All You Need to Know
About EigenLayer

Introduction

In the ever-evolving world of cryptocurrencies, new projects are constantly emerging, but EigenLayer stands out as a noteworthy exception. This Ethereum restaking protocol, boasting over $13 billion in TVL, has recently made a splash by launching on the blockchain's mainnet. Along with this significant milestone, EigenLayer has also introduced EigenDA, a data-availability (DA) service, to further enhance its offerings.

Even before its official launch, EigenLayer had already garnered substantial attention and became a preferred destination for crypto inflows. The protocol's unique feature allows users to earn additional rewards by restaking their already-staked Ether. This innovative approach has made it one of the most popular choices among crypto enthusiasts, rivaling established platforms like Lido and Rocket Pool.

Exploring Eigenlayer & Its Features

Exploring EigenLayer & Its Features

EigenLayer's initial launch introduces a limited feature set, with CEO Sreeram Kannan describing it as a "beta" version, with more features to be added in the future. Until now, users could only deposit liquid staking tokens (LSTs) into the protocol or set up a smart contract to restake ETH natively. With the mainnet now live, restakers can delegate their entire stake to one of the 200 Operators who have opted in to secure an Actively Validated Service (AVS); commonly referred to as validator service. This new functionality aims to offer greater flexibility and options for restakers, enabling them to choose an Operator that best matches their preferences and objectives.

Coinciding with its mainnet debut, EigenLayer introduced EigenDA, which is the first AVS to be launched on the protocol. It is designed to assist other blockchain applications in storing transaction data. Operators interested in running AVSs can register as node operators on EigenLayer and opt-in to manage services such as EigenDA. Initially, the active operators for EigenDA are restricted to the top 200 operators based on delegated stake, with plans to expand this group in the future.

Additionally, the mainnet does not include the following features:

1. In-protocol payments from AVSs to operators, and
2. Slashing

For those who are unaware, "Slashing" is a mechanism that EigenLayer will use to ensure the integrity of AVS operators. This method is akin to Ethereum's proof-of-stake system, where validators risk having their stake revoked if they engage in malicious activities.

To summarize, the new functionalities include:

• Restakers have the ability to delegate their entire stake to a preferred Operator.

• Operators can sign up with EigenLayer and opt-in to manage AVSs.

• AVSs can register with the protocol, commencing with EigenDA, which is currently in its beta phase.

EigenDA: The Game Changer?

The project places significant emphasis on the success of EigenDA, which is a crucial component of their long-term vision. Rollups utilizing EigenDA can benefit from the following key advantages:

• Hyper scalability: Designed to accommodate future growth, allowing for a substantial increase in transactions on rollups.

• Cost flexibility: Offers options for on-demand and reserved bandwidth, along with the ability to make payments in native tokens.

• Seamless integration: Rollups can easily integrate with the Optimism Stack and Arbitrum Orbit through RAASs like AltLayer, Conduit, Caldera, and Gelato.

• Native token staking: Rollups have the flexibility to customize EigenDA to use their native token in a separate quorum for verifying data availability.

Conclusion

EigenLayer's innovative approach allows new blockchain protocols to leverage Ethereum's security by enabling users to restake their ETH, thus pooling it with a larger amount from other users in return for additional interest. And this recent mainnet launch has fueled expectations for even greater demand.

Moreover, there’s a brewing interest in the crypto community over EigenLayer’s unique points system, which many anticipate could be linked to a future token airdrop. This trivial yet unique gamification has also played a major role in attracting large sums of deposits into the protocol.

Moving forward, the team is currently focused on developing in-protocol payment and slashing features, as well as preparing for the launch of additional AVSs to enhance the protocol and challenge Lido's dominance. In early March of this year, EigenLayer surpassed Aave to become the second-largest DeFi protocol in the crypto space.

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