EigenLayer: A Restaking Protocol for Ethereum

EigenLayer managed to attract 45,000 $ETH ($88M) in less than 12 hours. You probably wanna make sure you don't sleep on EigenLayer .Here's everything you need to know about @eigenlayer.

📜 Preface

EigenLayer offers ETH stakers a unique opportunity to validate new software modules on Ethereum, earning extra rewards while accepting additional slashing conditions on their staked ETH. This protocol promotes security, decentralization, and innovation within the ecosystem.

🚧 Problem

Despite thousands of DApps on Ethereum, not all leverage its trust and security fully. Existing Actively Validated Services (AVS) such as sidechains based on new consensus protocols, data availability layers (DA), new virtual machines, oracles, and trusted execution environments, etc. are typically responsible for their own security,

Problem is they suffer from fragmented trust networks and value leakage due to separate fee structures. This results in weakened dApp security and higher operational costs for AVS rewards.

✨ Solution

EigenLayer introduces re-staking and free-market governance to bridge these gaps. Users can re-stake their ETH to various AVS, earning additional revenue for providing security and verification services.

Free-market governance allows validators to choose AVS based on risk appetite, striking a balance between Ethereum's stable governance and AVS's innovation.

⚙️ Restaking Methods

EigenLayer offers multiple staking options such as native restaking, LSD restaking, and LP restaking. This flexibility empowers validators to participate in AVS according to their preferences and resource capabilities.

🙋 Delegators

Restakers who wish to participate in EigenLayer without running nodes themselves can delegate their rights to operators.

These operators deposit the delegated stake, create new nodes, and distribute proceeds to the delegators. This encourages more widespread participation.

🔪 Slashing Analysis

Slashing is a crucial mechanism to deter malicious activities. EigenLayer avoids issuing fungible tokens, eliminating potential conflicts between holders and node operators.

Risk management tackles operator collusion and unintended slashing, using rigorous security audits and a governance committee.

📜 Governance Framework

EigenLayer's reputation-based committee, comprising prominent members from Ethereum and EigenLayer communities, oversees upgrades and slashing reviews. This approach fosters trust and ensures proper vetting of new AVS.

🔒 Maximizing Security

EigenLayer proposes two design patterns - hyperscale AVS and lightweight tasks. Hyperscale AVS distributes computing workload among participants, lowering costs and increasing throughput. Lightweight tasks enable low-cost, redundant verification by operators.

🌐 A World with EigenLayer

EigenLayer empowers various protocols through AVS services, from data availability layers to MEV management. It leverages staker heterogeneity to expand blockspace and breaks the democracy-agility trade-off in Ethereum upgrades.

💼 Business Models

AVS on EigenLayer can adopt diverse models, from pure wallets to tokenization of fees. These models provide revenue-sharing opportunities for operators and enhance utility and value for protocol tokens.