What is EigenLayer? EigenLayer is a ReStaking platform that unlocks liquidity for ETH assets in the form of LP or LST (liquidity staking tokens) and generates additional income for the asset holders. So what is EigenLayer? What’s special about it and how does it work? Let’s find out in this article!
EigenLayer Overview
What is EigenLayer?
EigenLayer is the first platform to introduce Restaking, allows reuse of ETH across the consensus layer. Users staking native ETH or with liquidity staking tokens (LST) can choose to participate in the EigenLayer smart contract to stake ETH or LST to extend security to crypto economics and applications online supplements to earn extra rewards.
Holders of assets such as stETH, rETH, cETH, LP-ETH, LP-stETH,… can Stake and authorize Validators to earn additional income. But you need to choose a reputable Validator. Because if the Validators to whom you authorize assets misbehave, they will be penalized by the platform. This means that your assets will be partially lost depending on the severity.
That’s why users who stake assets on EigenLayer will not receive back a Token representing their assets on the platform. That is, when you deposit 100 stETH into the platform, you will not receive any other asset representing the position.
AVS (actively validated services), which are the validation services here, are Validators mounted on the EigenLayer layer. To attack, it is necessary to account for about 50% of the total Stake assets on the platform. As for other Staking protocols or the Ethereum network, to attack an AVS, you only need to occupy about 50% of the shares of an AVS. In addition, the introduction of Restaking brings high profits, increasing the demand for ETH Staking, making the Ethereum network more secure and fees centralized.
On the other hand, Validators on the Ethereum network can install themselves to authenticate the EigenLayer network. And Validators on EigenLayer can operate and authenticate at the same time for many protocols and platforms built on EigenLayer.
Application cases for EigenLayer:
- Hyperscale Data Availability Layer (Hyperscale AVS): It is possible to build a layer of hyperscale data (DA) that provides high DA ratio and low cost using EigenLayer resetting and some advanced ideas in DA developed in Ethereum community, including Danksharding.
- Decentralized Sequencers (Lightweight/hyperscale AVS): Many Rollups require a decentralized sequencer for their own MEV management and censorship resistance. These sequencers can be built on top of EigenLayer with a maximum number of ETH stakers, which can have a minimum number of unique decentralized sequencers performing the service for synthesized many times.
- Light-Node Bridges (Lightweight AVS): Light-node bridges to Ethereum can be easily built using EigenLayer. For example, the Rainbow Bridge between NEAR and Ethereum is based on the Optimistic model but has high latency due to high verification gas costs.
- Fast-Mode Bridges For Rollups (Lightweight AVS): For ZK compilations, as the cost of proof verification on Ethereum remains high, aggregation sequences write to Ethereum infrequently, affecting composability and delaying guarantees confirm. It is possible for a minimal group of miners on EigenLayer with a large amount of ETH to participate in verifying the ZK proof offline and confirming that the proof is correct on-chain.
- Oracles (Lightweight AVS): There have been proposals to host price feeds into Ethereum or use Uniswap Token quorum to provide price feeds. Such type of Oracle can be built through Eigenlayer.
- Opt-in Event-Driven Activation (Lightweight AVS): Event-driven triggers such as liquidations and collateral transfers are currently not available on Ethereum. Although they can be built on a separate layer, Nodes do not manage block space, and cannot guarantee the inclusion of event-driven actions.
- Opt-In MEV Management: As a simple example, MEV can be built on EigenLayer by a group of restorers who decide to divide MEV equally among its members. Any restorer who deviates from the prescribed MEV smoothing behavior is subject to guillotine.
- Settlement Chains with Ultra-Low Latency: Ethereum has high latency to get final results (up to 12 minutes). EigenLayer allows the creation of reset sidechains where ETH resetters can participate in new consensus protocols, some of which have very low latency and very high throughput.
- Single-Slot Finality (Lightweight AVS): It is possible to imagine nodes signing the finality of a block through an opt-in mechanism on EigenLayer. The core idea would be that reset nodes can now attest that they will not build on a chain that does not include an attested block, thus creating a potential final path.
For protocols or platforms that need high security, they can require Validators to only be staked with ETH to participate in validation. And they can hire 1 or a group of Validators at will or in accordance with their needs. And protocols can issue tokens, which can be used for staking in the AVSs that operate the protocol itself. And the service fee paid by AVS users, will be distributed to bettors and validators.
EigenLayer has established a DAO to administer the platform and manage Validators. Since the DAO will be the backbone that determines all activities related to the protocol, the DAO board will initially consist of members of Team EigenLayer and those with a voice on Ethereum.
EigenLayer Difference
- Unlocking liquidity, creating more applicability for ETH’s LST and LP assets helps increase income for holders.
- Increase income for Validator Nodes on Ethereum or allow Validators to run for many protocols and platforms to increase income.
- Enhance security for other protocols, platforms, and especially help Ethereum become more secure with increased Staking demand to earn profits for ETH holders.
