Like a scalability is an important until it suddenly is, the centralization isn't important until it suddenly is, and privacy isn't important until it suddenly is. The solo sticker is a very particular animal. It is somebody that understands the value of the centralization. If you are a big pool that has thousands of validators and you're constantly producing blocks, you are bound to get some lot, some of these big payout big MEV blocks, which are
also known as lottery blocks. The inverse scenario is like a solo sticker that has one validator and proposes around two to three blocks per year. The chance of this validator getting a lottery block is tiny, very small. So if we agree that home stickers are more valuable in terms of the centralization and resilience for the network, why are we paying them less? If you're looking to stake your crypto with confidence, look no further than Course one.
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Deploy on the EVM compatible Gnosis Chain or secure the network with just one GNO and affordable hardware. Start your decentralization journey today at gnosis dot IO. Welcome to Epicentre, the show which talks about the technologies, projects and people driving decentralization and the blockchain revolution. I'm Frederica Ads and today I'm speaking with Edu Antonian Polanski, founder and project lead of adapt note. And that note is a solo staking
hardware and software provider. Eduan, for it's a pleasure to have you on. The pleasure is entirely mine. To Lily. So we've we've known each other for a very long time, but it's the first time we're actually talking about Dapno on this show. You've actually been on kind of on one of the on one of the Dapcon episodes, I think. But I don't think we've actually ever really covered DAP note, have we? Well, we talked some time ago when the merge happened, maybe
in the center and it was great. But yeah, I think it's important to cover also DAP here, I guess. Absolutely. Before we dive right in, tell me a bit about yourselves and your backgrounds. Maybe we'll start with you ADO. OK, great. Well, I've been around since 2017. It's has been a long trip to be here today. A lot of things in the middle.
I started working with Geordie making some audits like Make it Tall. And during this audit, the idea of Dubnot comes to my mind and Europe is 1 and we started to make this happen. And yeah, the product has evolved a lot and we have tried to adapt to the market during these years. So yeah, really interesting travel to to be here today and a lot of things to share with you. You cut out for just a little bit, but kind of you said that kind of Jordy was was this was also Jordy's idea.
Yeah, yeah, yeah. The founders of that are Jordy, Valina Griffin and myself and the Mellie. The idea that comes to my mind and George is 1 and leave it's it's about decentralization. We realized that at that moment we were creating the centralized technology with, but without having decentralized hardware, and we started to make this happen. Absolutely, and I mean both of them are now involved with other projects primarily, but kind of they've also been on the show before.
So Judy actually several times for for Ms. and Polygon and kind of the ZK stack that he's building ZKEVM and so on. And Griff has been on some of the community shows. What about you could? Well, well, first of all, it's a pleasure to be here. Thank you for thank you for inviting us. And I think I, I started in crypto mining Dogecoin in 2014. The reason why I decided to mine Dogecoin is because I was late to Bitcoin, but I realized that
it, it was the same code. So if I learned how to mine Dogecoin, I would just need to scale up my hardware and it would, it would basically be very, a very similar experience. Then like I sort of went on to the corporate route. I did my MB A I, I worked in corporate for a while and in 2016 I met Griff Green, who with whom I collaborated in Gibbeth.
And then in 2019, when I was ready to quit corporate, he introduced me to Edu and the first I think in the 1st 5 minutes of having a chat with Erdu, I knew that the next day I was going to resign from my job. I think it was everything that didn't exist in, in the corporate environment where I was. So I, I since then, since under 19, I've been working with, with Dapnot.
And when all the founders took a step back and and went to other projects, I decided to take over and and try to try to bring it to where we are now. What were the things that you've had Edwin Dabnote offered that were lacking in your in your legacy job? Yeah. So I think at that point it was like you could go straight to the point, you could go straight to what we're discussing without endless layers of politics of thinking. Which department would that fall into?
Whose responsibility is the A was this? It was just about doing something that was for a greater cause. And Edu was just so patient with me, like I, I pretended I was, I was in a job interview mode and I pretended I knew a lot. And Edu was super down to earth and super didactic and tried to educate me a lot in a super humble way as he is. So I was, I was humbled and I was like, yeah, this, this straight to the point. Smarts is with whom I want to to be working with.
I feel, yeah, I feel, yeah, I think that's generally a virtue in the ecosystem. So it's also what I really enjoy. Edu, tell us about the founding story behind that note. So kind of like it was you, Jordy and Griff and kind of there was the maker audit. So what, what kind of, what kind of drove you to say, look, we should make, we should make hardware for people who want a soda stake? Yeah, well, it's, it's a really good question. And yeah, it has been an
evolution to to be honest. So the the first idea was just to create software, not hardware. And our decision was to create a kind of project, not to make a business with, but to make it so, so sustainable. Yes, we did yet to provide a public good to people, people allow people to have decentralized technology.
It was not just sticking at that moment, because at the moment sticking was kind of an ideal, but it was about to have privacy to be able to connect to the centralised network in a really decentralised manner. So yeah, we, we started the projects just myself and, and later on we started to ask for some grants to maintain the project. We, we got grants from Nazis, we got grants from foundation
Aragon mainly. These three actors were the first one to support us and it has been a small project from the beginning, only four people at most during the first three years, mainly because, yeah, the idea was she has to try to evolve and maintain the project and survive. I mean, we have survived I think 3 better markets. I don't know the numbers now, but for that you need to be very careful and, and and just continue building. So yeah, we, we started this initial idea of having this open
source software for for anyone. But then we realised that we need something more because people at the end of the day wants to have a kind of out-of-the-box solution makes their life simple. Because at the end I'm not the idea behind that it's not make easy for anyone to run different networks. That was the initial idea. So that is why it was important us to combine the software with the hardware solution. Really running a hardware company is not easy at all. Is is a pay for us.
But but I mean, I think it's needed and I think it's providing value to the users. That is the the full goal of the of the project, to provide value to final users, to make them access to this kind of technology that without this facility will be possible. So, yeah, maybe some years working on this, then something that changed everything.
