The Home Of EigenLayerWhat are the parties in a Re-staking process?
A Quick OverviewSo, EigenLayer is a protocol that facilitates the staking or restaking of ETH across multiple networks and protocols for better rewards for the stakers, while ensuring security for the protocols by providing more liquidity to ensure smooth operations. 😎 Just a subtle reminder that the LSTs received from the staking of native ETH can be restaked to ensure the security of subsidiary networks and earn higher rewards. This process/concept is known as restaking.How does Restaking ...
The Home Of EigenLayerWhat "Problem" does EigenLayer solve ?
The ProblemThink of a middleman or a broker you’ve just met. He says he will take your money as an investment and pay you some interest. The methodology will be his own, but your money will grow. Will you trust him? 🤔Handling finances with multiple parties involved is all about trust. The involvement of middlemen and third parties reduces trust because the opportunities for default increase. In addition to trust issues, the involvement of third parties or institutions also leads to a lack of...
The Home Of EigenLayerWhat are the benefits that an AVS receives through LRTs?
AVSs & LRTsThe amusement park analogy has proven to be quite useful. 🎢At an amusement park, there are rides, security inspectors and fun passes. 🎟️Rides are analogous to the different networks/protocols.Security inspectors are analogous to AVSs (Actively Validated Services).Fun passes are analogous to LRTs (Liquid Restaking Tokens).The Formal Definition In formal terms, AVS are blockchain applications that extend beyond EVM but use Ethereum’s extended validator set for validation semantics....
Everything you need to know about EigenLayer and the Restaking ecosystem. Learn about restaking and analyze restaking data all in one place.
The Home Of EigenLayerWhat are the parties in a Re-staking process?
A Quick OverviewSo, EigenLayer is a protocol that facilitates the staking or restaking of ETH across multiple networks and protocols for better rewards for the stakers, while ensuring security for the protocols by providing more liquidity to ensure smooth operations. 😎 Just a subtle reminder that the LSTs received from the staking of native ETH can be restaked to ensure the security of subsidiary networks and earn higher rewards. This process/concept is known as restaking.How does Restaking ...
The Home Of EigenLayerWhat "Problem" does EigenLayer solve ?
The ProblemThink of a middleman or a broker you’ve just met. He says he will take your money as an investment and pay you some interest. The methodology will be his own, but your money will grow. Will you trust him? 🤔Handling finances with multiple parties involved is all about trust. The involvement of middlemen and third parties reduces trust because the opportunities for default increase. In addition to trust issues, the involvement of third parties or institutions also leads to a lack of...
The Home Of EigenLayerWhat are the benefits that an AVS receives through LRTs?
AVSs & LRTsThe amusement park analogy has proven to be quite useful. 🎢At an amusement park, there are rides, security inspectors and fun passes. 🎟️Rides are analogous to the different networks/protocols.Security inspectors are analogous to AVSs (Actively Validated Services).Fun passes are analogous to LRTs (Liquid Restaking Tokens).The Formal Definition In formal terms, AVS are blockchain applications that extend beyond EVM but use Ethereum’s extended validator set for validation semantics....
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Everything you need to know about EigenLayer and the Restaking ecosystem. Learn about restaking and analyze restaking data all in one place.
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Imagine locking your funds in a Fixed Deposit and still being able to use them to earn extra rewards. Sounds amazing, right? 😎
This is exactly what EigenLayer stands for. By restaking—or in simpler terms, by reinvesting the same money—you can earn more rewards, secure the network, and boost new Dapps simultaneously.
Essentially, staking refers to the process of locking in your funds for the smoother operation of the blockchain network. These operations include the validation of transactions and securing the network by providing increased liquidity through your locked funds.
As we've discussed a little about staking, it is also important to know why staking was needed and how it is better than the consensus mechanism that was previously used.
