We identified the parts that a lot of protocols, a lot of networks are starting centralized because decentralization journey is so hard and it's so unoptimized or start with the really software validator set and software for that. If you have like a million nodes, it's suboptimal. Decentralization is something that really expensive for people to maintain.
It's really hard to operate. Our basic job was to create an alignment of incentives for new protocols, so they when they decide to launch centralized or with proof of authority or whitelisting of operators, they decide on full-fledged decentralization immediately. Welcome to App Center, the show which talks about the technologies, projects and people driving decentralization and the blockchain revolution.
I'm Brian Crane and today I'm speaking with Misha who is the Co founder and CEO of Symbiotic. Symbiotic is a re staking staking protocol and yeah, it's a very interesting new paradigm. So I'm excited to speak with Misha about that. But just before we get into that, really briefly like to share a bit about our sponsors this week. If you're looking to stake your crypto with confidence, look no
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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. Cool. Thanks so much for taking the time, Misha. I'm really excited to speak with you. I think re staking is, you know, as someone who's been working staking for a long time, it's a very interesting new concept. It's an interesting kind of, you know, conceptual evolution of where staking may go same time.
It's like totally at the beginning you guys had a lot of like very interesting ideas. So I'm, I'm excited to speak with you about that, but maybe I'm curious, maybe we can just like start with a little bit your background, your journey, like how did you get into crypto and what was your journey been? Yeah, I like, I was interested interested in crypto for a while, I think since 2011 or something in and out.
I, I learned about this electronic money concept and was really impressed because like what, what, what not to be impressed with the decentralized and unstoppable money. Everything else. I, I, I knew little about like how the institutions and how regulations work because nobody
knew that back then. Like it, it wasn't for like the average consumer to know how like how people are, like how banks are going to be like included or excluded from the SEPA where SWIFT networks, like nobody knew about those networks before. Like you, you didn't, if you didn't do like cross-border payments or something like that, you were like basically going visa to visa payments. So yeah, like it was a really interesting concept.
Then like I tried mining Bitcoin for for a few like weeks or days, I think, but it's like you couldn't do anything with that except like trade on mountain gogs or something like that. There were not no actual exchanges. This one, I think there there was no defy. There was nothing to actually do by but speculate on one like asset pair. So, yeah, like I, I, I turned that off for a while and then returned when the, I like ICO and Ethereum started to take off.
And that's where like the interesting part began because you, you can actually do something.
You could, I don't know, invest into ICU, like IC OS, you could support interesting protocols because like donations were like really huge back back then before IC OS, people just wanted something to be built and they had like a lot of mined bitcoins or Ethereums. So you just like go to Bitcoin talk forum and just donate to people without expecting them to like do something for you just to see where it where it, where
it goes. Ethereum was back down like it was like 7 or like 5-5 bucks a piece. So people were like spreading it around and then it grew by like 100% and then like 10:10, I don't know, like 1000%. And a lot of people, they're building protocols realize that this is like an actual funding mechanism. What's the origin story of Symbiotic? Well, we were working on State Minds with Algis. We found it. It's my Co founder for for
symbiotic as well. We're working on state Mind with the goal of making our part like our industry a bit bigger by like make it safer, protecting people and trying to secure protocols, networks. Like we, we helped block chains as well as roll ups secure their networks and as well as like big huge defy protocols. And yeah, we analysed a bunch of stuff like how do we, we had a team of around like 25 people with us working on securing every part of the industry.
So we analysed like can we help secure compilers more? So we helped wiper like wrote like fuzzer for them and make like security assessments of that found like several bugs. Then we realized like OK, like there is an old code, right? We have multi client for their differential fuzzing other tooling. So like this is semi coloured. OK, what can we do next? Or like we have our PC notes, our PC notes like secured by this, this and this.
And like we went through every, every part of the industry, like basically every interaction that user can have with blockchain. So like PBS and everything like that and identified parts that, that are needed to, to, to make our like development sustainable. Because for industry sometimes takes like, I don't know, like from 100 to $1000 to get a
really like quality participant. And then immediately like hundreds of thousands of them are gone because like there is some vulnerability or something wiped out from like the, the productive part of our crowd. So at some point we realized like to, to make it, to make it sustainable. Like we identified the parts that a lot of protocols, a lot of networks are starting centralized because the centralization journey is so hard.
Yeah. And it's own unoptimized or start with the really software validator set and software for that. And we decided, yeah, it's a good time to start like the protocol that optimizes for that. And that's how we started working on Symbiotic. OK. So you said the protocol that optimizes for that maybe, Yeah, describe like what is the problem that Symbiotic is trying to solve? OK. Yeah, basically the symbiotic is trying to solve decentralisation. Decentralisation is like it's
suboptimal. Everybody knows that redundancy is like a step from outside of optimum. You the, the optimal setup is you have is 1 server that's controlled by you that's deployed, that's deployed in one place or like with the like with few backups, if you have like a million nodes. It's not, it's, it's suboptimal. The centralization is something that that's really expensive for people to maintain. It's really hard to operate.