It was the, the well, the proof of stake and, and the merch obviously because it's when people start to using DAB not for something more than than privacy. And at the moment we start to solve, to solve more, more hardware for people that want to run solar staking at home. And yeah, really, really proud of the of the success that we achieved with this. So who are your users because kind of like the the privacy, I mean, I totally understand the privacy point that you were making.
So kind of like whenever you kind of connect to say, and at that time it was mostly Metamask. So kind of like that would go to inferior. So kind of inferior would kind of like have all your data. And even if in principle kind of like you had been super careful about kind of like where the funds on your address for gas and so on came from inferior might be able to kind of infer who you are and kind of and so on.
So I totally understand the, the value proposition then principle in practice, kind of very few people are actually willing to kind of pay for privacy a in funds and B in time and upkeep and so on. So kind of who who were your users then and has this changed? Yeah, sure. I think at the at the beginning it was have a lot of enthusiasts, a lot of people who really, really believed in Ethereum, really believed in the centralized technologies, IPFS and they wanted to contribute to the network.
It was more a contribution to the network than to than to like take really use it. Of course, there's always been like a fair share of developers who prefer to have their own node because then you have like a limit, unlimited querying and you don't, you don't need to pay an API or being rate limited,
etcetera. But at the beginning, it was mostly people who who really believed in Etherium and the, the shift really came with the first Test Nets for what was then known as Etherium 2, the Medallia test Nets. The all this test Nets that that came out, people started realizing that proof of stake was going to become a reality.
And especially those who were not particularly technical, they figured out that with that note, it could be an amazing solution to just one click deploy and and be running those test Nets. So I think like in the matter of like the three months from the first Test net going out, like we like 6 or 6 or 10X our, the people in our riot channel. We were using Matrix and, and riots back then. So it was wild.
It was when we decided that, yeah, we that that was probably a good pivot to focus on, on staking above anything else. Yeah. And I mean, what, what maybe just as background. So kind of before proof of stake, obviously we had proof of work and now you kind of you needed very specialized hardware, right. So kind of it wasn't something that kind of you would run on your on your regular machine at home. So kind of like people build, people build and board
specialized hardware. So kind of offering that out-of-the-box kind of for people to kind of just install on kind of like the machines they never turn off in their homes. That wasn't kind of an option. Kind of it was literally just running a full node, kind of getting the complete state and then kind of after the the transition to proof of stake or kind of like even the lead up of that transition kind of people were were actually validators on
the network property. So I hear that kind of you had a lot of idealists. Staking is also can also be a profitable business has has kind of this crowd shifted somewhat from kind of like the people who just wanted to be part of the network. Yeah, absolutely. There's. So I think the solo sticker is a very particular animal. It is somebody that understands the value of the centralization. And of course, in general, it searches for the yield that Etherium provides, but it's
looking for something more. It's looking for a higher level of contribution and a higher level of exposure. The to, to get access to the yield of Etherium. It's very easy to just buy into any liquid staking protocol and and then you'll have access to that yield. So definitely like if you need to invest in hardware or you need to invest in something else is because you want a higher degree of control. And here, like there's, there's multiple, multiple personalities or multiple overlaps.
There's the, the developer that wants to run their own node and again, queried and at the same time manages to use it for validation. There's the OG the that, that has massive amounts of ETH from the early days. And maybe they were even stockpiling 1500 ETH. That's it was supposed to be the first staking specs. And and then all of a sudden they found out that they could run a lot of validators with that.
So, so yeah, mostly it's somebody that that definitely wants access to that yield and wants the economic interest, but that also believes that their work on validating at home is valuable for the ecosystem as well. Is that also how you determine which networks to support because kind of like you support networks beyond Ethereum, So I know for a fact you support NOSES because I validate for NOSES. I also know you support IPFS and
Hopper and a couple of others. So kind of like how do you how do you determine which networks to support? That, that's a really good question to be honest. Obviously we we are trying. I mean as I mentioned at the beginning, we are on a small team.
So there were health maintaining several networks around packages is hard for us. So we need to be very careful choosing them, especially we take a look to the value that provide to the users and also if they are aligned with our values that I think is more the most important thing at the end of the day, this kind of a general purpose machine, right. So we will like to have as much as possible.
But then obviously these are the metrics kind of right that they are providing value to the final user that is decentralised that it's offering. Yeah, several things. And, and going back to the previous question or linking it to it, is, is, is, but we'll see how people are not getting too much about privacy, but also privacy is related to censorship resistance. That was also one of the initial
values. And it's sad, but people only realise about the importance of this when they are in trouble, when government start to censorship you. And that is when you realise, realize this, that you need this technology. Otherwise it's like people forget about it. And from day to time this happen around the world and it's a big boost for us probably. But it's important to keep in mind that we are building the centralised networks. Nosis, I don't know the the
number right now. Paul maybe knows how many validator solar stickers are in in Nosis, but I think it's 30% or something like that. Yeah, just an excess of 30%. Yeah, it's, it's amazing to see how this is this network decentralised, right And how we are in our side helping to make that happen. And, and, and at the other today we are creating different network for this reason, not
because it's more efficient. I mean if you go to centralized sequencers, you are going to get much better performance, right. But then why we are building different tries technology just to have these these properties? I think if I may add to this, one very smart design choice that that Edo and Jordy did at the very beginning was to really think about Dabnode as an ecosystem and to, to create the SDK.
So actually anybody can create any sort of apps or any sort of Dabnode packages or Dabnode this or dabs as we call the centralized apps, right. So it's not so much who do we try to support, but also who is able to, to be part of the ecosystem. And the answer is anybody. All of the networks can. Like if you can dockerize your node, it can be deployed on DAP Node through a, through a DAP Node app, through the SDK and for.
