EigenLayer is an innovative protocol on Ethereum that introduces the restaking mechanism, allowing previously staked assets to be reused to secure new services. This turns Ethereum into a source of crypto-economic security for a wide range of applications, including AVS (Actively Validated Services) and the EigenCloud platform.
Contents
- What is EigenLayer
- Restaking Mechanism
- AVS and Ecosystem
- The EigenCloud Platform
- EIGEN Token and Intersubjective Slashing
- Risks and Challenges
- Conclusion
1. What is EigenLayer
EigenLayer is a protocol built on Ethereum that enables the reuse of already staked ETH or LSTs (Liquid Staking Tokens) to secure external networks and services. This model reduces the infrastructure costs for new projects and creates a “trust marketplace” where stakers, operators, and AVS interact via smart contracts with embedded incentives and penalties.
Development of EigenLayer began in 2024, and the project has been growing rapidly. It introduces modularity into Ethereum, effectively turning it into a "security-as-a-service" platform. This enables easier deployment of decentralized applications and supports the expansion of the Web3 ecosystem without requiring new validators.
2. Restaking Mechanism
Restaking is a core feature of EigenLayer. It allows stakers to reuse their ETH for both securing Ethereum and supporting AVS at the same time. This resembles rehypothecation, but with the key difference that users retain full control over their assets.
Main Forms of Restaking:
| Type of Restaking | Description |
|---|---|
| Native Restaking | Reuse of ETH directly staked on Ethereum. |
| LST Restaking | Use of liquid staking tokens (e.g., stETH) that represent ETH locked in staking. |
Via smart contracts, stakers connect their assets to EigenLayer and select AVS to support. In return, they may earn additional rewards, but also face the risk of slashing if the selected operators violate the terms.
3. AVS and Ecosystem
AVS (Actively Validated Services) are external protocols that require crypto-economic security. EigenLayer enables them to leverage Ethereum’s staked capital through restaking, providing access to a robust validation layer without building their own consensus mechanisms.
AVS may include:
- Sidechains and rollups
- Data availability layers (DA)
- Oracles, bridges, virtual machines, and other infrastructure components
EigenLayer functions as a "trust marketplace," where AVS offer rewards to operators, who in turn attract stakers willing to delegate their assets. This model enables the rapid and efficient scaling of Ethereum’s security to external services without requiring the deployment of separate blockchains or consensus mechanisms.
Currently, the EigenLayer ecosystem is expanding actively. Key AVS such as EigenDA (data availability), EigenCompute (off-chain computation), and EigenVerify (proof verification) are already operational. The number of such services is expected to grow within the unified EigenCloud platform, positioning EigenLayer as a central hub for decentralized security.
4. The EigenCloud Platform
EigenCloud is EigenLayer’s integrated platform combining key services: EigenDA (data availability), EigenCompute (off-chain computation), and EigenVerify (dispute resolution). It offers developers a robust foundation to build scalable, decentralized applications with enhanced security via restaking.
The platform includes CLI DevKit, orchestration tools, built-in monitoring, incentive systems, and usage accounting — all designed to streamline AVS development and management.
EigenCloud recently secured $70 million in funding from a16z, reflecting strong investor confidence. The platform is positioned as a “verifiable cloud layer” with high throughput (up to 50 MB/s), suitable for enterprise-grade Web3 solutions.
5. EIGEN Token and Intersubjective Slashing
EIGEN is a universal “work token” within the EigenLayer framework. It enables both objective and intersubjective slashing — the latter based on community consensus about misconduct, rather than hardcoded rules. This is particularly valuable for complex AVS where behavior cannot always be verified automatically.
The EIGEN Token Enables:
- Custom slashing conditions defined by each AVS
- Forking tokens mechanism to resolve disputes through community consensus
- A balance of incentives and penalties to ensure honest behavior from participants
With these features, EIGEN serves not only as a reward token but also as a governance and coordination tool for robust decentralized security across diverse services.
6. Risks and Challenges
While restaking increases capital efficiency and yield, it also introduces new risks. Using the same collateral across multiple services makes the ecosystem more interdependent and prone to cascading failures.
Reuters highlights the threat of “collateral loops,” where restaked assets are over-leveraged. Financial Times warns that a failure in one AVS could lead to a broader systemic crisis.
Another issue is cumulative slashing — when multiple AVS penalize the same staker, potentially wiping out incentives. EigenLayer addresses these challenges with built-in safeguards at the protocol level.
7. Conclusion
EigenLayer represents a breakthrough in decentralized security infrastructure. By allowing the reuse of Ethereum's economic security, it empowers developers to build scalable services without setting up new validators, while introducing flexible incentive and governance models.
EigenCloud, the expanding AVS ecosystem, the EIGEN token, and the restaking mechanism together form a powerful foundation for the next generation of decentralized services. While risks remain, the protocol’s thoughtful design and growing adoption signal its potential to become a core layer of the Web3 infrastructure.
