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His research at UW focuses on distributed computing, information theory, queuing theory, networking, coding theory, and game theory of blockchain systems.

Eigen Layer is a proof of stake validation marketplace that reuses state capital and existing validation infrastructure. With Eigen Layer. Ethereum can enable permissionless and modular innovation across all blockchain layers.

Today, we dive into Sreeram’s background in academia, how the blockchain space piqued his interest, and the hype around Eigen Layer.

But first, Sreeram is going to tell us exactly what he’s up to at Eigen Layer and how he merges both a data availability layer and a restaking platform.

Listen to the interview in this week’s podcast episode here:

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00:00 All Eyes to Mainnet
01:46 Background
03:48 Academics and Crypto Skepticism
13:36 What is EigenLayer?
16:09 Decentralized Trust
24:07 Data Availability + Restaking Platform
28:51 User Journey
36:57 Slashing and Liquidation
45:43 Governance Layer
50:22 Incentives Structure
51:58 Business Model
53:44 What’s Next
1:00:41 The Protocol v/s The Company
1:01:47 Why Decentralization

Our main focus at EigenLayer is to get the product to the mainnet. To achieve this, we are currently working on building the core smart contracts of the EigenLayer layer, which will enable stakers to participate.

Additionally, we are creating a data availability layer called EigenDA that will be built on top of EigenLayer. At the moment, most of our efforts are dedicated to development, and we are currently operating on a private testnet.

We plan to move to a public testnet and domain net in the upcoming quarters, specifically in Q2 and Q3. Our entire focus at EigenLayer is geared toward achieving this goal.

As an academic, one of my motivations is to contribute to the innovation landscape. I have worked in various fields, including peer-to-peer wireless systems, computational genomics, AI, and, most recently, blockchains.

I became interested in crypto because it provides a way for anyone, regardless of trust or identity, to contribute to innovation. This is a paradigm shift that enables individuals to create and innovate without needing to be trusted.

The pseudonymous economy in crypto allows for an inclusive and equal playing field, where anyone can participate regardless of race, religion, gender, or other dimensions. Crypto provides an amazing world where everyone is equal, and discrimination is not possible.

I find it unusual that an area such as blockchain can generate so much polarized opinion, mostly in a negative direction. Despite this, I believe that blockchain technology will change the world in every way and cannot be ignored. Some initial negative associations with blockchain technology have colored people’s opinions of its potential, but its broader utility is significant.

I have observed that people who have successfully transitioned to one paradigm, such as the cloud, are often the most resistant to change to another paradigm, such as blockchain. In academia, the dominant opinion is still skeptical of blockchain’s value proposition, and even those who work on it for specific purposes may not be driven by its core value proposition. Without fundamental motivation aligned with blockchain’s value, people may drop it when it is no longer trendy.

Coming from an academic background, you have been super involved in the Ethereum community. What surprised you most about the Ethereum community so far?

These are the values that we are building for decentralized trust, permissionless innovation, credible neutrality.

I have been interacting with Ethereum researchers for over three or four years. Last year, I attended ETH Denver, my first community crypto conference, and I came back telling my friends that I am an Ethereum guy.

I am not a user of any DeFi apps, and I don’t hold ETH, but the values of decentralized trust, permissionless innovation, and credible neutrality are what make me an Ethereum guy. These values are ranked higher than any individual, and they are aligned with the principles of public goods funding. Finding the Ethereum community was like finding a home.

Academic projects and tokens haven’t gotten the best wrap in the crypto space. So what would you say to people that might call Eigen Layer an academic project?

The root of the problem is there are innovators who have technologies, but they’re not community builders.

It took me many years to realize that’s a slur, rather than a credit. I intend to solve the problem of why academic projects have to go a certain way and how to build better systems. Currently, the only way to do this is to start a new network, which requires community building, something academics are not good at. We realized this when we presented our Prism protocol to Bitcoin and Ethereum communities.

Decentralization makes it difficult to impact and change protocols, which led us to start EigenLayer, which empowers innovators with new ideas to build on top of a common trust network. The root of the problem is that innovators have technologies, but they’re not community builders, and there are existing communities and decentralized trust emerging out of these communities.

Eigen Layer is a mechanism that allows other protocols or services to access the decentralized validation network of Ethereum. It is essentially a marketplace for decentralized trust, where individuals or organizations can access and purchase a portion of the trust provided by the Ethereum network to enhance the security of their own systems.

