Token2049 | IOSG Old Friends Reunion in Singapore successfully closed!
🎉🎉 IOSG Old Friends Reunion-Singapore was an astounding success on September 12th! We are thrilled to announce that the event, is themed LSD & ZK Modular! With the participation of more than 1000 registrants from Luma and engagement from 100+ top-tier industry experts, including 2 panels and 11 talks, the one-day event concluded flawlessly!
Today we brace ourselves to dive deep into the very core of the crypto revolution as IOSG Ventures brought together the luminaries, pioneers, and vanguards of the decentralized world. We extend our sincere thanks to all the founders, developers, industry experts, and everyone involved who shared their invaluable insights and visions on the topic of Staking & Restaking, Decentralized Trust, Data Ownership, Modular Blockchain, ZK-EVM, and so much more.
Once again, we want to express our deepest appreciation to all of you who attended and made this event a grand success. Your enthusiasm and commitment to the crypto community continue to drive innovation and progress. We look forward to future opportunities where we can gather once again and further contribute to the advancement of this ever-evolving industry.⚡️⚡️
The Highlight of Each Session đź‘€ đź‘€
🎤Talks
🎙️Welcome speech — Momir Amidzic — Principal of IOSG Ventures
Momir Amidzic gave a comprehensive overview of IOSG Ventures’ investment philosophy. IOSG Ventures is a prominent Asian crypto venture fund that has been investing in the crypto space since 2017. They focus on Ethereum and its ecosystem, with a globally diversified portfolio. They are actively involved in researching and investing in various areas such as staking, modularized blockchains, crypto and AI, data-driven DeFi, regulated DeFi, and social and entertainment. They are particularly interested in Ethereum staking, restaking, modularization of blockchains, crypto-AI intersection, stablecoin disruption, and the tokenization of real-world assets. They also emphasize the evolving dynamics between creators and communities in social media.
🎙️The Impact of Distributed Validator Technology on the Staking Ecosystem — Collin Myers — Founder & CEO of Obol Network
Obol Labs is dedicated to building the Obol Network, a comprehensive ecosystem for trust-minimized staking software. Obol Network primarily focus on Ethereum and aim to enhance scalability in areas such as the execution layer, data availability, and consensus layer. Obol Labs offers various tools and technologies, including Distributed Validator technology, the DV launchpad, Obol API Suite, Obol Solidity, and Obol testnets. Obol Network have conducted large-scale testing and are preparing for a go-to-market launch in collaboration with Lido and their upcoming Minimum Viable Product (MVP). Obol Labs is also focused on enterprise scaling and has published reports highlighting the advantages of their software for users running thousands of validators, emphasizing improved stake security, cost reduction, and network decentralization.
🎙️Chain Development Kit’ for ZK-Powered L2s on Ethereum — Sandeep Nailwal — Co-founder of Polygon
Polygon recently launched the Polygon CDK, which allows anyone to launch their own ZK roll-up with a full-blown prover. This CDK is a base technology framework for future technologies and aims to bring trustless computation and scalability to Ethereum’s layer two solutions. The goal is to create a seamless and interoperable ecosystem where multiple chains can coexist and liquidity can flow freely between them, similar to the Internet of Information in Web Two. Polygon 2.0 aims to address the scalability and liquidity fragmentation issues in the Ethereum ecosystem by introducing an architecture that allows for the creation of multiple chains connected through an aggregation layer. With the Polygon CDK (Chain Development Kit), developers can launch their own ZK roll-ups and connect them back to Ethereum. The goal is to achieve unlimited scalability and unified liquidity by aggregating ZK proofs and settling them on Ethereum.
🎙️Smart Contracts are ZK Databases — Scott Dykstra — Co-founder & CTO of Space & Time
Scott Dijkstra highlights the limitations of current solutions, such as off-chain indexers and centralized databases connected via Oracle, which are susceptible to manipulation. In response, Space & Time has developed innovative technologies including a ZK circuit for SQL and a Rust-based ZK indexer. These advancements enable secure verification and indexing of data from major chains, allowing smart contracts to access and process on-chain and off-chain data for more advanced financial instruments in a decentralized manner. Space & Time’s platform facilitates data-driven DeFi by offloading complex data queries and storage from smart contracts to a ZK layer. They leverage GPU acceleration to compute proofs of SQL queries within Ethereum block time and provide verified query results to smart contracts. Their solution caters to various applications in DeFi, gaming, and Layer 2 scalability, offering a unified platform with practical business service level agreements (SLAs) and an AI-powered user interface.
