Symbiotic: Scaling Shared Security Through Restaking - Misha Putiatin. Ep. 575

Transcript

we identified the parts that a lot of protocols a lot of networks are starting centralized because the centralization journey is so hard and it's all unoptimized or start with a really software validator set and suffer for that if you have like a million nodes it's suboptimal the centralization is something that really expensive for people to maintain it's really hard to operate our basic job was to create uh an alignment of incentives for new protocols so they when they decide to launch centralized or with proof of Authority or white listing of operators they decide on full-fledged decentralization immediately welcome to EP Center Destro which talks about the Technologies projects and people driving

decentralization and the blockchain revolution I'm Brian Crane and today I'm speaking with Misha who's the co-founder and CEO of symbiotic symbiotic is uh a reaking staking protocol uh and yeah it's a very interesting new paradigm so I'm excited to speak with Misha about that but just before we get into that we briefly like to share a bit about our sponsors this week if you're looking to stake your crypto with confidence look no further than course one more than 150,000 delegators including institutions like Bido Penta capital and Ledger trust corus one with their assets they support over 50 blockchains and are leaders in governance or networks like Cosmos

ensuring your stake is responsibly managed thanks to their Advanced me research you can also enjoy the highest staking rewards you can stake directly from your preferred wallet set up a white label note restake your assets on igon or symbiotic or use the SDK for multi-chain saking in your app learn more at c.1 and start saking today this episode is proudly brought to you by nosis a collective dedicated to advancing and decentralized future nosis leads Innovation with circles nosis pay and metry reshaping open Banking and money with hashy and nosis VPN they're building a more resilient privacy focused internet if you're looking for

an L1 to launch your project nosis chain offers the same development environment as ethereum with lower transaction fees it's supported by over 200 200,000 validators making nosis chain a reliable and Incredibly neutral foundation for your applications nosis Dow drives nosis governance where every voice matters join the nosis community in the nosis da forum today Deploy on the evm compatible nosis chain or secure the network with just one gno and affordable Hardware start your decentralization journey today at nosis doio cool thanks so much for taking the time mea I'm really excited to speak with you I think uh

reaking is you know as someone who's been working in staking for a long time is a very interesting New Concept it's an interesting kind of you know con conceptual evolution of where staking may go same time it's like totally at the beginning uh you guys had a lot of like very interesting ideas so I'm I'm excited to speak with you about that but maybe I'm curious maybe we can just like start with a little bit your background your journey like how did you get into crypto and what was your journey been yeah I like I was interested interested in crypto for a while uh I think since 2011 or something uh in and out uh I I learned about this

electronic money concept uh and were was really impressed uh because like what what what not to be impressed with the decentralized and Unstoppable money uh everything else I I I knew little about like how the institutions and how regulations work because nobody knew that back then like it it wasn't for like average consumer to know how like how people are like how banks are going to be like uh uh included or excluded from the Sapa or Swift networks like nobody knew about those networks before like you you didn't if you didn't do like uh crossborder payments or something like that you were like

basically going visa to Visa payments so yeah it was a really interesting concept uh then the like I tried mining Bitcoin for for a few like weeks or days I think but like it you couldn't do anything with that except like trade on Mountain gos or something like that there were not no actual exchanges just one I think uh there was no defy there was nothing to actually do by but speculate on one like asset pair uh so yeah like I I I uh I turned that off for a while and then returned when the I like Ico in ethereum

uh started to take off and that's where like the interesting part began because you you can actually do something uh you could I don't know invest into I like icos you could uh support interesting protocols because like donations were like really huge back then before iOS people just wanted something to be built and they had like a lot of mind uh Bitcoins or ethereums so you just like go to bitcoin talk forum and uh just donate to people without expecting them to like do something for you just to see where it where it where it goes ifum was back then like it was like seven or like five five bucks a piece uh so people

were like spreading it around and then it grew by like 100% And then like 10 10 uh I don't know like a th% uh and a lot of people that building protocols realize that this is like an actual funding mechanism what's the origin story of symbiotic well we were working on state mind with alus we found it it's my co-founder for for symbiotic as well we're working on state mind with the goal uh of um making our part of like our industry a bit bigger uh by like make it it safer protecting people and trying to

secure protocols uh networks like we we helped uh blockchains as well as rollups secure their networks and as well as like big huge defi protocols uh and uh yeah we analyzed a bunch of stuff like how do we we had a team of around like 25 people with us working on securing every part of the industry so we analyzed like can we help secure compilers more so we helped Viper like wrot like fer for them and like security assessments of that found like several bugs uh then we realized like okay like there is a note code right we

