"Really Crazy Stuff Will Happen With AVSs", ether.fi Founder Mike Silagadze

[@TravisFont]

The concept of AVS is correct, and it is in its early experimental and conceptual stages. The problem is RE + stake (reusing the already staked) Ether, which just inflates and creates additional derivative and synthetic layers that are borrowing from each other (hence security). This design is expected to have a failure (this is the penalty design). This will cause a huge problem for those who are using these liquid tokens in DeFi - everything becomes liquidated with leverage (onto itself). Nobody is talking about this in detail.. just the concept of tech itself. Making Ether worth more cannot occur by recycling it, but by making it more unique. Whether purchasing or gaining it from already staked Ether, it should have one use case that's specific (unique). Choose whether to stake a chain, stake a protocol, stake to an AVS, lend, trade, etc - one specific use case allows more Ether to exist to add functionality and a strong sense of security AND safety.

[@GentlemanJamesWin]

I don't think Mike is correct at 43:55. ETHx, OETH and mETH are redeemable, I think others are as well.

[@gmensah2008]

This was a brilliant interview, great questions to really push the thinking around this new vertical. Amazing and eye opening content!

[@AndrewSaul77]

I really worry about the risk here. But the low risk not the high risk. I'm fine with any products that are high risk, high return in LRST. It's the ones sold as low risk i worry about. There's zero way anyone has to assess risk so the idea you can them go and market them as low risk because validators care about their repetition is crazy. Never in crypto has reputation stopped any losses when there's a market collapse.

[@Terabbaiseedhemaut]

Hi cami and team, was scrolling through your podcasts and very first was with OMG network's founder.. Just needed your intake about is omisego or omg still a thing or a fundamentally decent project? Any 1 liner answer in comment or in your news digest or in any next video would be profoundful. Thanks

[@mattlorig]

Mike's statement about LSDs not allowing users to withdraw ETH is patently false. Literally every LSD protocol allows users to withdraw deposited ETH.

[@punkasaurian3055]

I took a second to fact check you. I just checked Renzo, since they are the next biggest LRT. No withdrawal function on dapp. And Community mod confirmed no withdrawal function. I'm not bothering with the rest, but so far Mike is checking out.

[@GentlemanJamesWin]

Yeah I am 100% sure ETHx, OETH and mETH. I think most of the other big ones do to.

[@mattlorig]

@@GentlemanJamesWin I think it's possible the Mike meant to refer to LRTs (like rsETH, ezETH, etc.) when he said they do not allow withdrawals. It is true at the time I write this that neither KelpDAO nor Renzo (or any other LST protocol) allow token holders to withdraw the underlying ETH. But, in the interview he said "LST" and referred to Lido's stETH token. So, what he said is false. But, it could have been just an honest mistake.

[@KevinNdhlovu]

🚴🏃

[@Mohnstrudel]

one guy sits in jungle? Had to escape? good sign?

[@bubblybull2463]

To me re-staking makes no sense for Ethereum and puts the whole network at tremendous risk. It’s like using the bricks of the foundation of a building to use in other constructions : it’s bound to make eveything collapse… If I’m correct in that assumption then this restaking business is borderline criminal because Ethereum is the best thing that happened to crypto so far and it should be preserved at all costs…

[@mattlorig]

Why do you think restaking will make the entire system collapse? What is the specific risk that you think is existential?

[@bubblybull2463]

@@mattlorig First, it is not accounted for in TVL, which already rigs the game. Second, imagine the restaking protocol goes belly up, just like Celsius did, and all these restaked ETH is lost? Then all the staked ETH will serve as collateral and will have to be withdrawn (this could be forced out by judicial judgement) or given that these staked ETH would have lost value for Ethereum it could simply make the price the Eth plunge. Staked ETH is the locked treasury that secured the network. If it is allowed to be played with, then there is no security. To me, this is madness