discussed a lot and very wild idea still like most innovation in crypto starts out on ethereum and sort of matures there a little bit and then ultimately makes it down to maybe alternative BMS or like Cosmos chain mcoin narrative is is coming up now like the mcoin super Pyle everyone is talking about we have a lot of institutional capit Capital coming in so it's getting really serious and like suited up on the one side and then getting way more deun on the other [Music] side so I'm here with Miro s rewards and

Felix of symbiotic thanks sir thanks for joining me guys so we're here at staking Summit so it's the fourth staking Summit uh the third actually oh it's the third okay so I have been to all of them I thought there was a fourth one in there I thought there was a fourth one in there I miss but um yeah congrats on this event it's like really good it's been two days uh everyone from the staking industry is here uh really high quality good signals and noise everything you want out of an event and it's the beginning of week too so people are pretty pretty uh energetic still uh even even though they're mostly jet like but um yeah how's it been for you guys yeah really great I mean we um posted the first second Summit in Lisbon like uh 3

years ago now um 2022 and then the second one in eul and now in uh in Bangkok and it grew like every year like 30% around start with like 300 people and then like I think 600 and this time we are like uh close to a thousand in in attendance and um it's really great to see like the whole steaking industry grow as well um so I'm very impressed actually to see um yeah how the proof of steak industry grew and then also the steak and Summit kind of grew alongside so you can really see like how the the discussions are on staking and through Stak evolved over time we look back at like first second summer there was a lot of like talk about DBT was like the big new thing P of and like over had a presentation and everyone was kind of

like wow what is this yeah we're going to decentralize all the validators you know now kind of like all right everyone is using it already and like anyone you speak to yeah something to do with skvt so it's really interesting to see like this uh the evolution um over time as well yeah yeah how about you yeah amazing conf as always I I was also on all of the events actually in Reading also like speaker just after mirac so thanks I back the day I think you know MERS Al like one of my first contacts in staking I uh when we were both in Berlin and we started seing rewards and we were we kind of like chatting about you know what staking is and what you can sort of

incorporate under this staking umbrella because I think staking was also used for like Master no it's and you know at some point even staking was used as a term for within like sort of the defi ecosystem yeah right like synthetic staking and stuff I think that I should went back a bit I feel like now it's really again more infrastructur but um you know so so it was really great to see staky rewards like always be part of that and then starting to make this conference and really like this key Niche uh and bringing all the players there together that usually will like try to meet uh some other conference and some corner and uh now it's like super um simpli in one spot and you have all

the people there that that matter which which reproductive I think for many people that's why you see many of the sponsors I guess also returning and yeah coming back but staking has also kind of gone back into defi now with with reaking and and lrts and everything we'll talk a little bit more more about that as well but um what of the you know over the last three years so you talked about like DBT is was the main topic in the first year you know what's what's the uh what's the arch of staking in your view like the main themes that we've seen here that you you've noticed kind of evolved over the last three years I mean this year like there was actually surprising even for me surprisingly a lot to talk about like Bitcoin saking um and not just like Bitcoin sing also Bitcoin potentially

moving to proof of state so that was actually discussed a lot yeah very wild idea still yeah and it came up last year at the second it was like we had one panel about Bitcoin saking and everyone was kind of like yeah what is this and uh it was really kind of um yeah prown up on even still and now it feels like it's already common to talk about it um so that's that's really interesting I think yeah you want to turn Bitcoin on a Fiat money don't you yeah okay I mean I I know I know Sun's talked about this and like a lot a lot of lot folks have I think uh well that will happen maybe but in a long time I don't know how how long you think the timeline is on that but I feel it's

like maybe decade out something yeah like it's going to take a very long time like s was talking about the Bitcoin Renaissance so I mean yeah they needs to be a cultural mindset mindset Shi yeah do you think that comes from um I don't like this word capture but like capture of Bitcoin by more institutions in the form of like ETFs and and institutional um yeah institutional use of of Bitcoin yes all of the institutions are actually very surprisingly interested in in Bitcoin staking yeah because somehow everyone has Bitcoin but they can do nothing with it um and now people are already used kind of from the from the proof stake word that they can do something with

