Use Case

EigenLayer introduces itself as a restaking collective for Ethereum, enabling Ethereum validators (ETH stakers) to extend their staking capabilities to validate new software modules built on top of the Ethereum ecosystem. This is facilitated through smart contracts, which allow additional slashing conditions on validators’ staked ETH, extending Ethereum's cryptoeconomic security to these new modules. This setup creates a marketplace where validators, referred to as operators, provide their expertise and hardware to support nascent networks, while those networks, called Actively Validated Services (AVSs), gain access to reliable security.

It enables the validation of various types of modules beyond traditional dApps, including but not limited to:

Consensus Protocols
Data Availability Layers
Virtual Machines
Keeper Networks
Oracle Networks
Bridges
Threshold Cryptography Schemes
Trusted Execution Environments

This vast support transforms the Ethereum ecosystem into a more versatile and secure platform for decentralized applications and services.

EigenLayer’s most significant innovation is the decoupling of the economic incentives from the native token of a network. Validators do not need to hold or stake a new network’s token. Instead, they deposit or attract stakes of established assets such as Ethereum (ETH) or liquid staking tokens (LSTs). In the event of malicious behavior, these assets can be slashed, which mitigates the risk for validators by allowing them to stake assets they are already comfortable with.

This approach provides several key advantages for both validators and new protocols. Validators avoid the risk of holding new, volatile tokens, while protocols can eliminate the need for high token emissions to incentivize security. This model also allows protocols to selectively curate their operator sets based on specific security needs, enhancing the overall resilience of the network.

However, with this new model comes reliance on EigenLayer itself. While EigenLayer runs on Ethereum, which is known for its robust security, the smart contracts that facilitate EigenLayer still introduce an element of risk. Nonetheless, the backing of Ethereum’s extensive node network and significant capital provides a strong foundation for the platform’s security model.

From an economic standpoint, protocols utilizing EigenLayer have flexibility in how they compensate validators and stakers. Rewards can be distributed in established tokens such as ETH or stablecoins, creating a transactional relationship where operators provide services in exchange for a widely accepted currency. Alternatively, protocols can distribute rewards in their own native token, which resembles the traditional crypto model. This latter option, however, requires protocols to ensure their token maintains value, or operators will likely sell the tokens immediately upon receiving them, undermining the network’s long-term security.

By allowing new Actively Validated Services (AVS) to bootstrap security from Ethereum’s large validator set, EigenLayer addresses the bootstrapping problem faced by new AVS. It also enables trust aggregation, significantly improving the trust model for dApps by increasing their pooled capital (and thus security).

EigenLayer aims to solve the fragmentation of security in the blockchain space by aggregating Ethereum's security across many modules. This elevates the security of decentralized applications that rely on these modules and presents ETH holders with additional value and fee-generating opportunities through participation in this expanded security network.

Aggregated Security with EigenLayer

In the traditional Ethereum staking model, validators stake their ETH to secure the Ethereum blockchain itself—validating transactions and maintaining the integrity of the main network. This staking and the associated security benefits are directly tied to the main Ethereum blockchain and are not inherently extendible to other applications or services built on or interacting with Ethereum.

Thus, each new application or service must develop its own mechanisms for establishing trust and security, leading to fragmented and isolated security models across the ecosystem. This complicates the landscape for users and developers and means that the security and trust established by Ethereum's validator set do not automatically benefit the broader ecosystem.

New applications and services built on Ethereum face the challenge of bootstrapping their security, particularly if they require their own consensus mechanisms or validator sets. This often involves significant resources and time to attract a sufficient number of validators to ensure robust security, during which these applications are more vulnerable to attacks. Since EigenLayer’s launch, the protocol has absolutely surged in total value locked (TVL) to 4.6 million ETH (~$12B USD) as of Q3 2024.

However, through EigenLayer, new startups on Ethereum can leverage aggregated security and avoid the high upfront costs associated with building their own security models and tokenomics structures from the ground up. Theoretically, this should lead to a greater boom in the Operator-to-AVS bridge marketplace and fuel economic growth overtop Ethereum.

