Title: Evolution of the Trust and EigenLayer

Author: DoganEth

Compiler: Luccy, BlockBeats

Editor's Note:

Crypto researcher DoganEth conducts an in-depth analysis of EigenLayer from the perspective of trust and crypto-anarchism. He points out that innovative technologies like Bitcoin, Ethereum, and EigenLayer play a key role in building decentralized trust systems, while also highlighting the challenges and trade-offs involved.

Through the exploration of the DA layer and EigenDA, DoganEth showcases the potential future of trust in the crypto economy.

"Trust is a fundamental aspect of interpersonal relationships and society, rooted in the belief in the reliability, truth, ability, or strength of someone or something."

ChatGPT's answer to "What is trust?"

Since the beginning of human history, trust has been a core concept that forms the foundation of society and human relationships. Trust was initially necessary for survival, then for hunting and gathering activities, and finally for social structures. Today, trust has become a major element of modern society, primarily provided by governments, especially in the economic and legal domains.

Dall-E --- The Evolution of Trust

From the earliest days of trade, trust has been at the heart of commerce. People initially trusted that their trading partners in barter transactions were not selling counterfeit goods and that the value of the goods was equivalent to their own. Later, they trusted gold, believing that its supply could not be arbitrarily increased to serve as the primary currency. Today, we trust government-issued currency. The government gives us a piece of paper (or some increasing numbers on our mobile applications), and we assign value to these and use them in our daily payment systems.

Currency - The Evolution of Dall-E

Trust in the Digital Age: Blockchain and Game Theory

The undeniable fact is that for centuries, governments have been the primary authority providing trust. Anarchists, who reject this authority and deny the existence of governments, have long attempted to negate this authority and create alternative concepts of trust. In the digital age, as our privacy diminishes and the power of authority increases, a range of activists has emerged, leading to the birth of "crypto-anarchism."

Crypto-Anarchist Manifesto

Crypto-anarchism posits that people can now communicate by relying on systems of mathematics and computers without revealing their identities, which could fundamentally change the social structures we know. Crypto-anarchists propose certain ideas to ensure that society, rather than central participants, benefits from this evolving social structure.

For years, crypto-anarchists have been researching systems that do not require human trust, but it wasn't until Bitcoin that they succeeded. A talented engineer named Satoshi, whose name, identity, location, and even gender remain unknown, developed the concept of Bitcoin and blockchain, presenting it to the digital age. Since then, our concept of trust has changed forever.

Banks vs Bitcoin - Dall-E

Bitcoin created an infrastructure that took trust away from central authorities or groups and handed it over to mathematics and game theory. In short, the infrastructure works as follows: Alice wants to send BTC (the native currency of Bitcoin) to Bob. She sends a transaction to the network that includes a BTC transaction fee.

In this network, if miners see this transaction and "act honestly," they will receive the BTC transfer fee and an additional BTC reward. They will include this transaction in a block and broadcast it to other participants in the network. If everyone agrees, our miners will receive their rewards and continue to work on finding new blocks.

The focus here is not on how Bitcoin works, but on how its trust mechanism operates. Miners solve difficult mathematical problems on their computers, and the first to solve the problem finds the block. If a miner includes an invalid transaction or engages in "malicious" behavior in the block, the rest of the network will see this, and dishonest miners will not receive the block reward. The trust in Bitcoin is based on game theory, where miners act honestly to obtain this block reward.

While Bitcoin paved the way for decentralized trust and payment systems, it has one issue: it can only be used for payment systems and has limited programmability.

For Ethereum, it's a different game. Participants in the validating network receive a certain amount of Ethereum in advance, and if they act honestly, they will earn Ethereum rewards. Unlike Bitcoin, bad behavior (note: the type of bad behavior is very different; I chose this as the most appropriate translation for malicious behavior in Turkish. I apologize for any confusion) not only results in the loss of rewards but also leads to the burning of staked Ethereum. Validators are locked in Ethereum.

The trust mechanisms of both Bitcoin and Ethereum have given rise to a new concept of trust in the digital age: "crypto-economic trust."

Programmable Crypto-Economic Trust: EigenLayer

PoS (Proof of Stake) systems like Ethereum essentially provide the following trust: validators stake a certain amount of assets and will earn rewards as long as they act honestly; if they act dishonestly, they will face penalties such as burning their staked assets.

The biggest problem with these systems is that every application requiring crypto-economic trust must build its security from scratch. This leads to several issues:

• The problem of "economic security fragmentation" arises because each application creates its own economic security.
• It is impossible for every application to issue tokens, and poorly designed or useless tokens make it impossible to construct the game theory needed to build the network.

