EigenLayer introduces a restaking model, aiming to resolve the fragmented security landscape in blockchain networks. Restaking allows staked ETH to be reused, providing additional security for other protocols while maintaining Ethereum’s base security. Through EigenLayer, participants can earn additional rewards by securing multiple protocols but must also accept the risks of potential slashing penalties from those protocols.
Ethereum’s security is decentralized across middleware applications and non-EVM-compatible solutions, making it expensive to build and maintain secure networks. EigenLayer simplifies this by enabling protocols to reuse Ethereum’s security. Validators can restake ETH to protect new applications or protocols, like data bridges or data availability layers, without requiring separate security infrastructures.
EigenLayer extends slashing conditions to staked ETH, ensuring that validators act honestly across protocols. This design enables protocols to utilize Ethereum’s robust security while benefiting from validators’ services on the EigenLayer market.
EigenLayer’s restaking model is built on two principles:
Pooled Security:
Allows multiple protocols to leverage Ethereum’s security, raising the cost of attacking individual applications.
Validators agree to additional slashing conditions, making their ETH collateral subject to penalties if they misbehave on other protocols.
Free-Market Governance:
Protocols can control how much pooled security they consume based on supply and demand.
Validators have the freedom to choose risk-reward parameters and determine which protocols they want to serve, fostering competition and efficiency in the market.
Protocols benefit from reduced costs since they can buy security from EigenLayer’s open market instead of creating their own security networks. Restakers, in turn, can reinvest their capital across multiple protocols for higher profits.
The first project built on EigenLayer is EigenDA, a data availability layer for offloading data security from Ethereum. Using a dual quorum model—with Ethereum stakers and Rocket Pool participants—EigenDA achieves 15 MB/s throughput, which is 176 times higher than Ethereum’s current capacity without Danksharding. Future upgrades could push throughput to 1 GB/s.
Other potential applications include:
MEV Boost: Maximizing miner extractable value.
Oracles: Providing real-time data feeds for smart contracts.
Bridges: Securing cross-chain transactions.
Solo Staking:
Validators can independently provide validation services for protocols or delegate operations to other operators while continuing to validate Ethereum’s network.
Trust Model:
Validators delegate operations to a trusted operator. If the operator violates agreements, they face slashing penalties.
Cost-Efficiency:
Developers leverage Ethereum’s security without maintaining their own infrastructure.
Customizability:
Protocols can choose to prioritize decentralization, scalability, or other features.
Validator Flexibility:
Validators control which protocols they secure and under what conditions.
Using EigenLayer introduces risks, as restaked ETH is exposed to multiple protocols’ slashing rules. If a protocol secured by EigenLayer is compromised, it could result in collateral loss, impacting both the validator and Ethereum’s network stability.
After two airdrops, EigenLayer experienced a 40% decline in Total Value Locked (TVL), dropping from $20 billion to $11.93 billion as users began withdrawing assets. Among the liquid staking tokens, stETH from Lido dominates, accounting for 66.1% of all assets deposited in the protocol.
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