have multi client for that differential fuzzing other tooling so like this is semi covered uh okay what can we do next like we have RPC nodes RPC noes like secured by this this and this uh and like we went through every every part of the industry like basically every interaction that user can have with blockchain so like PBS and everything like that and uh identified parts that that are needed to to to make our like development sustainable because for industry sometimes takes like U I don't know like uh from 100 to 1,000 to get a really like quality participant and then immediately like uh hundreds or

thousands of them are gone because uh like there is some vulnerability or something wiped out from like the the productive part of our crowd so at some point we realized like to for make it to make it sustainable uh like we identify the parts that a lot of protocols a lot of networks are starting centralized because the centralization journey is so hard yeah and it's all unoptimized or start with the really software validator set and software for that uh and we decided yeah it's a good time to start like the protocol that optimizes for that uh and that's how we start it's working on symbiotic okay so you said the protocol

that optimizes for that maybe yeah describe like what is the problem that symbiotic is trying to solve okay yeah uh basically the symbiotic is trying to solve decentralization uh decentralization is uh like it's suboptimal everybody knows that redundancy is like a step from outside of optimum you the the optimal setup is you have one server that's controlled by you that's deployed uh that's deployed in one place or like with the like with few backups if you have like a million noes it's not it's it's suboptimal the centralization is something that uh that's really

expensive for people to maintain it's really hard to operate and uh yeah like our our basic job was to create uh an alignment of incentives and uix as well like supporting tools uh and uh General support system uh to make this journey easier to make this journey way more uh easier like way easier to digest for new protocols so they when they decide to uh to launch centralized or with proof of Authority or like with white listing of operators uh they decide uh on full-fledged

decentralization immediately not a hard task because like again it's physics uh decentralization is by definition suboptimal uh but I think we we are on the right path to make it so that it's way easier and way more uh way well way more efficient for networks to use outside okay so you want to make decentralization easier and more efficient I think most people think of symbiotic as like reaking protocol what's the Comin what's the connection between you know decentralization and making decentralization easy and

reaking yep um okay like again the the the decentralization is suboptimal you need to pay a lot of people a lot of money to operate your network otherwi you can just pay yourself uh or not pay at all get one server uh and operate your network if it's fully centralized not it's not going to be a network but like pay one mode to to to to operate your network uh so the Journey of the centralization it's quite expensive and it's quite uh hard so you need to have like with the current with the current proof of stake uh models you need uh to have something to stake first right like you need to launch your own token uh for

this token you need to create like some legal basis because you you need that for you not to get sued after that you need to have a legal basis you you need to spread it around uh with a lot of participants then you need to uh you need to you need to create enough liquidity for for the token price to be semi-stable you need to list it in multiple exchanges and then you can decentralize so you need to you need to create a lot of things and you need to like go through a long journey uh before you even think about

decentralization and then you need to find yourself an operator Set uh when you find yourself an operator set like it's you need to talk to like each company separately and that's when you actually can start test interaction and if you say like your token is say like uh around 100 Mil it is General consensus uh total circul lium Supply in general consensus you can't unb board 10 billion USD in tether immediately because you don't have the security base to support the circulating supply of tokens on your EOS like in your ecosystem or you can't secure if you're like Oracle Network you can't secure 10 10 100 bill of tvl in other

protocols with your a price fit so what raking does is that it helps you like as a part of shared security which we are like we are shed security protocol so one of The Primitives that we use is restating what it does it enables you to get a wide economic base from the from the tokens that are actually stable that have like really good liquidity that are listed everywhere and immediately start testing your traction before all of these steps that I described like before this 6 to 16 months of development and like trying to to create enough of stable economic base enough of the like really good validator set and like the

the mechanics of your toomics and everything like that you can start immediately and you can on board a lot of money and really good operators immediately almost this is the goal at least for uh for shared security protocols and like again it plays to the same narrative you can do better while being suboptimal so you can get enough enough yix Improvement enough goto Market Improvement enough enough Capital efficiency to counteract and even like receive a lot of a lot of benefits while being redundant and while being decentralized from the

start one point you're making right is that basically if you're launching a proof for stake Network right it's expensive there's a whole bunch of um overhead cordination finding operator set Etc uh in the reaking case so if now a protocol goes to symbiotic and they say Okay I want to launch some chain and I want an operator set and I want to have some economic security then I mean generally they'll still use their native token no because they still need to provide some kind of incen for this or they can use points or other me mechanisms for that like they they it's not there there might be optim like the

optimization here might be achieved through V mechanics so lockup period dual staking uh basket staking a lot of other like Fe model straight up fee model for some networks that like would never need their token at all uh we we're exploring these mechanisms as well this is like a really really bullish concept uh but for for most like for totality of networks but uh yeah there are a lot of Novel mechanisms that are not going to be like they were not available at all before you can you can shorten your journey by a lot just not like launching your token immediately or launching it in like some limited

