What is EigenLayer? How it is affected in long term? Let’s explore!

1/ Overview

EigenLayer is a re-staking protocol that lets users re-stake their ETH for extra yield and utilizes Ethereum's security to support middleware, blockchain, and new protocols at a reduced cost.

The entire EigenLayer protocol can be divided into:

• Demand side: middleware, data availability layers (DA), oracles protocol, bridge protocol...

• Supply side: Individual ETH stakers in staking service provider (Lido, Rocketpool...)

2/ Team

Team size: 35 members, with over 80% being engineers.

Young but experienced research in blockchain technology, making EigenLayer team a promising and noteworthy group.

Historically, projects led by such technical teams have often achieved great success.

3/ Financial

EigenLayer has garnered substantial early-stage support from the capital market, securing over $64.4M across 3 funding rounds.

With 8 high-profile backers, 4 of them are top VC tier-1.

4/ SWOT analysis

📌Project Strengths:

• Trinity benefits: achieved through 3 sources (pledging Ethereum earnings, cooperative project node construction, verified token rewards).

• Increasing market efficiency:

+ Unlock liquidity for LSD & LP tokens.

+ Save internal bootstrapping & maintenance costs for new protocol

• Enhance network security: Increase the security of the network using liquidity staking.

• Lower the threshold for project parties: project can reduce costs, and thresholds, and improve core functionality & user experience by using Ethereum trust Layer provided by EigenLayer.

📌 Project Weakness

• Risk of asset loss: If a node or network is attacked, forked, or misbehaved, the restaker's assets may be forfeited in partial or total permanent loss.

• Trust leverage risk caused by restaking.

• Asset bubble risk.

• Cancellation period risk: If the restaked ETH needs to wait a certain period of time to unlock when unstaked, then users may be exposed to liquidity and price fluctuations.

• Value capture risk: If the security and incentives provided by EigenLayer are not sufficient to attract protocols and validators -> loss of sovereignty over the protocol, reduced value of collaborative projects, or slow ecosystem development.

📌Project Opportunities

• First mover advantage: Re-staking is a new concept that has no direct competitors, if EigenLayer is successful it will become the leader.

• Market share: EigenLayer is promising to place a top TVL project in the LSD industry with a TVL of about $200B.

📌 Project Threats

• Tokenomics issues: If users can earn by restaking ETH without using native tokens from other protocols, EigenLayer's native tokens may lose value and demand.

• Reward distribution: unfair token distribution and reduced user participation.

• Security event risk: A large number of ETH is being confiscated, affecting the security of the Ethereum network.

• Technical risks: result in the loss of assets or trust of the staker and module, affecting the reputation and development of the project.

5/ Current Metrics

• TVL: $73M, ranked at top 13 in Liquid Staking TVL rakings.

• 12.9K unique addresses deposited into EigenLayer.

• Collected 161+ $ETH gas fee.

We’re in the early stage of re-staking and how it affects the long-term balance of the industry.

We hope that you find that thread helpful ❤️