How EigenLayer is going to revolutionize Blockchain Security
Blockchain technology has changed the way we transact online. With the rise of decentralized finance, the security of these networks has become more important than ever. Enter EigenLayer or Eigen, a restaking protocol poised to change the way we think about blockchain security.
What is EigenLayer?
According to the manufacturer, EigenLabs, EigenLayer is a blockchain that uses a protocol based on the security-as-a-service (SECaaS) concept. It rehypothecates or puts back into work with Ethereum to provide security for other, newer projects. This means that the Ethereum network is used to secure other projects, providing an additional layer of security to the entire blockchain ecosystem.
How does EigenLayer work?
The Ethereum network uses a proof-of-stake consensus mechanism to secure the network. This means that validators can join the network by staking 32 ETH and they can earn an ETH-denominated return as a reward according to Decrypt. However, if a validator fails to do its job or behaves maliciously, it will be penalized and part of its ETH staked will be taken away.
EigenLayer goes beyond staking Ethereum by repurposing staked ETH to improve security for other blockchain projects. This also enables participating actors to earn a higher return and benefit from the success of more projects. Similarly, it makes it more convenient for developers to deploy their projects with the confidence that they are supported by a secure and reliable network.
For added context, there is a total of 20 million Ethereum staked right now to keep the blockchain secure. This involves the participation of over 625,000 validators. At the time of writing, one unit of ETH is trading over $1,800.
Status of EigenLayer
As of March this year, the team behind this platform, EigenLabs, has already raised $50 million in a Series A round. The financing round was facilitated by Blockchain Capital, which is a venture firm focused on the blockchain industry.
The new protocol was praised by none other than Joseph Lubin, the co-founder of Ethereum. In his tweet, he stated that the work that EigenLabs is doing now puts them at the forefront of the “most exciting work” happening on the Ethereum blockchain. In addition, he expressed his support for Sreeram Kannan, the founder of EigenLayer, and the rest of the team behind the new platform.
Benefits of restarting early with EigenLayer
So far, there is no specific time frame for the launch of the EigenLayer Mainnet, but there are indications that it is approaching. With that, EigenLabs promises the following benefits to those who choose to re-deposit ETH to EigenLayer before the launch:
1. Secured place
By retaking early, users can secure their place in the EigenLayer ecosystem and gain an advantage over those who wait to retake. This can help them maximize their betting opportunities and potentially earn bigger rewards over time.
2. Skip the withdrawal queue
Native stakers identified by their 0x00 prefixes can bypass the withdrawal queue and connect their validators directly to EigenLayer’s contracts, potentially streamlining the process of withdrawing staked tokens.
3. Maximize betting opportunities
It allows users to enjoy the earliest possible access to retaking services launched on EigenLayer. Some services may limit their initial recharge amounts, so early recharging can help early adopters take advantage of these more flexible options.
4. Access to Premium Services
Those who choose to restake early with EigenLayer can take advantage of a number of exclusive benefits, including access to curated workgroups with EigenLabs, operators, modules and other restakers. This will enable them to stay informed about the latest developments and network with other key players in the EigenLayer ecosystem.
EigenLayer is an innovative protocol that promises to revolutionize the blockchain industry. By using a restaking mechanism, it aims to provide an additional layer of security to the entire blockchain ecosystem.
With its promising benefits, such as a guaranteed seat, skip the withdrawal queue, maximize betting opportunities and access to premium services, early stakers can enjoy greater rewards over time. As the EigenLayer Mainnet launch approaches, iterating early may prove increasingly beneficial.
Overall, EigenLayer is a project to watch out for, and it could potentially change the way we think about blockchain security.
Giancarlo is an economist and researcher by profession. Before joining Blockzeit’s dynamic team, he handled several crypto projects for both the public and private sectors as a project manager for a consulting firm.