And then then of course, like the ones that we have supported since the beginning are the ones that, as Ava said, are completely aligned with, with our values, right? Those are the ones that that we've been pushing through and maintaining ourselves. When the teams the the client implementer teams were too busy or something, then we've been putting our own efforts into making it available on DAP Node.
I want to come back to kind of like the seeking philosophy and outlook later, but before that, can we maybe kind of quickly cover the tech aspects of that node? So kind of like if you look at the tech stack that powers that node, what are the major components and how do they work together? Oh, OK. I can do this one probably. So, yeah, for the very beginning we ambition display like a totally centralized platform.
So that is why the first thing that we did it was to create to deploy the Arab smart contract the APM. The APM has to be able to distribute versions of the packets in a decentralised manner. So we link, link this smart contract to IPFS plus ENS and these allow us to make a kind of a package manager distribution in a decentralised period, decentralised manner.
So that mean that if someone publish a package, no one can block you, no one can remove that package from the network because it's completely different from us. And that was one of the core values of of that employee. And then yes, the other part of this is what we want to distribute. And then it's, it's Docker. So we create a platform of dockers that are distributed in,
in this in the system. And that makes quite easy to to develop an application for that, as Paul mentioned, because the process is just to take the download SDK just to create a docket image, upload it to IPFS and the link to the small contract. And with that, anyone in the world can they start it. And, and I think that that's great. But also, I mean, we have been talking a lot of about blockchain, but that is not just
that. At the end of the day, something that we are trying to do is to bring home back the computers because it's like people are just not having this kind of computer at home. They are using laptops and other things and we are trained to force them back to have this.
And at the moment that you have a computer at your home, you can do more things like time machine, you can have your own cloud for photos, You can have not just blockchain and and mainly that is the the the idea and having a decentralized distributor system for this. I think there's a, there's a naval tweet that I that I really like. I think it goes something like this like like a scalability isn't important until it suddenly is.
The centralization isn't important until it suddenly is, and privacy isn't important until it suddenly is. So I think that note is ready to to make this happen at any single point and for any platform to be to be ready for, for either needs for scalability, the centralization, privacy. So walk me through this. So I'm a vanilla user, so kind of I, I say I want to use, I want to say sake on noses and Ethereum. I have a DAP node. I kind of plug it in. I kind of connected to the Internet.
What do I need to do then? Once you connect your DAP nodes, we we've tried to design the whole flow to be extremely easy and to not have to use command line at any point. So basically when you plug the machine to your router and you turn it on, it will start emitting a Wi-Fi hotspot and you will connect with this with your device.
We need your phone or your laptop or whatever you connect to that hotspot and then you have to visit my dot dot note, which is being served by the dab note itself. So basically you use your dab note from your browser and from this browser you can go through the configuration flow and then you can change the password of that initial Wi-Fi. You can configure access through VPN.
And this is important to have access to your dab note from wherever you are in the world, not when you're next to it. And, and in range of this initial Wi-Fi thing. And then after this initial configuration and configuring the way you want to access it, then you can start installing packages, right and installing apps. And for this, there are two modes.
There's the DAP store. And in the DAP store, you can find all of the packages that people can create through the SDK and that we have published as well. And then there's the Stakers UI. And the Stakers UI is a very specific flow for Ethereum based block chains. Right now we have three of them. We have Etherium, Nosis chain and Luxo and basically the in in the flow it, it gets you through configuring your execution client, your consensus client, then you are forced to install a Web 3 signer.
That's where the key stores and of your validators will live and then you can choose whether you want MEVMEV boost or not. So this is monkey proof basically like it's it's you cannot go to the next step unless you have chosen one of each and and then you click apply and that note then installs all the clients and configures all the connection among them, etcetera, etcetera, etcetera. So yeah, that that's sort of like the flow that you would do
to start validating. Then you would need to create these keys, this validation keys somewhere else and then upload them onto onto your adapt note and you'll basically start validating approve of stake chain. This is always kind of like when you hear this from techie, it's kind of like monkey proof. It's usually not monkey proof and I don't think it's monkey proof, but I can, I can attest to the fact. So I mean, I, I, I'm attacking myself, but I know plenty of people who are not devs who
actually run dev nodes. So kind of like within noses, we actually encourage everyone to kind of run nodes and a lot of the large parts of the non dev team actually successfully run nodes at home. So this is very much, this is very much attainable for interested non devs for sure. So, so tell us about the DAP store. So kind of is it, is it fully permissionless? So could I could I? Could I kind of upload some sort of malicious docker there? Yeah, this is a really good
question. We have two repositories in DAB, not one is the DAB not repository that is the one that we control is the one that we take care of and we are 100% sure that everything is fine and nothing can be breaking because of the repositories that we are publishing then. And then we have a completely permission repository that is the public DAB not that is so yeah, there is anyone can publish on the public. And then obviously this is the jungle. You need to be really careful
what you are just telling. But I mean, there are really interesting things also in the public like I don't know, optimism package or or community Montana packages that are trusted. So, yeah, at the end, we try to combine these these little scenes, one more trustful and one more trustless and with the other of, of creating an ecosystem. Because at the end of the day is like regular repositories, like the the App Store that you have in your mobile phone Nandra, right?
So you can install an application that you found everywhere around the Internet, or you can just use the official 1. So yeah, it's it's hard because at the end of the day, people are restoring value on on this hardware. So that is why we need to try to balance and protect user of not installing the things that are not correct. What's the process of updating your notes like for user? Because kind of like, as we all know, kind of like these updates happen regularly and they are
often somewhat manual. So how do you, how do you kind of balance security and and usability in these scenarios? The I think the key here is that once you install a package, these these package is signed by the key of the developer. So somebody trying to spoof a an update or something like this, it wouldn't pass the validation checks for for like the DAPNO
does. And first of all, they couldn't even publish into the same, into the same repository, into the same smart contract because the permissions wouldn't allow it. But there is this developed trusted developer key system that sort of helps you manage which develops do you want to trust. And these also works for the, the public App Store as well, right?
