GenLayer | Blockchain Platform | Crypto Deep Dive

Executive Summary

GenLayer is a blockchain platform that leverages AI to implement and execute smart contracts. Its unique approach involves a network of validators connected to various Large Language Models. These validators work together to ensure the accuracy and reliability of smart contract execution through a consensus mechanism known as Optimistic Democracy. This method enables them to agree on non-deterministic instructions, such as processing text prompts and reading web data, making GenLayer a flexible and versatile solution.

About The Project

Vision

GenLayer is reimagining smart contracts for the AI era. It is building a protocol where intelligent entities can autonomously negotiate, execute, and enforce agreements on-chain. Think of it as a DeFi infrastructure upgrade that enables more dynamic, real-world-aligned interactions. GenLayer is pushing the limits of blockchain, paving the way for a new wave of innovative dApps.

Problem

Traditional smart contracts have limitations and need an oracle to interact with real-world data. They’re hardcoded, can’t adapt to real-world changes, and rely on clunky oracles to access off-chain data. GenLayer is here to break free from these shackles.

Solution

GenLayer is being built to overcome the limitations of traditional smart contracts. It’s “Optimistic Democracy” consensus algorithm ensures secure and efficient handling of non-deterministic outputs, making the platform adaptable and reliable. In essence, GenLayer aims to push the boundaries of blockchain technology, allowing for more sophisticated, responsive, and interactive applications.

GenLayer introduces AI-powered smart contracts that use large language models (LLMs) to access real-time web data and understand natural language. Unlike traditional smart contracts, which execute predefined blockchain actions, intelligent contracts dynamically interact with external data and adapt to changing conditions, modifying their operations as new information becomes available.

How Does GenLayer Work?

Here’s how a GenLayer transaction achieves finality.

• You send a transaction: To kickstart the process a transaction is sent to the GenLayer network.
  
  
• A leader steps up: A random validator takes charge and processes your transaction, proposing a result.
  
  
• Validators check the work: A group of validators reviews the leader’s proposal, making sure it’s legit and fair leveraging the Equivalence Principle.
  
  
• The result is in If most validators agree, the result gains provisional acceptance.
  
  
• Not happy? Appeal it: If one disagrees with the outcome, they can challenge the result within a set time. But they’ll need to deposit collateral.
  
  
• Double-checking the work: In case of an appeal, a new group of validators analyzes the transaction. After a vote to assess if a particular transaction is worth rechecking, a new leader takes over.
  
  
• Final verdict: The process continues until all network participants agree. If an appeal is valid, the challenger wins. If not, they lose their collateral. Once all appeals are settled, the finality is achieved.

Market Analysis

Currently, the decentralized smart contract platforms have a combined market capitalization of more than $600B, which includes both L1 and L2 networks. Similarly, the AI tokens hold a combined market capitalization of $30B.This, together with a $10.4B market of blockchain oracles, gives GenLayer a huge upside potential.

With more and more organizations relying on Artificial Intelligence for routine operations, the adoption of AI will only increase from here.

Competitors – GenLayer’s major competitors could be Layer 1 smart contract platforms like Ethereum, Solana, Avalanche, and SUI. Since it connects smart contracts to real-world data, blockchain oracles like Chainlink, Pyth Network, API3, and Band Protocol could also be considered its competitors.

Unique Value Proposition

GenLayer’s Intelligent Contracts revolutionize blockchain functionality by combining the power of AI and smart contracts. These contracts can access real-time data, understand natural language, and adapt to changing circumstances, providing developers with a versatile tool for building dynamic and adaptive applications. 

This is a significant departure from traditional smart contracts, which are limited to predefined actions. By automating tasks that require real-time data analysis and decision-making, businesses can improve efficiency, reduce costs, and enhance overall productivity.

GenLayer‘s Optimistic Democracy consensus mechanism ensures the accuracy and fairness of transactions. The Equivalence Principle and structured appeal process provide a robust framework for resolving disputes and maintaining consensus, even for subjective and non-deterministic transactions.

Features

Natural Language Processing

GenLayer introduces Intelligent Contracts that can interpret and execute instructions written in natural language. This capability allows for more complex, context-aware operations that go beyond traditional smart contracts.

Directly Accessing Web Data

Unlike conventional blockchain platforms, GenLayer enables Intelligent Contracts to directly access and utilize real-time data from the web. This opens up new possibilities for creating dynamic applications that respond to external events and data sources.

Consensus Model

GenLayer employs a cutting-edge consensus mechanism known as Optimistic Democracy. This approach enhances security and efficiency by allowing transactions to be validated and finalized quickly, with the flexibility to appeal and re-evaluate in case of disputes.

Developer-Friendly Language

Building on GenLayer is made easier with a developer-friendly language that simplifies the creation of Intelligent Contracts. Whether you’re new to blockchain development or an experienced coder, GenLayer’s tools are designed to streamline your workflow and accelerate innovation.

Interoperability

GenLayer is designed to be compatible seamlessly with other blockchain platforms and traditional web services.

Token

GenLayer’s native token fuels the whole incentive model. In addition to traditional utilities like network fees and staking, the token can also be used for tips and appeals. However, its maximum supply will remain uncapped.

Investors

YeagerAI, the development company behind the decentralized artificial intelligence network GenLayer, closed a $7.5 million seed round in August. The round was led by North Island Ventures. Other notable names at the cap table included Node, Arrington Capital, MH Ventures, WAGMI Ventures, Block Builders, Maelstorm, and ZK Ventures. 

Team

GenLayer’s founding team includes Albert Castellana Lluis, Edgars Nemse, and Jose Maria Lago. Albert is the CEO of YeagerAI and has a strong background in web3. His previous roles include the Chief Product Officer at Radix, partner and board member at Olyseum, Advisor at Sheesha Finance, and CEO at StakeHound. Edgar is the Chief Product Officer at YeagerAI and has worked at StakeHound and Radix with his co-founder, Albert. 

Conclusion

Considering GenLayer’s unique and innovative approach to connecting real-world data with smart contracts leveraging AI, its use cases could be massive. For instance, insurance premiums can be dynamically adjusted based on real-time driving behavior data, or service level agreements can be updated according to real-time performance monitoring. Similarly, it could be used to create decentralized prediction markets where users can trade on the outcomes of different events.

These use cases and unique value propositions make GenLayer an ambitious but exciting project. However, it is also worth mentioning that it is still at a very early stage of development, and it will be interesting to see how the team delivers in the coming months.