Additionally, new innovations or improvements to Ethereum's infrastructure (e.g., consensus mechanisms and scaling solutions) often require extensive testing and validation before they can be integrated into the main network. Without a mechanism like EigenLayer, these innovations are either tested in isolated environments that may not fully replicate real-world conditions or must be deployed cautiously, potentially slowing down the pace of innovation and the adoption of new technologies that could benefit the entire ecosystem. Thus, EigenLayer can also serve as a more effective launchpad for Ethereum Improvement Proposals (EIPs).

Eigenlayer Roles and Responsibilities within the Blockhain Stack

Actively Validated Services (AVS)

AVS are specialized services or protocols that require validation work—similar to that performed by Ethereum validators—but for specific applications or across different layers and domains within the blockchain ecosystem. These could include data availability layers, consensus mechanisms for new blockchains, oracle networks, and various other decentralized services that benefit from secure and trustworthy validation.

Ethereum validators can opt to restake a portion of their staked ETH to secure AVS. This restaking is facilitated through EigenLayer's smart contracts, which define the terms, rewards, and potential penalties (slashing conditions) for validators who choose to support AVS. By allowing an AVS to leverage the staked ETH of Ethereum validators, EigenLayer significantly enhances the security of these services. Validators' commitment of their staked ETH to AVS introduces a robust layer of cryptoeconomic security, making it expensive and risky for validators to act maliciously.

Validators are incentivized to restake their ETH to support AVS through the potential for additional rewards. These rewards can come from the fees generated by the AVS or other incentive mechanisms designed by the services themselves. This creates a mutually beneficial relationship between validators and AVS, enhancing the ecosystem's overall value.

EigenLayer facilitates a more decentralized and trust-aggregated ecosystem. By allowing multiple AVS to draw security from the same pool of Ethereum validators, it aggregates trust across the ecosystem, reducing the need for each AVS to independently establish a robust validator set. This aggregation can lower barriers to entry for new services and strengthen the trustworthiness of the entire ecosystem.

Operators

At the core of the advantages of AVSs is the decentralized validator set, which leverages the participation of reputable operators within the EigenLayer ecosystem. These operators handle AVS tasks in a trust-minimized way, ensuring robust integrity without the necessity of issuing their own tokens—this approach eliminates the need for significant initial capital typically required to establish a decentralized network.

Distributing tasks among various operators significantly improves AVSs' operational efficiency. This method allows for horizontal scaling, contrasting sharply with non-EigenLayer applications that rely on each validator to manage complete tasks. This burdens them as complexities grow and decentralization becomes challenging to maintain.

Operators can specialize in managing the participation in various AVS, handling the specific requirements, challenges, and opportunities each AVS presents. This specialization allows for more efficient and effective management of the restaked ETH, potentially optimizing returns for validators and ensuring better security for AVS.

By delegating to Operators, validators can participate in multiple AVS without needing to directly manage the complexities and operational requirements of each service. This scalability is essential for expanding the reach and impact of Ethereum's security through restaking.

The Operator mechanic introduces flexibility for validators in how they engage with the restaking ecosystem. Validators can choose Operators based on performance, reputation, the AVS they support, and their management strategies, tailoring their restaking activities to align with their preferences and risk tolerance.

The introduction of Operators opens up Validators to a type of service marketplace where management duties for each AVS can be outsourced in a three-step process:

Delegation: Validators delegate a portion of their staked ETH to Operators, authorizing them to use this capital to participate in specific AVS on their behalf.
Management: Operators manage the day-to-day participation in AVS, including meeting the validation requirements, optimizing strategies for reward maximization, and adhering to the governance and operational standards of each AVS.
Rewards and Penalties: Operators are responsible for distributing rewards earned from AVS back to the validators and are also accountable for any penalties (such as slashing) that may occur due to mismanagement or failure to meet AVS requirements.

Defining a Task in EigenLayer's AVS

In EigenLayer's ecosystem, a task is defined as the smallest piece of work that operators undertake when participating in an AVS. Each task is associated with specific slashing conditions, ensuring that operators are held accountable for their actions within the system. Tasks vary widely in their nature and scope, encompassing a range of activities from data hosting and serving to post-state roots for bridge services.