Like if in the public App Store, you have decided to trust some developer there because you, you trust them and you, you've met them and there are some people who, who have reputation in the space and they have published packages, then you, you will not be alerted or you will be able, you'll be allowed to download these packages and update them, etcetera, etcetera. If a package is updated by a, an address, a wallet or signed by a wallet that you do not trust, you will be alerted.
So you can, you can make sure that this is a person that you trust or like an update that you trust. Now when it comes to the updates themselves, because DAP Node is already online at 24/7 and it scans the this repository, the smart contract, this Argon package manager we were talking about, whenever the developer publishes a new version of it, the user will be will be alerted.
So the DAP Node will read the smart contract will read the event and will say, hey, there's a new, there's a new version available. And you can even set up automatic updates. So it will automatically update to the newest version, the newest version of the of the DAP note package, which is really handy because basically it takes the maintenance to, to only looking at your DAP note when
something goes wrong. You can of course opt in or opt out of those outdoor updates and you can check and and manually update the the packages yourself. So so how often do things actually go wrong? So say I set it to auto update, how how often would you expect? I kind of have to check in and manually do something by the people on the DAP note discord and so on. That's a good question. It kind of like the the things that go wrong are usually not related to DAP.
Note the things that go wrong are usually related to like the the power failing at home and then disconnecting the machine and then the database of the execution layer clients gets corrupted and you have to re sync again. Or the Internet goes down or they change your IP and or there's something with the router and then you lose access through through VPN. So Dabner itself is so if everything goes well, you rarely have to look at it.
And that's actually a bit of a problem because people are missing out on on new cool features and and new things because they just don't have to look at their dab notes ever again after setting it up. But if like if you live in an area where the light is constantly going on and off like you, you can expect that at some point you will have to re sync your execution client because the database will will be corrupted. OK, fair. What proportion of dab nodes run on DAB node hardware?
Oh, that's an excellent question, probably my favorite. And the answer is we have no idea. Really. The, the reason why we have no idea is because we do not capture any telemetry by default. And we know that DAB nodes that we have sold of course, but we have no idea if you installed the free open source software into your own machine.
So we, we can only tell you about the DAB notes that we have sold, but not about the proportion that these represent over the total amount of DAB notes that we have. So, and this is by design because like as as Ed was saying, privacy was one of like the the core principle. But but you know how many dab notes there are and told you, right? No, no we don't. I mean, we know the ones that we have sold.
But you don't know how many people actually run DAP node packages for for kind of validations. No, OK. The only things that we can measure are proxy metrics, which basically is. So by default if you're using DAP node to validate, the default graffiti will say validating from DAP note.
So then we can go and look at the validators that have this graffiti and safely assume that they're probably running DAP Note. We still don't know in which hardware, like if it's hardware that we have that we have sold them or or not. So we can have an idea of how many validators, but again, there's a decoupling of validator two hardware and we don't know if two validators are running on on the same hardware either.
So it's very, very, very hard for us to know or to to even estimate the amount of that notes that are that exist out there. This is what you think? So kind of like the the graffiti there being a good indicator.
Do you remember like 15 years ago or so when people started sending emails from their iPhones and kind of it would say send from iPhone, but then kind of everyone would kind of copy that kind of like on their Huawei's and kind of, you know, put like send from my iPhone below because kind of just this, this what you did, right? OK, Yeah, yeah. Joking aside. So you don't know how many, how many people are running that notes, but how many that notes
have you sold? We have sold around 2000 DAP nodes. OK. OK. If you could go back to the very start of DAP node, say anything you would do different Diego. Well, this a really good question. Other things. So to be honest, I mean we build this with very strong principles. We keep that from the very beginning and I'm really proud of being maintaining that. Maybe I don't know at some point maybe try to find a small business model to sustain this
project could be interesting. Maybe because for this time as we have been talking, we not don't know how many people are running down for value technique or or not since we have this child reported graffiti. But at some point we were running around 1% of the CD network and this is a lot, a lot. And we were not taking anything from that, just surviving with brands and, and, and, and both
the selling of hardware. But yeah, probably probably just to get a little more for, for making this bigger because obviously when you don't have this bigness, this model, business models for, for this kind of software, it's really, really hard to maintain it, especially at the very beginning. So maybe try to find something in the middle, Although if I need to choose, but I prefer the the the path that I took in the past. But yeah, obviously make our lives easier to build this.
It will be. It will be great at some point. You had a pretty large upgrade recently, Depth node smooth talk about that and kind of how that fits into the broader depth node ecosystem. So I think we realized the importance of smooth when when we realized that we are paying less to solo stakers overall than to big centralized players. And, and, and you could you'll go like, what? Wait, what, what do you mean we're paying less these people?
And the reason why, why I say this is because we have taken this MEV path on on, on Ethereum and we have decided to, to, to manage the, the block building on this like proto PBS that that the MEVMEV boost enables. And what what these does is basically MEV distribution is follows a power law, which means that very, very few blocks will have huge MEV rewards and the great majority of blocks will have, you know, not so great MV
rewards. What that makes is that if you're a big pool that has thousands of validators and you're constantly producing blocks, you are bound to get some lot, some of these big payout big MEV blocks, which are also known as lottery blocks. So if you get one of these lottery blocks, what these big pools do is they do not keep that to a particular validator, right? Because the validators within a pool are fungible.
So basically they distribute this huge reward among all of the validators of the same pool and that brings the execution reward higher for all of the blogs in that pool. The inverse scenario is like a solo sticker that has one validator and proposes around two to three blocks per year. The chance of this validator getting a lottery block is tiny,
very small. So most likely, the most likely scenario is that in a year one validator that is a solo validator will not have exposure to a lottery block and we'll have a small reward. Whereas one validator that is part of a big pool will have a higher return because they will have exposure to the lottery blocks that have fallen into
into this pool. So if we agree that home stakers are more valuable than one marginal validator in a data center because they give more resilience, more geographical decentralization, more geopolitical protection, more censorship resistance. So if we agree that home stakers are more valuable in terms of the centralization and resilience for the network, why are we paying them less? But is it really the expected value?