their tokens and earn Guild as well and put it up as collateral like ethereum is kind of very like sing is part of every Financial product now like it's kind of part of the stick yeah already yeah yeah I think like most innovation in crypto starts out on ethereum and sort of matures there a little bit and then ultimately makes it down to maybe alternative BMS or like Cosmos chains like you know in Cosmos we didn't I thought Cosmos was like The Innovation Hub of Crypt or so for for like I guess for chain related things for app chain stuff and like the ultimate vision of app chain world yeah yeah but I don't think for defi right for defi it's definitely ethereum for sure yeah and so it's starting ethereum then Cosmos

and now coming to bitcoin it seems sort of like a Natural Evolution um and that's fine it's actually kind of cool it's just also like there isn't really anything super new there right it's just okay you use Bitcoin as the collateral yeah well cool yeah it's great it's a great collateral but we have to see like something like completely new emerged there that's like what I'm more interested in yeah cuz I mean up up until now a lot of innovation on bitcoin is happening at the L2 layer and maybe um you know tap route and sort of like enabling more security or EAS easier bridging to l2s but not so much is happening at the Bitcoin layer I mean I'm not like super familiar with this

but I've heard people talk about the covenants and how that could come to bitcoin and uh maybe some small changes to bitcoin that would make ZK proof like more easily uh to be done natively on chain but here you're talking about potentially uprooting the entire consensus mechanism which is like in itself like such a fundamental uh defining property of Bitcoin in proof of in proof of work um yeah it's like it's over yeah go going back to the Innovation part um obviously like a lot of innovation is happening on eum but what I find interesting also is like eum is looking more and more like Cosmos as well right with all the app chains and especially like through Shar security theum is a cosmos chain yeah but uh like yeah that's just app chains

right now basically on ethereum so ethereum is kind of yeah taking all of these innovations that actually happened on Cosmos first and having them now on on eion yeah and I guess the same thing can then transition onto Bitcoin as well there still need to be the the protocol upgrades in order to make that happen like this op uh cat upgrad yeah in order to have truly decentralized rollups on midpine but I think once that happens we see the same transition that we saw from like yeah ethereum becoming more like Cosmos and yeah Bitcoin becoming more like ethereum and L ah okay the yeah thing will happen through the rollups as far as I see it also speaking to like a few teams in the which is eos also from

the symbiotics side I also try to understand it there is then like I guess it's mostly about how you do the construction so that the rollup can sort of natively settle on bitcoin and use Bitcoin SDA yeah and then but the roll up itself actually is kind of like ebm environment or maybe some sort of other move sbm thing uh but I guess it's just another road up ultimately right yes but it pays fees to bitcoin meaning this can actually offset some of the fears that people have that Bitcoin is not used at all they is a store of money that the rollups pay fees to proof on bitcoin will like sort of maybe elongate the the need to move away from Mo work it would

be like one Theory to have yeah yeah I mean I guess that like sort of disrupts the prary one of the primary use cases of Bitcoin which is like store value Etc but um yeah not to make this all about Bitcoin but it is an interesting topic I think we could go really deep into this and maybe just so I was s like sign and we work closely with s we like the staking dashboard for them um and they are planning to also settle on bitcoin which is really interesting because yeah perceived there ethereum Layer Two right absolutely but that's not even how they see themselves in the long term they see themselves as a layer two um to any drop Shain right so also settling on bitcoin also settling on salana and so on so I I guess that's also a way for Layer Two

said then not even yeah are kind of tied to one one okay so let me let me throw this at you if if we're going to go like super philosophical and kind of like long-term thinking here so you know we um I think you introduced me to this team catalysis right and they're um they're doing like an abstraction layer with all the reaking providers so it sort of abstracts away reaking as one coming pool of security that any application can build on and they have like an SDK and everything is the future like going further into that uh down that rabbit hole one where all l1's you know Bitcoin ethereum and maybe salana like if you

take like the three largest ones by usage and market cap um become this big kind of shared security thing where all the rollups and all the l2s are you know are settling to that and so kind of commone tizes that security do we is that where things are heading or will we still have like a clear distinction between okay Bitcoin security has like these properties the security has these properties and yeah how do you see that play yeah yeah go ahead I think I guess if it's does it all become one day blockchain that's whato does as well right like putting all the different

tokens and collateral together and right right right I think but if it matters like for shadan or like da then your underlying layer should be sort of optimized for that use case so I think if you're actually building a ZK roll up on Bitcoin now like I spoke to the citria team and they have the vdvm and then it means you can get like 10 orders of magnitude less per gas than you if you would like just do it on bitcoin somehow like basically but you used to pay for a transfer like significantly more than you pay on an ethereum L2 now but then again you have like Alda that's even cheaper or like this maybe the settlement can also be cheaper somehow so I think actually got the underlying a one that you settle to and stuff is very like d stabilized but also performant