capacity while already testing traction of your product Market feed with like a huge economic base so one big benefit right that I I can totally see is that you know you're making things a lot more flexible right cuz cuz so far let's say actually proof of stake has been pretty pretty uniform in a lot of ways right there's some variation right like for example some protocols say oh the validators have to hold some self Bond and their wallet and others can can be delegated you know so there's some difference there like let's say tasos a few others but you know mostly it's

really the kind of Cosmos staking model I think has been the most common where you know you have some people running validators then people delegate to the validators the validators charge some kind of commission and then the voting power on the chain of all the validators is determined by the amount that's being staked and then you know the protocol basically inflates the supply and it pays it to the people staking so that's like really like the standard model that I think has been copied over and over again what do you think of the problems with this like from an economic and incentive

perspective yeah uh well like you you were mentioned you were mainly mentioning chains it's really important for people to understand that like we have oracles as well we have uh threshold networks that are like operating on completely different mechanisms we have preconiran-food.com security if they

have like some ability for validators to misbehave or operators to misbehave so like slashing mechanism versus the reward mechanism in terms of optimization straight up optimization yeah like you can you can start immediately like uh go to market optimization of six months is going to be a huge value proposition for a lot of people and uh Cosmos SDK that you mentioned the cosmos Cosmos chains that you mentioned they uh if even with the like incentives how they are to develop for Cosmos ecosystem they uh reached a lot of uh they they reach a lot of actual use cases and uh like a lot of

teams that are building on this Tech stack because they have an uix optimization that we are trying to achieve as well uh just imagine if you have like registry that's can be reused multiple times Network middlewares thrust roots on ethereum that can be reused multiple times people launching with like with the same primitive or close primitive uh networks that are operate with the same like tokenomics or with the same reward or like slashing model they can reuse code each time that they they launch so it's not a like onetoone Journey uh and like that's what brought a lot of people to Cosmos because their system can be reused we are building that but in more

generalized way uh so it like will encompass every decentralized Network and bring optimization that that is reached for rest staking so you don't have to pay your validator that much or your operator that much because you're us like you have less uh less money to to pay apy for less amount of money yeah and like while getting get go to market and like Tye pure timing uh optimization so I I Feel This is actually very interesting in aspect of like the economics of reaking and like one way I so if you take like a typical Cosmos Network right

so let's say uh TP or typical proof of stake chain doesn't really matter so let's say it has a market cap of 100 million and now it has uh inflation of 7% so let's say it pays 7 million a year to the stakers but then of course most of this it's just people who hold the native token they get more of the Native tokens so they're like oh I'm happy I have more tokens right I just uh you know accumulate more tokens and then you have something that is going through the validators who are actually doing the work of like running the chain so let's say that is like let's say it's like 7% on average so now in such a chain right

let's say in this example you'd have like half a million per year which is actually paid to uh the validators running the chain the rest goes to back to the Token holders I mean I see what one downside I see in this is that maybe the payments to the validators are very uh uneven right some make a lot because they have big stake a lot of them might be running at a loss but if you compare it to reaking right if now I'm have my native token and I pay it to you know ethereum holders or Bitcoin holders or you know somebody else who has some other asset and they just want to have more yield on

their other asset then you know you have to assume that in most cases they're just going to sell the token right and this is like going to lead to uh sale pressure for this asset so I'm curious how you think about that and like how you sort of deal with the yeah this aspect of you know the more you pay in rewards the more sell pressure it creates in the reaking scenario yep uh in actuality uh the highest amount of pressure that you can experience is when you paying for the stake in your own tokens uh when you

launch natively because just imagine you have uh first uh you're launching your own token uh so like you usually your uh annual APR is a bit higher than like for the classical assets because you need to like that there is more risk involved so like if for ethereum is like 3.5% new networks usually pay up to like well 15 10% in some cases like so I would take like 10% as a as a metric uh so you pay 10% uh for the the amount of like the for the 100 Mil that you uh you have you

can't abort a lot of money you can't get generate a lot of fees you can't bring B protocols because you're limited by the amount of like your market capup so it's going to be slow growth for you like if you're not viral immediately uh it will take you a couple of years to get on board enough protocols enough networks like boost your uh market cap that like you can actually on them so like at least for like one bill or two bill and it's you're going to be paying 10% like on your tokens each time so you're going to be like diluting your tokens let's take the case of uh like using restating first you can use me mechanisms of V