And yeah, like our, our basic job was to create an alignment and of incentives and UX as well like supporting tools and general support system to make this journey easier, to make it this journey way more easier, like way easier to digest for new protocols. So they, when they decide to to launch centralized or with proof of authority or like with whitelisting of operators, they decide on full-fledged
decentralization immediately. Not a hard task because like again, it's physics, decentralization is by definition suboptimal. But I think we we are on the right path to make it so that it's way easier and way more way, well, we're way more efficient for networks to use outside. OK, so you want to make decentralization easier and more efficient. I think most people think of symbiotic as like restaking
protocol. What's the common, what's the connection between, you know, decentralization and making decentralization easy and restaking? Yeah, OK. Like again, the the decentralization is suboptimal. You need to pay a lot of people a lot of money to operate your network. Otherwise you can just play yourself or not play at all. Get one server and operate your network. If it's fully centralized, it's not going to be a network, but like pay one mode to, to, to, to operate your network.
So the journey of this centralization is quite expensive and it's quite hard. So you need to have like with the current, with the current proof of stake models, you need to have something to stake first, right? Like you, you need to launch your own token. For this token you need to create like some legal basis, because you, you need that for you not to get sued after that. Now you need to have a legal basis. You you need to spread it around with a lot of participants.
Then you need to, you need to, you need to create enough liquidity for, for the token price to be semi stable. You need to list it on multiple exchanges and then you can decentralize. So you need to, you need to create a lot of things and you need to like go through a long journey before you even think about decentralization. And then you need to find yourself an operator set when you find yourself an operator said like it's, you need to talk
to like each company separately. And that's when you actually can start testing traction. And if you say like you're talking say like around 100 mil, it is general consensus, total circulating supply in general consensus.
You can't onboard 10 billion USD in Tether immediately because you don't have the security base to support the circulating supply of tokens on on your ecos like in your ecosystem or you can't secure if you're like Oracle Network, you can't secure 1010100 bill of TVL in other defy protocols with your price fit. So what is taken does is that it helps you like as a part of shared security which we are like we are shared security protocol.
So one of the primitives that we use is this taking what it does, it enables you to get avoid economic base from the from the tokens that are actually stable, that have like a really good liquidity that are listed everywhere.
And immediately start testing your traction before all of the steps that I described like before this 6 to 16 months of development and like trying to, to create enough of the stable economic base, enough of the like the really good validator set and like the, the mechanics of your tokenomics and everything like that. You can start immediately and you can onboard a lot of money and really good operators immediately almost. This is the goal at least for,
for shared security protocols. And like again, it plays to the same narrative. You can do better while being suboptimal. So you can get enough enough weeks improvement, enough go to market improvement and now enough capital efficiency to counteract and even like we receive a lot of, a lot of benefits while being redundant and while being decentralized from the start. One point you're making right is that basically if you're launching a proof of state network, right, it's expensive.
There's a whole bunch of overhead coordination, finding operator set, etcetera in the restaking case. So if now a protocol goes to symbiotic and they say, OK, I want to launch some chain and I want an operator set and I want to have some economic security, then I mean, generally they'll still use their native token, no, because they still need to provide some kind of incentive for this. Or they can use points or other mechanisms for that.
Like they, they, it's not there. There might be like the, the optimization here might be achieved through V mechanics. So lock up period dual staking baskets, taking a lot of other like straight up model for some networks that like would never need their talking at all. We we're exploring these mechanisms as well. This is like a really bullish concept, but for, for most like for totality of networks.
But yeah, there are a lot of novel mechanisms that are not going to be like they were not available at all before You can, you can shorten your journey by a lot, just not like launching your talking immediately or launching it in like some limited capacity while already testing traction of your ID or product market feed with like a huge economic base. So one big benefit right, that I, I can totally see is that, you know, you're making things a lot more flexible, right?
Because, because so far, let's say actually proof of stake has been pretty, pretty uniform in a lot of ways, right? There's some variation, right? Like for example, some protocol say, oh, the validators have to hold some self bond in their wallet and others can can be delegated, you know, so there's some difference there, like let's say Tasers, a few others.
But you know, mostly it's really the kind of cosmos taking model I think has been the most common where, you know, you have some people running validators, then people delegate to the validators. The validators charge some kind of Commission and then the voting power on the chain of all the validators is determined by the amount that's being staked. And then, you know, the protocol basically inflates the supply and it pays its to the people staking.
