What is Eigenlayer? Restaking Explained + Airdrop Drama
Summary
TLDRThe video explores the complexities and controversies surrounding the Igen Layer airdrop, offering an in-depth look at its programmable staking mechanism and its network of validators. It delves into the technical aspects of staking, the potential for a security model that includes off-chain verification, and the drama of the first airdrop, including geographical restrictions and token distribution concerns. The video also addresses the Igen token's unique social consensus slashing model and the challenges faced by the project in terms of clarity and communication.
Takeaways
- 📰 Igen Layer has been in the news for its airdrop, which has generated both hype and disappointment due to confusion and conflicting information.
- 🔍 The channel 'Whiteboard Crypto' aims to provide clear education on cryptocurrency topics, including Igen Layer, without sponsorship influence.
- 🛠️ Igen Layer operates on the concept of 'programmable staking', where validators, called 'operators', secure various networks and services beyond just Ethereum.
- 🔒 Security for smaller blockchain networks is enhanced by Igen Layer's network of reliable computers, making it harder for attackers to compromise the system.
- 💡 Igen Layer's model is somewhat centralized, but this centralization is paradoxically more secure due to the vast amount of funds required to control it.
- 💻 Igen Layer allows new blockchains and services to pay a fee for validation and security, expanding the utility of its network of operators.
- 🚫 The first airdrop by Igen Layer was controversial, with geographical restrictions and token claim limitations causing frustration among participants.
- 🤔 The project's documentation and white paper are criticized for being unclear and using complex language, making it difficult for users to fully understand Igen Layer.
- 🔑 The Igen token introduces a social consensus slashing model for off-chain actions, which is a novel approach to handling misconduct that isn't verifiable on-chain.
- 🌐 Igen Layer's claim of using 'Ethereum security' is more of a marketing term, as it uses its own staking model, though similar in concept to Ethereum's security mechanisms.
- ⏳ Igen Layer has an escrow period for unstaked funds, which is a measure to prevent immediate withdrawal after potential misbehavior, adding a layer of security.
Q & A
What is the main purpose of Igan Layer?
-Igan Layer aims to provide security to various blockchain networks and services by leveraging a network of trusted computers, called operators, to validate and secure multiple networks simultaneously.
How does Ethereum's blockchain change from Proof of Work to Proof of Stake affect validators?
-In the Proof of Stake model, validators need to lock up 32 Ethereum to participate, ensuring they have a reliable computer and internet connection. Misbehavior can result in 'slashing,' where part of their staked tokens are taken away.
What is the concept of 'programmable staking' as mentioned in the script?
-'Programmable staking' refers to the idea of staking tokens in the Igan Layer network to earn rewards and have the network's operators perform computations on behalf of the staker for various services.
What are Actively Validated Services (AVSS) in the context of Igan Layer?
-AVSS are different blockchain networks, bridges, or other services that a staker can choose to stake their funds with in the Igan Layer network to earn rewards.
What was the controversy surrounding Igan Layer's first airdrop?
-The controversy arose when users discovered they couldn't immediately use their airdrop tokens, and Igan Layer restricted who could claim airdrops based on geographical location, even blocking VPN usage.
How does the Igan token enable a social consensus slashing model?
-The Igan token, when staked, allows for a social consensus model where the token can be forked in response to off-chain verifiable bad behavior, separate from the token used in non-staking situations like DeFi.
What is the significance of the two-token model used by Igan Layer?
-The two-token model ensures that only the Igan tokens staked in the ecosystem are subject to forking due to social consensus, while tokens used in DeFi and other non-staking environments remain unaffected.
What is the escrow period for withdrawing staked funds in Igan Layer?
-Igan Layer imposes a 7-day escrow period after unstaking, during which funds cannot be liquidated to prevent immediate withdrawal in case of misbehavior.
How does Igan Layer's security model differ from Ethereum's?
-While both use a large amount of funds for security, Igan Layer has its own network of stakers and validators, whereas Ethereum's security is provided by its native stakers and validators.