Completing tasks enables validators to earn additional rewards beyond what they receive for securing the Ethereum base layer. These rewards come from the fees generated by the services they help secure and are a significant incentive for validators to participate in the AVS ecosystem.

Tasks are a fundamental part of how AVS extends Ethereum's security model to support a diverse range of applications and services. They allow for a flexible, opt-in model where validators can choose which services to support based on their capabilities and risk appetite. This model facilitates a more efficient allocation of validation resources across the ecosystem, reducing the capital costs associated with securing new blockchain services and preventing value leakage from the Ethereum ecosystem.

Moreover, tasks enable the creation of a highly secure and decentralized validation layer for applications that cannot be fully realized within Ethereum's current architecture, such as those requiring off-chain data or complex computations. This not only enhances the security of these applications but also fosters innovation by allowing developers to leverage the pooled security and trust of Ethereum for their services.

Example Use Case: EigenDA

Developed by EigenLabs, EigenDA stands as the inaugural AVS within the EigenLayer ecosystem, spearheading a burgeoning marketplace. This decentralized data availability (DA) service is engineered to leverage the restaking primitive of EigenLayer, optimizing for high throughput and robust security. This innovative approach not only highlights the versatility of Ethereum's security model but also sets the stage for a transformative AVS marketplace capable of revolutionizing blockchain infrastructure.

Data Availability

In the evolving blockchain ecosystem, data availability (DA) has become a central issue that ensures the verifiability and accessibility of transaction data within blocks. As blockchain technology scales, particularly with the adoption of layer-2 (L2) solutions like rollups, the role of DA becomes increasingly important. Simply confirming a transaction on-chain does not guarantee that the underlying transaction data is readily accessible. Data availability ensures that all transactional data is verifiable and that users can confirm its existence, which is a critical function for maintaining the trustless nature of blockchain systems.

The core purpose of DA is to guarantee that the transaction data in any given block is accessible for public verification. Even if a blockchain confirms a transaction, the absence of data availability could undermine the credibility of the blockchain by obscuring whether users can check the transaction data. DA is particularly significant in layer-2 solutions, which often store transaction data off-chain in order to increase scalability. However, this off-chain storage poses a challenge: how can users ensure that the off-chain data remains verifiable without requiring them to download the entire dataset? DA addresses this concern, allowing for efficient and scalable verification processes.

There are three primary reasons why DA is a critical component of blockchain architecture:

Trust: Blockchain systems are designed to be trustless, meaning they should not rely on a central authority to validate the availability of data. Without DA, users might have to place trust in a single entity that claims the data is available, thus compromising the trustless nature of the system. With DA, users can independently verify that the transaction data exists.
Scalability: As blockchain networks grow in size and complexity, storing all data on-chain becomes impractical. Offloading transaction data to external systems is essential for scalability, and DA mechanisms ensure that this off-chain data can still be verified without impeding network performance.
Fraud Prevention: DA serves as a safeguard against fraud by enabling users to check whether transactions have been processed correctly. Without this mechanism, bad actors could potentially hide or manipulate transaction data, threatening the integrity of the entire blockchain.

The DA problem arises when layer-2 solutions, like rollups, depend on layer-1 blockchains, such as Ethereum, for security but store transaction data off-chain. These layer-2 solutions rely on the underlying security of the layer-1 chain while utilizing off-chain storage to improve scalability. DA ensures that the off-chain transaction data can still be verified, eliminating the need for users to download and verify the full dataset themselves. This enhances the efficiency and practicality of these layer-2 solutions while maintaining the core security features of blockchain systems.

EigenDA

EigenDA empowers rollups with enhancements to scalability and efficiency. Utilizing a shared cryptoeconomic security model supported by EigenLayer restakers, it provides rollups with access to lower transaction costs and enhanced throughput. The architecture of EigenDA is designed to scale horizontally, which means as more restake and operators join, both security and throughput proportionally increase.

