Restaking Alignment with Vitalik, Sreeram, Tim Beiko, Justin Drake, Dankrad & Jessy

What are the implications of restaking? Not every Bankless listener will be prepared for this conversation. This one is a hard one. If you want to be adequately equipped for the conversation that awaits, we recommend listening to the Bankless episode we did with Sreeram a few weeks ago. That episode will get you up to speed to understand some of the nuances and problems that are discussed in today’s episode.
Because, today on the show, we have the largest and most gigabrain panel that we’ve ever had on Bankless…Vitalik Buterin, Justin Drake, Dankrad Feist, Jessy (aka 13-year-old VC - that’s her pseudonym), and of course… Sreeram Kannan himself, founder of Eigenlayer and perhaps the creator of restaking…all moderated by Tim Beiko!
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TIMESTAMPS
0:00 Intro
4:45 Setting the Panel
8:51 Jessy’s Restaking Thoughts
10:20 Justin’s Restaking Perspective
11:40 Dankrad’s Restaking Views
12:30 Sreeram’s Restaking Arguments
14:00 Why Justin is a Restaking Doomer
18:30 EigenLayer’s Restaking Architecture
22:05 Restaking Builder Hooks
25:05 Vitalik’s Restaking Concerns
30:05 EigenLayer’s Acceleration
32:50 Sreeram Addressing Vitalik’s Concerns
37:48 Ensuring Restaking is Aligned
46:04 Reputation Systems & Alignment
51:35 Ethereum Protocol Complexity
59:00 Credible Neutrality
1:03:30 MEV Boost & PBS
1:07:10 One Shot Signatures
1:09:10 Closing Thoughts, Arguments, & Next Steps
1:16:30 Closing & Disclaimers
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RESOURCES
Sreeram Kannan
/ sreeramkannan
• EigenLayer Will Change...
Vitalik Buterin
/ vitalikbuterin
Tim Beiko
/ timbeiko
Justin Drake
/ drakefjustin
Dankrad Feist
/ dankrad
Jessy
/ 13yearoldvc
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Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here:
www.bankless.com/disclosures

[@David-Pang]

Gotta give respect to this channel for wholly turning the conversation over to the subject matter experts and getting out of the way (not even reserving a vid chat spot). Having the good judgement of when to talk/when to stay silent is rare among channels and hosts these days. Respect.

[@dfnope]

Totally agree, props to Bankless for giving the mic to Tim, but that's a easy decision given how good Tim is.

[@rifkiamil]

❤❤❤

[@johnstadler1341]

That was an amazing segment. Please do not wait 12 months for a follow up. Seriously great job Bankless! Thank you.

[@Skyfire-x]

This is the Ethereum community at its best. An open, honest discussion about potential benefits and consequences of a new idea. Unlike the Bitcoin maxis and the Taproot wizards.

[@wardogsmokes]

​@JustMe-in1lt at 1:13:20 they talk about restaking leading to centralization

[@flacrwth]

Further this one guy mentioned: for him it would be okay to destroy protocols if they start to threaten the staking security. This is a very authoritarian viewpoint which I am shocked to hear. Clearly an "Expert issue" to me.

[@andrewmcmurray8081]

Show actually begins around the 5 minute mark

[@toon_gnarizard]

This is the power of Bankless. To able to assemble such a quality panel to discuss such an important topic is nothing to take for granted

[@_Pickle_Rick_]

brilliant discussion - definitely seeing parallels to early mev talks

[@theonlyconstantischange123]

Super interesting, thx guys

[@google_silvershieldcollection]

Great panel great content will definitely relisten a couple times

[@Pablojosearroyo]

Tremendo 👏🏼👏🏼

[@nextalphaa1222]

fantastic conversation, Ethereum is the future of france

[@theg10055]

This was amazing

[@an17-j4k10]

this entire discussion made me feel incredibly dumb. Time to get learning ig

[@Rawsavon]

Much more of this type of content and less of the Bankless bloat and shilling, please!