So that's like really like the standard model that I think it's been copied over and over again. What do you think are the problems with this? Like from an economic and incentive perspective? Yeah. Well, like you, you were mentioned or you were mainly mentioned in chains. It's really important for people to understand that like we have oracles as well. We have threshold networks that are like operating on completely
different mechanisms. We have pre conformal network, fast finality networks, other like networks that are not chained, they're still secured by stake and economic security, but they're not block chains. They don't operate. And on the same principle every decentralized chain can use not not the chain, every decentralized network.
That's what why why they call why we call them networks can benefit from economic security if they have like some ability for validators to misbehave or operators to misbehave. So like slashing mechanism versus the reward mechanism in terms of optimization, straight up optimization, yeah, like where you can you can start immediately, like go to market optimization of six months is going to be a huge value
proposition for a lot of people. And Cosmos SDK that you mentioned the Cosmos, Cosmos change that you mentioned they even with the like incentives how they are to develop for Cosmos ecosystem, they reached a lot of they, they reached a lot of actual use cases and like a lot of teams that are building on this tech stack because they have a unique optimization that we are trying to achieve as well.
Just imagine if you have like registry that's can be reused multiple times, network middlewares, trust routes on Ethereum that can be reused multiple times. People launching with like with the same primitive or close primitive networks that are operate with the same like tokenomics or with the same reward or like slashing model, they can reuse code each time that they they, they launch. So it's not a like 1 to one journey. And like that's what brought a lot of people to Cosmos because
their system can be reused. We are building that, but in more generalized way. So it like will encompass every decentralized network and bring optimization that that is reached for it is taken. So you don't have to pay your validator that much or your operator that much because you're use like the you have less, less money to to pay APY for less amount of money. Yeah. And like while getting to go to market and like type pure timing
optimization. So I, I feel this is actually a very interesting aspect of like the economics of re staking and like one way I so if you take like a typical Cosmos network, right, So let's say tip or typical proof of stake chain doesn't really matter. So let's say it has a market cap of 100 million and now it has. Inflation of 7%. So let's say it pays 7 million a year to the stakers, But then of course, most of this is just people who hold the native token. They get more of the native
tokens. So they're like, oh, I'm happy I have more tokens, right. I just, you know, accumulate more tokens and then you have something that is going to the validators who are actually doing the work of like running the chain. So let's say that is like let's say it's like 7% on average. So now in such a chain, right, let's say in this example, you'd have like half a million per year, which is actually paid to the validators running the chain. The rest goes to back to the
token holders. I mean I see what one downside I see in this is that maybe the payments to the valid is a very uneven right. Some make a lot because they have big stake. A lot of them might be running
at a loss. But if you compare it to re staking, right, if now I'm have my native token and I pay to, you know, Ethereum holders or Bitcoin holders or, you know, somebody else who has some other asset and they just want to have more yield on their other asset, then, you know, you have to assume that in most cases they're just going to sell the token, right? And this is like going to lead
to sale pressure for this asset. So I'm curious how you think about that and like how you sort of deal with the, yeah, this aspect of, you know, the more you pay in rewards, the more cell pressure it creates in the restaking scenario. Yep. In actuality, the highest amount of pressure that you can experience is when you're paying for the stake in your own tokens when you launch natively, because just imagine you have first you're launching your own
token. So like you usually your annual APR is a bit higher than like for the classical assets because you need to like that there is more risk involved. So like if for Ethereum it's like 3.5%, new networks usually pay up to like well, 1510% in some cases like so I would take like 10% as a, as a metric. So you pay 10% for the the amount of like that for the 100 mil that you you have, you can't abort a lot of money. You can't get generate a lot of
fees. You can't bring B protocols because you're limited by the amount of like your market cap. So it's going to be a slow growth for you. Like if you're not viral immediately, it will take you a couple of years to get on board enough protocols, enough networks like boost your market cap that like you can actually on board them. So like at least for like one bill or two bill and it's you're going to be paying 10% like on your tokens each time. So you're going to be like
diluting your tokens. Let's take the case of like using risk taking first. You can use mechanisms of V tokens points or other mechanisms that to to postpone the actual cell pressure on your tokens by months or like year if if you have like really good user base that understands that. So no pressure at all in in this optimization, you can use dual staking for the optimization of like and motivate people to stake your native tokens to get this proportional amount of
rewards to say Etherium stakers. You can use other like million mechanism for that. But let's let's imagine you don't like you don't you're not clever at all. You're not going to be using any of those, OK, like for Etherium stakers you can create like you, you can use same if token like say around five times, right? This is like the the threshold that we are looking at right now five times.
So each network for you to get the same amount of APR can like can provide APR, say like three times as low. So you only need to pay 3% for the amount of stake that you receive. But you can start with couple of billions in ethereal if your your system requires that. If it's an Oracle system that's going to be like you already have like a good BG connections to say Ava or other protocols for them to use your price feed and you immediately start with like your system secured by two bill.
