my name is JK I'm the operations manager
at a steak fish Thank You steak fish is
a validator for different Priya West
block chains and and no two operators
for projects that use staking mechanisms
I'll get into that a bit later but you
know we're all excited for a dream 2.0
POS is going to be enabled but you know
there have been plenty of other POS
protocols that have been in operations
for a year or even or slightly less than
that and there are already good data
points to take from there and having
been in this space for about a year now
and a bit over a year there's plenty of
lessons that we've learned throughout
the way throughout our our operations
and we wanted to share a few of those
with you today in the hopes that once
eternam 2.0 launches we don't have
similar problems we've seen on other POS
protocols so just a very short
introduction about sake fish steak which
was founded by auction who co-founded f2
pool which is one of the of course
largest Bitcoin and it dairy mining
pools and you know he wanted to
contribute something similar in the
proof of stake space and of course
naturally dye meant creating validators
and staking pools and so so far we have
validators or nodes on various projects
we have AOS whereof a leader on B owes
cosmos Tasos lunette work Irish Network
boss a node operator for a chain link al
grant and a storage node provider for
storage as well and so right now roughly
we're facilitating around 30 million
dollars in stay Keable assets so first
of all just a quick reality check I know
that everyone will be able to run in a
dream 2.0 validator known as long as you
have thirty two E's but the reality is
not everyone will be able to you know
either you don't have the equipment we
can't assume that everyone will have a
PC at their home or even a laptop and we
can't assume everyone will have the
technological capabilities of you know
parsing through github or even using
command lines to actually run a
validator node and so that's where I
Valladares come in we're trying to help
lower the barriers to staking even
further by making seeking easy for
retail and so there are two main service
offerings that volunteers offer so far
one is validated as a service this is
where we run a validator and people
delegate their coins to us delegate is
where people don't give up their
ownership but rather they provide the
power and end of the coins to a
validator so it's a pretty special type
of transaction and so therefore we're
able to run a validator but we don't
have custody over the coins that are
stake with us also there's a fair amount
of Valladares that run a note as a
service this is where you imagine like
AWS right you're trying to spin up an O
Valley general for any customer that
wants to stake and you know there are I
think in the US are two big players in
the space there's block Damon and bison
trails and you know largely loaded as a
service you can really imagine it to
look similar to just an AWS but of
course with the 2.0 Razak there's no
such thing as delegation you're not
gonna be able to delegate your coins so
unless you have custody of the funds
Valladares a service is probably not
going to be a viable business for for
volunteers so I won't go too much into
detail because of time constraints of
over what validators are considering on
what are their businesses that could be
provided but you know rest assured and
node as a service will probably be one
of the more strong business lines that
validators will pursue for East 2.0 but
of course personally and there's there's
other avenues that are exciting such as
some giving a shout-out to Crockett pull
of course which I'm really looking
forward to for e 2.0 but you know so you
know the valleys are losing probably
like one of their main business lines
and note as a service seems to be one of
the more viable options but like why are
valid ears and here at all in this space
right now there's around about five
billion dollars of stackable assets in
the market
so it's a fair amount and I estimated
roughly that in a year or so there is
gonna be this number is gonna balloon to
30 billion dollars and of course it
Durham 2.0 is gonna be the majority of
that with 8 billion dollars and so not
to say that this is the exact like
revenue opportunity but this is the the
size of the market and so therefore
there's a reason why do validators are
here they want to either facilitate
something here they want to do something
here
they want to help facilitate staking of
8 billion dollars and when eise 2.0
launches and so that's sort of a short
intro on like who validators are how
they're trying to they're approaching
eath 2.0 but let's go into like the
reason why i'm here today to talk about
some of the lessons the key lessons
we've learned by validating on other POS
protocols and I've really summarizes it
down to five Garf are many but these are
the five key ones that I believe this
Durham community needs to focus on so I
don't know if any of you were at the
first speaker panel session for today
life Adam from life here actually gave a
pretty good presentation on the one of
the key bottlenecks of staking right now
and it's a it's the user interface right
now staking is insanely hard even on you
know even for like a network like tezo's
for example it's very difficult to
understand like where I need to go if I
have two Z's in my ledger is there an
interface I could use to stake it's very
hard to find out I recommend you trying
to google it you'll you'll come up with
very different you know explanations on
where you could go it's not really clear
on cosmos similarly so when cosmos
launched there was only one mobile
wallet available and what one web wallet
available and obviously people were
confused whether that was the only ones
they could use but you know but the most
safe one was actually using the command
line and so people about some of the
validators started telling people to use
the command line and obviously as I
mentioned when I first began to stop we
can't expect everyone to understand how
to use the command lines
therefore there was a lot of confusion
so it's important that some form of
staking interfaces or multiple staking
interfaces are available 1 2 e 2.0
launches if not it's gonna cause a lot
of confusion and you're just basically
limiting the opportunity to stake it's a
very limited set of people of community
members now another important part is
the making staking trackable uh and you
know of course you want it for
bookkeeping you want to see how much
income you're you have how much how much
you have stake but more importantly
there are tax reasons for this there's a
lot of regulatory unclarity on how
staking should be considered tax wise
but eventually you know people will need
to be paid our taxes on problem most
likely on staking Awards and the only
way they'll be able to do that is if
they're able to track how much rewards
even receiving how much assets Amiens
taking so far
there aren't that many of such
dashboards many of them are launching
right now but this is another of another
another key tool that needs to be pride
that when ES 2.0 becomes available so
yeah so number one key theme here is try
to make you know interfaces for users
for retail such that they're able to
stay easily and also to track how their
state assets easily number two is so