EigenLayer provides an infrastructure that allows for partial leasing of Ethereum's crypto-economic security through re-staking tokens. (I will explain why this is partial in the next section.) With this infrastructure, developers can build their applications by renting security from Ethereum without issuing new tokens. This can be used for securely storing data in any database, decentralized ordering, bridging projects, or developing new chains.

What Exactly is EigenLayer?

EigenLayer is simply a series of smart contracts that exist on Ethereum. These smart contracts support token deposits, withdrawals, and slashing. One point I want to emphasize here is that everything is done completely off-chain by participants known as operators.

Therefore, when you re-stake tokens in EigenLayer, you trust that your delegated operator will act honestly, as the operator's bad behavior will lead to the burning of your Ethereum. This is actually a problem with the delegation system in most dPoS (Delegated Proof of Stake) systems, but it introduces additional risks that do not exist in Ethereum's main protocol. The same goes for LST.

Blockchain is not just about crypto-economic security; you cannot rent it with money: autonomous communities. In Ethereum and Bitcoin, the true security comes not just from crypto-economic security but from the dominance of off-chain communities over the on-chain. Even if most validators or miners behave dishonestly, or if there are issues with the chain's software, the community can fork the chain and invalidate previous transactions. EigenLayer cannot rent and take over this type of security provided by off-chain communities.

Vitalik mentioned this in his article "Don't Let Ethereum Consensus Overload." He suggested that your double-staking and re-staking applications should not rely on Ethereum for slashing and should not add extra complexity to Ethereum's simplified consensus.

It is important to recognize the trade-offs of security (the inability to rent off-chain community security) and the security that is rented is crypto-economic security. Furthermore, EigenLayer opens a door for innovative innovations in Ethereum. Many applications have already begun developing on EigenLayer.

EigenDA

I will not explain Rollups and blockchains from scratch here, but I will discuss data availability layers, their market strategies, "which is better," and their differences.

Blockchains are more powerful than you might think. Even if all participants validating the chain approve an invalid transaction, your own full node can recognize that the transaction is invalid and confirm that the contents of the chain are correct "without trust."

My Node vs Malicious Actors

Despite the power of full nodes, setting up a full node from scratch is both very cumbersome and expensive for end users. Hence, we have light clients. However, they trust that most full nodes are honest, so unfortunately, there exists a trust-based situation.

DAS (Data Availability Sampling) is a method that allows users to confirm that on-chain data is available and valid without downloading all blockchain data. Celestia is currently attempting to achieve this through fraud proofs, while Avail is doing so through zero-knowledge proofs. They are trying to use DAS and powerful light clients to generate larger blocks and increase the data capacity of blocks.

This is particularly evident in the context of Sovereign Rollups on Celestia. Users can participate in the blockchain by running rollup and Celestia's light nodes without trusting anyone. Sounds great, right? But how many Sovereign Rollups are currently running on Celestia?

So what is Celestia currently used for? The primary use of Celestia is to provide cheap data availability for rollups on Ethereum. While this sounds good, there is a significant drawback: Ethereum L2s using Celestia cannot directly benefit from Celestia DAS. The main reason is that DAS cannot be verified on Ethereum. The bridge proving Celestia to Ethereum only checks whether 66% of Celestia validators have signed the transaction, so any Ethereum Rollup cannot benefit from Celestia's innovative technology.

The same issue applies to Avail, but I know they have plans for this issue, and I won't discuss it here as they have not publicly shared it yet.

EigenDA: EigenDA is an application that utilizes EigenLayer and provides data availability (DA) services to Ethereum rollups. Yes, I refer to EigenDA as an application because it is not a blockchain but an efficient database. This database provides services by offering data availability oracles to rollups and all applications that require Ethereum data availability. Since it is not a blockchain, concepts like light clients do not apply to EigenDA. I won't delve into technical details, but it offers higher efficiency and cost-effectiveness compared to competitors. As mentioned earlier, EigenLayer only provides crypto-economic security for applications. In this regard, EigenDA seems to be on par with Celestia and Avail in terms of crypto-economic security; however, EigenDA may offer higher security through re-staking, but there is an important nuance to consider:

Users running Sovereign Rollups and light clients on Celestia can punish Celestia validators for (potential) misconduct, whereas in EigenDA, this punishment is entirely dependent on the operators. Therefore, punishing misconduct is easier in Celestia, and I do not see this improvement in EigenDA.

Further Reading: ACeD: Scalable Data Availability Oracle

Each of these three projects has significant advantages, and I am working to understand and further develop the innovations they bring.

The new concept of trust introduced in the world of crypto-anarchism: EigenLayer. I believe that the importance of EigenLayer in advancing crypto-economic trust will become increasingly evident in the future.