Yeah, you're going to be paying for like 3% for that in your token. But again, there are a lot of optimizations for that to counter the price pressure or
eliminate it all together. And you you test your product market, if you don't scale immediately well-being safer then you will never like be. So even without optimization, yeah, like mistaken will just divide like by the order of like by the mistaken ratio divide the amount of like cell pressure you are going to be experienced, experienced. I actually don't, I really don't agree with this.
Like let's take the example, right, You have a company and the company has shares and now you do a stock split and now instead of one share, everyone has 2 shares. Like did you really change anything? Not really, right? It's just everyone has twice as many shares. They're worth half as much. The market cap of the company is the same. Like I think staking, like on a very simple level, if you have, if you pay staking more, it's in your native token.
Two people already holding your native tokens is just kind of like a stock split. It's sort of like, now there's a little caveat there, right, which is that some people are probably going to need to pay taxes on their stake rewards and then they will have to sell some of it. I think that's that is a factor. But still like you're, you know, for the most part, you're paying more rewards. It doesn't mean you have. It's not an actual cost because you're paying it to your token holders anyway.
You're paying to a portion of your token holders. That's like start, you're splitting the stocks for like less than half of your state, less than half of. Yeah, you, you do. You do have some redistributive effect. That's true, right, Where you basically redistributing ownership from those not staking to those staking, which you know, you can think about whether you want that or not. It may not be bad, right?
Because like, who are the people who are not going to be staking and maybe short term holders, market makers, traders, things like that. People that are using this in Defy, say, people who are like actually using token to like and you need all of those like I I wouldn't like value one more than the other or you don't want to proportion of like more than half of your tokens to be staked ever. Like this is that we had the systems that that were designed specifically not to allow for that.
Ethereum was trying to counter that like at at all costs because like that, that's that's how you get that, that blockchains no, like the, the stake amount first. Yeah, like let's let's let's like go argument by argument. So it's not a stock split because like only a portion of your shareholders are splitting their tokens.
OK, sure. It's different in this regard like by a lot then like the actual mode of transport there is like validators and stakers sell their tokens all the time, not because of taxes, but because they want to hedge the risks and they need capital. Like no, like we, we, we have
analytics for that. Like it's pretty like it's pretty well well researched and yeah, here and it's like it, it's really like once you launch and once you actually have stakers, the mechanics of rewards is it's kind of hard to update for networks. Like for networks launching with restaking, it's a bit more flexible because they have like they have they they have an economic security base that is
outside of their own token. Immediately they experiment without people actually ever risking their money because they have like Ethereum to to rely on for for at least for bootstrapping face. And then they can stimulate the the same behavior, but with local periods and like a lot of other mechanisms that are going to be doing the same thing that you you're just mentioned, but doing them on the algorithmic level, not on like oh, believe in our like operators and
validators. They're not going to be selling or stakers. They will like that. That's all they do. No well, except for like polka dot ones, because most of them were like non non existent at the time. They're like that accounts that accounts don't sell. Other than that, yeah, like you, you, you can create systems that are way more sustainable that
what we have right now. Because like there, there there's going to be like mechanisms that are will reward the behaviour that you've talked about and this actually will become like less of a payment. Yeah, I definitely agree that like the flexibility here is very appealing, right where you can like experiment with a lot of different. Now I I think my other thing here where I also have a bit of AII disagree to some extent with one of the key narratives around
re staking. And you also like mention it. You're like, OK, some chain launches and you know, they only have like 100 million market cap and you know that's somehow a problem. And if you say like, oh, now you have like 2 billion that's sort of securing this chain. It makes like a material difference. I think in like, you know, in the history of proof of stake, right, we've had tons and tons of proof of stake network
launch. I'm not aware of a single proof of stake network that, you know, failed because, you know, the economic security wasn't high enough and then it got, you know, attacked or something like that. And you know, you made the example of oracles right now, OK, you may have an Oracle that's now securing a lot of
value. But I mean, if you take the biggest Oracle chain link, I mean chain link, for the longest time, even though the chain link token had like huge market cap, it didn't actually secure any of the Oracle feeds, right? It was basically APOA system. Or you know, to give another example, you know, there's like Noble chain in Cosmos issuing USCC again, there's not even a token there. It's there's actually 0 economic value. It's like proof of authority chain as well.
So I think even even in those systems where you do have like, you know, some very high amounts of value at risk, you know, if, if Chain Lake now said, OK, it's 10 billions of dollars is securing these oracles, does it really make a difference to people who really care? So I, I, I feel like the, the degree, the number of cases where having like more economic security, that's like securing a system being like a major driver of success. I think it's extremely small.