tokens points or other mechanisms that to to postpone the actual sell pressure on your tokens by months or like year if if you have like really uh good user base that understands that uh so no pressure at all in this optimization you can use dual staking for the optimization of like and motivate people to stake your native to tokens to get this proportional amount of rewards to say ethereum stakers you can use other like million mechanism for that but let's let's imagine you don't like you don't you're not clever at all you're not going to be using any of those uh okay like uh for ethereum

stakers you can create uh like you you can use uh same if token like say around five times right this is like the the threshold that we're looking at right now five times uh so uh each Network for you to get the same amount of APR uh can like can provide APR say like three times as low so you only need to pay 3% for the amount of stake that you receive but you can start with couple of billions in ethereum if your your system requires that if it's an oracle system

that's going to be like you already have like a good BT connections to say AA or other protocols for them to use your price fit and you immediately start with like your system secured by two bill yeah you're going to be paying for like three % for that in your token but again there are a lot of optimizations for that to counter the price pressure or eliminate it all together and you you test your product Market fit on scale immediately while being safer than you would ever like be so even without optimization yeah like reaking will uh just divide like by the order of like by the staking ratio divide the amount of like sell pressure you're going to be

experienced so I actually don't really don't agree with this like let's take the example right you have a company and the company has shares and now you do a stock split and now instead of one share everyone has two shares like did you really change anything not really right it's just everyone has twice as many shares they're worth half as much the market cap of the company is the same like I think staking like on a very simple level if you have if you pay staking more in your native token two people already holding your native tokens it's just kind of like a stock split it's sort of like now there's a little caveat there right which is that some people

are probably going to need to pay taxes on their staking rewards and then they will have to sell some of it I think that's that is a factor but still like you're you know for the most part you're paying more rewards it doesn't mean you have it's not an actual cost because you're paying it to your token holders anyway you're paying to a portion of your token holders that's like started you're splitting the stocks for like less than half of your state less than half of your people yeah you you do you do have some re redistributive effect that's true right where you're basically redistributing ownership from those non staking to those staking which you know uh you can think about whether you want

that or not it may not be bad right is like who are the people who are not going to mistaken it may be short-term holders market makers Traders things like that people that are using this in defy say people who are like actually using token to like you need all of those like I I wouldn't like uh value one more than the other you don't want to proportion of like more than half of your tokens to be staked ever like this is that we had the systems that that were designed specifically not to allow for that ethereum is trying to counter that like at all costs because like that that's that's how you get that dead blockchains uh no like uh the the stake

amount uh first yeah like let's let's let's get like uh go argument by argument so it's not a stock split because like only a portion of your sh shareholders are splitting their tokens okay sure it's different in this regard like buy a lot then uh like the actual mode of Transport there is like validators and stakers sell their tokens all the time not because of taxes but because they want to hedge the risks and uh they need Capital uh like no like we we we have analytics for that like it's pretty like it's pretty well well researched uh and yeah uh here and it's like it's really uh like once you launch

uh and once you actually have stakers uh the mechanics of rewards is it's kind of hard to update uh for networks uh like for networks launching with risk taking it's a bit more flexible because they have like they have they they have an economic security base that it's outside of their own token immediately they experiment without people actually ever a risk in their money because they have like etherum to to rely on for at for at least for bootstrapping phase and then they can stimulate that the same behavior but with Lo up periods and like a lot of other mechanisms that are going to be doing the same thing that you you

just mentioned but doing them on the algorithmic level not on like oh believe in our like operators and validators they're not going to be selling or stakers they will like that's that's all they do uh no well except for like polka do ones because most of them were like non non-existent at the time there like that accounts that accounts don't sell other than that yeah like you you you can create systems that are way more sustainable than what we have right now because like there there there's going to be like mechanisms that are uh will reward the behavior that you've talked about and this actually will become like less of a payment yeah I definitely agree that

like the flexibility here is very appealing right where you can like experiment with a lot of different now I I think my other thing here where I also have a bit of a I I disagree to some extent with one of the key narratives around reaking and you also like mention it you're like okay some chain launches and you know they only have like 100 million market cap and you know that's somehow a problem and if you say like oh now you have like two billion that's sort of securing this chain it makes like a material difference I think in like you know in the history of proof for sake right

we've had tons and tons of proof of stake Network launch I'm not aware of a single proof of stake Network that you know failed because you know the economic security wasn't high enough and then it got you know attacked or something like that and you know you made the example of oracles right right now okay you may have an oracle that's now securing a lot of value but I mean if you take the biggest Oracle chain link uh I mean chain link for the longest time even though the chain link token had a huge market cap it didn't actually secure any of the Oracle feeds right it was basically a POA