What challenges did the scriptwriter face in understanding and explaining Igan Layer?
-The scriptwriter faced challenges due to the project's lack of clarity, with short and technical documentation and white papers, making it difficult to understand and explain the project's workings.
What was the issue with the contact information on Igan Layer's Foundation website?
-The 'Contact Us' link on Igan Layer's Foundation website led to an email address that bounced, making it impossible for the scriptwriter to contact the foundation for script review.
Outlines
🔍 Investigating Igen Layer's Airdrop Controversy
The video script delves into the recent news surrounding Igen Layer, a project that has garnered both attention and criticism due to its first airdrop. The channel, Whiteboard Crypto, aims to clarify the confusion by explaining the concept of Igen Layer, its operation, and the Igen token's role. The script criticizes the lack of clarity in the project's documentation and the conflicting information provided by the founder versus the project's documents. It also addresses the airdrop drama, which includes restrictions based on geographic location and the small percentage of tokens allocated for airdrops, raising concerns about potential manipulation by early investors and contributors.
💡 Understanding Igen Layer's Programmable Staking and Social Consensus Slashing
This paragraph provides a deeper look into Igen Layer's staking mechanism, comparing it to Ethereum's proof-of-stake system and explaining how Igen Layer leverages a network of validators, referred to as 'operators,' to secure various blockchains and services. The script discusses the concept of programmable staking, which allows users to stake funds into Igen Layer and earn rewards without running their own validator node. It also introduces a unique social consensus slashing model enabled by the Igen token, which addresses off-chain issues that cannot be verified on-chain, such as inaccurate oracle updates. The video script highlights the challenges faced by the Igen Layer community, including the limited number of actively validated services and the high entry cost for new services. Additionally, it touches on the project's communication issues, such as the unresponsive contact link on the foundation website and the lack of clear resources for understanding the protocol.
Mindmap
Keywords
💡Igen Layer
💡Airdrop
💡Validators
💡Proof of Stake (PoS)
💡Slashing
💡Programmable Staking
💡Forking
💡Oracle
💡Escrow Period
💡Liquid Staking
💡Decentralized Application (DApp)
Highlights
igen layer has been in the news for its controversial first airdrop, with a lot of hype and disappointment.
Investigative research revealed conflicting information between the founder's statements and the project's documentation.
The concept of 'staking tokens to receive airdrops' is a common message among investors, but the actual process is more complex.
Whiteboard Crypto is a leading educational channel explaining cryptocurrency topics using analogies and examples.
Ethereum's blockchain has recently switched from Proof of Work to Proof of Stake, affecting the way new blocks are added to the chain.
Validators in the Ethereum network lock up 32 ETH to participate and are subject to slashing for misbehavior.
igen layer proposes a solution to secure smaller networks by leveraging the security of Ethereum's validators.
igen layer has its own network of validators called 'operators' to validate multiple blockchains and services.
The idea behind igen layer is to create a more secure and harder-to-attack network than many smaller networks operating separately.
igen layer's concept is often referred to as 'reaking,' but the founder prefers the term 'programmable staking'.
Staking in the igen network allows users to earn rewards without running their own validator computer.
igen layer currently has 14 actively validated services (AVSS), which is a limited number compared to its potential.
The airdrop rewards for season 1 of igen layer were met with controversy due to geographical restrictions and token usability.
Only 15% of all tokens are allocated for airdrops, with a significant portion reserved for early investors and contributors.
igen token introduces a social consensus slashing model for off-chain verification, using a two-token model to manage forks.
igen layer's claim of using 'Ethereum security' is technically a marketing simplification, as it uses its own staking model.
The project's documentation and communication have been criticized for being unclear and difficult to understand.
igen layer imposes a 7-day escrow period for unstaked funds to prevent immediate withdrawal after misbehavior.
The future success of igen layer will depend on its ability to stand the test of time and its unique airdrop method.