So kind of like if I mean, if I kind of it in the infinite margin, so kind of like I kind of I run a solo validator forever kind of I will hit upon a lottery block and I won't have to share with anyone. I will get to keep it all for myself. So doesn't that kind of make up? Yes, exactly. But it's like in an infinite timeline, you are bound to get a lower block, but you might get it in 200 years or in 80 years or who knows if Ethereum will
exist. So in a five years timeline, you are much better off joining a smoothing pool because you in in five years you would produce 10 blocks, for example, 10 to 15 blocks. And that's still very, very, very little. And that is if we continue at at our current level of validators, which it seems that it has a
stabilized a little bit lately. OK, so after we realized that that the solo stickers were sort of like being short changed on their execution rewards were decided to like build a pool for their execution rewards. And that's literally what it is like. The solution to this is basically, we all pull together our execution rewards into the same smart contract, which then distributes these rewards among all of the participants of the pool.
Therefore, if one of us gets a lottery block, everybody else gets their share of this lottery block. So yes, if you get a lottery block when you're in the pool, you will have to share this lottery block with everybody else. But The thing is, you cannot possibly know in advance that it is going to be you who will earn this lottery block. So that's the trade off. You either decide to have higher than expected execution rewards by joining the pool or decide to play the lottery and have
overalls. Or most likely a scenario where you have less rewards than if you had joined the pool, but you get exposure to this huge lottery block that you might get. So it's kind of like insurance, inverse insurance. So I get a payout every month, but kind of if I become very sick kind of to kind of I, I also kind of the insurance pays that for me, right? Yeah. Yeah, exactly. Tell me about kind of debt node smooth and the business model, it also changes things on your end, right?
Yes, yes, certainly. I think so. We've decided to charge a fee for smooth because it basically, So what happens with the numbers, the actual numbers of joining Smooth is that you will, you're expected to double your execution rewards. So basically you, if you consider execution and, and consensus rewards, you, you basically maybe like you increase your total rewards of a validator by 2025%, something like that.
If you were participating in these and you can double your rewards, We've decided to take a 7% fee of all of the rewards that go into the pool. And that's sort of like changes what Ada was saying before, right? Like up until now, we, we didn't have any business model built into that note. And that's because DAP Node makes it extremely easy to to run validators and stuff, but we didn't quite develop any client implementations.
And basically what you're doing with DAP Node is you're basically running other people's software, right? So charging for this, I mean could have been an option, but we decided not to go for it. But here it is something that we have created and it's something that actually gives you value, gives actual value to the user. It gives double the expected
execution rewards. So we decided to charge a fee here and that brings in or starts bringing in this business model that can make DAP not sustainable. Are there technical challenges to kind of develop and implement DAP notes smooth because it kind of from from the face of it, it sounds like a pretty straightforward pulling
contract, no? Yeah, maybe maybe the most challenging thing here is theoretical, because at the end most of you know there is a disconnection between the things that are happening on the situation layer and the things that are happening on the consensus layer. So it's not possible to to correlate this data. So that is why we needed to build an article obviously.
Well, we have been talking here. We are not too much too much alike with oracles, probably, but having we create a system of different oracles providing the same value. And obviously we envision a future in which we can replace these Oracle for certain knowledge proof of the of the
result. But the most complex part of, of this is smoothing pool has been the the article, because it's the one that take cares of the, the, the results of the thing they're having on the conscious layer and posting to this data on chain. But yeah, following the, the culture of Dubnut, we obviously did everything open source and anyone can run it's own Oracle to double check that everything is fine. So just trying to, to be aligned
with, with our spirit. It's it's, I mean, we, we have a mantra in Dubnut is decentralized until inherits it works. And we try to follow that from the very beginning. And because at some point there are something that you can understand, realise I'm just thinking about, for instance, you mentioned about automatic updates. Well, we have a connection to Telegram. So if you you're supporting Telegram, you can get notifications in Telegram.
But obviously this is obtained and there is no way to send a decentralised notification to a user. So at some point you need to find this one. I'm writing the yeah, a balance between decentralisation and centralisation to make the things works. So what's been the feedback like from the community for that note smooth. Yeah, that's a that's a very
good one. People who have joint, they absolutely love it. They some people were saying like, Hey, I haven't even proposed a block, but I'm already accumulating rewards and I don't know what the reward of my next my first block is going to be, but I I know that I know exactly it gives me this predictability on exactly how much, how much am I going to get right?
I think most of the bad feedback has been like not really understanding the difference between the expected rewards, which are around the median and the rewards that you can put or how the smooth gets your rewards closer to the average. People have some some trouble understanding the difference in I have a I've come up with a with a quite an easy way of explaining it how how the median and the and the average are
different. So imagine that there's like there's a company and we are all part of this company and the owner is very fair. The owner pays €1000 to each employee, including himself. So every month everybody gets the same. So the the median salary, the median is defined by if you put all of the the numbers or the salaries in order from the biggest to the smaller, the one that's right in the middle is the median, right?
And it's clear to say that if we're 10 employees that the median will be like 1000. It's and the average, which is defined as adding up all of the numbers and dividing by the number of instances of salaries. So adding up the 1000, dividing by 10, that's also 1000. OK, so that's these in Etherium are the consensus rewards. They're equal for everyone. Now imagine that the end of the year comes and me as the owner decide to pay myself dividends and I pay myself like I pay
myself like 90K off dividends. It's a huge payoff. Not not 1000 but like like 90K. So basically at this point, on that particular month, everybody will have their salary of 1000 including myself, but I will have a massive bonus of 90K. So let's look at the median for that month.
