AVS (Actively Validated Services) combines the scale of web2 with the trust of web3, ushering in the next iteration of the internet: distributed systems and custody of assets. In this article, let’s take a quick look at the AVS ecosystem of EigenLayer:
While blockchain effectively processes transactions, attempts to shift all computations to smart contracts have proven to be challenging due to delays and throughput limitations. Even rollup solutions cannot support comprehensive needs such as custody of front-ends, oracles, and databases.
Smart contracts need to be carefully designed as they interact with the account layer and have significant economic importance in paying gas fees for each transaction. Take Uniswap for example, this DEX signifies on-chain DeFi with an AMM mechanism.
Their latest v4 design combines hooks for external contract deployment, providing high customizability for liquidity providers and users. Hooks can support different types of orders such as limit orders, dynamic fee structures, custom oracles, and TWAMM.
One consideration for the future of blockchain computing is a hybrid architecture, separating computations and storage into temporary and persistent layers.
Blockchain serves as a persistent layer with high security guarantees, maintaining shared state among multiple validators. Low validator requirements ensure broad decentralization, minimizing censorship, and safeguarding important data such as transaction logs and identities.
AVS introduces a temporary layer maintained by a decentralized operator network, offering power for highly specialized services including execution engines, virtual machines, oracles, watchtowers, distributed key generation, and more.
Web2 relies on centralized cloud service providers for storage and computing, making it less secure and susceptible to censorship. AWS replicates data in different locations to achieve redundancy, but sensitive information like bank accounts requires custody governance.
In contrast to centralized cloud service providers, AVS services are supported by a group of Ethereum operators who prove their honesty and reliability through encrypted economic staking. Even if the temporary state is compromised, user funds remain secure on the blockchain’s persistent layer.
The core promise of AVS is to bring web3 trust guarantees to all computations, whether on-chain or off-chain.
AVS – a network of operators cross-checking each other’s work.
AVS operators – individual node operators providing specific hardware resources.
The architecture of AVS implements a new application infrastructure, offering verifiable cloud services and verifiable computing.
Let’s start with “Verifiable Cloud”.
Versatus has launched Allegra, a cloud AVS, providing anti-censorship, transparent infrastructure for dApps, at 50% lower cost than traditional cloud providers. These applications are hosted on the AVS node network, eliminating single points of failure.
We might see a new category of applications emerging, different from traditional dApps entirely on-chain. Versatus aptly named it “U?????????e A???” and introduced a new framework reflecting the familiar HTTPS standard.
Projects requiring recommended information flows like decentralized social media are now possible. AVS achieves this by supporting advanced algorithms that continuously update user information streams based on historical data, creating dynamic experiences while accessing on-chain media NFTs.
For these services, do we need to “trust” them? Just as we expect quality in physical services, we need every software computation to remain honest. Unlike tangible goods where quality is visible, software requires trust in the unseen processes behind each function.
Algorithms that control our lives lack transparency, and our understanding of them is limited. Think about the recent leak of Google’s search engine optimization algorithm. Clearly, Google misled the public about how they rank web pages.
How expensive is this kind of “trust”?
As we are still in the early stages, it’s difficult to calculate the additional costs of operating software on AVS. EigenLayer founder Sreeram Kannan estimates an additional 0.1% cost for cryptographic security of financial transactions.
The second key benefit is “Verifiable Computing”.
AVS node network executes off-chain computations supported by cryptographic/ZK proofs that can be used as inputs for applications. Let’s look at Uniswap’s v4 design, which can combine with a decentralized matching engine hosted on dedicated AVS nodes. This operator pool can efficiently match thousands of trade requests with counterparties, creating a settled transaction on-chain.
AVS operators cannot steal user funds, only execute trade matching based on user-defined intents. This architecture allows operators to process intents, integrate AI-driven outcomes, manage dark pools, and develop applications with variable fees, enhancing functionality.
AVS offers: neutral, accessible, and unstoppable web services.
It provides developers with a reliable node network capable of handling specialized computations on-demand, simplifying the development process without starting from scratch.
Currently, there are 1459 AVS operators and 16 AVS services, with EigenDA leading with 264 active operators. Operators handle multiple tasks simultaneously, offering multiple AVS services to maximize returns. Some services typically have specific hardware configuration requirements.
The possibilities opened by AVS are tremendous across multiple fields. We can categorize them into 3 categories: verifiable Web2 infrastructure, Web3 primitive infrastructure, and rollup services.
AVS operators can provide trustless web2 services like content delivery, key management, and decentralized computing. For example, Witness Chain uses AVS watchtowers for strategic global positioning, providing location proof by analyzing network latency.
By combining MPC and threshold signatures with AVS, applications can offer smoother login experiences and privacy protection. Mishti is an AVS network using a set of distributed nodes to generate private keys through biometrics, ensuring no single node has access to user passwords.
AVS is innovating in the field of decentralized computing, such as providing a matching engine off-chain for traders. Cedro Finance is preparing to launch an AI agent layer supporting dynamic calculation of CEX and DEX prices to provide timely liquidity.
AVS also supports fundamental primitives relied upon by blockchain and rollups. It strengthens the ecosystem by protecting the security of the DA (data availability) layer, providing ZK-supported oracles, and deploying easily integrable monitoring systems.
Lagrange and Brevis are decentralized provers, queries are shifted to an AVS network off-chain, where they are executed and verified before being reintegrated into contracts. dApps can utilize historical data to implement functionalities like VIP loyalty programs.
EigenDA is an innovative DA solution inspired by the Danksharding roadmap. Designed for horizontal scaling, EigenDA’s AVS operators provide enterprise-grade SSDs for data storage, supporting speeds of up to 10 Mbps in testing, with the ultimate goal of 1 Gbps as more operators join.
The final category of AVS focuses on rollup services – bridges, interoperability solutions, fast layers, shared sorters, re-staking rollups, all secured by AVS. For example, NEAR Protocol is developing NFFL – a fast settlement layer using AVS to verify rollup states between L2.
In conclusion, AVS is a highly transformative cryptographic layer on the blockchain, enabling developers to build trustless applications using any programming language.