Yeah, it's not a driver of success. It's a driver of like first it's a perception driver and then like the the examples that you mentioned are, yeah, like chain link where it was operating under pro authority for a long time. It's a first mover advantage. Now we have networks that are like actually fixing a lot of those because pro authority requires being permissioned and being permissioned requires decision making for every network for every price feed because you're the one who who
who's making that decision. That's why like new newcomers are like eating the cake of chain link in a lot of ways, because on actual economic security, their permission permissionless systems can be built. So we have like other optimization. Poor authority is not only bad because like it's unsafe, which which that is, and proof of authority and small validator sets that are controlled by networks.
They're not like they're not, they're not like they, they have like examples where they stole people's money. Like I remember a few of those. I, I need just need to remember names. There were like a really small networks that track their users with the small operator set that was controlled by them. The biggest example of centralization of operators is EOCR. It was like a long, long time ago EOS. Yeah. Yeah, yeah, yeah.
So like they had like operator said that was really small and they were attacked by it multiple times. We had examples of that and industry learned their lesson now like small cap low, like low footprint networks, they're not getting traction not because like that they're not getting hacked. They just get perception of not being safe enough. And for Oracle networks, yeah, that's why chain link were like the perception that it was safe help them to be market leader for a really long time.
And now this perception can be counteracted by the actual economic model. So newcomers were really having a really hard time competing with changing because of the perception and really good track record. And this is like the the flexibility and optimization and go to market. This really jumps is is like innovation speed booster markets that were like gate capped by a reputation for a long time, as well as like the operator markets as a close, a semi close club.
They can be unlocked with risk taking because you can get the same economic security and the same like you don't have to have the same reputation, but you can have the same economic actual economic security as the bigger networks immediately. And I think like this is really, really powerful. And yeah, like, but those are like the Oracle network and POS chain. They are that they're not like
the flagship cases. They're really like I, I hope I explained a bit like why does why, why does why, why is this important not only from the like pure security perspective, but from the traction testing and flexibility perspective. But let's say like you have, say, pre confirmations or anything that like works with the like hundreds or hundreds, thousands or like millions of proposals, right? Be it's pre confirmations, be it immediately, be it something
else. If you need a huge operator sets to be secured by some like by by by some tokens, if you just have staking, you need to like for them to be secured. I don't know, like by hundreds of billions of dollars, like the same as they use for their like part of the, the, the stake that they're going to be using for their actual proof of stake operations. And with this taken, you can be like secured like 100,000 proposals can be secured by like 1 if you do more like 10 if you do.
And that's going to beat like we'll, we'll, we're still seeing the, the risk taking cases emerging. But even like the worst case scenario proof of stake network, I like I explained how it can be like optimized a lot as well. Yeah, yeah. Well, I would say let's talk a little bit about the architecture of Symbiotic. Like what does the system actually look like and what are the different Yeah components and and actors in the system? Yeah. Well, it has like basically 3
participants. First is takers, that's so that give give their stake to to networks through operators, operators, networks and stakers. Networks require economic security to launch and decentralize their network. They are receiving that from stakers through operators with
their operator set. And if network is OK, like network is the arguably the most important participant, if it's OK with the amount of stake that they receive and the amount of like the the validator said that is attached to that, they opt in and they start start to be operated by those operators through this stake. If any of the operators violate some rules of the network, network can slash them.
If they don't, network can reward them their their role of restaking protocol or shared security protocol in our case is to make sure that once the like the commitments are made that this is the mode of work between those three that complete commitment are commitments are like commitments are followed. OK. So you have stakers, operators, you have the networks. So let's talk through this from to perspective maybe of the stakers and the operators.
So if I'm somebody who wants to now stake and I want to earn, you know, additional rewards, maybe I have some other interests like I don't know, maybe I find some of the projects interesting, the building on Symbiotic or something like that. Like what is the flow here? The the staker will then choose some network to restake to and then for example choose maybe some operator that they trust Or how would the state? What does the Staker experience
look like? Yeah, well, most of this this experience will go through LRTS, but if like say an example of that like the the staker wants to to manage everything themselves, they will create a vault, a vault, the vault will have like. Lock up period that corresponds to the networks that they want to wants to stake to it will have its own or like separate resolver that's basically the safeguard against the unlawful slashing.
And through this resolver like it's it will select the operator said that it's wants to delegate to and the network it wants to opt in and through this evaluator set and once this request is made network can agree and select this stake to be operated. OK. So you mentioned a lot of it stake would go through LRTSLRTS, meaning like liquid restaking tokens for those who follow the eigen layer. You know, you've had that there, like ether fry, Renzo and stuff getting a lot of traction.
How, how do you imagine LO TS will work? And, and does this mean basically as a as a staker, I want to benefit from, you know, when we take some assets, I want to use symbiotic. I would then just basically, for example, take my EF and deposit it in an LOT and I get some sort of, I don't know, Renzo, swell, Etherfy, something LOT token and then on the back end what happens?