The median for that month is going to be take all of the salaries, put them one after the other and the median is still 1000. But if you take the average, you add up all of the rewards that you've been given, that's going to be 10K or so, like 100K. So if you make the average, the average of add the 100K divided by the number of employees divided by 10, it's 10K. But this number is meaningless
to you as an employee. If you hear all the, the average salary in or the average compensation in that in that company is 10K. Well, for you that is not the owner like that means nothing. And what you're interested or what you're going to get is 1000, not 10K, right? So something, something like this happens, except that we don't have owners in, in Ethereum or like not in not in the traditional sense, not in the same sense.
But the like we, what we have is people who are lucky enough to have one of these lottery blocks. And this, if somebody gets a lottery block, it pushes the average up, but that doesn't mean that it means anything to you who most likely are never going to get one of his lottery blocks. So if you sort of like trust the your probability or like look at the probability of you having
one of these lottery blocks. And on it, as you very well said before, in a time span of five years, how many blocks am I going to propose? How many of those have a chance of being at a lottery block? What you're going to end up is that your reward is going to be closer to the median. What you can expect is closer to the median. Now, what Smooth does is really pulling this 90K of bonus that I gave, pulling it and making it and giving it to everybody.
It's like instead of being a a company, it's a cooperative. And we all divide all of the all of the benefits amongst everybody, which really does bring the total compensation to 10K instead of for everybody. Yeah. So. So what proportion of that node users have opted into smooth? Well, that would be an amazing question to answer if we knew how many dabnet users we have. I think it's important to mention that dabnet is simple. Is not only for dabnet users, is for.
That's right for everyone, OK. And, and right now we have almost 2000 validators on it. And yeah, we're, we're getting considerably considerable smoothing effects already like we, we are hitting some lottery blocks. I think the biggest one that that we got was around 1314 ETH, something like. That, wow, let's talk about kind of like staking kind of from a bird's eye perspective, right?
So kind of solo staking as admirable and virtuous as it is, it's kind of economically, it's often not the best way of kind of like using your ETH, right? So kind of like if I use a liquid staking protocol, I can kind of earn rewards on my ETH and at the same time kind of use it as cholesterol somewhere else because kind of it becomes fungible, right? So I don't, I don't have the, the, the, the opportunity cost that I kind of have when I stake.
How do you see that? Yeah, I mean this is a really good question. So the the that we are seeing or at least from my Pandas view is that is at some point we are putting incentives in the ground place. I mean, as Paul mentioned before, we should need to divide more the the solar staking. But I think that is happening is, is the percent is I mean the people that are not doing solar staking are having more benefits, are having less, less or more facilities to make this happen.
And especially with the leakage sticking as you mentioned. Now what I expect in the future is to have this look at this tickets on the shows combined with DBT. Because now right now one of the big issues for for Dubnot and for solar staking is that 32 is it is a lot of money and not all the people can afford that obviously.
So if we are able to combine these DVD solutions and liquidity staking and make anyone to be part of this decentralized network validation in, in a way that make easy makes easy for them and also provide this value of, of liquidate shaking. I think it's the the future that we need to spend or, or the thing that we are trying to
achieve. Because otherwise we are going to end up in the same situation in the past, like in Bitcoin, where most of the the minor are controlled by the same people. And, and from the very beginning of the city and the centralized channel was always one was there. And, and that is why today we are able to run by theaters from now consumer hardware, because it was always one of the
principles of the season. So I hope that in the future we can start to go this direction of, of being able to to take the seminar fees or even more for solar sticker and and not benefit to the one that are going in the centralized direction or centralized path. You just mentioned DVT, can you maybe explain that? Yeah, sure. I mean, The thing is currently the keys to make a senator of validator has they, they have a lot of power and and they can sign a message, they can slot you.
So you have an issue. You cannot decentralize this key or give this key of validation to anyone because they can search you, they can do bad things with this key. So the the very kind of DVD of the DVD technology is to create a way in which no one has the control of this key. And with the senator of three or five or end of N members of this committee, they can make this senatorial of the valuation.
This allow us to give this power of valuation without exposing and and to be exposed to the risk of of exposing the key. So the other hand of this DVD is just to create small groups of people sharing a key but not having the control of this key allowing to anyone to to trash on this decentralized manner of
signing things. And if you put this together with like staking, you can take ether from people if a leakage derivative of this ether and put this ether to validate on a decentralized system of people running this mutantly. So that's distributed validation, right? So kind of like you need less than 30 to eat and you can kind of pour those together and kind of you can do it in a trustless manner. Is that more or less it? Yeah, yeah, much better than my inspiration for sure.
No, no, I, yeah. And yeah. So kind of why, why would that kind of eliminate the opportunity cost that people currently face when they solo stick? Yeah, The thing is that currently you will can run 32. I mean one validator 62 is I mean, obviously we we cannot see you.
It's, it's, it's just one video. So it's much, much easier talking about the difficulties that mainly that is why we have more validators in industries rather than the city probably because it's more affordable, it's more accessible for for users to be bought into the network. But in the case you can only run 3364. So it's a lot of money probably if you have a hardware you were willing to run, I don't know 101,000 validators in the same
hardware, right. But you are not having access to this speak about of either or maybe some people, but not the regular people. So The thing is to find, I mean it's like we have a pool of people having and maintaining hardware willing to run validators for other ones. And in the other side, we have people with ease willing to decentralize this. So at the moment that you are able to trash on this decentralized Hardwell let you know people validating. Maybe you're at home and going
to run only a solar staker. I mean, you can run your validator this 32, eight plus validators from other people from this poll allowing you to get more benefits and and reduce your operational cost because you are just running your validator plus the valid those other ones and get into the work of of doing this this job for them. So yeah, maybe this is the idea. But you can't use the stake eat as collateral as you can kind of do when you have liquid staking,
right? Kind of like when, when, when a liquid stake, I get a liquid token back that I can use as collateral elsewhere to kind of take out more ether or whatever, right? And kind of and yield on that as well. So kind of I can leverage up. Yeah, as a user, I think I would say it's even better what you can do, which is you can you, you can put, you can be running and operating a validator without a bond.