system uh or you know to give another example uh you know there's like noble chain in Cosmos issuing usdc again there's not even a token there it's there's actually zero economic value it's like a proof of authority chain as well so I think even even in those systems where you do have like you know some very high amounts of value at risk you know if chain LNA said okay it's 10 billions of dollars is securing these oracles does it really make a difference do people who really care so I I I feel like the the degree the number of cases where having like

more Economic Security that's like securing a system being like a major driver of success I think is extremely small yeah it's not a driver of success it's a driver of like uh first it's a perception driver uh and then like the the examples that you mentioned are uh yeah like chain link where was operating under Pro Authority for a long time it's a first mover Advantage now we have networks that are like actually fixing a lot of those because Pro Authority requires being permissioned and being permissioned requires decision making for every Network for every price fit

because you're the one who who Who's Making that decision that's why like uh new newcomers are like eating the cake of chain link in a lot of ways because on actual Economic Security the permission permissionless systems can be built so we have like other optimization proof Authority is not only bad because like it's unsafe uh which which that is and uh proof Authority and small validator sets that are controlled by networks they're not like they're not uh they're not like they have like examples where they stole people's money like I remember a few of those I I need just need to remember

names there were like really small networks that racked their users with the small operator set that was controlled by them the biggest example of centralization of operators is e Oso it was like a long long time ago EOS yeah yeah yeah yeah so like uh they had like operator set that was really small and they were attacked by it multiple times uh we had examples of that an industry learned their lesson uh now like small cap low like low footprint networks they're not getting traction not because like they're not getting hacked they just get P perception of not being safe enough uh and uh for Oracle networks

yeah that's why uh chain link uh were like uh the perception that it was safe helped them to be market leader for a really long time and now this perception can be counteracted by the actual economic model so newcomers were really having a really hard time competing with chain link because of the perception and really go good track record and this is like the the flexibility and optimization and goto Market this really jumps uh as as uh like Innovation Speed Booster markets that were like gate kept by a reputation for a long time as well as like the operator markets uh as a

close a semi closed Club they can be unlocked with RIS taking because you can get the same Economic Security and the same like you don't have to have the same reputation but you can have the same economic SEC actual Economic Security as the bigger networks immediately and I think like this is really powerful and uh yeah like but those are like the Oracle Network and POS chain uh they are that they're not like the flagship cases they're really like I I hope I explained a bit like why does why why does why why is this important not only from the like pure security perspective but from uh the

traction testing and flexibility perspective but uh let's say like you have say preconiran-food.com right be it pre-confirmation be it IM relays be it something else if you need a huge operator sets to be secured by some like by by by some tokens if you just have staking uh you need to like for them to be secured uh I don't know like by hundreds of billions of dollars like the same as they use uh for their like part of the the stake that they're going to be using uh for their actual proof of stake

operations and with this taken you can be like secured like 100,000 proposals can be secured by like one ethereum or like 10 ethereum and that's going to be it uh like we'll we are still seeing the the raking cases emerging but even like the worst case scenario proof of stake Network I like I explained how it can be like optimized a lot as well yeah yeah well I would say let's talk a little bit about the architecture of symbiotic like what does the system actually look like and what are the different uh yeah components and and actors in the

system yeah uh well it has like basically three participants uh first is sters uh that that give give their stake to to networks through operators operators networks and stakers networks require uh Economic Security to launch in decentralized their Network they receiving that from stakers through operators with their operator set and if network is okay uh like network is the arguably the most important participant if it's okay with the amount of stake that they receive and the amount like the the validator set that is attached

to that they uh opt in and they start start to be operated by those operators through this St if any of the operators violate some rules of the network network can slash them if they don't Network can reward them they their role of reaking protocol or shareed security protocol in our case is to make sure that once the like the commitments are made that this is the mode of work between those three uh that commitment are commit ments are uh like commitments are followed okay so you have stakers operators you have the networks so let's

talk through this from uh the perspective maybe of the stakers and The Operators so if I'm somebody who wants to now stake and I want to earn you know additional rewards maybe I have some other interest like I don't know maybe I find some of the projects interesting they're building on simbi or something like that like what is the flow here the the Staker will then choose some Network to weake to and then for example choose uh maybe some operator that they trust or how would the St what does the Staker experience look like yeah uh well most of this this experience will go

through lrts uh but if like say an example that like the the Staker wants to uh to manage everything themselves they will create a vult volt uh the Vault will have uh like lock up period that corresponds to the networks that they want to wants to stake to uh it will have uh its own or like separate resolver that's basically the Safeguard against unlawful slashing and through the this resolver like it's it will select the operator set that it wants to delegate to and the network it wants to op in with this validator set and once uh this