🎙️Common Vulnerabilities and Attack Surfaces in Liquid Staking Protocols — Kasper Zwijsen — Head of Audits of Hexens
Hexens recently conducted an audit for Lido’s V2 upgrade, which introduced functionality for stakers to also withdraw their funds. Liquid staking protocols, such as Lido, allow users to pool their ETH together to create validators and earn rewards, but they also pose security risks, including data availability issues, malicious validators, implementation bugs, unfair maximum extractable value (MEV), and semantic differences between the consensus layer specification and protocol implementation. Lido mitigates some of these risks through the use of Oracle contracts, consensus among Oracle nodes, penalty distribution mechanisms, and safeguards provided by the Ethereum consensus layer.
🎙️Reinventing Liquid Staking with StakeWise V3 — Kirill Kutakov — Co-founder of StakeWise
Kirill Kutakov introduced StakeWise V3, aiming to reinvent liquid staking. Liquid staking protocols have gained popularity due to their ease of use and the ability to use staked capital in DeFi. However, the market is currently dominated by Lido, which poses risks of centralization and limited innovation. StakeWise V3 introduces a liquid staking token that can be minted against any node, aiming to lower barriers to access and provide more options for stakers. They also introduce Vaults, a customizable infrastructure that allows stakers to choose their own terms and attract more participants to the network. Overall, StakeWise V3 aims to be a foundational and decentralized liquid staking infrastructure for Ethereum. StakeWise V3 offers users full control over their interaction with DeFi using stake capital, allowing for a customized and decentralized experience. The protocol has undergone auditing, has been deployed on testnet, and is preparing for mainnet deployment in the coming weeks.
🎙️Build Your Own Application-Specific Ethereum Rollup — Hilmar Orth — Co-founder of Gelato
Hilmar Orth discusses the strategy of scaling Ethereum through the implementation of roll-up solutions. Ethereum’s role is evolving into a modular data availability layer, providing security and consensus for other chains like roll-ups and Layer 2 solutions. In Layer 2, transactions are sent to a sequencer and executed off-chain, while Ethereum serves as the data availability layer. Validity proofs are utilized to validate the state updates, ensuring security and finality. The choice between roll-ups and validiums is explained, where roll-ups store transactions on Ethereum for transparency, while validiums store them externally for higher throughput but with a trust factor. Hilmar explores the trade-off between trust, security, and throughput when adopting roll-up solutions in Ethereum’s Layer 2. ZK roll-ups offer high trust and security through validity proofs but have limited throughput and higher costs due to on-chain proof posting. Optimistic roll-ups provide increased throughput and lower costs but compromise some cryptographic trust and compatibility with Ethereum’s virtual machine.
🎙️ZK Applications — Kenny Li — Co-founder of Manta Network
Kenny explains the importance of ZK technology for applications. He mentions that building ZK-enabled applications is complicated and expensive, making it impractical for everyday use due to high gas fees. However, ZK enables new use cases, such as privacy-preserving transactions and secure gaming. Kenny also highlights the limitations of transparent blockchain systems, where sensitive information like card games and payroll becomes fully visible. To address these challenges, Manta Network aims to make ZK more accessible by providing it as a service, similar to how software-as-a-service models have simplified various industries. Then he introduces the concept of providing ZK as a service through their universal circuits. This approach simplifies the development of ZK-enabled applications by eliminating the need for developers to learn cryptography and manage a larger code base. By modularizing components and focusing on application development, Manta Network aims to accelerate time-to-market and scalability for developers.
🎙️A Progressively Hybrid Rollup Design — Daniel Wang — Co-founder & CEO of Taiko
Taiko, a ZK roll-up company, offers a rollup protocol that relies on layer 1 validators for sequencing transactions and blocks. Taiko uses zero-knowledge proofs to provide validity proofs and ensure trust between L1 and L2. Provers are assigned to prove blocks, and if they fail to do so within the specified time, they are penalized. They allow users to start with less trustworthy but low-cost optimistic proofs and gradually transition to more secure and expensive ZK proofs. Taiko aims to unify these two protocols and will launch a hybrid rollup design on their upcoming testnet in October, seeking feedback from the community.
🎙️Comprehensive Approach to Smart Contract Security — Palina Tolmach — Verification Engineer of Runtime Verification
Runtime Verification is a leading company in formal verification, offering tools and services for smart contract security in industries such as aerospace, automotive, and blockchain. They emphasize the challenges of writing secure smart contracts and the need for external audits, security-oriented development practices, and comprehensive testing strategies. They have developed ERCX, an automated token analysis tool that helps developers and auditors ensure conformance to ERC20 and ERC721 standards and detect vulnerabilities in token implementations. Runtime Verification offers tools and services for smart contract security, including ERCX and Aircse. ERCX utilizes fuzzing to run tests on token smart contracts, while Aircse employs symbolic execution for formal verification and stronger security guarantees. They are also developing a symbolic debugger to aid developers in understanding and ensuring the correctness and security of smart contracts.