And so as Zelda was saying, there's there's this people who have the ETH and they need to be running like the pools or centralized exchanges or, or liquid staking pools. They have the ETH and there's no reason why before DVD they would, they would untrust random users on the Internet to, to run their validators, to run validators for them, because they owe it to the people who have surrendered their liquidity, their actual ETH for staking. They owe it to offer them a proper yield.
And if like they, they need to ensure that the operations of these validators are OK. Now with DVT, what they can do is they could, they can give it to groups of random people on the Internet that they've gathered together.
They've created a DVT cluster and and now they can present themselves as credible node operators because if one of them goes down as it's as it would be perfectly normal on a home set up, the rest of the cluster picks up the slack and what they can do. So as an operator now let's let's look at it like as an operator, you don't even need to actually be a staker to benefit from the like the the rewards of
operating. So you will get paid as an infrastructure provider, not as a staker anymore. So you're basically, you don't even have to put up any capital. So right now there's only one program that that does this or I think maybe two programs that do this, that they require.
No, no bond. There's Ether Fi with the Operation Solo Staker and they manage their DVT clusters and they, they give ether from the Ether Fi protocol for them to, to, to run validators on. And then there's the simple DVT module of Lido. So in order to participate in either of those, you don't really need to put up any bond. So there's literally no cost of opportunity, you just need to run the hardware. OK. And I, I understand that kind of if you're the person kind of
running the hardware. But if you, you're the person with the ETH and you're still better off kind of doing this in a way where kind of you get a fungible token back that you can use in things. Because kind of like when you kind of stake kind of in a DVT set up, you get no fungible token back that you can, you can still utilize, right?
Yeah, that is correct. You, you don't either give you want if you have the ETH and you want to have a liquid representation for it, you're obviously better off like DVD is not useful for that. Then you have like other things like you can create like a, a vault on stake wise and that will create a liquid presentation of the ETH staked in that Volt. And then you're, what you're introducing is you're introducing a layer of smart
contract complexity in here. But if you're OK with this, then you can transform the ETH of your Volt into OS ETH, which is which then you can use on D5. So you you can totally do that as well by not necessarily by using DVT, but by using other solutions like Stakewise Volts. OK, Yeah, I, I, I understand the other, the other thing that kind of gets discussed very critically is re staking. What's your take?
I knew that. Yeah, maybe just very quickly in a nutshell, kind of re stakings the idea that you can use the same collateral twice to kind of stake for different things. So kind of like if you already have EAT staked on Etherium, you could also use it to validate on 7 other protocols and kind of be slashed on the same ETH, which kind of allows you to kind of multiply the yield you can generate on that ETH. It also possibly overloads the security consensus. So yeah, what? What's your take?
Yeah. So I think it is a great idea in practice, having all of these ETH sitting there is and and not being slashed is could be like could be seen by some people as like a, a waste, right? Like all of this ether that only serves to validate Etherium and it could be reused for for other protocols. So, but mostly I think it's given way to greet and the ability to or the the willingness to get more rewards out of the same ETH. And this basically endangers endangers Ethereum as a whole.
Like in the case of a mass a slashing event on the restaking protocol like ETH could see like like this. Let's let's bear in mind that this is actually not ETH that it's not staked at the same level as the as the consensus layer. So it's not burnt, but it it will be sold and it will basically dump the price. So a massive re slashing event, re staking slashing event would would be very, very negative for Etherium. And I think it's something that has to be like it.
It is OK to be tried slowly, but I think it's been overblown and sort of incentivized with all these points protocols.
And it increases risk and complexity in a way that we stop being in, in control of the financial products that are built on top of stakes of, of the security of the consensus of, of Ethereum. And it exposes the consensus of a theorem to a lot of complexity in the same way as the repackaged mortgages exposed the financial system to to a lot of risk in a way that we could not possibly understand what was what was going on behind the financial products that that
were that were created in 2008, for example. Do you agree? Yeah. I mean, I totally agree with Paul is, I mean is this feeling that we are putting leverage limited on, on the ether. And I mean when the thing in the right direction, everything looks good. But the moment that you are increasing this leverage and if something goes wrong, it can be completely structured. So at the end of the day, I think it's also important how how much I mean how this growth
this this risk taking. I mean, at the low level, I think we can be more or less safe. But if this become as if I think the the risk that we are taking is like putting leverage on Ethereum itself. So I think we need to take this into account because yeah, I am in this chain effects that can happen. You have link everything. So if something happened in one chain, it can be a massive situation for the other two ones and and and be a wave that destroy everything.
So yeah, this is feeling that in principle, it's a really great idea. I mean, but when you start to think about all the consequences that is compared to the ecosystem, well, it's the feeling is that it's, it's really risky or that's my, my point. The other larger topic that's currently very much under debate
is issuance. So kind of the idea that kind of if you already have a million validators, having another validators are very limited marginal value, whereas kind of if you only have say 10 validators, having an 11th is of much bigger value. So why, where do you stand on on that debate? So kind of how do you measure the value added by each additional validator? Yeah, the issue is, is probably also a hard topic. I have heard boys in different directions about this.
How, how how to measure the success. Success of a network from my point of view is how much you are able to make it decentralized. Other people is missing other things for me. If you are increasing the issuance of the network, you are getting probably more rewards. So that means that more people are going to get into the ecosystem.
But The thing is since the current it's in your network is, is situation more decentralized way to do the things because it's not real flows to centralized providers. Probably the thing that you are going to see is just more people with more money or doesn't feel it. So at the end, even I, I, I prefer the opposite just to have people that really believe on the, on, on the core values and, and not being healed only for the rewards.