and kind of computable or programmable matters so that the L2 also benefit it and the proof thing doesn't cost it as much so the Bitcoin L2 might forever be like inferior in terms of like pure fee being paid on the L2 so they need to like somehow make up for ads with like I guess the addics security you get from being on the coin so guess it's it's like a commodity game where like the features you provide as the setlement I guess in Bitcoin case that's mostly like hey this is the most secure chain and collateral assets yeah for then you which you need to be willing to pay more for the affrication which I'm not sure that's what people will want yeah I I see would also have to

separate between the the asset and the network I think like BTC as an asset uh not Bitcoin um has like the strongest value proposition in crypto it's like this very hardcoded 21 million there will never be more and can never be changed I think this is really like what this idea what what what captures all the or like what has all the value in in BTC um on the other hand ethereum is like a like it's the the word computer with the highest Network effects um so it's definitely it's purely like a a winner as a network BDC is a winner as a as an asset I think so I think yeah we see more more use cases for for ethereum as a network I think because they have all of these

Netbook effects and also more use cases for BTC SMS then I think BDC staking is very interesting issue yeah so how important is BDC staking in the symbiotic product and like yeah for for chains that are built for projects that are building adss on symbiotic how do that play in there yeah um it's quite important I think because there's not that many other assets that you can easily show sort of the vision of a multi-asset staking system or future where like obviously need to have Bitcoin there basically you need eth Bitcoin and probably like stable coins so and then

you know there's like longtail of other assets like I don't know LP positions in in an amm or maybe like governance tokens of of the Native projects but like yeah bitco is kind of one of those core assets that you you want there I think for symbiotic um what we really deliver is kind the programmability and the the slashing and so the expressivity that you can have as a as ABS as a network Builder uh and then also the the element that you could use Bitcoin but obviously if you're using Bitcoin up on symbiotic you will have to bridge it somehow to ethereum or like have like some sort of slashing message passing um there or that's we are working with like a bunch of cool teams that are innovating on this front so for example DLC BTC I

think there's like some Rebrand coming but basically they're using the lightning channel uh the lock contracts to create this like self wrapping decentralized custody network of Bitcoin so it's not just like you know Hil by bito but yeah you can wi your own uh Bitcoin and then this aset comes to ethereum and can be res so it's like and can be slashed also because we can we can kind of go back and uh unwrap the original Bitcoin and slash where that actually comes very close to kind of what the product that babyon offers I guess with that made if Bitcoin thinking but the problem there I guess is that because of how B works natively on bitcoin it's very hard for them to be like as programmable as as symbiotic and

as can cover so many like different sort of slashing use cases so but you know you can just put your Bitcoin straight on bcoin and and earn the additional new there is like a great bad roof position so I think very importantly for yeah there are like some tradeoffs there and um obviously like assets that are natively issued on on ethereum are potentially more are interesting you could still well because they're like completely mative to that environment yeah and there's no risk I mean the risk is is there's less risk to some extent like bridging risk Etc you have to account those things yeah yeah how like what's your perception of how like the reaking narrative has changed staking I

mean like you guys offer data services for uh for the staking industry and you know you sort of looking at the um across the board like yeah how is reaking changed the narrative for validators and infrastructure providers yeah I mean I I think it opens up like Endless Possibilities basically that that's why it's really interesting like because proof of like staking has always just been like yeah kind of you you provide INF infrastructure for like a like one chains and now you can yeah provide Economic Security for like any app uh anything on the internet so it makes it really easy to like yeah really create a fully centralized stack because um if we think about yeah that we're going to go into like a app chain World

um we we want to see like every um every service on the internet being decentralized somehow and that's what shared security and reaking basically allows us to do that like anything can be like out of the box like decentralization as a service kind of so it really changes the the whole game from just Sten being only used for kind of blockchain infrastructure um now it's been used for like basically internet infrastructure so it's like the the use cases are so much wider actually for staking um what are the most like exciting use cases that you guys seen you know here or just generally yeah I mean it's so already you're probably closer to like all the networks and like

