The Good Tech Companies - How EigenLayer is Transforming Blockchain: An Interview with Allnodes' CEO

Episode Date: May 21, 2024

This story was originally published on HackerNoon at: https://hackernoon.com/how-eigenlayer-is-transforming-blockchain-an-interview-with-allnodes-ceo. Join us for an enlightening interview with Konstantin Boyko-Romanovsky, Founder and CEO of Allnodes. Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #proof-of-stake, #konstantin-boyko-romanovsky, #blockchain-protocols, #allnodes, #eigenlayer-mainnet, #restaking, #storing-cryptocurrencies, #good-company, and more. This story was written by: @ishanpandey. Learn more about this writer by checking @ishanpandey's about page, and for more stories, please visit hackernoon.com. Join us for an enlightening interview with Konstantin Boyko-Romanovsky, Founder and CEO of Allnodes, as he discusses the revolutionary impact of EigenLayer's mainnet launch, the intricacies of staking and restaking, and the future of blockchain security.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. How Eigen Layer is Transforming Blockchain. An interview with Allnodes CEO. By Ashan Pandey. In the rapidly evolving world of blockchain technology, few names stand out like Konstantin Boyko-Romanovsky, the visionary founder and CEO of Allnodes. As a leader in the non-custodial staking and node hosting space, Allnodes has been at the forefront of providing secure and innovative infrastructure for both institutional and retail investors. With support for 77 proof-of-stake blockchain protocols and the hosting of tens of thousands of nodes, Allnodes has established itself as a cornerstone of the

blockchain community. Today, we are thrilled to have Konstantin join us to share his insights on the latest advancements in the blockchain ecosystem, particularly focusing on the groundbreaking launch of EigenLayers MainEd. This interview will delve into the significance of restaking, the critical role of operators in blockchain security, and the future prospects for investors in the crypto space. Ashan Pandey. Hi, Konstantin. Welcome. Could you please introduce yourself to our readers? Konstantin Boyko-Romanovsky. My name is Konstantin Boyko-Romanovsky, founder and CEO of Allnodes. I'm here to promote safe innovation and curiosity about staking and restaking. Allnodes is a non-custodial staking and node hosting platform that offers innovative and secure infrastructure for institutional and retail investors. With six years in the industry, we currently support 77

proof-of-stake blockchain protocols and host tens of thousands of nodes, 41,697, worth over $4.6 billion. In addition, we build and innovate for the blockchain community by offering complementary tools and RPC node infrastructure, making it easier for users and developers to partake in blockchain networks and build cool stuff. Ashan Pandey, Eigen Layer recently announced the launch of its Mainnet. Why do you think this launch is significant for the broader blockchain ecosystem? Konstantin Boyko-Romanovsky, for several reasons, Eigenlayers may not launch ISA significant milestone for the broader blockchain ecosystem. First and foremost,

Eigenlayer introduced restaking, which is not to be confused with compound staking or compounding rewards. A process of automatically or manually adding earned staking rewards back into the principal amount. THU CERNING rewards not only on your original stake but also on the additional rewards that were compounded. Restaking, on the other hand, is even more remarkable. Restaking allows users towards their staked Ethereum, ETH, or liquid staking tokens, LSTs, to secure other blockchain protocols to secure various blockchain projects, known as actively validated services, AVSs, which can range from blockchain bridges to exchanges, oracles, and more. By doing so, they receive extra compensation

from these services in addition to their initial staked amount. Another way to think of it is a shared security model. Ethereum's staking ecosystem serves as a unified trust layer for various decentralized services and applications, AVSs, reducing their capital burden. Until now, each such project had to build and maintain its own separate network. It took a lot of time and resources, like finding investors and supporters and building a community of followers and users. Many great projects have failed in this process. Today, AVSs can tap into the combined security resources of Ethereum's state debt. As AVSs mature and gain adoption, they have the potential to reshape the blockchain industry landscape significantly. What's interesting is that

it leads to a ripple effect of other noteworthy innovative results. Take RISK, for example. With EigenLayer, it's harder to attack the network. Before, an attacker would need to compromise only the Ethereum network, which is not easy to do, but for the argument sake. Today, they will also need to undermine the various AVSs secured by Restaked ETH to cause a ruckus, which is significantly more costly and difficult. In addition, the incentives are great for everyone involved. Restaking aligns the incentives of AVSs, stakers, and operators alike. We have three leading players here, AVSs who need capital or shared security, stakers who delegate their stake death to operators,

and the latter who then opt in to validate, among other things, the AVSs. All parties benefit from the security and growth of the shared ecosystem, hopefully ensuring responsible behavior and promoting a self-sustaining security model. And I say hopefully because, like with every new and innovative concept, it is hard to predict what may go wrong, as innovation doesn't stop for good or bad actors. Ashan Pandey. What role did operators, like Allnodes, play in the launch of Eigen Layer Mainnet? Konstantin Boyko-Romanovsky. Allnodes played its part in Eigen Layer's Mainnet by performing validation tasks for actively validated services, AVSs, deployed on the protocol and

helping run the AVS's software, which varies from one AVS to another, sometimes significantly. By opting in to validate, operators essentially lend their staked ETH and the stake delegated to them on behalf of stakers to secure that AVS. In fact, this is what restaking is all about. The original staked ETH is being roost to validate a separate service beyond the Ethereum network. There are currently nine AVSs on EigenLayer, starting with EigenDA, which is the first native AVS designed by EigenLabs, the company behind EigenLayer. That's how it all started. Next, we have EORICLE, WitnessChain, Lagrange StateComedies, AltLayer, ExterioMock, Brevis