So probably in the direction of, of, of reducing the issues, not increasing the issue at all. And but yeah, I mean the enough depends also, I mean, if you are able to to create a more decentralized network, that's my point and and that's my feeling. I think it all stems from the impossibility to know what, what is a decentralized validator that actually adds more value. Like if we had a a proper way of measuring this, then it would be
very easy. Like, OK, we, we keep the centralized or we have some sort of like asymptotic rewards curve on, on how many validators you, you can have. So the first validators increase your reward quite a bit and the like after like you reach a certain plateau of validators, then your issuance or your like the ETH that you mint on your validators, your consensus rewards lowers or tapers down the like. Of course, this is an extremely naive approach and it would being at the completely
decentralized platform. What this would what this would do is like it would give raise to like a lot of civil attacks and and people would pretend to have low validators. So that's not something that's on the cards right now. And like, if we like I, I honestly don't think reducing issuance is a good idea because there is a, like we see it in
our community. A lot of people in Dabnode, even though they are, like we, we said that they are ideologically motivated, at least in part, they do also want rewards. And it's not that they hate money, you know, like they, they do like, they do like their rewards and they want to maximize them. And if the rewards go down above like below a a certain threshold, they will stop
validating. But other big institutions or people who are less hands on or people that have less cost of opportunity for for running their own validators, those they they might be OK unless the issuance is negative. So with a non, with a non negative or non 0 issuance or reward, they, they would be OK on keeping this. So I see reducing issuance in a naive way just reducing it. I see it also as a negative for the decentralization of the of the network. Now there are some things that
that I think could be done. So right now we have correlation penalties for slashing events and it is suggested that we could have correlation penalties for missed attestations as well for being offline. But I think it would be really funny if there would be a way of reward. So there's, there's this thing, there's the Unicorn Unicorn
Chaos day. I think it's the status theme that that implemented it. Unicorn Chaos day is a day where people try to hack their own, the, the things that they are building themselves. They, they, it's just a day for
testing security. I think it would be amazing to implement something like this in Ethereum, something where if you can prove that you are making the an entire group of validators go down at the same time and miss at the stations, if you can prove that it was you, you get part of these correlated attestation penalties. You get them for yourself. So you're still like only playing. It's it's a safe game because you're still only playing with like missed attestations.
You're not, you're not slashing the principles or so to speak. And it could be targeted at like players that have or like, yeah, like more having more than 1000 validators, for example. So if you manage and you can prove that it's you who like destroyed a data center, not destroyed, sorry, like a went a like effectively attacked a group of validators that that are an easy target because they're all together, then you
get part of the reward. And that would be an interesting case where people would be like actively watchtowering the bewatts hours for, for these centralized actors, right? And that would mean that it's less profitable to run validators in a centralized spot because you're risking yourself to being attacked. And if you have to decentralize them in different in different spots, that will also increase
your costs. So it will be less that you'll be able to give less profit to the liquid staking representation. So at the same time, solo stakers do not are not affected because they usually run less than 1000 validators. So they would, they wouldn't be a target for for these sort of people. So effectively what this does is it increases the costs of securing their own infrastructure operations for big players and it has no impact on solo stickers.
I'd like to see something like that implemented. So what do you guys have in store over the next, you know, months or years with that node? Yeah, I think the so we've been talking a lot about staking and the issuance right now is quite low and we're not seeing that much influx on on staking,
right. So a lot of what's happening internally in that note is looking at ways to leverage these hardware already existing in people's homes to give them access to privacy preserving technologies or self sovereign technologies in a way that they that that they're using that hardware that's giving them some some sort of return in order to provide more value out of it. And here what we're talking about is we're talking about running local models.
For example, we have a proof of concept where we have local models running on a dab note and you can communicate with them through a Telegram bot the same way as you speak on a chat interface with ChatGPT. But instead of ChatGPT and giving your away all of your data to open AI, you're talking to your own local model, right? I think the, the future of open source and local AI is, is really brilliant because we, there are certain things that we are not going to we, we are not.
So basically AIS are, are just sort of like exocortex is like this third party brains that, that we pay to access, right. And for some things like work, we're, we're going to be using stuff that is, that is the maximum, the foundational model,
that's the maximum performance. But at some point we will want something that is ours, some agent that is not tamperable, some agent that really works for us and it's controlled by us and maybe decides whether we can ask a foundational model or we can, we can have our own or we will use our own data to do to do something like this. So that that note, I think it's perfectly positioned to to provide those services. And that's sort of like what we're looking into right now.
Super interesting. Yeah, my partner is just to think about a lot of applications that in which privacy and EA like for instance, I mean that you can connect your local model to your Google Drive and you can make index queries on the data. And that's for, I don't know anything in your documents or in your photos or in your back accounts or you might need to connect AI to your emails and make summaries of all your emails or you're still got a conversation or you have to remind that.
I mean, I see a lot of applications in which I mean, I can help you a lot, but it's so sensible. The information that you want to take a look is so sensible that you have no, not you are not going to never connect to a centralized provider. You are not the absolutely partner contest and this point and also because it's also part of our core values mixing the privacy with this technology
that provides a lot of value. I see a lot of potential application that makes totally sense and and can bring a new party on this on this new applications. Cool, fantastic guys. Where can people learn more about that node? Download the software by hardware even and how can they be in touch with you guys? Right, so dabnode.com is our website, the APP node and OD edabnode.com that's that's our website and all of our socials
are also listed there. And we have a super great Discord community that really helps both with the installations of the open source software and also with support and also like providing feedback for the hardware, etcetera, and with guides on to on how to do things on that note. So we have an amazing community. Our Discord is probably the best way of interacting with this community and see if that note is for you from the website as well.
You can. You can download the software to your own machine, or you can access the shop and buy a plug and play hardware that will bring that note to your home without any technical knowledge. Perfect. Thank you both for coming on. Thank you for having us. Thanks again for inviting us here. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud, or wherever you listen to podcasts.
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