AVS Categories

To help inform YieldNest on the eventual curation of AVS exposures within a suitable basket, we present an initial approach to AVS categorization, whereby YieldNest may strive to diversify its exposure to frontrunners in each category. Categorization is also generally useful for conceptualizing the landscape of emerging services.

1. Rollup Services

Within the EigenLayer ecosystem, each sub-category under Rollup Services represents a specialized function or set of functions that can be offered by a specific AVS. These protocols leverage the cryptoeconomic security provided by restaked ETH. The modular nature of these services enables the development of highly customizable and scalable blockchain applications.

• Data Availability: this service ensures that all necessary data for transaction validation and execution is readily accessible and stored in a manner that can be reliably retrieved.

• Sequencing: this service organizes and orders transactions into blocks, providing a reliable sequence for transaction processing and validation. It ensures that transactions are processed in the correct order, which is crucial for maintaining the integrity of the blockchain.

• Verification: this service involves the process of confirming the accuracy and validity of transactions and blocks. Verification ensures that all transactions are legitimate and comply with the network's rules and protocols

• Finality and State Proofs: finality provides mechanisms to ensure that once a transaction is confirmed, it cannot be reversed or altered. Finality guarantees that transactions are permanent and immutable after a certain point. State proofs are cryptographic proofs that validate the state of the blockchain at a specific point in time, ensuring the integrity and finality of the blockchain state. These proofs allow participants to verify the correctness of the blockchain state without needing to trust a central authority.

• Rollup-as-a-Service (RaaS): this service offers a turnkey solution for deploying and managing rollup instances. RaaS provides scalability and efficiency for blockchain applications, allowing developers to implement rollups without the need for extensive infrastructure management

2. Coprocessors

Coprocessors are specialized modules designed to offload and handle specific computational tasks, often enhancing the performance and efficiency of blockchain networks. They typically involve advanced cryptographic operations and are focused on improving privacy, security, and computational efficiency. Sub-categories of coprocessors include off-chain, parallel, multi-party, and other tech related to computation. Use cases may include general computation, AI, database operations, and EVM computations.

Coprocessors can be categorized based on their security design or by their intended use case:

• ZK coprocessors: specialized modules designed to enhance the scalability and efficiency of blockchain networks by leveraging zero-knowledge proofs.

• Database coprocessors: specialized hardware or software modules designed to accelerate database operations by offloading specific tasks from the main CPU to improve performance and efficiency.

• Trusted execution environments (TEE): secure enclaves are isolated environments where data can be encrypted, but computations can still be performed on them. The key idea is to isolate the data and computation so even privileged system processes can't access it.

• Secure multi-party computation (MPC): a cryptographic protocol that distributes a computation across multiple parties where no individual party can see the other parties’ data.

• Fully Homomorphic Encryption (FHE): permits computations on encrypted data without ever decrypting it, making it stable even with highly intensive computation.

3. Interoperability

Interoperability services enable communication and data transfer between different blockchain networks. These protocols ensure that various blockchain ecosystems can interact, share resources, and operate together, improving the overall utility and flexibility of decentralized applications.

Blockchain interoperability may be specific to value transfers or may be generalized to interoperability of any arbitrary data:

• Cross-Chain token bridges: bridge networks that allow the secure transfer of tokens between networks.

• Cross-Chain messaging protocol: Generalize bridge networks that allow the secure transfer of arbitrary data between networks, for example to make smart contract calls and facilitate data exchange.

4. Web3 Infrastructure

This category covers all types of networks that outsource cryptoeconomic security (trust) from Ethereum in the form of restaked ETH. These networks leverage the security and trust of the Ethereum ecosystem by utilizing restaked ETH to secure their operations, ensuring robustness and decentralization.

Decentralized networks may encompass the consensus layer, blockchain service provider, and application layer:

• Secured networks: decentralized networks that operate as secure Layer 1, Layer 2, or sidechain solutions but outsource security (trust) from Ethereum (restaked ETH). All networks that require distributed validator mechanisms. This includes secured Layer 2s like Cyber, Xterio, and DODOchain "MACH"

• Oracles: decentralized networks that provide reliable and tamper-proof external data to smart contracts, bridging information between blockchain and real-world. This includes eOracle and OpenLayer.

• DePIN: decentralized networks that coordinate and manage real-world endeavors via on-chain token incentives. Possible use cases include car-sharing, peer-to-peer solar power trading, and 5G or WiFi connectivity.

5. AVS Tooling

This category may include any AVS designed to support other AVSs.

• Inter-AVS services: any service wherein an AVS provides services to other AVSs, including tools and services designed to facilitate interaction and collaboration between different AVSs.

• Developer Services: tools and frameworks that assist developers in building, testing, and deploying AVSs, providing resources such as SDKs, APIs, and documentation.

• Management and Monitoring Services: services for managing payments to restakers and operators, helping operators with node management, and monitoring.

• Security Services: systems delivering essential security functionalities to decentralized protocols, instrumental in thwarting potential exploits and safeguarding staked assets, often combining off-chain monitoring and on-chain responses.