CodeChain AVS, OmniNetwork, and Automata Multiprover AVS. Allnodes is an operator to them all. It is important to have reliable and responsible operators backing innovative initiatives, especially in the early stages. Ashan Pandey. How does an operator's involvement with EigenLayer benefit ITS customers and the broader crypto community? Konstantin Boyko-Romanovsky. The operator's role in EigenLayer is crucial because one mistake on their behalf or on behalf of the AVS they are validating for can lead to grim consequences. It is a big burden on the operator and is not often discussed, but it must be mentioned. Not yet, but soon, EigenLayer will introduce slashing, which will be on top of the regular slashing risks associated

with staking on Ethereum. It's hard to distinguish between malicious behavior and honest mistakes on Ethereum. This means that honest validators can get slashed because of operational mistakes, misconfigurations, and bugs in the validator client, the AVS software. To make matters worse, the opportunity for mistakes scales with the number of AVSs an operator opts into. In other words, if an operator, through their mistake or not, causes a security breach or fails in their duties to any AVSs they are securing through restaking, they could be subject to slashing penalties from all the AVSs they are securing. All nodes and other accountable operators understand this too well. To benefit all

parties involved and to be a part of a sustainable crypto initiative, which Eigen Layer aims to be, operators must perform thorough due diligence on the protocols they choose to support through restaking. Moreover, responsible operators must implement preventative measures, be it insurance, innovative tech that solves the problem, or both. Allnodes is fully prepared for its duties for the sake of our customers, the Eigen Layer ecosystem, our own peace of mind, and the benefit of the broader crypto community. Ashan Pandey. Are there any features or services provided by operators that are re-enhanced by the EigenLayer mainnet? Konstantin Boyko-Romanovsky. Operators can earn additional rewards by providing validation services to various AVSs built on Eigenlayer.

These earning opportunities extend to our users, be they retail or institutional players, maximizing the utilization of their capital in a way. Institutions can generate higher returns on their existing staked ETH by participating in restaking through all nodes. It can tickle down further. Through our white-label solutions, institutions, too, can offer restaking services to their customers. However, other perks come with being active in the eigen-layer community. We ghetto partake in cool blockchain technology poised to deliver positive changes. Ashan Pandey. From an investor's perspective, what are the primary benefits of staking and restaking ETH? Konstantin Boyko-Romanovsky. From an investor's perspective, what are the primary benefits of staking and restaking ETH? Constantine Boyko Romanovsky. From an investor's perspective, staking Andre's staking ETH offers new avenues

for passive income. It's as simple as that. If traditional staking on Ethereum yields 3.5% in annual percentage yield, restaking, hypothetically speaking, adds another 5-9% to the same staked amount the pathetically speaking. Staking allows investors to earn rewards or interest on cryptocurrency holdings be participating in the network's consensus mechanism and validating transactions. It provides a passive income stream without having to sell the underlying assets. Restaking allows investors to diversify their stake and earn additional rewards. As an investor, you can decide whether to stake long or short term. The longer you are in the game, the better.

You'll earn rewards proportional to the amount and duration of your staked assets, but it depends on your investment strategy. Ashan Pandey. What advice would you give investors considering using staking services for the first time? Konstantin Boyko-Romanovsky. For investors considering using staking services for the first time, Konstantin Boyko-Romanovsky. For investors considering using staking services for the first time, please take the time to understand the risks. Each proof-of-stake POS protocol is unique and demands thorough research before staking. For first-time stakers, it is advisable to choose an established and reputable staking provider with a proven track record of secure operations and reliable rewards distribution.

Familiarize yourself with the reward structure of your chosen POS protocols, including any additional fees or commissions charged by the staking and node hosting platform you're joining. Storing cryptocurrencies in a hardware wallet is typically wise, particularly for long-term holding. This approach secures your funds, making theft difficult than if the device is lost. Also, some hardware wallets support staking, making them essential if you're planning to manage your own assets. Don't forget to like and share the story. Tip Vested Interest Disclosure This author is an independent contributor publishing via our business blogging program. Hacker Noon has reviewed the report for quality, but the claims

herein belong to the author. Hashtag D-Y-O-R. Thank you for listening to this Hacker Noon story, read by Artificial Intelligence. Visit HackerNoon.com to read, write, learn and publish.