The operational dynamics of EigenDA are quite straightforward yet robust: L2 sequencers transmit transaction data as 'blobs' to the Disperser, which then employs erasure coding to expand this data, allowing recovery even if only part of the data is available. This expanded data is segmented into chunks, each accompanied by a KZG commitment and proof, dispatched to various EigenDA operators. These operators validate each chunk using the provided proofs, ensuring their authenticity. Once validated, operators return their signatures to the Disperser, which aggregates these and uploads them to the EigenDA Manager contract on Ethereum. This streamlined process secures large volumes of data on-chain, facilitating rapid and scalable transaction processing for L2 networks.

Technological Breakthroughs

EigenDA is engineered to amplify Ethereum's data bandwidth from the existing capacity of 80 kilobytes per second to an impressive 15 megabytes per second, marking a nearly 200-fold increase. This surge in data handling capabilities is pivotal for overcoming scalability bottlenecks, thus enhancing the efficiency and scalability of blockchain applications. EigenLayer’s ambitious target to expand this capacity further to 1 terabyte per second represents a quantum leap forward in blockchain technology.

Currently, EigenDA supports over 15 MB per second (120 Mbps) and has plans to reach 100 MB per second soon, with a long-term goal of achieving 1 GB per second. In a recent test in 2024, raw block data from 15 chains, including Bitcoin, Ethereum, and Solana, was loaded onto EigenDA. Even at 15 MB per second, the system operated at less than 54% capacity. This demonstrates the immense processing power of EigenDA.

What sets EigenDA apart is its ability to scale horizontally, making it the only system in the crypto space with this capability. Horizontal scaling means adding more nodes increases throughput, a stark contrast to other systems where decentralization hinders scalability. EigenDA's 15 MB per second throughput is already substantially greater than any other data availability layer (DA) in the market.

For crypto applications, EigenDA’s bandwidth brings web-scale performance to blockchain infrastructure, a space currently lagging far behind traditional web infrastructure. For instance, during Amazon Prime Day 2020, Amazon’s DynamoDB handled an extraordinary 80.1 million requests per second and 16.4 trillion calls over 66 hours. In comparison, even high-throughput blockchain networks like Solana, which reaches a few thousand transactions per second (TPS), are nowhere near this scale.

This disparity in scalability impacts applications, preventing real-time, low-latency experiences and often leading to failed transactions or unpredictable gas costs as networks struggle to keep pace. EigenDA addresses this by providing dedicated bandwidth and ensuring predictable data availability and pricing regardless of external network activity.

Innovative teams such as MegaETH Labs and Movement Labs are leveraging EigenDA alongside cutting-edge execution techniques to push transaction throughput to its maximum potential, aiming to bring cloud-level scale to crypto applications.

It's essential to note that EigenDA is not a traditional blockchain; it resembles more of a decentralized autonomous corporation (DAC) rather than employing a standard blockchain consensus algorithm. Unlike data availability layers such as Celestia and Avail, which are akin to blockchains, EigenDA's unique structure relies on decentralized operators rather than centralized entities. This model, drawing parallels with the concept of Danksharding, involves sophisticated mechanisms like receiving transaction blobs, employing erasure coding, and utilizing the KZG commitment scheme to ensure robust data availability.

By its design and operation, EigenDA is setting a foundational precedent for secure, scalable, and cost-effective data storage solutions crucial for the next generation of blockchain applications.

Comparing Leading Data Availability Solutions: Avail, Celestia, and Eigenda

As DA becomes increasingly essential in blockchain architectures, several solutions have emerged to address the challenges posed by off-chain data storage. The most notable DA layers are Avail, Celestia, and Eigenda, each offering unique mechanisms and capabilities to support blockchain scalability and security.