🎙️Dawn of the Modular Blockchain Era — Nick White — Co-founder & COO of Celestia
A modular blockchain is a new type of blockchain architecture that separates core functions, such as consensus, data availability, and smart contract execution, into distinct protocols. This design allows developers to select and combine different layers based on their specific requirements, providing greater flexibility. Modular blockchains offer several benefits, including scalability, as block size can increase with the number of network nodes, preventing congestion and high fees. They also enable customization and flexibility by allowing developers to deploy their own execution layer and choose the most suitable virtual machine for their applications. Moreover, modular blockchains inherit security from the base layer and facilitate interoperability between different chains. Celestia, for instance, is a modular consensus and data network that simplifies the deployment of personalized blockchains with minimal overhead. It offers scalability, shared security, customizability, and interoperability, promoting a decentralized and innovative approach to blockchain development.
🎤Panels
🎙️Panel One: Staking Innovation and What Comes Next?
- Collin Myers — Founder & CEO of Obol Network
Collin believes that the potential of DVT or distributed validator technology is going to be the most important trend in the staking industry in the coming future. Other than DVT, one area that he thinks is very interesting for staking and liquid staking specifically is stablecoins. The debate about stablecoins is rather open. For the first time ever, there is now a real capital asset with a high yield that can be utilized to create innovative things. Collin places great emphasis on LSTs and their maturity being used for stablecoins is quite an interesting thesis for the entire space.
The introduction of a Decentralized Key Generation (DKG) mechanism, coupled with the emergence of multi-operator validation, has significantly boosted institutional confidence in the cryptocurrency space. Institutions no longer feel the need to rely solely on a single entity, which was the initial preference during the early adoption stages.
- Kirill Kutakov — Co-founder of StakeWise
Kirill is excited about self-custodial liquid staking that enables people to take full control of their DeFi experience from the comfort of home node but he also agrees DVT is a very interesting topic. In terms of risk mitigation and management, the industry is moving in the right direction. Kirill believes we are also seeing some changes to how proof of stake and the execution layer function. The upcoming EIPS is supposed to remove the Oracle risk from operating a liquid staking protocol and also remove the sort of custodial element of node operators participating in liquid staking protocols. A lot has already been done in order to make staking as noncustodial and decentralized as possible but Kirill suggests moving away from cloud infrastructure towards dedicated servers could be a potentially good solution.
- Laszlo Szabo — CEO & Co-founder of Kiln
Laszio expresses excitement about the concept of restacking, which involves using staking positions horizontally to secure various networks, enhancing yield opportunities and infrastructure security. He also highlights the importance of mitigating smart contract risks through audits and continuous monitoring. Additionally, he emphasizes the significance of engaging with regulators in different jurisdictions to offer regulated cryptocurrency products in the future. Laszio emphasizes that KYC (Know Your Customer) compliance is crucial for institutional adoption, especially in the absence of clear regulatory guidelines. This requirement encourages institutions to engage with staking protocols that have robust KYC procedures in place or are backed by reputable custodians within the cryptocurrency space.
- Daniel Dizon — Founder & CEO of Swell Network
Daniel believes the concept of rehypothecation could open up some new opportunities. In some ways, the liquid staking layer has enabled people to access their staking rewards in a flexible way. After the Ethereum Shapella upgrade, the deposit queue remains one-way, indicating a strong demand for the product. This may lead to yield compression in Ethereum staking, prompting investors to seek alternative ways to earn yield. Restaking is one such option, offering a more sustainable approach compared to liquidity mining incentives, aiming for significant infrastructure improvements.
- Lorien Gabel — Founder & CEO of Figment
Lorien believes that the interfaces for native staking and liquid staking are improving dramatically but are still a problem for the space in general and have been since day one in that it is still quite difficult to interact with the protocols. He thinks there could be an explosion of innovation on the user experience improvement end to allow users to access the protocol much easier for the various audiences who want to stake. Other than the user experience improvement, he also envisions restaking to be a huge area of opportunity. Lorien agrees that slashing is the most immediate risk. Aside from slashing risk, there is also some regulatory risk, especially for marketplaces and exchanges that are pending on post-election and some court cases in North America.
🎙️Panel Two: Scaling Tomorrow — Ethereum’s Layer-2 Vanguard
- Alex Gluchowski — Co-founder of Matter Labs & zkSync
Alex said that all the design decisions we’re making for zkSync as a core team are driven by the end state of the mission. So we have a certain vision, and we articulated that in the manifesto called the ZK Credo. What we want to achieve in the long run, we imagine this vision and then we reverse engineer from there and we look at what technical architecture decisions or choices have to be made. Part of this end vision is the seamless user experience that is as good or hopefully better than what you have at Web Two. And that means that native account abstraction was one thing that we still believe is an unlocker for the really mainstream universal adoption. Because you can’t expect most of the users to understand the seed phrases, understand the concepts of gas, have some special tokens to pay gas, and so on.