On the back end though, did this take through the vault of LRTS is going to be deposited into vault on symbiotic side and it's going to be delegated to network through the operator set by the LRT management management team. Yeah. And like we already have like around 1212 LR TS. So like this is how it's like this is not an unvalidated concept. We already received most of our stake for LR TS because it's just like maybe more optimal
that way for most users. So, and then the LR TS would basically they would then decide, OK, which of these networks do we want to secure? They would then say, and they would have some existing operator set, let's say they have like 10 operators or something. And then they would say, OK, now we go to Network A and we say, OK, we bring our 10 operators, we bring $500 million worth of economic security and basically negotiate some kind of
compensation for that. And the network will receive several requests for that from different LRTS and we'll select the basket of LRTS, their own users or like the, the yeah, the sump proportion of it. So say like 5 LRTS 200 fifty 552,003 thousand users for outside of LRT and this is going to be the set of stakers for from the beginning of the network to be changed later. Right.
So I think what is interesting is that LO TS kind of become this also collective like bargaining organization know where they would like negotiate sort of on behalf of both the stakers and the validators with operators. Yeah, they their job is going to be to fight for for the most optimal stake location. Yeah. I expect a lot of optimizations to come from LRT fights once they actually start. Yeah, 'cause they are obviously also going to be in, yeah, very serious competition.
Yeah, of course like that there is limited amount of networks at least from the beginning and there's going to be not a lot of rewards for them probably from the beginning as well. So like all artists will will have to fight and choose and try to be on boarded into as many good networks as possible because other other than that they're the only ones like spreading their talking around and there is no like inherent reward being like beneath them at the base layer.
And then you guys also have some plans, is my understanding too, because right now basically Symbiotic is a set of smart contracts on Ethereum. Of course, today's staking happens all over the place in many different ecosystems and networks. How do you imagine that in many cases Ethereum remains as this kind of place where some of this coordination happens of like stake and operators and LRTS? Or do you imagine that you know, this will be kind of expanded to
different networks? Yeah, Symbiotic is in every network already like the. This is by design the fact that our trust route is based on Ethereum and we use like Ethereum as like data availability and execution
layer. It doesn't mean that much like we can, we symbiotic is designed in a way that we can use like tokens or on like almost any chain and like we don't have to transport them to Ethereum. Even the assets on like Cosmos, the other chains that the assets on like on the Solana or any like almost any place else can be used. This is the unique feature of restaking kind of like shared security, at least as how how we designed it. The fact that you don't need immediate bridging or fast rapid
bridging. You just need to do to asynchronously slash something and make sure that something is still present in the escrow or some deposit contract on other chains. It enables you to to use assets that are like outside of Ethereum easily.
And that's how we designed. We have this collateral abstraction and dogs like it's like a bit of a technical concept, but basically like a lot of a lot of other outside ecosystems are building on us. Yeah, the registry is going to be stored on Etherium. But like everything else in terms of ecosystem, in terms of LRT, in terms of reward, reward management and slashing can be done on their ecosystem without like any vampire attack from Etherium or something like that.
So as like as current thinking goes, we'll see about like the future, but there is no like actual need for Symbiotic to be deployed anywhere, anywhere else. We just lose like some networks of effect. So like let's say if you say like, OK, some Solana related thing would use symbiotic, you guys would not need to deploy some kind of smart contracts on Solana. Is yeah, is there will will the, the the supply side for the liquidity will need to have some escrow contract or a deposit
contract. That's burner contract that yeah, that needs to be like unwrap and burn if if the message is received from the from the Ethereum side. But no, like the core of Symbiotic can stay on Ethereum and it's like it does need to be deployed as soon as you want to use some like some collateral from other chains, you just deploy the this the like the the simplest of messaging players when contract and you're good to go.
If you want to get have rewards on Solana as well, you'll need to deploy like Solana contract of rewards. But the registry is going to be taken from Ethereum because like actually you don't need like there. There are there aren't a lot of requirements to their base layer for there is taking. It doesn't have to be like fast in terms of finality. It doesn't have to be cheap.
It's just needs to be like as have as much of network effect as possible and to be like as efficient of orchestration layer as possible. And if you do miss that, that's why we designed Symbiotic to work on if you do L1, but in actuality like especially if like you have canonical bridge or something or IBC, you can use it anywhere else. You you don't need to deploy Symbiotic to every ecosystem like it's already there basically. What about slashing? How do you imagine slashing to
work? Well, it's going to be different for every asset at least like we we're just exploring this this part of the wood slashing. Yeah, like it's the the main part about it is that it's going to be it's going to be determined by networks first of all, like this is the important part. You don't have to like there,
there is no one-size-fits-all. For some networks like we'll there, there's going to be like algorithmic slashing for some reason for some networks, they're going to be subjective slashing because you can't verify like the the actual active misbehaviour. For other there, there can be consensus slashing. The the fact that we designed it really flexible manner. So like network can can can deploy that any in any way that they want. The tricky part for that was like, how do we make it safer?