Avail
- Proof Mechanism: Avail utilizes validity proofs, allowing the system to prove data availability without requiring external trust. This approach ensures that users can independently verify data existence.
- Scalability: Avail’s throughput is currently 2MB per block, with the potential to scale up to 128MB without sacrificing performance.
- Finality: Blocks achieve finality in approximately 40 seconds, with data availability guarantees occurring simultaneously.
- Data Availability Sampling (DAS): Avail supports DAS, which allows users to verify data easily, even on lightweight devices such as smartphones.
Celestia
- Proof Mechanism: Celestia relies on fraud proofs, which assume that data is available unless proven otherwise, offering a different approach to data verification.
- Scalability: Celestia currently supports up to 2MB per block, with plans to scale to 100MB and potentially 1GB in the future.
- Finality: Data availability finality in Celestia takes around 10 minutes due to a challenge period required for fraud proofs.
- DAS: Like Avail, Celestia supports DAS, which enables decentralized and lightweight verification of data availability.
EigenDA
- Proof Mechanism: Eigenda also uses validity proofs and is supported by EigenLayer, providing a high level of economic security.
- Scalability: Eigenda is a leader in throughput, currently supporting up to 15MB per second, with ambitions to scale to 1GB per second.
- Finality: Finality depends on Ethereum’s smart contracts and finality times, typically taking around 15 minutes.
- DAS: Eigenda does not support DAS. Instead, it employs a data availability committee (DAC), which introduces some trust assumptions, diverging from the fully decentralized approach of DAS.

Competitive Advantages/Pros of Restaking

Restaking offers numerous advantages that assist in the overall development and expansion of the Ethereum ecosystem in several key ways. More broadly, staking enhances Ethereum’s scalability, security, and capital efficiency.

First, restaking allows Ethereum validators to secure additional layers or services beyond the Ethereum consensus layer. This creates a more robust security model where the security of Ethereum is extended to other applications and services. By restaking their ETH, validators contribute to a broader security net, which can deter attacks on Ethereum and integrated services.

By providing Ethereum validators with additional earning opportunities through restaking, the Ethereum network can encourage greater participation and commitment from its validator base, which remains, indisputably, the largest and more sophisticated of its kind in the world. This increased engagement enhances the overall security of the network by ensuring a more distributed and resilient validation process.

Lastly, and most importantly, restaking helps to bolster the capital efficiency of the entire Ethereum ecosystem. In other words, it helps bootstrap security and validation services for a seemingly unlimited amount of applications, protocols, and startups on the Ethereum blockchain.

Challenges to Adoption

The largest glowing detriment to the potential widespread adoption of EigenLayer stems from the strategy of restaking as a whole. While promising new, highly robust efficiencies for the Ethereum ecosystem, critics suggest that the associated risks with such a model are currently not understood - and aren’t necessarily just individual risks but systemic risks as security becomes aggregated.

A recent Blockworks article from April 2024 even suggested that a worst-case scenario could see cascading failures that may be big enough to destabilize the underlying blockchain security, similar to the layers of synthetic assets that brought down the global economy during the 2008 Great Financial Crisis.

This idea is relatively plausible. Staking by itself is extremely stable as it removes liquidity from the open market, helping to ensure there is appropriate capital providing security to the blockchain. Liquid staking protocols like Lido provide stakers with the ability to freely use this capital once again, albeit in a synthetic way. Now,the parallel has been drawn to when a leverage provider or other lender re-lends a borrower’s collateral to another borrower.
This is called rehyothecation, which in the traditional financial system, involves using the same collateral for multiple loans.

Competition

EigenLayer is at the forefront of developing a shared security and restaking ecosystem specifically for Ethereum. The platform allows staked ETH to be utilized in securing protocols beyond Ethereum’s consensus layer, creating a multi-layered security environment. This approach benefits various stakeholders:

Restakers: Participants in EigenLayer can earn additional rewards or fees by restaking their ETH. However, this comes with the caveat of increased risk, as restaking extends their exposure beyond Ethereum’s base layer.
Operators: Node operators on EigenLayer can optimize their node and capital utilization, gaining more from their resources. But this efficiency also comes with added risk, reflecting the broader security responsibilities they assume.
Developers: For developers, EigenLayer offers streamlined access to Ethereum’s robust security framework. This accessibility facilitates the development of diverse applications that benefit from Ethereum’s proven security without needing to build independent security layers.

EigenLayer’s restaking model effectively extends Ethereum’s security guarantees to other protocols, reinforcing the network’s overall resilience while providing restakers and operators with lucrative opportunities, albeit at higher risk.