request is made Network can agree and uh select this stake to be operated okay so you mentioned a lot of it stake would go through lrts uh lrts meaning like liquid reaking tokens uh for those who follow the I layer you know you've had that there like ether fry Renzo and stuff getting a lot of traction how how do you imagine Lots will work and and does this mean basically as a as a Staker I want to benefit from you know I would to restake some asset I want to use symbiotic I would then just basically for example

take my e and deposit it in an LT and I get some sort of I don't know Ren or swell efy something L token and then on the back end what happens on the back end though the stake uh through the Vault of lerts is going to be uh deposited into Vault on symbiotic site and it's going to be delegated to network through the operator set by the LRT managements management team yeah and like we already have like around 12 12 aler so like this is how it's like this is not an unvalidated concept uh we already

receive most of our stake through lerts because it's just like a bit more optimal that way for most users so and then the lrts would basically they would then decide okay which of these networks do we want to secure they would then say and they would have some existing operator set let's say they have like 10 operators or something and then they would say okay now we go to network a and we say okay we bring our 10 operators we bring $500 million worth of Economic Security and basically negotiate some

kind of compensation for that and uh network will receive several requests for that uh from different lrts and we'll select the basket of lrts their own users or like uh the the yeah the some proportion of it so say like five LTS 50 550 2,000 3,000 uh users for outside of LRT and this is going to be the set of stakers for from the beginning of the network to be changed later right so I think what is interesting is

that Lots kind of become this also Collective like bargaining organization know where they would like uh negotiate uh sort of on behalf of both the stakers and the validators or The Operators yeah they their job is going to be to fight for for the most optimal stake location yeah I expect a lot of optimizations to come from L fights once they actually start yeah cuz they are obviously also going to be in uh yeah very serious uh competition yeah of course like that

there is limited amount of networks at least from the beginning and there's going to be not a lot of rewards for them probably from the beginning as well so like other will will have to fight and choose and try to be on board it into as many good networks as possible because other other than that they're the only ones like spreading their token around and there is no like inherent reward be like beneath them at the base layer and then you guys also have some plans is my understanding to because right now basically simbiotic is a set of smart contracts on ethereum of course today staking happens

all over the place in many different ecosystems and networks how do you imagine that in many cases ethereum remains as this kind of place where some of this coordination happens of like stake and operators and lrts or do you imagine that you know this will be kind of expanded to different networks yeah biotic is an a network already like this is by Design the fact that our trust rout is based on ethereum and we use like ethereum as like data availability in execution layer uh it doesn't mean that much like we can we

symbiotic is designed in a way that we can use uh like tokens or on like almost any chain and uh like we don't have to transport them to ethereum even uh the assets on like Cosmos the chains the the assets on like on salana or any like almost any place else can be used this is the unique feature of reaking and like Char security at least as how how we designed it uh the fact that you don't need immediate bridging or fast rapid bridging you just need to to asynchronously slash something and make sure that something is still present in the escrow or some deposit contract on

other chains it enables you to to use assets that are like outside of ethereum easily uh and that's how we designed we have this collateral obstruction in dogs like it's like a bit of a technical concept but uh basically like a lot of a lot of other outside ecosystems are building on us yeah the registry is going to be stored on ethereum but like everything else in ter terms of ecosystem in terms of LRT in terms of reward reward management and slashing can be done on their ecosystem without like any vampire attack from ethereum or something like that so uh as current like as current thinking goes we'll see

about like the future but there is no like actual need for symbiotic to be deployed anywhere anywhere else uh we just lose like some networks effect so like let's say if you say like okay some salana related thing with use symbiotic you guys would not need to deploy some kind of smart contracts on salana as yeah the will will the the the supply side for the liquidity will need to have some srow contract or a deposit contract that burner contract that that that needs to be like unra and burn if if the message is received from the from the ethereum side

but no like the core of symbiotic can stay on etherum and it's like it does need to be deployed as soon as you want to use some uh like some uh collateral from other chains you just deploy the this like the the simplest of messenging players when contract and you're good to go if you want to get have rewards on salana as well you'll need to deploy like salana contract of rewards uh but the registry is going to be taken from ethereum because like actually you don't need like there there are there aren't a lot of requirements to the base layer for the reaking it doesn't have to be like fast in terms of finality it

doesn't have to be uh cheap uh it's just needs to be like as have as much of network effect as possible and uh to be like as efficient of orchestration layer as possible and ethereum is that that's why we designed symbiotic to work on ethereum L1 but in actuality like especially if like you have canonical Bridge or something or IBC you can use it anywhere else you don't need to deploy symbiotic to every ecosystem like it's already there basically what about slashing how would you imagine slashing to work well it's going to be different for every asset at least uh like we we are