And that's why we designed the resolvers that are going to be like really important at least for the beginning to be to, to to help mitigate some bug related or like abuse related slashings. Resolvers are going to be veto committee that are going to be standing between the network messaging of slashing and the actual stake. They can be like again that really flexible algorithmic ones prove based ones or so this. Also chosen by the network.
The resolvers are chosen by both like they they are chosen by the pair of stakers and network. They both agree on that. The resolvers that are going to become connected through they can be different. They can be like tiered in terms of like how they they work. There are different configurations from the start just to like safely innovate in this category of of of protocols. I think there's going to be a committee mistakes mostly.
And then most of them like will will go resolver resolver less and like probably like or or go into route of like proof, you know, Zeke proofs or fraud proofs, but that remains to be seen. Yes. I'm actually also curious if you think slashing is important. I mean, if we look at the, you know, the history of proof of stake, right? The first of all, if you look at in the amount of money that has been sort of slashed, it's very,
very, very tiny. You also had the case that actually, for example, when Cosmos launched, Cosmos today has like your ATOM, Cosmos Hub has 5% slashing, so 5% of the state roads can be slashed. Actually, I remember when Cosmos launched, the idea was, oh, we're going to launch like that because it's, you know, beta, it's new. But then later we will increase. But of course it never increased and honestly nobody ever pushed for it to be increased.
When Solana launched, they were also, oh, it's beta, it's new. So we are going to launch without slashing. And then totally actually at the time was talking about, oh, maybe we're going to have 100% slashing later. And if you double sign you get. But today, Solana many years later, it's become very, very successful, very big proof of state network and it doesn't have any slashing. Avalanche doesn't have slashing, right. So do you think slashing is important?
Do you imagine that like there would be regular slashing events or do you imagine like do you think there also might be a lot of chain set or chains or all these centralized systems that symbiotic that are using symbiotic that don't use slashing at all? Yeah, yeah. I expect, I expect some category of networks to to not have slashing at all for them. Stake is going to be just gatekeeping like mechanism and voting mechanisms.
You get enough reputation for people to vote for your network because the money are still limited for their supply. And you get like to gatekeep the operator set like the basically the delegation without slashing. For some networks. It works like in case of Solana, by the way, like the it's the only major blockchain that was not available for like days on end. So I think that that like no slashing gruel backfired for them like multiple times.
And I'm like, I'm sure that we'll see more fun news from them as well in the future. Well, I, I, I don't know if that has a lot to do with the slashing though. The Solana downtown, I think that's different. Like if actual people were slashed I think they would take this outage more seriously. Yeah. Yeah. But yeah, for some networks
slashing is inevitable. Like if it's straight up, we, we have like multiple threshold networks, security and a lot of stake and a lot of like like wallets that are really like high, high volume for Oracle network slashing might be like really essential if their oracles are like option based or
like calculation based. And for, for some networks, even the eco processor networks, unique slashing is going to be really important because if they don't perform within this, within this like some small window, they might deliver a lot of like a lot of harm to users. For a tester network that this might be really important because like what what's stopping you from like issue and attestation that like you receive transaction and transactions finalized when you
actually don't have that? And like they're like exchanges are going to get hurt or some people that are going to get hurt in process or like arbitrars. Arbitrars are going to be hurt. Yeah, for pre confirmation, it's obviously a big deal because like people if they don't have like the other like somewhere old, like included in the block, they will lose a lot of money. So that they might be immediate
harm. For blockchains with like with modern consensus mechanisms, yeah, the harm is like limited a lot. So they might like skip their leg day and disable or not enable yeah, not enable the the
slashing call together. I think the will the the the shared security will help find this like sweet spot because like the difference is going to be quite noticeable just because like the the overall experience will be more streamlined and you will you'll have like 2 networks launching at the same time, 1 be slashing the other one is not without and see like how it goes from both sides. So what about immutability of
the symbiotic contracts? Is that something where you think they should be like fixed, immutable? Is there a rule for governance there? Yeah, well, like it was. This was the hard part, to actually design the system to be as flexible as it is, but still immutable at its at its core. Like it took us 8 months to do that. Yeah, but we did.
As with everything else, the goal was for us to cater to as much possible network types and like business type types and token types and participant types as possible. And we just wanted to eliminate the government's risk for now. Yeah, there is no way to upgrade the contracts because like we, we don't want people ever being concerned with that.
This is like within the same trope for us to, to reach optimization as with the highest, the highest rate of like with the, with the highest success success rate possible. And for that, yeah, like there there's no way for us to introduce Peace 1st and there is no way for us to upgrade the contracts. So yeah, like there is no, there is no like governance inside, at least for the core part of the contracts. And then do you imagine, I mean with Uniswap, it was kind of like that too, right?