Karak: Expanding Restaking Beyond Ethereum

Karak Network takes a broader approach by constructing a universal security and restaking layer that encompasses the entire cryptocurrency economy, beyond just Ethereum and its liquid staking tokens (LSTs). Karak’s value proposition centers on the idea that economic security can be achieved with a diverse array of assets, not limited to ETH, provided that these assets hold sufficient value capitalization.

This strategy introduces significant flexibility into the restaking paradigm:

Asset Diversification: Karak allows protocols to select from a diversified basket of assets to derive security, mitigating the risks associated with relying on a single asset, such as ETH. This diversification reduces the vulnerability to a single point of failure, enhancing the overall security and stability of the ecosystem.
Unlocking Idle Capital: By enabling restaking with various assets, including stablecoins and governance tokens, Karak unlocks potentially billions of dollars in idle capital. This inclusion broadens the base of collateral available for securing protocols, contributing to a more robust financial system.

Karak has already onboarded over 40 assets across five blockchain networks, utilizing chain-agnostic infrastructure that can support non-Ethereum Virtual Machine (EVM) ecosystems in the future. This adaptability positions Karak as a key player in creating a secure and interconnected multi-chain DeFi environment.

Symbiotic: Permissionless, Multi-Asset Restaking

Symbiotic takes the concept of restaking a step further by developing a general-purpose, permissionless protocol for shared security through restaking. Unlike EigenLayer and Karak, Symbiotic emphasizes fully permissionless collateral, allowing a wide range of assets to participate in the restaking process as long as they meet minimal collateralization criteria.

Symbiotic’s approach offers several distinctive advantages:

Multi-Asset Support: Symbiotic’s protocol supports a variety of restaked assets, including staked ETH derivatives like wstETH, cbETH, wBETH, rETH, and others. This multi-asset support significantly amplifies the network effects within its ecosystem, fostering a more inclusive and diverse restaking environment.
Modular Infrastructure: Symbiotic utilizes modular infrastructure to enable the creation of permissionless liquid restaking tokens (LRTs) tailored to individual risk profiles and curation models. This flexibility allows users to customize their restaking strategies based on their specific risk tolerance and investment goals.

Although Symbiotic’s deposits are currently capped, the platform is expected to expand its support for additional collateral types across various blockchain networks. This expansion will likely enhance Symbiotic’s role in the broader DeFi landscape, offering users more options and opportunities to participate in shared security systems.

While EigenLayer, Karak, and Symbiotic share the common goal of enhancing protocol security through restaking, each platform adopts a distinct approach that caters to different aspects of the DeFi ecosystem:

EigenLayer focuses on extending Ethereum’s security to other protocols, providing a secure but high-risk environment for restakers and operators.
Karak emphasizes asset diversification and cross-chain compatibility, offering a universal security layer that goes beyond Ethereum.
Symbiotic prioritizes permissionless, multi-asset restaking, enabling a flexible and inclusive ecosystem that accommodates a wide range of collateral types.

Network Effects

EigenLayer has seen a significant increase in activity and deposits over a relatively short period. From December 2023 to August 2024, total deposits surged from approximately 410,000 ETH to over 5 million ETH, valued at around $13 billion.

This substantial growth is largely due to native restaked beacon-chain ETH, which constitutes about 59% of the total. The protocol also holds considerable deposits in stETH (approximately 23%), followed by smaller proportions in Swell ETH and Mantle (each around 4%), Stader (2.5%), Binance (2%), RocketPool (1.5%), and Coinbase (1%), among others.

A notable increase in the total value locked (TVL) occurred around February 5, 2024, coinciding with the addition of five new types of staked ETH to the protocol. As of the latest data, there have been around 115,000 unique depositor addresses, highlighting the broadening adoption and trust in EigenLayer's capabilities within the cryptocurrency community.

During the same period, there was a significant expansion in liquid restaking tokens (LRTs), with total LRT deposits exceeding 2.3 million ETH. Etherfi's eETH is the most prominent, comprising about 40% of these deposits, followed by Renzo with 28%, Puffer with 16%, and Kelp with 9%.