Ed Felton thinks a couple of things are true here. One is that we’re one of the very few companies in the space that doesn’t have the name of approving technology in the name of our company or the name of our product. And that really goes along with our Pragmatic philosophy about this. We’re going to adopt the technology that we think best solves the problems of our users and developers. And right now that still is optimistic. Optimistic proving has lower cost. Yes, the ZK people have done amazing work to reduce the cost gap but there still is one. It’s still the simplest to implement and it gives the most flexibility because, for example, the reason that were able to build stylus and do it the way that we did in a fully composable, interoperable way is because the core of our system is built using a popular programming language.
We really stick to the values and the philosophy of EVM and that makes us develop really fast because we stick to this openness we stick to this community driven it’s very hard to say which zkevm is the most performant one because everyone is kind of developing their tech stack. But we are confident that we develop in the most open way because it’s the only zkevm that is fully open source from day zero. You. Can see all kinds of proposals from a very early stage every GitHub commit you can just pay attention to all the way we develop with the ZK team at Ethereum Foundation as well as some other community members and also the most community-driven one.
- Mihailo Bjelic — Co-founder & Chief Architect of Polygon Infrastructure
I think if anything, people are realizing now that we’re practically and kind of by acting basically with the things that we do, we are demonstrating that we’re ethereum aligned. We have invested so much in ZK and in building Zkevm, which is, I would say, the most advanced piece of technology, scaling technology that Ethereum ecosystem has at this point. So I think we’re demonstrating now more than ever our Ethereum alignment and a recent proposal to upgrade our POS chain, which is a side chain like construction or architecture, to upgrade it into a zkvm powered Validium. I think that’s another major kind of signal or demonstration of our practical demonstration of our ethereum alignment.
- Nick White — CEO & COO of Celestia
A lot of the roll-up teams here started before the word modular was really being used. Modular was more like a word that kind of emerged and that Celestia started using to articulate this new way of building blockchains. But it’s obviously been a community effort from the very beginning. That said, I think the power of modular is that it is a meme and it’s a word that kind of expresses this deep sort of like new paradigm and mindset shift. And memes are very powerful because they give a way for people to sort of grasp something. And the issue I think before we had the term modular was that it’s such a complex subject like blockchain architectures and things like data availability and roll-ups and these are concepts that most people didn’t understand. But if you gave someone a word to sort of latch onto, that was sort of like the starting point of their journey of learning and understanding what was being built.
Concluding Remark🤔🤔
In a long term, we expect a more balanced market share in the staking vertical. After the Merge happening last year September, staking has become an important vertical in Ethereum community as it opened up new design choices and business opportunities for the teams in the community. While staking sector seems to be taking shape, we think it is far away from its end game. We think that for Ethereum’s strategic positioning, it is very important to mitigate winner take all scenario as it could potentially jeopardize Ethereum’s perception of being a credibly neutral global settlement layer. Beyond the LSTs, there are other important developments in this segment to keep an eye on such as DVT technology, institutional staking, staking as a service provider, etc. Restaking is a natural next step in the extension of the staking. We’ve been mentioning this word restaking for past several years. However, only with Eigenlayr they truly opened our eyes to how strategic and important this restaking direction is. So essentially, with Ethereum being one of the first programmable blockchains, what happened is that Ethereum modularized trust, allowing applications to be built on top without having to worry about bootstrapping their own trust networks. If restaking realizes the vision it has put forward, that would mean the Ethereum validator set would be securing many other external networks such as oracle networks, L2s, shared sequencers, storage providers, etc. This would not only extend the security of Ethereum to these external networks, it would also make it much easier for these networks to bootstrap as security would become a lesser concern.
About IOSG Ventures👇
IOSG Ventures is a pioneering crypto fund founded in 2017 that invests in the future of Web3. As a thesis-driven firm, we assist founders in developing community-driven protocols that are primed to transform the crypto landscape. Our portfolio comprises a wide range of innovative and high-potential investments, including ZKRU (Scroll, StarkWare, Arbitrum, zkSync), Security Auditing(Runtime Verification, Hexens), MEV (Flashbots, Blocknative), DeFi/NFT-Fi (1inch, MetaMask), FOG (Big Time, Illuvium), and a number of industry leaders including Arweave, Cosmos, Celestia, EigenLayer, Scroll, zkSync, Nil Foundation, and Mina, etc. We are passionate about investing in crypto-native paradigms that have the potential to transform the future of the industry, whether you’re building infra, middleware, security, gaming, or social platforms.
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