Everyone is talking about EigenLayer. With @eigenlayer, ETH's security will extend to all onchain apps, enabling major progress across infra and eliminating oracle & bridge exploits for good. A thread on everything you should know🧵
1/ What is EigenLayer? EigenLayer eliminates fractured trust networks by enabling $ETH stakers to opt into validating new software modules on top of the Ethereum ecosystem.
2/ What problem does it solve? Before Eigenlayer, any module that can't be deployed or proven on top of the EVM, couldn't absorb the pooled trust of Ethereum.
3/ Examples of such modules include:
- DA layers
- New VMs
- Oracle Networks
- Sidechains w/ new consensus protocols
4/ As a result, these modules required developers to build their own Actively Validated Services (AVS) with validation semantics that must be either:
1. Secured by a custom native-token
2. "Permissioned" in nature
5/ Along with the obvious technical overhead, this leads to dApps with multiple trust networks (eg. ETH + module), which are MUCH more vulnerable to attacks due to the module's low cost of corruption.
6/ As more modules & dApps are built, security becomes increasingly fragmented, making it more difficult and expensive to bootstrap more of these AVSs. Until now...
7/ Enter stage: EigenLayer
EigenLayer enables modules to be secured with restaked ETH rather than their own tokens. Restaked ETH can then be freely reallocated among modules based on risk & reward.
8/ "Restakers" operating nodes on EigenLayer can earn extra revenue for their services, while being held in check through the risk of getting their mainnet $ETH stake slashed for misbehavior.
9/ In doing so, EigenLayer increases the minimal cost of corruption to that of Ethereum’s, greatly reducing the risk of a 51% attack.
10/ In a broader sense, EigenLayer provides an outlet for AVSs to "buy" decentralization.
The more AVSs that join, the more profitable it becomes to run home validator nodes on Ethereum, which incentivizes decentralization!
(as explained by @sreeramkannan)
11/ Why does it all matter? In addition to the stated benefits, in a practical sense, this functionality also enables Eigenlayer to play a significant role in advancing modular blockchain infra via:
12/ Data Availability
EigenDA is an opt-in middleware that incorporates DA sampling & proof-of-custody, enabling $ETH stake to provide data availability for app-rollups like @Calderaxyz.
13/ Decentralized SequencersThe sequencer for a rollup executes transactions, but are currently entirely centralized.EigenLayer enables decentralization via reusing $ETH stake for sequencer leader election.
14/ That's not to mention the business-models enabled by Eigenlayer.For example, if a module operates as a commercial service, Eigenlayer enables that company to earn a fraction of fees from gas as return for their services!
15/ If a module operates as a protocol, users can opt to pay gas fees using its native token.Fees are then divided between $AVS stakers and ETH restakers on EigenLayer, ensuring that the native token has its own utility.
16/ In a nutshell, EigenLayer has introduced a new frontier in protocol security, providing the foundations for a new wave of secure, fully-decentralized applications to arise. Consumer use-cases here we come ✨
18/ Also, if you wanna chat about anything discussed in this thread feel free to reach out! My DMs are always open :)