Notably, Kelp and Puffer have seen decreases in their market shares recently, while Renzo's share has been on the rise. The majority of these LRTs are held on Ethereum Layer 1, with a smaller portion residing on Arbitrum.

AVS Landscape

On April 9, 2024, EigenLayer launched its Operator and AVS modules on mainnet, quickly becoming a hub for over 200 operators and 11 live AVSs, with more anticipated. The ecosystem is expected to segment into “horizontal” and “vertical-specific” categories, akin to the traditional SaaS landscape.

Horizontal AVSs focus on:

Developer Services: Tools and frameworks for building and deploying PoS networks, including AVSs and L1s/L2s, requiring shared security (e.g., Othentic, Blockless, Ethos).
Operator Services: Solutions for managing node infrastructure, validator tasks, and staking operations (e.g., Supermeta).
Payment Services: Managing payment deliveries to restakers and operators (e.g., Anzen).

Vertical AVSs encompass:

Rollup Services: Foundational services scaling Ethereum with security from its trust network, including Data Availability (e.g., EigenDA, NearDA), Shared Sequencing (e.g., Espresso, Radius), Rollup-as-a-Service (e.g., Caldera, AltLayer), and Interoperability (e.g., Omni, Polymer, Hyperlane, Polyhedra).
Decentralized Networks: Networks with distributed validator mechanisms, such as Oracles (e.g., eOracle), Proof Verification (e.g., Aligned Layer), DePIN (e.g., WitnessChain, OpenLayer), Security Monitoring (e.g., Drosera), and Smart Contract Policy Engines (e.g., Aethos).
Coprocessors: Cost-effective, verifiable offchain computing capabilities, including Database coprocessors (e.g., OpenDB), ZK coprocessors (e.g., Lagrange, Brevis, Space and Time), Trusted Execution Environments, and Encryption Coprocessors (e.g., Automata, Fairblock), and AI Inference (e.g., Ritual).
Applied Cryptography: Robust cryptographic systems like Fully-homomorphic Encryption (e.g., Fhenix), Multi-party Computation (e.g., Silence Laboratories), and Threshold Cryptography (e.g., Mishti Network).
MEV Management: Emerging services for block proposers to make credible commitments on block inclusion and ordering.

At the application layer, new onchain apps leveraging EigenLayer's economic security properties are emerging, including Rollups, Liquid Restaking Tokens (LRTs) and associated DeFi protocols, social and gaming applications, decentralized physical infrastructure networks (DePIN), and identity/privacy-preserving apps.

AVS category breakdown q3 2024 — Source: The Block Pro

EigenDA

On April 9, the EigenLayer team launched EigenDA, their first AVS, marking a significant development phase for their restaking protocol. Shortly thereafter, on April 11, they announced the addition of six more AVS on EigenLayer. An AVS encompasses any blockchain or blockchain-based service that is secured by EigenLayer restakers.

Before this launch, EigenLayer was in Phase 1 of its development roadmap, primarily supporting deposits of ETH and liquid staking tokens (LSTs) up to a specified cap. Since then, the protocol has gradually increased the caps on these LST deposits and broadened the types of LSTs accepted.

Developed as the initial service on EigenLayer, EigenDA is operated by ETH stakers, providing a crucial incentive for early stakers to engage with the network. It employs a blend of erasure codes and validity proofs to enhance scaling. Erasure codes fragment the data into smaller pieces, distributing them in such a way that any half of the nodes can reconstruct the entire dataset. Validity proofs ensure the data is encoded correctly.

This system has achieved a remarkable data throughput of 15 MB/s, a substantial increase over Ethereum’s current capacity of 80 KB/s. The scalability benchmark for data layers ideally reaches N (the number of nodes), with each node holding unique data and contributing fully. EigenDA operates under the assumption of majority honesty (N/2), which allows for data recovery as long as at least half of the nodes remain honest. Theoretically, the performance capacity of EigenDA is poised to increase well beyond 15 MB/s as more nodes participate.