abss and so on I guess it's mostly like rollups and like it's still some sort of part of the the like infrastructure also for blockchains yeah not sure if you've seen any kind of like outside D or like apps or something is shed security already I think like my take is more that it actually doesn't change it's like a I feel like we already have had staking for specific use cases outside of just being a layer one right like I guess chaining doesn't have Stak but you kep you could probably have some Oracle that had like some staking mod there like app chains and Cosmos that do like specific things that aren't just consensus log networks yeah um but I

think the core Innovation is that now you don't it doesn't necessarily need to be a consensus Network that you that you can have say from just like Economic Security as a service of like yeah like reaking is also like it depends what is actually the what you're talking about is it just the framework for staking that makes it easier to OT strap the validators and have like sort of Decor staking logic or is it really like reusing the same Capital if if you're talking about the reusing the same Capital then we actually haven't seen that at all yet there's no raking life in the real world yeah so we don't actually know yet the new use cases but I personally think that because everything is done in this one protocol and uh like they can share goer together you can also create just a much larger

pool of sort of of collateral and then it can become very interesting for like some some random use case like like a reinsurance use case that will pay very little apy but needs like a lot of capital at risk to to Leverage The restake Capital that actually is also St all these to pay apy to then just add like a little bit and a lot of capital will opt in just to get that additional percentage points and can like create like I guess just a prodcts like that that aren't necessarily improv State n works like something that I expect sure yeah so I want to ask you and you I think like helpful for for the audience to understand too you know but Ian Lair

has really created The reaking Narrative or at least like brought it to Market in a very significant way um and like there are now other reaking providers I think symbiotic is um like the biggest runner up after after Igan l in terms of uh TPL and also you know just having Capt captured the narrative like what is the what are the fundamental differences to you know the symbiotic product and and Ian Lair and how how are you guys uh like how are you thinking about becoming basically like the winner in this category yeah uh yeah definitely I think it certainly like I have captured sort of this imagination of a lot of people

and created like sort of uh this industry and just brought way more people into the staking space that probably wouldn't be here otherwise I think that's hard to been ey uh so that's been really cool to see also like more people caring about like sort of standardizing certain parts of their infastructure which probably otherwise they would spill the centralized service I think there's still probably too many things going around that are actually centralized and not considering building on some sort of this staking framework that makes it easier for you to boot your decentralized network that's ultimately how we see ourselves so like istic we kind of want to just make it as easy as possible to decentralize your your network whatever it is and that basically means we provide a core uh

protocol and a or framework to to essentially build like special staking logic so you can use whatever P assets you want to use you can kind of uh have special slashing conditions the the service itself can use whatever chain building stack you want to use like Cosmos SDK is upstraight it can be a roll up stack But ultimately the liquidity is concentrated on on fum and sort of the staking happens there and uh all the so records are kept on the and it's orchestrated there and all the agreements that the different networks are doing with the operators and their stakers so there's this division of deal and labor in in um symbiotic they are accounted on ethereum and like sort of

enforced there so if someone says like you know your network a BC like we decide to share that the they're collateral together and network C get slashed it will impact us but yeah it's it's enforced on on some on ethereum and uh you know you opted into it so you the tough L you suffer from that slash and R you could have just also had like isolated steak just for your network and now you don't have the reaking benefits but you would know okay this thing only C by me and uh ultimately having that sort of uh allows you to also you can put that together in syic any way you want so you can have like parts of the state be restake with other networks and other parts be like

sort of isolated to you so it's like a mix and match thing and and that's kind of the design philosophy to be more modular more flexible and try to design putable in this minimal way that all these different use cases can be B on top without like prescribing certain things so like I think what went wrong in previous Shir security iterations is that they came with like sort of a top down view of this is like the Shad us and we the overlord and this is the fen auction this is The Shard yeah so like it's very prescriptive in how the shed security is shared whereas we were more like here's the protocol for how you can build it but yeah build it you know and then we'll see what emerges from it in the long run but it's all built on the

same protocol and there's never effects around that yeah and what what do you see is like being unique and in symbiotic that um makes a real difference in terms of like how weaking your balls well I think it's much more modular right so like I I guess that's the the real Advantage like trying to be more modular and like kind of decentralizing the the restak and shared security stack even more I mean that that's at least what I get from the semiotic team I think they're looking to um yeah just decentralize the the whole protocol much much more um so I think that's a that's a great Edge and uh a great philosophy really yeah there also a point of like IM immutability and sort

