The Problem

Think of a middleman or a broker you’ve just met. He says he will take your money as an investment and pay you some interest. The methodology will be his own, but your money will grow. Will you trust him? 🤔

Handling finances with multiple parties involved is all about trust. The involvement of middlemen and third parties reduces trust because the opportunities for default increase. In addition to trust issues, the involvement of third parties or institutions also leads to a lack of privacy. 🫢

The Solution

To solve this problem of trust and lack of privacy, Satoshi Nakamoto introduced Bitcoin in 2008 with the concept of programmable money. And oh boy, have we stopped ever since? 😎

Programmable Money & Programmable Trust

As the name suggests, Programmable Money is coded through smart contracts with the terms of agreement written in the code. If the conditions are fulfilled, then only a transaction can take place. Hence, building trust. 🫱🏻‍🫲🏻

Also, with the nature of blockchain, smart contracts are transparent and easily auditable. Hence, MORE TRUST!! 🫂

EigenLayer & Programmable Trust

EigenLayer is solving the problem of bootstrapping trust for new decentralized networks by allowing stakers to provide programmable trust to other services. As these stakers provide security and liquidity to the networks, a set of rules governs their actions.

Earlier, with the PoW consensus method, there was no way to ensure negative incentives for incorrect mining. However, with the advent of PoS, we can reward validators 💰 and also slash 🚫 them for incorrectly executing nodes.

The Three Pillars

EigenLayer ensures Programmable Trust by ensuring that the following three pillars are upheld:

1. Economic Trust:

   • As EigenLayer ensures trust through security and governance, new networks do not need to generate their own tokens.

   • They can utilize Ethereum’s existing economic security model.

2. Decentralized Trust:

   • Trust from having a decentralized network operating by independent and geographically isolated operators.

   • In simpler words, decentralized is secured, and the network can move on to building more complex cryptographic schemes.

3. Ethereum Inclusion Trust:

   • This allows the block proposers to go beyond the problem of consensus and extract more value from the miners.

   • Basically, everyone is getting a fair chance to play i.e. the game can’t be corrupted, so we can move to extracting even more value from the protocol or have more fun in the game.

References Used: https://www.blog.eigenlayer.xyz/the-three-dimensions-of-programmable-trust/