Alongside this, Consensys' Infura also announced plans to launch its Decentralized Infrastructure Network (DIN) as an Actively Validated Service (AVS) on EigenLayer, which will boost scalability and cost-efficiency in Web3 infrastructure. Lubin also recently commented on easing crypto regulations under a Trump administration, and predicted that there could be a potential shift in the SEC's approach. Although crypto regulations could ease under Trump, the Financial Stability Board (FSB) called for stricter AI oversight.
Joseph Lubin Introduces 'Network State'
Ethereum co-founder and Consensys founder Joseph Lubin revealed a groundbreaking initiative called "Network State." One of the initiative’s main goals is to empower people to declare their personal sovereignty in the decentralized Web3 and AI-driven global economy. The project was launched on Nov. 14 and is hosted on the Consensys-developed layer-2 zkEVM rollup, Linea. Lubin wants to encourage self-sovereignty and build stronger, more equitable communities through blockchain technology.
Lubin described the initiative as a paradigm shift due to its potential to transform the crypto space. At Ethereum Devcon in Bangkok, he specifically mentioned the challenges posed by regulatory hurdles, especially from the U.S. Securities and Exchange Commission (SEC), which he accused of stifling innovation. He believes that the crypto industry has operated under a cloud of regulatory uncertainty, which slowed down progress and natural development in the Web3 ecosystem.
The Network State platform is accessible at sovs.xyz, and allows users to attest to various forms of sovereignty significant to them. Lubin described this as an early-stage partnership with the community to explore the still evolving concept of self-sovereignty. He envisions a future where more aspects of daily life, like finances, identities, communication, art, and entertainment, will be mediated through open networks and decentralized protocols.
The project builds upon Ethereum co-founder Vitalik Buterin’s exploration of network state theory, which involves online communities forming physical communities with aspirations of political autonomy. Consensys decentralized the Linea platform even more by launching a Swiss nonprofit association to oversee its governance and growth.
Consensys’ Infura DIN Launches as AVS on EigenLayer
Network State was not Consensys’ only recent move in the crypto space. Infura, the Ethereum validator node provider under Consensys, announced impressive progress in its Decentralized Infrastructure Network (DIN) initiative, and revealed plans to launch DIN as an Actively Validated Service (AVS) on Ethereum’s EigenLayer restaking platform. The announcement was also made by Tom Hay, the head of product for Infura DIN, during Devcon 2024 in Bangkok on Nov. 14.
DIN serves as a decentralized Web3 API marketplace, very similar to a blockchain "app store," and offers developers a new way to connect to Ethereum and other leading blockchains. The network currently spans multiple chains, including Blast, Mantle, Starknet, ZKsync, BNB Smart Chain, and Scroll. The transition to an AVS on EigenLayer is expected to reduce development costs, enhance accessibility and reliability, encourage collaboration among infrastructure providers, and streamline the process of launching new Web3 services.
Sreeram Kannan, the founder of EigenLayer, shared some of the advantages of this integration, and stated that building DIN as an EigenLayer AVS enables permissionless infrastructure provisioning, scaling the marketplace while improving reliability and cutting costs. EigenLayer itself is an Ethereum restaking protocol, and allows staked Ether to earn additional rewards while providing custom validation mechanisms for off-chain operations. This setup ensures staking and slashing protections without requiring projects to launch tokens prematurely.
EigenLayer data (Source: DeFiLlama)
EigenLayer has seen serious growth in 2024. Data from DeFiLlama indicates that its total value locked (TVL) surged by 900% since the start of the year to $12.9 billion. While its TVL previously peaked at $20 billion in June, recent upticks have been driven by rising ETH prices.
Consensys CEO Sees SEC Clashes Easing Under Trump
Consensys CEO Joe Lubin also recently turned heads by sharing his thoughts about the future of crypto regulations under Donald Trump. According to Lubin, the crypto industry could see some relief in its legal battles with the SEC after Donald Trump’s reelection as the 47th president of the United States. At DevCon 2024, Lubin suggested that the industry could save hundreds of millions of dollars as many cases may actually be dismissed or settled under the new administration.
Joe Lubin at Devcon
Trump’s victory on Nov. 5 was widely celebrated in the crypto space, especially because of his campaign promises to overhaul the SEC, including firing its current chair and crypto critic, Gary Gensler. Optimism is also growing that Trump will fill his cabinet with pro-crypto figures, which will likely trigger a potential shift in the regulatory landscape. Lubin stated that Trump’s transition team is already moving aggressively.
This could be a huge turning point in ongoing legal disputes between the SEC and major crypto firms like Binance, Coinbase, and Ripple. Consensys itself has been a part of this legal clash, and even filed a lawsuit against the SEC in April. The lawsuit accused the regulator of trying to classify Ethereum as a security and seizing control over the future of cryptocurrency. Although a Texas federal judge dismissed the lawsuit in September, Lubin is convinced that the legal action started a broader conversation about SEC overreach.
In a separate case, the SEC accused Consensys of operating as an unregistered broker and offering unregistered securities through MetaMask Swaps. This case is still ongoing. Lubin also mentioned the SEC’s arguments centered around Ethereum 2.0, which claims that it is a new version of Ether that could be considered a security.
Other well known people in the crypto space are also optimistic about what could be next for the industry. Coinbase CEO Brian Armstrong even called for the next SEC chair to apologize for the damage that was caused by the agency’s actions.
FSB Calls for Stronger AI Oversight
While crypto regulations may ease under Trump, the same can not be said for regulations surrounding artificial intelligence (AI). The Financial Stability Board (FSB), which is an international organization that oversees global financial systems, released a report analyzing the implications of AI in financial services and outlining strategies to mitigate associated risks.
The report was published on Nov. 14 and was titled “The Financial Stability Implications of Artificial Intelligence.” It explores how AI is reshaping financial systems worldwide, and how it offers both opportunities and challenges.
The FSB mentioned some of the advantages of AI, including improved operational efficiency, personalized financial products, enhanced regulatory compliance, and advanced data analytics. However, it also warned of potential vulnerabilities AI could amplify, like increased systemic risks stemming from third-party dependencies, service provider concentration, cyber risks, market correlations, data quality, and governance issues.
Additionally, the report shed some light on the potential misuse of AI by malicious actors, particularly through generative AI (GenAI). According to the FSB, GenAI could increase financial fraud and disinformation in markets. Misaligned AI systems that operate outside legal, regulatory, and ethical frameworks may also pose threats to financial stability.
The concerns that were brought up in the report align with findings from a September report by Gen Digital that pointed out the growing sophistication of AI-powered deepfake scams, particularly in the crypto sector.
To address these risks, the FSB recommended several strategies. These include bridging data and information gaps in AI monitoring and encouraging greater engagement between regulators and private sector entities.