just exploring this this part of the wood SL flashing uh yeah like it's uh the the main part about it is that it's going to be it's going to be determined by networks first of all like this is the important part you don't have to spec like there there is no one size fit all for some networks uh like will uh there there's going to be like algorithmic slashing for some reason for some networks they're going to be subjective slashing because you can't verify like the actual Act of misbehavior for other there there can be consensus slashing that the fact we designed it really flexible manner so like Network can can can deploy that any in any way that they want uh the tricky part for

that was like how do we make it safer and that's why we designed resolvers that are going to be like really important at least for the beginning to be uh to to to help mitigate some bug related or like abuse related slashings uh resolvers are going to be veto committee that are going to be standing between the network messenging uh of slashing and the actual stake uh they can be like again really flexible algorithmic ones Pro based ones or so that's also chosen by the network or the resolvers are chosen by both like they are chosen by the pair of uh

stakers and network they both agree on that the resolvers that they going be connected through they can be different they can be like tiered in terms of like how they they work uh there are different configurations uh from the start just to like safely uh innovate in this category of of uh of protocols I think there's going to be committee stens mostly and then most of them like will will go resol resolver L and uh like probably like or or go into rout of like proof ziki proofs or fraud proofs but that remains to be seen yeah I'm actually also curious if you

think slashing is important I mean if we look at the you know the history of proof of stake right first of all if you look at in the amount of money that has been uh sort of slashed it's very very very tiny you also had the case that actually for example when Cosmos launched Cosmos today has like so atom Cosmos Hub has 5% uh slashing uh so 5% of the state to can be slashed actually I remember when Cosmos launched the idea was oh we're going to launch like that uh because it's you know beta it's new but then later we will increase uh but of course

it never increased and honestly nobody ever pushed for it to be increased uh when Solana launched they were also oh it's beta it's new so we are going to launch the F slashing and I told you actually the time was talking about oh maybe we're going to have 100% slashing later and if you double sign get but today salana many years later it's become very very successful very big proof Estate Network and it doesn't have any slashing uh Avalanche doesn't have slashing right so do you think slashing is important do you imagine that like there would be regular slashing events or do you imagine like do you think there will also might

be a lot of chains that uh or chains or or detented systems that symbiotic that are using symbiotic that don't use slashing at all y yeah I expect I expect some category of networks to to not have slashing at all uh for them stake is going to be just gatekeeping uh like mechanism and voting mechanism you get enough reputation for people to vote for your network because the money are still limited for the supply and you get like to gatekeep the operator Set uh like the basically the delegation without slashing for some networks it works like in in case of salana by the way like

it's the only major blockchain that was not available for like days on end so I think that that like no SL gr backfired for them like multiple times and I'm like I'm sure that we'll see more fun news from them as well in the future well I I I don't know if that has a lot to do with the slashing though the salana long time I think that's different no like if actual people will was were slashed I think they would take this outage more seriously yeah yeah but uh yeah for some Network slashing is inevitable like if it's straight up we we have like multiple uh threshold networks secur in a lot of stake and a lot of like wallets that are

really like high high volume uh for Oracle Network slashing might be like really essential if their oracles are like option based or like calculation based and for for some networks even Z kco processor networks U slashing is going to be really important because if they don't perform within a within a like some small window they might deliver a lot of like uh a lot of harm to users for a tester Network this might be really important because like what what's stopping you from like issuing attestation that like you receive transaction and transaction finalized when you actually don't have that and

like the like exchanges are going to get hurt or some people are going to get hurt in process or like arbit Arbiters are going to be hurt yeah for pre-confirmation it's obviously a big deal because like people if they don't have like the other leg uh somewhere all like included in a block they will lose a lot of money so that they might be immediate harm for blockchains with like with modern consensus mechanisms yeah the harm is like limited a lot uh so they might like skip their leg day and disable or not enable uh yeah not enable uh the the flashing all together I think the will

the the shared Security will help find this like sweet spot because like the difference is going to be quite noticeable uh just because like the overall experience will be more streamlined and you will we'll have like two networks launching at the same time one with slashing the other one with not without uh and see like how it goes from both sides so what about IM immutability of the symb contracts is that something where you think they should be like fixed immutable is there rule for governance there uh yeah uh well like it was this was the hard part to actually design a system to

be as flexible as it is but still immutable at at its score like it took us eight months to do that uh yeah we did as with everything else the goal was for us to cater to as much possible Network types and like business type types and token types and uh participant types as possible and we just wanted to eliminate the government's risk uh for now yeah there is no way to upgrade the contracts uh because like we we don't want people ever being concerned with that this is like with in the same throp for us to to reach optimization as with the highest with the highest rate