[@alexg5460]

When do they shill? Hahah just angry for no reason be grateful for there content

[@Rawsavon]

​@@alexg5460 I'm not angry in the slightest. I do get disappointed with them at times, but that is only due to having higher expectations for them comparatively speaking. I compliment their videos as often as I critique them. Though I will say I firmly disagree with your 'be grateful' mindset as this is a business transaction - we give up our most valuable resource and one that cannot be replenished in our time, and they provide content that comes with ads, sponsorships, partnerships, etc for which they are compensated for. To answer your question, one of their most recent videos this week was nothing but a shill video (ZK stack). David stated that Bankless serves as advisors, and he also stated that he guided them through the video. There was no pushback, there were no critiques, there were no counters. I like the tech and am optimistic about it, but, personally at least, I want to hear the counters and critiques and areas of need with my news (even more when it is something I support). They also promote exchanges and wallets...which they should not be doing IMO. They/we might like the companies involved (like Kraken), but we have no way of knowing what is going on behind the curtain. Bankless' reach and the possible fallout is too great for them to be shilling wallets and exchanges. I wonder how they are feeling right now about their Ledger partnership...just like I wonder how Cobie, Ledger, and Nathaniel Whittemore are feeling about their Sam Fraud deals.

[@SonGoku-df1fw]

Vitalik is in the bathroom

[@cecilechau7932]

Systematic risk - contagion - restaking - collateral -centralization concerns - delegated stakers - security concerns: share keys

[@cecilechau7932]

Changes the incentive landscape

[@cecilechau7932]

Incentive design

[@cecilechau7932]

One side: strengthen network effect; another side: centralization - systematic risk

[@dexterous187]

I wonder why I missed this episode.

[@Josiah_Harder]

Vitaliks comments on his confidence in staking security need to be addressed. I say this as a believer in Ethereum and not one of these salty Cardano maxis. Vitalik and the other dev who made the "sausage" comment need to address this.

[@guitarislife01]

Vitalik, just some guy 🤣🤣

[@jackseves4559]

Where has ryan been

[@CulllegLee]

wooooooooow

[@56Hoperoad69]

Only 8k views and it had Vitamin. Sad

[@DonteeWeaver]

👀

What I want to know is: what does Paul Sztorc think about this? lol

[@nilsdannemann]

Good discussion. Thanks! Don't want to bash ETH, but this makes me think that all that time that went into research on Cardano was time well spent 🤔 Anyway props to the ETH community. Let's all get together and build the future!

[@vtr8427]

Eugene another layer of abstraction oh buoy.

[@admazzola3569]

why not make a special kind of private key that can ONLY be used to attest as a validator? like colored private keys .

[@PatrickAyelle]

Wish granted.😂 that’s how it works today

[@humbertohernandez281]

Just hearing vitalik I know this restaking is getting shut down

[@paulperegud6000]

Sreeram is wrong for delegated case. Ransom attack can’t be addressed by contract immutability. Stake is the only thing holds operator honest. If operator attacks owner, owner is fried.

[@geldz]

gets quantum 42:04

[@abc76580]

Thank you was looking for exactly this comment

[@gogodiego]

no way is that jessy

[@monkeygames1771]

can't believe how small this community really is 😂😂😂😂🤣🤣

[@PatrickAyelle]

28:59 unfortunately, when people don’t understand the technical conversation taking place they use quotes waaaay out of context.

[@HasDanielDay]

Ethereum is having an identity crisis. That's a reality we need to face. We have ETH devs say on the record that Decentralization Doesn't Matter, and Vitalik is showing concerns about the security of staking and the centralization nature of the restaking. Whether we like it or not, want to admit it, or ignore it, Ethereum is getting increasingly Centralized. And that's not even the biggest problem. The first level is infrastructure centralization. Infura runs a disturbing % of transactions connecting users to the apps and the Ethereum Network. Around 80% of transactions go via Infura. This alone is a single point of failure situation. Because of Infura, ETH can lose a core property, Openness. It happened already with Infura cutting access to Ethereum Network for IPs from Iran and Venezuela. Now they are getting saying that neither Decentralization matters. Is this what you signed for? Let's go on a deeper level. What do we mean when we say that a network should be decentralized? What exactly do we value? The fact that it operates on more machines? Well, I don't think so. The value is Openness. But why? Openness = Nonexcludability = Censorship Resistant = Permissionoless That's the whole point of Decentralization. I recently saw a great video about this topic. The thesis was this. Openness > Decentralization. It's worth watching-a fascinating perspective that made me think about what we mean by Decentralization. Here is the video: kzbin.info/www/bejne/eWmUdWl4btiafpo Decentralization doesn't matter! I agree with that. Openness is what matters. But how can you achieve Openness at a massive scale? Now that's a question worth asking. Go and look at what Saito Network is building. saito.tech/ twitter.com/SaitoOfficial

[@flacrwth]

Clearly had the same negative feelings when hearing this. Even though during the meeting, censorship resistance (openess) was mentioned as the core feature to be preserved while doing changes to eth.