Mechanism of action
Restaking methods on EigenLayer:
- Native Restaking: Validators can naturally reset their staked ETH by pointing their withdrawal credentials to EigenLayer contracts. This is equivalent to L1 EigenLayer yield stacking.
- LST Restaking: Validators can reset by staking their LST, ETH that has been reset through protocols like Lido and Rocket Pool, by transferring their LST into the EigenLayer smart contract. This is equivalent to DeFi Eigen yield stacking.
- ETH LP Restaking: Validators stake LP tokens of a pair consisting of ETH. This is equivalent to DeFi yield stacking.
- LST LP Restaking: Validators stake LP tokens of a pair that includes liquid staking ETH tokens, such as Curve’s stETH-ETH LP tokens, thus using the L1 yield stacking route.
Development Roadmap
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Core Team
Chris Dury: Chief Operating Officer
- In 1993, Chris graduated with a Bachelor’s degree in Economics from Michigan State University, then he went on to graduate with a Master’s degree in Business Administration from NYU Stern School of Business.
- Chris’s first job was as an Analyst at Intel, a large technology corporation in the world. Working at Intel for 4 years, he moved to become Investment Banking Associate at SoundView Technology Group.
- In 2003, Chris started UniFone, the first venture-backed virtual mobile network operator, using WiFi in the home and mobile when away.
- In 2008, Chris was Chief Executive Officer at GetJar Inc, the largest independent mobile application store. Started as VP of Product in 2008, then promoted to COO in 2010 and CEO in 2012.
- In 2014, Chris served as Director at Amazon, leading teams of more than 100 engineers, product managers, designers, and marketers for three AWS services. Also created Merch by Amazon and created a Twitch group focused on game developers.
- In 2020, Chris was SVP Product at Domino Data Lab.
- Currently, Chris is the Chief Operating Officer at EigenLayer, a startup that provides crypto economic security in the form of aggregation services, bridges, and other blockchain applications.
Calvin Liu: Chief Strategy Officer
- In 2009, Calvin graduated with a Bachelor’s degree in Philosophy and Economics from Cornell University.
- In 2009, Calvin was an Analyst at Houlihan Lokey, having conducted technology M&A deals with a total value of more than 1 billion USD, including acquisitions of Arrow Electronics, Microchip and Flextronics.
- In 2014, Calvin co-founded Outpour, which created an iOS app that allowed users to anonymously write messages of appreciation about their friends. Launched with WIRED coverage on December 14.
- In 2018, he became Strategy Lead at Compound Labs, creating a cryptocurrency market for the Ethereum crypto asset. Supported by A16Z, Bain, Polychain, Paradigm, Dragonfly and Coinbase.
- Currently, he is Chief Strategy Officer at EigenLayer and Investor at Divergence Ventures.
Sid Sanyal: VP Engineering
- Sid Sanyal has worked as an Architect for companies such as SAP Labs, Ericsson Australia, HBOS Australia, Barclays Bank Plc, Zurich Financial Services Australia, ANZ Bank.
- In 2015, Sid Sanyal joined Amazon Web Services (AWS), where he held positions such as Senior Technical Program Manager, Principal Technical Program Manager, Engineering Manager.
- In 2020, he was Group Technical Program Manager – Privacy & Data Infrastructure at Facebook.
- In 2021, he worked as Engineering Manager & Product Lead (Web3 Infra) at Protocol Labs.
- Currently, Sid Sanyal is Vice President of Engineering at EigenLayer.
Liz Vortman: Recruiting Director
- In 2005, Liz graduated with a Bachelor’s degree in Psychology from Sonoma State University.
- In 2020, Liz became a Recruiting Consultant at Robinhood.
- In 2021, Liz works as Group Recruiting Manager, Technical Recruiting at LegalZoom. Recruitment management through engineering, data, IT and Product support, construction design and recruitment coordination supervision for about 6 months.
- In 2022, Liz worked as Senior Recruiting Manager at Domino Data Lab, managing recruitment for product and design.
- Currently, Liz is working as a Recruiting Director at EigenLayer, she starts working on the project in March 2023.
Investors
- August 22, 2022: Seed round successfully raised $14.5M led by Polychain Capital, Ethereal Ventures and participation from other funds such as Figment Capital, Robot Ventures, dao5, P2P Validator.
- March 28, 2023: Successful $50M Series A round was led by Blockchain Capital and included Coinbase Ventures, Polychain Capital, Electric Capital, Hack VC.
Tokenomics
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Exchanges
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EigenLayer’s Information Channel
- Website: https://www.eigenlayer.xyz/
- Twitter: https://twitter.com/eigenlayer
- Discord:
Summary
EigenLayer is the first project to introduce the concept of Restaking, this novelty helps unlock ETH LSD and LP assets. It also helps increase security for Etrhereum protocols built on the platform. This will be a good model and solution to help the DeFi market grow and explode in the future.
So I have clarified what EigenLayer is? EigenLayer cryptocurrency overview. Hope this article provides you with a lot of useful knowledge!