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Introduction

EigenLayer is a popular Ethereum protocol that allows for the restaking of Ether and liquid staking tokens (LSTs). Restaking solves two problems. First, the practice allows AVSs to employ Ethereum’s robust, time-tested security network – in which validators earn yield as a reward for verifying network activity and maintaining the Ethereum blockchain – rather than developing their own security systems from scratch. This massively reduces deployment time for new applications and gives developers more flexibility, reducing reliance on the Ethereum Virtual Machine. Second, restaking with EigenLayer provides significant benefits to stakers. After a stake is made on Ethereum, restaking allows EigenLayer users to earn additional yield and protocol-specific rewards from the decentralized applications that benefit from the pooled security. Initial stakes on Ethereum are untouched, and continue to perform their function.

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EigenLayer Participants

EigenLayer involves three key parties: restakers, operators and AVSs.

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Restakers

Restakers are users of EigenLayer. After making a traditional stake on Ethereum, users can generate an EigenLayer smart contract – an EigenPod – and begin restaking their locked assets.

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Operators

Restaked tokens, which can derive from natively staked Ether or LSTs, are transferred to operators. EigenLayer operators contribute to the daily upkeep of the EigenLayer network by maintaining nodes and distributing resources. If restakers want to bypass operators and perform validation activities themselves, they have the option to do so.

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Actively Validated Services

Those resources are distributed to EigenLayer’s growing network of Actively Validated Services (AVSs) – decentralized applications built in environments other than the Ethereum Virtual Machine. Because AVSs are created outside of the dedicated Ethereum development platform, additional steps are required to bridge AVS and Ethereum functions.