Omni Network

Omni Network's role as a unification layer offers a streamlined framework for rollups, ensuring that assets and data can move seamlessly across different platforms without the typical barriers or complexities involved. This capability is critical in addressing two prevalent issues:

Fragmented Liquidity: Assets that are siloed within specific rollups can create inefficiencies and limit user access to broader market opportunities. Omni Network integrates these isolated ecosystems, facilitating a more cohesive and liquid market environment.
Complex User Experience: Users are often forced to navigate through multiple rollup interfaces and manage complicated asset bridging procedures. Omni Network simplifies this process, offering a unified interface that can significantly enhance user interaction and satisfaction.

Key Tasks and Expected Features

Interoperability solutions like Omni Network focus on two crucial tasks to maintain network integrity and functionality:

Verification of Source Network State: Omni Network checks and verifies the state of the source network to ensure that all transmitted information is accurate and current, which is vital for maintaining trust and reliability in cross-rollup communications.
Relaying State Updates: It efficiently relays state updates to the destination network, ensuring that all changes are accurately and promptly reflected across the involved networks.

In fulfilling these tasks, Omni Network is designed to be:

Secure: It prioritizes the safety of state and asset transfers, guarding against losses during transmission, which is paramount for user trust and network reliability.
Performant: Omni Network aims to facilitate cross-chain messaging with minimal latency and maximum accuracy, ensuring that communication and asset transfers between different rollups are both swift and error-free.

This advanced platform significantly improves the security of asset and message transfers between chains, a crucial improvement given the substantial losses historically incurred through bridge exploits. By integrating with EigenLayer, Omni Network not only fortifies the security of these transfers but does so more economically than many existing interoperability solutions.

Furthermore, the Omni Network simplifies the integration process for developers. Protocols can be connected to the network without altering the smart contracts already deployed. Instead, adjustments are made primarily to the front end, guiding transactions through the Omni Portal, which efficiently manages the execution across various chains. This approach minimizes the time and resources typically required for developers to enable cross-chain functionality, allowing them to focus on innovation rather than infrastructure challenges.

Additionally, Omni Network enhances the user experience by consolidating interactions with various rollups into a single, streamlined interface. This simplification removes the need for users to navigate multiple complex systems to move assets or execute transactions across different rollups, thereby making blockchain technology more accessible and user-friendly.

Potential NEAR Collaboration

The potential collaboration between NEAR and Ethereum could introduce the world's first "fast finality layer" for Ethereum's Layer 2 ecosystems, significantly speeding up transaction times to just seconds and substantially reducing costs. This innovation aims to enhance liquidity cohesion among Layer 2s and provide them with the flexibility to choose their own sequencers for transaction processing. Crucially, it maintains all Ethereum security standards while integrating the strengths of both NEAR and EigenLayer, making it an attractive option for Ethereum L2 developers.

This initiative is spearheaded by Pagoda, NEAR's development team, which is also focused on evolving the NEAR-Ethereum Rainbow Bridge into an actively validated service to boost its efficiency and security. This collaboration is expected to not only benefit Ethereum but also fortify the NEAR ecosystem, facilitating a smoother and more robust bridging experience between NEAR and Ethereum. This enhanced bridge promises quicker finality, increased security, and greater decentralization.

The NEAR Foundation is actively pursuing its vision for the Open Web—a groundbreaking iteration of Web3 that offers universally accessible infrastructure and protocols. By supporting Ethereum with rapid, cost-effective, and scalable solutions, NEAR is making significant contributions to this transformative internet paradigm. The anticipation for a testnet launch in the first quarter of 2024 heralds an exciting new phase for this partnership, with further details expected to be announced soon.

Developer Community

Active development on EigenLayer has been occurring publicly since late 2021 with under 10 core developers. Since its beginnings, the protocol has experienced a massive wave of development, with most code commits occurring in spring of 2022 (following the last bull market peak). Since 2022, code commits have not reached such a peak.

However, the core development team of EigenLayer has continued to expand, with rapid expansion coming in spring of 2024, spiking from a high of 45 developers to over 100 active developers today. This massive expansion has come just prior to the official launch of the EIGEN token and following EigenLayer’s absolutely rapid growth in TVL.

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