EigenLayer

What restaking does

Ethereum validators lock 32 ETH each to secure the network. EigenLayer lets validators opt to commit that stake to additional protocols (called "Actively Validated Services," or AVSs) — earning extra rewards in exchange for accepting additional slashing conditions if those protocols' rules are violated.

Operationally:

1. A validator stakes ETH normally on Ethereum.
2. They opt into EigenLayer's smart contracts, expressing willingness to provide additional services.
3. They register with one or more AVSs and run any additional infrastructure those AVSs require.
4. They earn rewards from the AVSs (typically in those AVSs' tokens) in addition to their normal Ethereum staking yield.
5. They face slashing risk both from Ethereum (for normal validator misbehavior) and from each AVS (for breaking those AVSs' rules).

This is restaking — using the same staked capital to secure multiple protocols.

Why this matters

The thesis: launching a new blockchain or off-chain protocol typically requires bootstrapping security from scratch — convincing validators to lock capital in a new token whose value depends on the protocol's success. This is hard. It also fragments security across many small validator sets.

EigenLayer offers a shortcut: new protocols can rent Ethereum's security pool. Validators can offer their stake without leaving Ethereum. The result: faster bootstrapping for new protocols, broader use of Ethereum's substantial security pool.

What kinds of services use it

The AVS category includes:

• Data availability — EigenDA is EigenLayer's own DA layer, competing with Celestia and others.
• Decentralized oracles — alternative oracle networks that use restaked ETH as security.
• Bridges — cross-chain message passing using restaked stake as backing.
• Coprocessors — off-chain computation services with on-chain verification.
• Threshold cryptography networks — distributed signing or randomness services.

Several dozen AVSs have launched or are in development, with more added regularly.

LRTs and the broader ecosystem

Liquid Restaking Tokens (LRTs) are a major derivative of EigenLayer. Protocols like ether.fi, Renzo, Kelp, and Puffer accept ETH (or stETH) deposits, restake on EigenLayer on the user's behalf, and issue a liquid token representing the restaked position.

LRTs let users participate in restaking yields without operating validator infrastructure or directly managing AVS selections. They've become a major DeFi category, with combined TVL in the billions.

The structural complexity: LRT holders are exposed to:

• Ethereum's underlying staking risks.
• Each AVS's slashing conditions.
• The LRT protocol's governance and contract risk.
• Smart-contract risk in any DeFi positions where the LRT is used.

This is several layers of risk stacked on the same underlying capital.

Risks and concerns

EigenLayer has been the subject of significant debate within Ethereum:

• Cascading slashing risk. If a major AVS slashes, it could affect many validators simultaneously, including the validators' core ETH stake. Critics worry about systemic effects.
• Centralization pressure. Restaking economics may favor large operators, accelerating staking centralization.
• Validator misalignment. Validators chasing AVS rewards may take on slashing risks that don't serve Ethereum's core security mission.
• Complexity. The aggregate risk picture across many AVSs is harder to evaluate than single-purpose staking.

EigenLayer's response has emphasized opt-in mechanics (validators choose what to restake, not forced exposure) and gradual rollout with conservative slashing. The debate continues.

Tokenomics

EIGEN, EigenLayer's native token, launched via airdrop in 2024 to early restakers. It serves as a coordination and governance token rather than the primary security asset (which remains restaked ETH).

EigenLayer also issues "intersubjective slashing" rules through EIGEN — a mechanism for resolving disputes that aren't algorithmically clear-cut, with EIGEN holders providing the final arbitrator role.

Where this is heading

Restaking is one of the more important architectural experiments in Ethereum since the Merge. The ecosystem is still maturing — AVSs are early, slashing has been used cautiously, and the long-run economic model isn't yet stable. Whether restaking becomes a fundamental layer of crypto infrastructure or a transient cycle remains an open question, but the early traction (billions in TVL, dozens of AVSs, mainstream LRT products) suggests durability.

Competing models — Babylon for Bitcoin-based restaking, Symbiotic as an EigenLayer alternative — are emerging in parallel, suggesting the broader pattern (shared security via restaked assets) may outlast any single implementation.