The concept of Eigen Layer is based on the idea of creating a commodity for decentralized trust. Ethereum was the first marketplace for decentralized trust, but it lacked flexibility. Eigen Layer seeks to offer more native access to flexible, decentralized trust by allowing users to tap into the set of nodes that run Ethereum and participate in a market where they can sell their trust to others.

Eigen Layer is a way to empower anyone to build their own layer on top of a common trust framework. This can be useful for services such as Oracle, data availability, bridge indexers, or any other service that requires a decentralized validation network. With Eigen Layer, users can access the trust and security of Ethereum, even if they are using a different blockchain or service.

I think a lot of people get confused. They ask, “Why?” Why is it bad for me to trust someone? So maybe you could tell us more about that and why you care about it.

I became interested in blockchain when I realized that trust is a necessary component for innovation, especially in financial products. Traditionally, institutions on Wall Street have provided trust, but this limits innovation to a few trusted entities.

With blockchain, trust is not consolidated into a single entity, but rather is decentralized through the network, allowing anyone to enter and create new services without needing to be trusted individually. This maximizes the rate of innovation and prevents the centralization of power. I believe that human societies are built on trust, but borrowing trust from decentralized networks allows for more innovation and less control.

You’re trusting the blockchain to then execute these things correctly, and this is a huge leverage, it allows anybody to come and enter and create new services and maximizes the rate of innovation. And so this is the reason we are passionate about it is not that we don’t want to trust each other.

I believe that many of the top companies in terms of market cap in 2023 are digital platforms, such as Facebook and Uber, that act as meeting points for users. These platforms have root access and exert significant control over what can be built on top of them. In the tech space, there is a focus on censorship resistance, which not only means that any user can participate but also that any developer has equal access to build on the platform.

Many digital platforms do not provide open APIs for developers to build on top of. This lack of competition and breakdown of the market economy is a fundamental problem that we are trying to solve. The success of social networks is not because they provide more value than airlines but because airlines operate in a competitive economy, while social networks do not. We believe that blockchains, like airports, provide a neutral platform for services to compete and deliver value to users.

A lot of people think that it’s a little bit confusing for people to wrap their heads around EigenLayer being both the data availability layer and then also this restaking platform. Can you double-click into how those two connect?

EigenLayer is a restaking platform with two sides: stakers participate on one side, and new infrastructure services are built on the other.

Suppose we had this cool restaking platform, bootstrapped, and it has a lot of staking and it has a lot of trust that comes into it. How can we leverage it in providing some new innovative use cases that solve some core problems in the Ethereum ecosystem? So this ended up being the data availability project that we are building on top of EigenLayer.

To bootstrap the platform, the team built the first service on top of it, which is the data availability project called EigenDA. This project aims to solve the problem of limited bandwidth in the Ethereum ecosystem. By writing data into a common ledger, the team is trying to measure the cooperation bandwidth of the system. Ethereum’s current data bandwidth is 83 kilobytes per second, which is not enough to run the world economy on a common decentralized trust infrastructure.

EigenDA aims to offer a hyper-scale data service with a bandwidth of 10 megabytes per second, allowing each node to touch only a minimal amount of data while still ensuring redundancy and recovery. EigenDA is just the first use case built on the EigenLayer platform, which aims to maximize the scale of open innovation and let people build new and innovative ideas on top.

Can you walk us through the user journey?

EigenLayer is a three-sided platform that includes stakers, node operators, and service builders.

 can deposit their liquid staking derivatives or stake natively into the Ethereum protocol and commit it to additional services provided by EigenLayer. They will receive rewards for providing these services correctly but will lose their stake if they attempt to manipulate them maliciously. Stakers participate to get additional yield in their stake and support the growth of the Ethereum ecosystem.

 provide a useful service to the stakers by running and maintaining node infrastructure and earn a cut of the fee in return.

 can write a smart contract that specifies the conditions for registration, including who can register and the set of risks their service wants to take. EigenLayer contracts hold the ability to withdraw the stake in the normal happy path, and the staker can withdraw the money and rewards accrued through the EigenLayer restaking.

EigenLayer does not operate as a new layer one or a new blockchain, but it is a set of smart contracts on Ethereum.

His research at UW focuses on distributed computing, information theory, queuing theory, networking, coding theory, and game theory of blockchain systems.

Eigen Layer is a proof of stake validation marketplace that reuses state capital and existing valida...

Everything You Need To Know About EigenLayer with Sreeram Kannan