[@DanielAlphaNovember]

ETH is an absolute no-go if the founders or devs don't want to stake all their own tokens in their protocol design. Appreciating the slow and steady approach by Cardano even though it endlessly frustrated me for years. Feels like there's mild panic behind the scenes over at the ETH camp. 😦

[@and1play5]

so this is just attack sreeram episode?

[@evelyndiaz8434]

I love this!. Please what is the best way to make money from crypto investments this period? Been making my research lately..

[@andrewmcmurray8081]

Sell your body for DCA money

[@danetorode9197]

Sooo... let me get this straight. Vitalik himself is too scared to stake on his own staking mechanism.... erm...ok

[@williamsullivan1160]

Vitalik has stated many times in the past he thinks hardware wallets are a huge risk (trusting the manfacture). He is simply stating he will not put all his ETH into a validator without using a multi-sig and its to complicated to validate transactions from a multi-sig right now on beacon chain. If your using a hardware wallet or anything else, it makes no difference to you and 99.9% are using a hardware wallet at most. The wallet is the weak point in his opinion and multi-sig is to much hassle.

[@danetorode9197]

@@williamsullivan1160 cool story bro

[@alexanderg9670]

The reason I lean more towards PoW than PoS is that PoW is first principles design and PoS seems to be reverse engineering from the goal

[@gilian2554]

The devs themselves don't even have confidence in the safety of the protocol and don't stake their ETH. Around 29 minutes Vitalik says so and Justin said in the past he doesn't stake his ETH (or not much of it) because he "knows how the sausage is made". How people gloss over that is crazy. Combined with block production becoming more and more centralized (LIDO and exchanges) and the low participation... Wake up people. Ethereum development has been failing.

[@andycason1560]

Wow!

[@IgorRoztr]

People don't like to analyze the details and want to delegate their thinking to experts. Pretty universal thing, only BTC has a chance of working

[@yesno103]

So ethereum still can't liquid stake and vitalik scared of staking 100% of his eth on his own blockchain Jesus lord smh glad cardano taking the a better a approach

[@williamsullivan1160]

Vitalik thinks hardware wallets are a huge risk and will only use multi-sig to store majority of his tokens but its to much hassle to validate transactions from a multi-sig currently on beacon chain. The weak point is the wallets in his opinion and multi-sig although secure is to much hassle. If you planned on using a hardware wallet to stake your tokens then that is the weak point and has nothing to do with the protocol. He thinks your placing to much trust in the manufacture as you have no idea what components are installed in there....based on the ledger news it sounds like he has been right.

[@yesno103]

@@williamsullivan1160 so why not have staking inside a hot wallet like metamask? Cardano has staking build in every wallet and we haven't been hacked at all

[@peter9910]

Clown Justin can "neuter" whatever he feels like

[@ARGWorldwide]

ETH is going go down as one of the biggest failures of our generation

[@gilian2554]

It's going to be a terrible look for crypto in general. People will have less faith in it and BTC maxis will once again double down with the ignorance and toxicity when the bubble pops.

[@MiguelMejia-ru4lm]

I remind everyone when a digital coin token stable coin is released it's because it works it has its functions and this is the point without the permission of the creator no one has authority to make changes period that is the fact and truth period so all changes are unauthorized

[@SecondJesus-ou9lq]

Bitcoin is the future, Investing in it now will be the wisest thing to do especially with the current rise

[@joeforeman3027]

Restaking? You’ve done the math obviously the yield doesn’t scale so manipulating value becomes necessary. And what’s the point? You have a JP Morgan subsidiary. Why call yourselves BANKLESS?

[@isacpinhao7152]

You are completely clueless about everything aren't you? Sad

[@aleemahmed6201]

waaa waaa

[@kushrajpurohit8125]

Lol why so much hate? You can also buy majority stake of any chain if you have the money which you don't so stop ranting like btc is owned by BlackRock, eth is owned by jp Morgan, the only way for a protocol like eth to be successful is to have a strong backing, there are million other shit you can choose from and be happy, i don't understand the urge to go to a random comment and rant just coz some shit is not getting attention.

[@aleemahmed6201]

@@kushrajpurohit8125 These protocols dont need big backers. They need a big enough community. Like all open source projects, ethereum is developed by everyone.

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[@S54VR6]

LMAO is this a joke

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