Thanks to EigenLayer, restaking is probably one of the hottest trend in crypto for 2024. This is my explainer of what is EigenLayer and what is this concept of restaking that it introduces. Besides EigenLayer, there had also been a lot of interest on associated protocols like ether.fi, Renzo and Kelp Dao.
There are 2 key reasons for the keen interests:
- Airdrop Opportunities: As of 24 Mar 2024, only ether.fi has dropped their $ETHFI token. The rest like EigenLayer, Renzo and Kelp are still tokenless. All these protocols are very well-funded by reknowned VCs (e.g. A16z invested US$100m into EigenLayer just last month) and having TVLs in the billions means the value of their token when dropped, are expected to be substantial.
- A New Paradigm: This concept of restaking introduced by EigenLayer is a novel approach within the PoS (Proof of Stake) mechanism by allowing already staked ETH to secure additional protocols, potentially enhancing network security and validator rewards.
What Is EigenLayer?
EigenLayer is a new system designed for the Ethereum blockchain. You can read about it in their own documentation or / and their whitepaper. But in a nutshell, EigenLayer allows people to take the Ethereum (ETH) they had already put up as a security deposit (staking) and use it again to help secure other projects or applications. This process is called restaking. By doing this through EigenLayer, people can help protect more parts of the…
