Launch of EigenLayer
EigenLayer, a “re-staking” protocol for cryptocurrency Ethereum (ETH), launched on the Ethereum mainnet on the 14th. There is an opportunity for additional yield for liquid staking token holders.
EigenLayer operates derivative tokens derived from ETH used for Ethereum staking, enabling re-staking on other protocols. A concept that repurposes the security of the ETH network and redirects it to external projects that build their own modules on EigenLayer.
Targets include middleware, sidechains, rollups, decentralized applications (dApps), oracles, bridge verification nodes, and more.
EigenLayer puts safety first and launched with multiple layers of security measures. In addition, three companies’ audit reports have been published following security analysis by a third party.
At the beginning of the launch, the total amount of tokens that can be re-staked was capped at 9,700 ETH (equivalent to approximately 2.26 billion yen), and a 7-day withdrawal waiting period was adopted to ensure the safety of assets.
Initially, EigenLayer will support three types of liquid staking tokens: Lido staked ether (stETH), Rocket Pool ether (rETH), and Coinbase wrap staked ether (cbETH), each capped at 3200 tokens. be.
These restrictions will be phased in over the weeks and months after launch, with the goal of finally being fully open and without restrictions.
EigenLayer has indicated a policy of changing its governance structure due to its commitment to future protocol decentralization. Although not specifically stated, the community has high expectations for future token issuance.
This move marks an important step towards effective utilization of ETH security resources and decentralization of the Ethereum ecosystem. The project team states:
EigenLayer’s progress is an important step forward for us, and we look forward to working together to build the future of shared security as Ethereum goes hyperscale.
Direct staking of ETH on EigenLayer is also possible, with no upper limit. However, the dedicated smart contract “EigenPod” has an upper limit.
What is Liquid Staking?
A DeFi (decentralized finance) mechanism that allows you to operate alternative assets (staking proof tokens) while receiving cryptocurrency staking interest.
connection:Ether “Re-Staking”, EigenLayer Launches Testnet
Evaluation of Eigen Layer
The potential market size of EigenLayer is enormous, and the middleware that integrates EigenLayer also has the advantage of enhanced network security. Currently, approximately 22.8 million ETH (approximately 5.3 trillion yen) is locked up in Ethereum staking contracts, accounting for approximately 19.14% of the total Ethereum supply.
The project is highly regarded within the industry and has received backing from well-known cryptocurrency venture firms such as Blockchain Capital, Coinbase Ventures, Polychain Capital, Electric Capital and Finality Capital Partners. EigenLayer raised approximately ¥6.5 billion ($50 million) in its Series A funding round in March 2023.
However, Ethereum co-founder Vitalik Buterin has also warned against moves like re-staking that complicate Ethereum’s consensus mechanism. He argues that the Ethereum network as a whole should limit the risk it takes.
Duplicate use of ETH that validators use for staking entails a certain amount of risk, but basically there is no problem. But the move by the application to seek socially consensual remedies for Ethereum for its own purposes is problematic.
EigenLayer co-founder Sreeram Kannan agrees with Buterin’s view. He also emphasized the importance of appropriately selecting security collaterals and not taking excessive risks. Within EigenLayer, it said it would introduce “slashing vetoes” and other risk mitigation measures to prevent the construction of overly complex financial primitives.
connection:Ether ‘re-staking’ firm EigenLayer to raise $65 million