Welcome to the third week of Validator digest! For this week, I'm sharing a list of all the interesting writings on assessing risks for EigenLayer AVSs. There's been a noticeable uptick in teams assessing AVSs for operators and LRTs. These posts should give you a sense on how some of them are trying to approach this topic.
AVS Selection Framework by Gauntlet.
Optimizing AVS Allocations for LRTs by Gauntlet.
Optimal Risk and Reward on EigenLayer by Chorus One.
EigenLayer AVSs: A Comprehensive Overview by Kairos Research.
Affine Restaking Risk Engine by Affine Protocol.
Memo on AVS & Operator Selection by Llama Risk.
As a reminder, I'm constantly maintaining the list of AVSs I've seen on the market today. I've begun adding in Symbiotic AVSs as well.
Last updated: September 25, 2024
Avalanche
Avalanche has a major upgrade scheduled to happen before the end of 2024 called the Etna upgrade (aka Avalanche9000).
This upgrade includes a major change for how subnets are validated. Previously, subnet validators needed to be a validator on the P-Chain and sync with all three primary Avalanche networks (P-, X-, C-Chains). Following this upgrade, subnet validators will only need to sync with the P-Chain without needing to validate the P-Chain. Consequently, subnet validators will no longer be required to stake 2000 AVAX. Instead, they'll need to pay a small fee in AVAX to participate.
Read more: https://github.com/avalanche-foundation/ACPs/blob/main/ACPs/77-reinventing-subnets/README.md.
Babylon
Babylon is opening up their deposit cap on October 9th, 2024. Interestingly, there is no cap this time. All staking transactions sent from block 864790 to 864799 (10 blocks) will be included.
Read more: https://babylonlabs.io/blog/babylon-bitcoin-staking-mainnet-launch-phase-1-cap-2.
Cosmos
A new release of Cosmos SDK called Olympus has been announced. The biggest change with this release is the ability to change consensus key (finally).
EigenLayer & LayerZero
EigenLayer and LayerZero partnered up to introduce a new framework called Decentralized Verifier Networks (DVN). LayerZero was secured by a permissioned set of DVNs up to now. It was well expected that they would eventually expand their operator set. However, it is interesting that with this framework, LayerZero will accept ETH and EIGEN as stake on top of their own token ZRO.
Read more: https://www.blog.eigenlayer.xyz/dvn/.
Golem Network has shared results from testing out running 200 validators on a Raspberry Pi 5. Read more here: https://blog.golem.network/eth-staking-tests-summary/.
Here is a fun little side quest that you can try for Babylon's cap raise. You can bet on Bitcoin fees using Alkimiya. Unless you have a direct relation with a major Bitcoin miner or mining pool, it'll be very challenging to successfully deposit into Babylon. Why not play the fee market instead of trying to race against miners?
The fight for blockspace, insane transaction feerates at 717 sat/vB, ~53.405 BTC in fees spent…
Trading Competition held simultaneously?
The successful hedging of 16.039 BTC, the PnL %, the…
Mark your calendars!
What is a good vs bad AVS? At the end of the day, this is the ultimate question on determining which AVSs to support as an operator or LRT. This feels similar to making a decision on which new L1s to support. I don't think any validator has truly cracked how to pick successful L1s, and I don't expect anyone to figure this secret out for AVSs any time soon.
The relationship between the operators and LRTs will become more complex as well. Operators are no longer doing the simple job of validating Ethereum. They need to run AVSs, which will have differing levels of complexity and requirements. Which LRTs will effectively monitor, manage and communicate with operators? How will LRTs effectively persuade operators to run the AVSs they select?
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