# Redistribution is Live on Mainnet!

**Published by:** [Coordinated](https://paragraph.com/@coordinated/)
**Published on:** 2025-07-23
**Categories:** eigenlayer, eigencloud, ethereum, ethereumdevelopment, elip, eip, mainnet, avs, slashing
**URL:** https://paragraph.com/@coordinated/redistribution-is-live-on-mainnet

## Content

the slashed stake is no longer wasted. the idea behind slashing is simple, punish bad actors. on eigencloud, operators run services (avs), and in return they get delegated stake from restakers. but that comes with a promise: follow the rules, or get slashed. until now, when slashing happened, the staked capital was simply burned. it was meant to be punitive. but it punished everyone equally, even honest restakers who didn’t know what they signed up for. and it left value on the table. with redistribution live on mainnet, that changes. EigenCloud @eigenlayer It’s here. Redistribution is LIVE on mainnet. Slashed funds may now be redirected instead of being burned. Rewards, slashing, and now redistribution, all working together to let AVSs build custom incentives, protect users, and grow resilient ecosystems. @capmoney_, the 198 9:05 PM • Jul 22, 2025 but what exactly is redistribution?redistribution is the next evolution of slashing. instead of sending slashed funds to a burn address, eigenlayer now lets avss choose what to do with that capital. redistributable operator sets can:reimburse affected restakersreward honest operatorsroute funds to a safety module or insurance pooleven use slashed assets to build native capital buffers for things like lending, stablecoins, or risk hedgingthis gives avss fine-grained control over incentives, penalties, and recovery.how does it work under the hood?avs creates a redistributable operator setthis must be declared at the time of operator set creationstandard operator sets cannot be converted into redistributable ones lateroperators opt inthey agree to run the avs under the given slashing rulesslashing conditions are defined offchain in the avs logicrestakers delegatethey choose to back these operators with capitalthey must assess the slashing logic and redistribution policy beforehandif a slash occursa slashId is recorded onchainfunds are moved from the slashed operatorinstead of burning, they are sent to a predefined redistributionRecipientdownstream contracts can automate how the capital is reusedthis adds a programmable layer to slashing, turning a pure penalty into a flexible coordination primitive.we already got our first adopter!Cap, a stablecoin protocol built on ethereum, is the first avs to adopt redistribution. cap @capmoney_ Cap is incredibly excited to be the first adopter of redistribution, a powerful primitive that is at the foundation of our protocol. EigenCloud’s launch of this feature unlocks a new wave of innovation on top of their stack, opening shared security to any type of coordination. EigenCloud @eigenlayer It’s here. Redistribution is LIVE on mainnet. Slashed funds may now be redirected instead of being burned. Rewards, slashing, and now redistribution, all working together to let AVSs build custom incentives, protect users, and grow resilient ecosystems. @capmoney_, the 139 9:20 PM • Jul 22, 2025 here’s what it does:cap offers yield-bearing stablecoins backed by institutional borrowersborrowers must stake capital and commit to loan termsif they default, cap can trigger a slashredistribution sends the slashed capital to a pool that protects stablecoin holdersthis creates one of the first stablecoins with onchain financial guarantees.so cool, but what does this unlock?lending with native slashing-backed guaranteesprotocols can offer unsecured loans with real risk coverageinsurance that isn’t just a promiseslashed funds cover claims directlycross-chain bridges with actual SLAsbreach an uptime or delivery guarantee? get slashed and pay the userrwas with fallback logicmissed payments or regulatory issues? use redistribution to compensateredistribution turns slashing into a source of capital, not just a deterrent.important constraints to keep in mindfully opt-in: redistribution is optional. avss must declare it, operators must opt in, and restakers must delegate with care.only for erc-20s: native ETH and EIGEN are not yet eligible.immutable once set: operator sets can’t switch between redistributable and non-redistributable.security risk goes up: if an avs or operator gets compromised, slashing + redistribution can lead to actual fund theft.stakers must do due diligence. look for:clear slashing logictrusted redistribution recipientsecure governance and key managementget started now!read documentation to get started: Redistribution Docslearn more about what users can expect with Redistribution here.read the Redistribution ELIP and comment on the Discussion Postreach out with questions on Discordtrack ongoing protocol updates on the Forumlooking at the bigger pictureredistribution brings us closer to capital-aware crypto systems. it helps apps enforce guarantees. it creates insurance-like protections. it lets protocols do more with less. and most of all, it rewards good actors while protecting users from the bad. this isn’t just a patch. it’s a primitive. redistribution is live. eigenlayer is now a programmable trust layer for capital. let the infinite games begin.

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