What is Eigenlayer? Restaking Explained + Airdrop Drama

Summary

The 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

00:00

🔍 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.

05:00

💡 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.

Keywords

💡Igen Layer

Igen Layer is a decentralized network that aims to provide security to various blockchains and services by leveraging a network of validators, called 'operators'. It is central to the video's theme as it discusses the project's functionality, the controversy surrounding its airdrop, and its approach to securing multiple networks. The script mentions Igen Layer's unique position in the ecosystem and its role in programmable staking.

💡Airdrop

An airdrop in the context of cryptocurrencies is a distribution of tokens or coins, often for free, to a large number of wallet addresses. In the video, the airdrop is a significant point of discussion, highlighting the hype and disappointment associated with Igen Layer's first airdrop, including issues with geographical restrictions and the small percentage of tokens allocated for the airdrop.

💡Validators

Validators are participants in a proof-of-stake blockchain who lock up a certain amount of cryptocurrency to propose and vote on the addition of new blocks to the blockchain. The script explains that in Igen Layer, validators are called 'operators' and they secure various networks and services, emphasizing the importance of their role in the security and operation of the Igen Layer network.

💡Proof of Stake (PoS)

Proof of Stake is a consensus mechanism used in blockchain networks where validators are chosen to create new blocks and confirm transactions based on the amount of cryptocurrency they hold and are willing to 'stake' as collateral. The video script discusses Ethereum's transition from proof of work to proof of stake, which is relevant to understanding how Igen Layer's validators secure the network.

💡Slashing

Slashing is a penalty in proof-of-stake blockchains where a validator loses a portion of their staked tokens for failing to act honestly or maliciously. The script explains slashing in the context of Ethereum and how Igen Layer's social consensus slashing model extends this concept to off-chain actions that are not verifiable on the blockchain.

💡Programmable Staking

Programmable staking, as encouraged by Igen Layer's founder, refers to the ability to stake tokens in a way that they can be used to secure and validate multiple services or blockchains programmatically. The video script uses this term to describe the innovative approach of Igen Layer, allowing stakers to earn rewards by securing various networks and services beyond just Ethereum.

💡Forking

Forking in the context of blockchain refers to the creation of a new chain from an existing one, often due to disagreements in the community or to implement changes. The script discusses Igen Layer's use of token forking as a method for social consensus slashing, allowing the community to decide on the validity of off-chain actions through a fork of the token.

💡Oracle

An oracle is a service that provides external data to a blockchain, which is otherwise unable to access off-chain information. The video script mentions oracles as one of the services that Igen Layer's validators can secure, and it uses the example of an oracle providing incorrect sports scores to illustrate a scenario where social consensus slashing might be applied.

💡Escrow Period

An escrow period is a waiting period during which funds are held and cannot be withdrawn after a user has decided to unstake their tokens. The script mentions Igen Layer's escrow period as a security measure to prevent misbehavior by validators, requiring a 7-day wait before funds can be accessed after unstaking.

💡Liquid Staking

Liquid staking refers to a method where users can stake their tokens and receive a derivative token in return, which can be traded or used in decentralized finance (DeFi) applications. The video script mentions that Igen Layer currently supports staking Ethereum and Ethereum-derived liquid staking tokens, indicating the flexibility of the staking process.

💡Decentralized Application (DApp)

A decentralized application (DApp) is an application that runs on a blockchain rather than a central server. The script does not explicitly mention DApps, but the concept is implied in the discussion of Igen Layer's validators securing various services, which could include DApps, and the use of Igen tokens in DeFi contexts.

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

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