Consensus Mechanism 🫱🏻🫲🏻
As blockchain is a decentralized technology, validating legitimate transactions requires agreement among network participants on the state of the ledger. To achieve this agreement, the concept of a consensus mechanism was introduced.
Various consensus mechanisms like Proof-of-Work(PoW), Proof-of-Stake(PoS), Proof-of-Commitment(PoC), etc. are used now-a-days.
Proof-of-Work(PoW) & Proof-of-Stake(PoS):
In Proof-of-Work (PoW), to achieve consensus, miners had to solve a Byzantine (mathematical) problem that involved very heavy computation and consumed a lot of energy and electrical resources. 😵💫
To promote better environmental practices 🌍, a Proof-of-Stake (PoS) consensus mechanism is being adopted. Users will stake their funds for smoother blockchain operations, earning rewards and staking tokens in return for providing liquidity.
Staking Tokens
In exchange for locking in your funds/cryptocurrencies, you receive staking tokens that hold the same value but have a different notation. For example, if you lock in ETH, you get stETH, but the value remains intact.
Now, these staking tokens, also known as liquid staking tokens (LSTs), can also be reinvested. 😉 This is known as Restaking.
Remember, the concept of Restaking? 🤔
EigenLayer is a platform that enables staking or restaking ETH using the network’s existing infrastructure to enhance both security and functionality.
An easier way of understanding would be considering EigenLayer as a broken/middleman built on Ethereum, featuring functionalities such as Decentralized Sequencing, Light Node Bridging, etc.
But, EigenLayer is not just limited to acting as a middleman between two parties i.e. the Users & the Ethereum Network. Users can also opt into EigenLayer allowing their staked assets to secure additional protocols. 💪🏻
Imagine locking your funds in a Fixed Deposit and still being able to use them to earn extra rewards. Sounds amazing, right? 😎
This is exactly what EigenLayer stands for. By restaking—or in simpler terms, by reinvesting the same money—you can earn more rewards, secure the network, and boost new Dapps simultaneously.
Essentially, staking refers to the process of locking in your funds for the smoother operation of the blockchain network. These operations include the validation of transactions and securing the network by providing increased liquidity through your locked funds.
As we've discussed a little about staking, it is also important to know why staking was needed and how it is better than the consensus mechanism that was previously used.
Consensus Mechanism 🫱🏻🫲🏻
As blockchain is a decentralized technology, validating legitimate transactions requires agreement among network participants on the state of the ledger. To achieve this agreement, the concept of a consensus mechanism was introduced.
Various consensus mechanisms like Proof-of-Work(PoW), Proof-of-Stake(PoS), Proof-of-Commitment(PoC), etc. are used now-a-days.
Proof-of-Work(PoW) & Proof-of-Stake(PoS):
In Proof-of-Work (PoW), to achieve consensus, miners had to solve a Byzantine (mathematical) problem that involved very heavy computation and consumed a lot of energy and electrical resources. 😵💫
To promote better environmental practices 🌍, a Proof-of-Stake (PoS) consensus mechanism is being adopted. Users will stake their funds for smoother blockchain operations, earning rewards and staking tokens in return for providing liquidity.
Staking Tokens
In exchange for locking in your funds/cryptocurrencies, you receive staking tokens that hold the same value but have a different notation. For example, if you lock in ETH, you get stETH, but the value remains intact.
Now, these staking tokens, also known as liquid staking tokens (LSTs), can also be reinvested. 😉 This is known as Restaking.
Remember, the concept of Restaking? 🤔
EigenLayer is a platform that enables staking or restaking ETH using the network’s existing infrastructure to enhance both security and functionality.
An easier way of understanding would be considering EigenLayer as a broken/middleman built on Ethereum, featuring functionalities such as Decentralized Sequencing, Light Node Bridging, etc.
But, EigenLayer is not just limited to acting as a middleman between two parties i.e. the Users & the Ethereum Network. Users can also opt into EigenLayer allowing their staked assets to secure additional protocols. 💪🏻
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