It was V2 and then V3. So do you also imagine there will be sort of later versions of symbiotic like similar to like how Uniswap upgraded? Yeah, that might be one of the trope for US, one of the possible pathing. There might be others like the core that depends on like how
the actual market starts. If we were like amazingly diligent during this like 8 months that we were like developing the architecture and if we were so great that we designed the system to work for V1 forever and account for every possible use case, then yeah, sure. Like V1 is going to be it for a while. But we, we have like that they're 100% going to be optimization in auxiliary systems and like well,
upgradable parts. Then the core is going to be just widely reused by everyone forever. And the like, the actual value add is going to be reached through auxiliary systems. If like we identified like, and this is like probably closer to what will happen if we
identified we haven't yet. Like Full disclosure, we for now, the core works ideally like it works great, but like the, the when the industry starts and then matures, if we identify something, there is of course going to be like we, we, if we identify value at that will warrant people migrating from V1 to V2, same as Uniswap. Of course there's going to be an upgrade path for us. It just designed to be like migrated as like secure as possible.
So people would would actually need to opt in into every version. So currently, what are some of the things that people are building on Symbiotic that you know you're most excited about and you feel like they're the best examples of how you want the system to be used? I I don't pick and choose. This is the neutrality part. Like I love all of my children, but equally. But yeah, we have like almost everything we were like out for. In the wild for around like 3 1/2 months I guess.
And since then we go to around 40 networks, 30 something like closer to 40 or already I think like couple of pre confirmations, couple of data availability, 3 or 4 fast finality or two Oracle networks, one or two agent based network for inference, ZK ecoprocessors, the couple of thresholds, couple of no one I think fully homomorphic encryption network.
Yeah, like basically everything a role kit for roll ups on even on Celestia like several TASI for, for substrate based like roll up dual deployment and network deployment, like several SDKS. Yeah, we have basically every every primitive in terms of the centralized networks like already on us, they were like building on us Excited for all of them, but more excited for the ones that launched before 2025. Like this is the the the only metric that I can score people over.
Like are you going to be actually launching before before the end of the year or like or after? Because that each, each network that launches helps the others to to see the light and to get the optimization. Because if you consider currently like the 0 AV s s or
networks are actually launched. So if you're considering being launched centralized, being going through the centralization journey alone with like your team only or launching with shared security, it's not an like easy decision.
But the more networks actually launch, even the Avs is the more, the more of like the when they start launching, the more of them launch into full production, the more you'll have the menu that you can select from and get inspiration from and to actually like to sway you in the direction of shared security. And that's what we want. So you just mentioned timeline. So what are what are the main milestones that are coming up with Symbiotic?
Yeah, We're going to launch Mainnet soon, getting toward that, towards that for a while. We just wait for networks to be ready because we don't want anyone to rush in and it's going to be full production. So like every functionality available from our side, yeah, like this is going to be a big one. And then, yeah, to scale up, Orient teams better Orient help validators to and operators to be as efficient as possible with this new paradigm.
And yeah, like overall coordination work, we have multiple teams building resolvers, teams building SDKS, teams building frameworks for networks to reuse. So yeah, after mainland. And like we're currently getting to a point where the actual good questions are starting to be started to be asked. Not the conceptual ones, but like actual UX questions like what's the local period that I need to use like to get the most alerties? What's there? I don't know like how do I
approach validator? Like validators? I don't want to talk to like each one of them, other consortiums of them are the groups of them I can reach out to. Like I, I don't want to, to have like 12 chats. I want to have one. Is it possible for me get the best like validator set available for with just one chat? And like we are getting to optimization part of it because like there are a lot of like concept work, but in terms of
like, do we need that at all? Like the, the, the a lot of questions that people ask when they don't have an actual problem to be solved immediately for networks, it's like it's applied, like really applied. They, they want, they just want them like a, OK, how do I get the best operator said that, that investors are getting off my back immediately. How do I get to the the stake amount so I can like launch protocols without and tell them that they have enough support?
How do I get the the the best like the the the text tag that I can immediately use and like develop as little as possible to get to the product market feed that I can actually like start testing. Cool, Excellent. Well, thank you so much, Michelle. It's been it's been really great to have you on.
I'm excited. I think it's, I think it's, I think Semioli is going to give rise to a tremendous amount of like interesting experiments around staking around how to operate, how to launch, how to operate, how to secure decentralized systems. And yeah, I'm, I'm super thrilled to see like what, what's going to come out of that. So thanks so much for coming on and thanks so much for, yeah, giving us this update. Thank you. Yeah, interesting, interesting questions. Thank you for that.
I am super happy to be here and super happy to spread the mission and ideas.