of making sure that the core architecture that the consensus of a network is being built P doesn't change below that so really the stable foundation for consensus right like we you think if you're building like native launch You're Building like Cosmos chain you sort of sort of have that but then your liquidity is isolated to your own chains now that's kind of shitty so like it's better to have that on ethereum but then if you build it on ethereum it actually needs to be either part of for core ethereum protocol or it needs to be mutable smart comp so yeah that they can up they change or if they are like you can opt into it and all these things so that's how where we started from um maybe Switching gears a little bit here uh you know we're

all infrastructure people I think you know uh like we invest in infrastructure you guys build infrastructure uh you guys provide data about infrastructure and um you know in in this current uh moment in in in in this part of the cycle in this cycle there seems to be um quite a lot of interest in meme coins and and other forms of applications that um you know I think a lot of people foresee as as uh uh potentially like be becoming huge uh in in the next couple of months um how do you think that affects the uh the infrastructure side of things and like people working in

infrastructure is it uh does it detract uh the the builders does it just mean there's like more Capital uh coming into infr projects um yeah I feel like there's two sides actually feels like this kind of mcoin narrative is coming up now like the the mcoin super psycle everyone is talking about and it's kind of the the industry is getting more ban on that side yeah on the other side it's kind of getting way way more institutional now it's like I I I guess we see a lot of like change in the US happening as as well with the new legislation and then um we have a lot of institutional cap capital coming in so it's getting really serious and like suited up on the one side and then getting way more deun on the other side it's like pulling at both extremes yeah

oh three um this dud had a bigger beat prob and yeah so there a lot of them investing in meme coins as well which is which is crazy and even like you must supporting Dogecoin and and and yeah and do is like top five yeah at least top 10 yeah top 10 at least yeah it's it's insane actually yeah um so yeah I think it it would be really interesting but I think mean coins is always these are great experiments actually um TR Test new stuff like for example trying to get Dogecoin to be POS or something could experiment um and also other meme coins could really like um through their creative designs unleash some yeah innovation in the end

um which yeah I think I think there's also just like a lot of Locked Up liquidity I mean if you look at you know what's the market cap of Doge is like like deep exactly and yeah cardono like uh to 20 billion or something like that right I mean this liquidity is basically just sitting there it's not being yeah restake do restake cardano I mean restake so it's like prist yeah oh really but not in someone needs to build Babylon for do like and like likecoin like I mean you know will lead round that's sorry our mean coin play yeah cool um for sure like yeah yeah I can

get the C it's a great heck to to use it the mecoin yeah it's like useless liquidity it's just there and it's not being utilized in defi when you know it could like potentially be billions of dollars like Dogecoin dig in like a or something no right does it no because Dogecoin is like a like similar to or got a leverage them to proof of work chain is separated from the evm depend they have any representation on it serum even yeah but yeah if there's a babyon for dcoin then there would be like also like abtc foron also sh isn't there something yeah Sheba but that that's that's an answer Co yeah the G yeah Sho is taking yeah we

know in the very beginning someone tried toay I think one one of those are like now I think p is already somewhere in in semetic as a collateral but it's not like sh go yeah cool well um and anything uh you guys want to share um any upcoming announcements that uh you want to or Alpha that you want to drop here of course uh we are working towards our minute I think we're probably not going to be like I don't know when we release this you going to like right away release it couple of days couple days yeah yeah yeah so basically

will we hopefully have a main night at some point in the coming weeks I hope so uh let so may night with abss with networks uh that are building yeah with symbiotic and actually slashing live and everything so we excited for that um and yeah using like deathcon to kind of get all the teams together that are needed for this coordination effort and speaking to them in person about like what's missing you know we have all these like different parts of the e like operators the networks and the the vaults the resters so so they all need to sort of coordinate and need to understand how everything works so yeah making sure the last things are clear and getting

started with the the real deal so I think that's the main main one we excited and then of course the secret do staking project yeah do it yeah and how about you guys um yeah I mean the next second Summit is coming up we announce it for uh April in bu yes next year so that's when be really excited it's going to be like a big staking mega event similar to this um and then on the product side we are we are working like on a um yeah building the official uh stocket Stak your dashboards um so you'll be able to like if you have many srk tokens you can stti it through our side also from the L1 um and then yeah manage all your positions and so on so um that's something we've been working on

extending like to other networks as well that you can stay directly on our platform um yeah we we also started integrating like syic as well so probably we also have more like reaking Integrations too um and just having like one staking marketplace where you can restake and stake any asset with any staking provider basically awesome well guys thanks for doing this it's been really fun thank you thank you very amaz [Music] [Music]