EigenLayer is developing one of the most important primitives on Ethereum since the base chain. This allows any distributed system to inherit security from Ethereum’s trust network. While Restaking enables the creation of new distributed systems it also incentivizes higher participation in Ethereum staking.

With restaking as a primitive and EigenLayer as a protocol, a network can program three types of trust: Economic Trust, Decentralized Trust, and Ethereum inclusion.

As restaking gains more prevalence, there is a natural need for services that enable and simplify the restaking process for new users. These services, such as Renzo, provide an interface to restake on EigenLayer abstracting away the technical barriers, resource allocation, and risk management. In turn, they also enable the creation of new primitives and design considerations for AVS applications, fostering open innovation and flexibility in the construction open distributed systems.

This research article will cover a few innovative applications that are possible with EigenLayer and protocol services built on top that enable such new designs:

1. Time-Locked Economic Security: AVSs that require a fixed value of economic security for a predefined time duration can do so via services such as Renzo. Here, the said participants are bound via a time-locked security contract to certain economic security and ensure the AVS does not worry about the volatility in staked value, especially during periods of important time-sensitive projects (for eg. AI training tasks occurring on a service provider's hardware needs security till the model training is complete). These time-locked contracts can also offer different incentives from vanilla staking and foster long-term staking commitment.

2. Chimera chains / Rollups: With an ever-increasing number of rollups launching atop Ethereum, there will be a large number of applications operating across rollups that require atomic transaction inclusion guarantees.  An ideal situation would resemble a setting in which a single atomic transaction can try to complete the execution of contract calls on both chains and either succeed or fail. Completion of transactions on one chain and failure on the other would not be desirable. This has also been described as shared validity sequencing.  An AVS could include sequencer operators from multiple networks that commit to chimera state partitions to facilitate these operations.

3. Data Availability: EigenDA, EigenDA is a secure, high throughput, and decentralized data availability (DA) service built on top of Ethereum using the EigenLayer restaking primitive.  A service like Renzo can enable wETH restaking on rollups that seek Data Availability from EigenDA. This transaction is performed using a decentralized network of relay operators also on EigenLayer. Cross-chain staking allows rollup users and treasuries like Celo and Mantle to earn rewards from restaking while retaining their capital on the rollup.

4. Verified Economic Trust (Privacy preservation): EigenLayer will open up a new era of adoption that will include AVS clients that seek Ethereum’s security but are required to moderate certain participants due to their geographical jurisdiction, on-chain history, or even compliance requirements. Thus, these clients can incentivize participating nodes and restakers to meet predefined profiles. Renzo can independently moderate such participants while passing on higher incentives to them.

5. Enterprise restaking: Enabling any player to permissionlessly build the restaking infra end-to-end, a smart contract that accepts deposits, node infrastructure, and securing the AVS strategy, thus controlling the entire flow with or without a liquid token. This also offers flexibility to custom-build parts of the infrastructure that suit their specific tastes and preferences. In many ways, this is similar to Tanssi for Parachain deployment.

6. Dual staking marketplace: In dual staking, restakers are required to stake the AVS's native token, and both ETH and the rewards are split at a determined rate. This will open up doors for marketplaces wherein AVS stakers are matched with ETH restakers and specific operator nodes to provide combined economic security, similar to Ignite by Benqi.

7. Financial primitives: Fractionalisation of AVS rewards via liquid tokens will enable the creation of new on-chain financial primitives, allowing restakers to hedge against AVS price volatility, slashing risks and making the restaking marketplace more efficient. Stakeholders can also build reward management strategies for the AVSs they support.

8. Ecosystem-specific restaking tokens: An ecosystem-specific LRT is backed by LSTs/ETH restaked only to secure a specific AVS that supports smart contracts. These LRTs are minted on the said AVS and can have higher use cases and introduce new primitives such as:

   1. Priority execution - Users holding or transacting the said LRTs get priority execution on the chain

   2. Fee rebates - Fee rebates on transactions involving the LRT

   3. Integrating LRT as a Gas token

   4. Dual governance representing aligned token-holders + restakers

As Renzo builds one of the first strategy managers and liquid restaking tokens on EigenLayer, we are excited about the open innovation possibilities via restaking. If you are an AVS developer, researcher, or team building on EigenLayer, feel free to reach out to team Renzo on X.

Thanks to Neel Daftary and Krane for feedback and inputs.