of like with with the highest success success rate possible and for that yeah like there there's no way for us to introduce pce first and there is no way for us to upgrade the contracts so yeah like there is no there is no like governance inside at least for the core part of the contracts and then do you imagine I mean with Unis it was kind of like that too right it was V2 and then B3 so do you also Imagine there will be uh sort of later versions of symbiotic like um similar to like how unisoft upgraded yeah that might be one of the uh trop for us one of the possible ping

there might be others like uh the core that depends on like how the actual Market starts uh if we were like amazingly Dent during this like eight months that we were like developing the architecture and if we were so great that we designed the system to work for with V1 forever and account for every possible use case then yeah sure like V1 is going to be it for a while but we we we have like uh that there 100% going to be optimization in auxiliary systems and like well upgradeable Parts uh then the core is going to be just widely used by everyone forever and uh the like the actual value

add is going to be reached through auxiliary systems if like we identified like and this is like probably closer to what will happen uh if we identified we haven't yet like full disclosure we for now the core Works ideally like it works great but like the the when the industry starts and then matures if we identify something there's of course going to be like we we if we identify value at that will warrant people migrating from V1 to V V2 same as Unis swap of course there's going to be an upgrade path for us it just designed to be like migrated as like secure as possible so people would would actually need to opt in into every version so what currently what are some

of the things that people are building on symbiotic that you know you're most excited about and you feel like they're the best examples of how you want the system to be used uh I I don't pick and choose this is the neutrality part like I love all of my children uh but equally but uh yeah we have like almost everything we were like out for uh in the wild for around like three and a half months I guess uh and since then we got around 40 networks 30 something closer to 30 40 or already I think like couple of pre- confirmations couple of data availability 30 or4 fast

finality uh or two Oracle networks uh one or two agent based Network for inference uh ZK Co processors uh couple of thresholds couple of no one uh I think fully homic encryption Network yeah like basically everything a roll keit for rollups on even on last year uh like several tassi for for substrate based uh like uh rollup deployment and network deployment uh like several sdks yeah we have basically every every primitive in terms of the centralized

networks like already on us like building on us excited for all of them but more excited for the ones that launch before 2025 like this is is the the the only metric that I can score people over like are you going to be actually launching before before the end of the year or like or after because that each each network uh that launches helps the others to to see the light and to get the optimization because if you consider currently like the zero avss or networks are actually launched so if you're considering being launched centralized being going through the centralization

Journey a uh with like your team only uh or launching with shared security it's not in like easy decision but the more networks actually launch even the avss the more the more like that when they start launching the more of them launch uh into full production the more you'll have the menu uh that you can select from and get inspiration from and to actually like sway to to sway you in the direction of shared security and that's what we want so you just mentioned timeline so what are what are the main Milestones that coming up for symbiotic yeah we're going to launch

main net soon uh getting toward that towards that for a while uh we just wait for networks to be ready because we don't want anyone to rush in and it's going to be full production so like every functionality available from our side yeah like this is going to be a big one uh and then yeah to scale up Orient teams better Orient help validators to an operators to be as efficient as possible with this new paradigm and uh yeah like overall coordination work we have multiple teams building resolvers uh teams building sdks teams building Frameworks for networks to

reuse uh so yeah after mainland and like we're currently are getting to a point where the actual good questions are starting to be started to be asked uh not the conceptual ones but like actual U questions like what's the lock up period that I need to use like to get the most alertes what's the I don't know like how do I approach validator like validators I don't want to talk to like each one of them other consortiums of them are there groups of them I can reach out to like I I don't want to to have like 12 chats I want to have one is it possible for me get the best like validator set available for with just one chat and like we are get into optimization part of it because like

there were a lot of like concept work but uh in terms of like do we need that at all like a lot of questions that uh people ask when they don't have an actual problem to be solved immediately for networks it's like it's applied like really applied they they want they just want them likey okay how do I get the best operator set that that investors are getting off my back immediately how do I get the the stake amount so I can like launch protocols without and tell them that I have enough support how do I get the the the best like uh the the the Tex tack that I can immediately reuse and like develop is as little as possible to get to the product Market feed that I can actually like start

testing cool excellent well thank you so much M sh it's been really great to have you on I'm excited I think it's uh I think it's I think simbot is going to give rise to a tremendous amount of like interesting experiments around staking around how to operate how to launch how to operate how to secure decentralized systems and yeah I'm super thrilled to see like what what's going to come out of that so um thanks so much for coming on and thanks so much for yeah giving us this update thank you yeah interested qu interesting questions thank you for that I I'm super happy to be here and super happy to spread the mission and ideas