Transcripts
igen layer's been in the news lately
with a lot of hype and disappointment
regarding their first airdrop however
during our investigative research we
found a lot of articles that used the
word Del tons of double speak and six
syllable Tech words and even conflicting
info between what the founder said
compared to what the docs said all the
smooth braid investors are saying you
just stake your tokens and then receive
a big old airdrop but what's actually
happening behind the scenes is this a
complicated scam welcome to whiteboard
crypto the number one YouTube channel
for crypto education and here we explain
topics of the cryptocurrency world using
analogies stories and examples so you
can easily understand them this video
isn't sponsored so you'll get the full
truth in this video I'll explain what
igen layer is how it works and what the
igen token does along with some drama
regarding their first airdrop we'll get
into the drama a bit later but first to
understand how igen layer works we need
a quick recap of how e staking Works
ethereum's blockchain recently changed
from proof of to proof of State meaning
the method of adding new blocks to the
blockchain was altered now to add a new
block to the chain you need to be a
validator a validator is simply a person
who has a reliable computer who has
locked up 32 ethereum into the network
you need a reliable computer because if
it goes down other computers in the
network can't rely on it so good
internet connection and power source are
needed secondly you need 32 ethereum to
lock up so that if you misbehave
something can be taken from you this act
of taking some of your stake tokens for
misbehaving is called slashing there are
hundreds of thousands of these eth
validators around the world all checking
each other's work and adding new blocks
to the chain with the goal of earning a
bit of new eth each time they behave now
here's where Igan layer comes in there's
almost 100 billion currently locked up
in the eth network to collude and start
misbehaving in the eth network you would
need to stake half of that value which
is still a ton of money however there
are a lot of other blockchains networks
and Services out there which get their
security in the same way but they don't
have $1 billion they might only have $1
million which would make the network
much easier to attack aan leer says what
if we had those eth validators which are
reliable computers with funds deposited
also secure another Network while
they're at it they're already set up
with reliable internet and power and
they already have a decent chunk of
money to lock up they might as well
secure say the chain link Network too
and maybe the Avalanche blockchain and
maybe even a crypto bridge then why stop
there if we have this network of trusted
computers with a financial incentive to
behave we might as well just add 20 or
50 other services for them to reliably
validate and Trust that's what igen
layer does except to be specific it
doesn't use ethereum's validators IG
layer has their own network of
validators called operators the idea is
that it's much harder to attack one huge
Network than many smaller networks
operating separately and yes this is
kind of a point of centralization if
you're wondering but it's
counterintuitive because to control this
centralized point you must have billions
of dollars of funds or find a hole in
code that's being used to control
billions of dollars of funds if you're a
new blockchain or Bridge or Oracle
service or you need some data checked or
logged or saved or computed you can pay
a fee to Igan layer and their pool of
computers across the world will do what
you want this is the idea of Ian layer
we commonly see it called reaking but
this is actually incorrect the founder
Shri Ram encourages the use of the
phrase programmable staking if you're
only interested in staking and earning
rewards and not running your own
validated computer you can just stake
your funds once into the igen network
someone with a reliable computer called
an operator will perform computation on
your behalf to earn staking rewards
during the staking process you select
which chain or Bridge or other services
you want to stake your funds with these
different services are called actively
valid Val ated services or avss in short
and it's the main income producing
method for en and its stakers or
validators one problem for this is that
right now igen layer only has 14 abss
the cost or payment to igen layer
Network to create and use the ABS
Network also isn't super cheap at the
moment speaking of not being super clear
almost the entirety of this project
isn't clear their docks are pretty short
and don't dive into the weeds and their
white paper uses a lot of complicated
words in math understanding the project
wasn't easy nor was writing this script
I guess now is a time to get into some
of the drama surrounding the historical
part of this project in early 2024 it
was well known that you could deposit
your funds to stake in Igan ler for
points these points had no dollar value
and the staking was essentially
speculation with many people expecting a
decent return in the future based on
Igan Leer's huge amount of total funds
locked up and their publicity however