EigenLayer is developing one of the most important primitives on Ethereum since the base chain. This allows any distributed system to inherit security from Ethereum’s trust network. While Restaking enables the creation of new distributed systems it also incentivizes higher participation in Ethereum staking.

With restaking as a primitive and EigenLayer as a protocol, a network can program three types of trust: Economic Trust, Decentralized Trust, and Ethereum inclusion.

As restaking gains more prevalence, there is a natural need for services that enable and simplify the restaking process for new users. These services, such as Renzo, provide an interface to restake on EigenLayer abstracting away the technical barriers, resource allocation, and risk management. In turn, they also enable the creation of new primitives and design considerations for AVS applications, fostering open innovation and flexibility in the construction open distributed systems.

This research article will cover a few innovative applications that are possible with EigenLayer and protocol services built on top that enable such new designs:

1. Time-Locked Economic Security: AVSs that require a fixed value of economic security for a predefined time duration can do so via services such as Renzo. Here, the said participants are bound via a time-locked security contract to certain economic security and ensure the AVS does not worry about the volatility in staked value, especially during periods of important time-sensitive projects (for eg. AI training tasks occurring on a service provider's hardware needs security till the model training is complete). These time-locked contracts can also offer different incentives from vanilla staking and foster long-term staking commitment.

2. Chimera chains / Rollups: With an ever-increasing number of rollups launching atop Ethereum, there will be a large number of applications operating across rollups that require atomic transaction inclusion guarantees.  An ideal situation would resemble a setting in which a single atomic transaction can try to complete the execution of contract calls on both chains and either succeed or fail. Completion of transactions on one chain and failure on the other would not be desirable. This has also been described as shared validity sequencing.  An AVS could include sequencer operators from multiple networks that commit to chimera state partitions to facilitate these operations.

3. Data Availability: EigenDA, EigenDA is a secure, high throughput, and decentralized data availability (DA) service built on top of Ethereum using the EigenLayer restaking primitive.  A service like Renzo can enable wETH restaking on rollups that seek Data Availability from EigenDA. This transaction is performed using a decentralized network of relay operators also on EigenLayer. Cross-chain staking allows rollup users and treasuries like Celo and Mantle to earn rewards from restaking while retaining their capital on the rollup.

4. Verified Economic Trust (Privacy preservation): EigenLayer will open up a new era of adoption that will include AVS clients that seek Ethereum’s security but are required to moderate certain participants due to their geographical jurisdiction, on-chain history, or even compliance requirements. Thus, these clients can incentivize participating nodes and restakers to meet predefined profiles. Renzo can independently moderate such participants while passing on higher incentives to them.

5. Enterprise restaking: Enabling any player to permissionlessly build the restaking infra end-to-end, a smart contract that accepts deposits, node infrastructure, and securing the AVS strategy, thus controlling the entire flow with or without a liquid token. This also offers flexibility to custom-build parts of the infrastructure that suit their specific tastes and preferences. In many ways, this is similar to Tanssi for Parachain deployment.

6. Dual staking marketplace: In dual staking, restakers are required to stake the AVS's native token, and both ETH and the rewards are split at a determined rate. This will open up doors for marketplaces wherein AVS stakers are matched with ETH restakers and specific operator nodes to provide combined economic security, similar to Ignite by Benqi.

7. Financial primitives: Fractionalisation of AVS rewards via liquid tokens will enable the creation of new on-chain financial primitives, allowing restakers to hedge against AVS price volatility, slashing risks and making the restaking marketplace more efficient. Stakeholders can also build reward management strategies for the AVSs they support.

8. Ecosystem-specific restaking tokens: An ecosystem-specific LRT is backed by LSTs/ETH restaked only to secure a specific AVS that supports smart contracts. These LRTs are minted on the said AVS and can have higher use cases and introduce new primitives such as:

   1. Priority execution - Users holding or transacting the said LRTs get priority execution on the chain

   2. Fee rebates - Fee rebates on transactions involving the LRT

   3. Integrating LRT as a Gas token

   4. Dual governance representing aligned token-holders + restakers

As Renzo builds one of the first strategy managers and liquid restaking tokens on EigenLayer, we are excited about the open innovation possibilities via restaking. If you are an AVS developer, researcher, or team building on EigenLayer, feel free to reach out to team Renzo on X.

Thanks to Neel Daftary and Krane for feedback and inputs.