slashing has occurred on Kosmos
especially recently not recently I guess
in June July someone uh one of the
Valladares had their value here was down
for a while and they tried to bring it
back up and accidentally they're back up
note and our main balladeer node came
back up at the same time causing a
double double signing so when as a
validator when I talk with retail or
other funds the number one question they
always ask us ask us is how are you
gonna insure me that you know how are
you gonna intervene in terms of slashing
risk it's all in their minds but with
this with this double signing event it's
becoming much more this risk is becoming
in their minds and it's become a key
theme that they constantly asked for
insurance or some way that some social
conscious I'm option contrary could sign
such that they're able to then somehow
recoup the / amount and so therefore
this is definitely another pain point
and there needs to be some method to let
you know people hedge their slashing
risk and most likely I believe this will
come in the form of defy in terms of
like insurance markets most likely and
so these sort of these sort of defy
products needs to be thought of in
advance and created not not after East
2.0 has launched really also another
thing is another way of actually
reducing slashing risk is by
diversifying who you stake to for
example if I'm trying to stake on cosmos
random valid any rather is taking with
one valid ear it's better to spread out
your risk and valid just similar to how
you diversify your portfolio
this concept is sort of not really
considered too much we see way too many
just all in staking going on in various
protocols so but the probably the main
reason why that's occurring is because
it's very inconvenient to diversify your
stake when you're staking so providing
an automated option or service such that
people could automatically diversify the
validators that they're using is also a
pretty important method of hedging
they're slashing risk and probably a
very important product that will be
needed you know close to when East 2.0
launches another key thing that we've
seen constantly come up in other POS
protocols is centralization debate it's
so on the left here you could see sort
of the graph of the state power
basically distribution and and this is
uh this is in cosmos by doing so for
ether a.m. there's no delegation so you
won't see this this dark of of a grant
distribution graph
you know and e 2.0 how this is relevant
is in two ways so exchanges definitely
will have so much in their custody so
they're gonna be big players so there
will be some some debate over their role
in the staking economy in the East 2.0
but second of all remember I said that
validators will probably enter into easy
2.0 as note as a service well imagine if
any of these note as a service providers
become big like they control like 50 60
percent of the market imagine that they
find a very critical bug in their
infrastructure what that means is then
every single user staking using their
node as a service are probably likely
going to be compromised so it's another
point of failure in that case so that's
also so that's somewhat like not gonna
be as forefront as you know seeing an
exchange gain like five six percent of a
networks power but this is also going to
be a very crucial centralization failure
point that will be neat will need to be
vigilant about so I actually took this
out I've put it as a separate point
because this is very crucial
so exchanges are finally entering
staking you know I'm quite sure many of
you have seen how by Nance announced
that they're providing staking
operations and the reason why staking is
so exchanges are so entering two staking
is crucial is because they're able to
provide instant liquidity and they
actually bypass any on bonding periods
and you know imagine that you know like
if you're trying to stake on a ES 2.0
and you don't need to lock up your ease
you just keep it on a low exchange
wallet and you instantly get each drop
to your wallet like how convenient is
that
and so therefore this is this is a
really problematic especially for
independent validators like us because
we're not really able to compete with
these exchanges that are able to bypass
these liquidity issues oh yeah and
there's like your street points on how
exchanges are entering I'll please come
up to me if you want to understand more
about how exchanges are entering
right now so as I mentioned the the
important part for the poor part about
like of tackling this is that
independent validators like us need to
be able to compete with these guys and
the only way we could do that is if
there's a way where we could offer
people who delegate to us who stake with
us have similar liquidity you know
liquidity wonder when they're staking
and so therefore I see staking
derivatives again defy playing a key
role here there are a few players right
now trying to tackle this and so once
staking derivatives are alive
that will then help us Valladares
actually compete with exchanges and
that's what that's key here I think that
that's how I don't expect Valladares to
be treated more favorably in compared to
exchanges but at the very least we could
level the playing field by providing
staking derivatives and so this is just
one a way of sort of tackling the
exchange centralization issue of
regarding staking but I welcome anyone
to think of any alternatives to try to
see where we could compete better with
exchanges when it comes to staking so
finally this is a topic that no one
likes to talk about but that we
seriously need to there needs to be a
working group around this it's
regulation and Taxation proof-of-work
mining has been around so there has been
some framework constructed around how
mining and mining words should be
considered but you know we can't assume
that proof of stake staking and staking
Wars will be considered the same way
like as an example like let's say a
proof of stake staking words will
eventually be taxed will it be taxed
once I get to staking Awards in my
wallet or will it be taxed once I
liquidate it into like a nerd a coin
like these are questions that are still
up in the air and no one knows the
answers to so there is a POS Alliance
proof of stake Alliance has been created
with a few key players in the staking
staking world I also do encourage the
Durham community to think about how we
could
engage policymakers and and regulators
around house taking should be considered
because if this stack is not figured out
like you know Valladares takers everyone
alike is gonna be in a heap of
regulatory issues so I think it's
important that we we we actually take we
take a proactive approach I try to talk
with policymakers on what they're
thinking and how we could make it
comfortable such that they make reasoned
and logical decisions on how staking
should be taxed how staking should be
regulated so yeah so those are sort of
the five key lessons I wanted to share
with you guys and hopefully that one
sees 2.0 launches we have some answers
to we might not have answers to all but
hopefully most of them I loves talking
about staking I'm happy to share any
knowledge insight on what we've how
we've operated so far so please feel
free to reach out to me on Twitter on by
email or or yeah I think that's it I
guess I'll take questions if there are
any
you