Content
@
https://warpcast.com/~/channel/eigenlayer
0 reply
0 recast
0 reaction
Yash
@0xpanicerror
The new /eigenlayer redistribution model is a game changer in designing consensus protocols. In a PoS network you must develop an incentive structure such that it's in everyone's interest to follow the rules. This is achieved by setting (cost of corruption) > (profit from corruption). But this assumes that everyone plays rationally. If a malicious actor decides to attack the network nonetheless, stakers will still lose money. ELIP#006 ensures that these slashed amounts can be redistributed amongst the affected parties to make them whole. This elimantes any risk for honest actors because even if users lose all the extractble value, there will still be enough slashed assets to make the creditors whole. This is analogous to over-collaterilised lending protocols like Aave where there is no risk of borrowers defaulting on their loans. Risk-free Insurance!
2 replies
1 recast
4 reactions
Satyaki
@satyaki44
can you talk more about applications? what are the defi insurance protocols possible on eigenlayer?
1 reply
0 recast
0 reaction
Yash
@0xpanicerror
of course ser. Think of a lending protocol using an Oracle. If the oracle service fucks up, it can cause user funds to get liquidated. Building the oracle service as an AVS can solve this by redistributing the slashed funds back to the users. This way, there is a garuntee that users are not harmed and the attackers are punished. Formally, a system like this is called "strongly crypto-economically safe" as coined by @soubhik You can read more here: https://arxiv.org/pdf/2401.05797 Also there's a really cool protocol building around this you can check it out too: https://x.com/juansamitier/status/1902797691912114668?s=46&t=LfGQDCifCSDGK0GRDYzQ6A
0 reply
0 recast
0 reaction