when the airdrop Rewards for season 1
were announced not only did users
realize they couldn't immediately use
their tokens when they claimed them Ian
leer also restricted who could claim
their airdrops it doesn't matter if you
stake $10 or $10 million if you were
based in a country they blacklisted
quote for legal reasons you had no
tokens to claim they even blocked VPN
usage which is a common way for other
daps and crypto services to have
plausible deniability while allowing
users to use a VPN to skirt around local
regulations in the spirit of through
crypto principles the big deal here is
that they restricted the airdrop
geographically even if you staked
millions of dollars another thing that
bothers a lot of igen participants is
that the airdrop is only a very small
part of the tokens only 15% of all the
tokens are used for this airdrop plus
future airdrops that kind of Whispers
that the community's airdrops could
easily be taken away by early investors
who get
29.5% and early contributors who bought
25.5 %. now let's get into the igen
token you know how slashing works now
where if someone does something
objectively bad that is verifiable on
chain they can lose some or all of their
staked e but what if they do something
objectively bad that is not verifiable
on chain an example of this could be
updating an oracle with price
information that is inaccurate an oracle
as a quick reminder is a way to bring
offchain data on chain as a blockchain
can't access information that doesn't
exist on it maybe an oracle says the s
Francisco 49ers won a Super Bowl when
the Kansas City Chiefs actually did how
would an ecosystem deal with this
problem while e staking has slashing
based on objective onchain verifiable
data the igen token when staked enables
a social consensus slashing model for
offchain f Ian slashing Works through
forking the token which is kind of a new
idea you're probably familiar with the
term forking which is when a blockchain
separates into two different chains one
of which is recognized as the true for
and it's usually done if there's a
serious upgrade to the chain or if
there's some dispute about consensus
that can't be resolved but how does a
token for wouldn't it be complicated for
the holders or users of the token to
have to figure out which token is the
active one actually no at least not all
users need to be aware igen achieves
this based on a two token model where
the igen that is staked is the one that
can be forked and an igen that is used
in non- staking situations such as defi
doesn't need to be aware of the fork as
a side note you might be wondering why
not all igen can be used as a staked
token that's because igen needs to be
used in defi for trading purposes if you
want to purchase igen you need to have
somewhere that swaps something like eth
for igen and that place is defi so
basically only the people who are
heavily involved in the ecosystem
already and are staking Ian will need to
know if worked and act accordingly which
is a pretty interesting way for a token
to fork in our opinion as with almost
every airdrop the people farming it aren
the people who actually want to use it
they just want to get the token to sell
to earn in BTC or eth or USD so keep
that in mind something I've seen enan
layers say a lot is that they use
ethereum security but this is
technically a marketing issue as
ethereum security is provided by native
stakers and validators but igen layer
uses their own stakers and has the
option to stake other funds than just e
so the more technically correct thing to
say would be that they're being secured
in the same way that ethereum is with a
large amount of funds another thing
worth mentioning the contact us link on
their Foundation website goes to an
email that bounces meaning we weren't
actually able to contact the foundation
about them reviewing our script which is
something that's quite helpful in
producing these videos their app website
doesn't have a contact Link in their
public Discord most users were
interested in claiming their airdrop not
asking protocol specific questions and
the mod that answered our questions to
help us gave a support ticket link
finally other than their Docs page the
next most useful resource was an ex user
with the name Manan I should also point
out that right now you can only stake e
and e derived liquid staking tokens
right now they have 12 other tokens you
can stake to but theoretically they
could also stake usdt or die or wrapped
BTC in the future with a downside being
more risk to the platform lastly Igan
layer imposes an escrow period to
withdraw your staked funds to prevent
someone from misbehaving and then
immediately removing their funds so once
you unstake you have to wait 7 days for
your funds to be liquid again all of
these points considered Igan layer is a
very interesting solution to a unique
problem and they raised a ton of funds
during the points farming period it'll
be interesting to see if this project
stands the test of time and is around in
5 or 8 years especially with their
unique airdrop method and communication
surrounding it anyway thanks for
watching we really hope you enjoyed it
and we hope you learned something see
you in our next
video for
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