EigenLayer (EIGEN)

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EigenLayer is a platform to leverage Ethereum security through restaking. EigenDA is a data availability service on EigenLayer, designed for Optimistic and ZK rollups.

Basics

History

  • From their About page (25-4-2023):

"Our founder, Sreeram Kannan, was a professor at the University of Washington, and the Head of the UW Blockchain Lab. The first members of our team came out of that lab."

Audits & Exploits

"Key Findings: 90% Code and team is strong.  The devs did not respond promptly.  This is the only weak spot.

Code Documentation: 87%  They could improve on traceability and architecture but overall thorough documentation.

Testing: 73%.  Good tests, yes with formal validation, but no documented code coverage or test report.   

Security: 86%. Solid audits, big bug bounty but I am not sure which audits are applicable to this code or if they have active monitoring.

Admin Controls 61%.  The only individual score that did not pass.   Rather dated, weak process.  Room for improvement."

  • "The EigenLayer contracts are under active audits, and a bug bounty program will be launched after audit completion." (6-4-2023).
  • Has no bridge to post proofs on Ethereum in order for L1 users to know the EigenDA data is available (28-11-2024). There is no delay on upgrades and there is no relayer failure mechanism. The validator set for this DA platform is permissioned.

Bugs/Exploits

"In a plot twist worthy of a B-grade hacker flick, their sophisticated token distribution strategy amounted to "send us an email with your ETH address."

Unsurprisingly, a digital Danny Ocean waltzed right in, changed an address and walked away with a cool 1.67 million EIGEN tokens. So, here we are. An almost $11 billion TVL protocol, outsmarted by what might be a teenager with a phishing toolkit."

Governance

Admin Keys

"The EigenLayer contracts have two different multisigs: a team multisig, which controls limited functionality, such as pausing and adding new restakable tokens; and a community multisig, which controls upgradability. For this testnet, both these multisigs are handled by the early builders of the EigenLayer protocol."

DAO

Treasury

Token

Launch

Token launched on 30-9-2024.

Token Allocation

Utility

Other Details

Technology

"Eigenlayer is built on Go, and there will likely be a smart contract component to define slashing criteria. Currently it is not possible to build on Eigenlayer however there will likely be more docs and information released over time."

How it works

"Eigenlayer is a protocol that modifies Ethereum at the base client layer in order to allow validators to rehypothecate their ETH stake to validate other protocols simultaneously in parallel. What this means is that you can re-use your staked ETH that is already being used to secure Ethereum to validate other protocols such as oracles and data availability modules. Each application will be able to define the criteria that would allow a validator to be slashed.

Imagine you run an Ethereum validator with 32 ETH Staked. In the future you will be able to browse a variety of applications in a sort of “app store”. You will be able to see who is building the app, how many people are running it, what the conditions for potential slashing are, and what compensation you will receive for running the application. Then you can perform a risk/reward analysis and decide if it makes sense to run the application, and seamlessly run multiple applications in parallel.

  1. Bridges are a good use case for Eigenlayer, depending on their design.
  2. An important use case will be running rollup sequencers on Eigenlayer.
  3. Eigenlayer will enable truly decentralized RPC nodes.
  4. App chain deployment protocols like @atlas_zk and @0xStacked will be able to use Eigenlayer behind the scenes to bootstrap security for new appchains, with value accrual returning to ETH as the base security collateral
  5. Oracles are a good fit for Eigenlayer because they are secured by the value of a token, ie LINK. By securing an oracle network with a larger amount of collateral, oracles can gain a 10x in security, reducing the likelihood of a profitable oracle attack on DeFi."

Fees

Upgrades

Staking

Validator Stats

Scaling

Interoperability

Other Details

AVS

  • From IOSG's newsletter (1-2024), which is a RedStone investor:

"[RedStone is] the only production-ready AVS on EigenLayer"

Oracle Method

Their Other Projects

EigenDA

  • Has no bridge to post proofs on Ethereum in order for L1 users to know the data is available (28-11-2024). There is no delay on upgrades and there is no relayer failure mechanism. The validator set for this DA platform is permissioned.
  • From this thread (6-11-2022):

"One of the flagship products of Eigenlayer is a Data Availability module that is being built in-house. The idea is to separate execution and settlement layers from data and consensus, so you can run execution layers like @fuellabs_

By removing consensus, EigenDA will have some specialized use cases - in particular, it will be suited for posting rollup attestations, enabling decentralized rollup sequencers."

EigenSettlement

"Settlement layers are extremely important for the modular blockchain ecosystem to work. They can, among other things, allow different execution environments to settle to the same layer. The interoperability and shared liquidity effects from this are massively important in order to avoid fragmentation in a modular ecosystem. This is another piece to making fully decentralized rollup sequencers, as the settlement layer is where dispute resolution takes place."

Eigen LRTs

The Eigen Foundation acquired (12-6-2024) Rio Network’s intellectual rights, including its liquid restaking token (LRT) technology, which will be open-sourced as a reference implementation in the EigenLayer ecosystem.

Roadmap

  • Can be found [Insert link here].

Usage

  • Eigenlayer has attracted $18.8 billion worth of crypto to its platform from less than $400 million in just six months (5-2024).

Projects that use or built on it

  • From IOSG's newsletter (1-2024), which is a RedStone investor:

"[RedStone is] the only production-ready AVS on EigenLayer"

Competition

"Celestia is a blockchain. Celestia focuses only on data availability and consensus and does not incorporate execution or settlement, instead offloading these to other actors in the network architecture who are also more specialized in their own feature set and functionality. Blocks in Celestia contain primarily transaction data, not state information. This focus on data rather than computation is what allows Celestia to scale for its purpose of offering more and cheaper data availability than what was possible or available before it launched. Unlike EigenDA, Celestia also supports sovereign rollups. This means developers can build rollups directly on Celestia without relying on Ethereum for settlement or security. This is an advantage for projects seeking more independence or different security models. A core takeaway is that Celestia is a blockchain and benefits from all of the properties of a blockchain while also having to adhere to the constraints, including consensus, data replication, network topology, leader selection, etc...

EigenDA is not a blockchain. EigenDA takes a minimalist approach to data availability. It operates without peer-to-peer networking, consensus mechanisms, or data replication, and lacks a central leader. This architecture enables scalability while still eliminating censorship bottlenecks. By leveraging erasure coding and direct data commitment to a decentralized network, EigenDA significantly reduces overhead typically associated with P2P systems and consensus protocols. EigenDA scales horizontally with the number of nodes, allowing for efficient utilization of bandwidth. Its design principles enable any node to encode and submit data directly, facilitating a highly incentive-compatible environment. This approach not only ensures high throughput and low latency but also supports features like self-verifiability and the potential for cryptoeconomic penalties through slashing and token forking if data becomes unavailable. TLDR: EigenDA is secure, inexpensive, and already has very high throughput relative to other solutions."

"EigenDA has an obvious advantage over Celestia - it is able to bootstrap a large validator network more easily by utilizing existing ETH validators and stake. Unlike Celestia, EigenDA is not a consensus layer, so it will be lower cost and higher throughput."

Pros and Cons

Pros

Cons

  • Has no bridge to post proofs on Ethereum in order for L1 users to know the EigenDA data is available (28-11-2024). There is no delay on upgrades and there is no relayer failure mechanism. The validator set for this DA platform is permissioned.
  • Again EL got into the news (16-8-2024) around airdrops, this time regarding its employees being favored by EL ecosystem projects within their airdrops. Even going so far as sending out EL employee wallets towards projects without asking, insinuating they required an airdrop.
  • EigenLayer started out with the narrative that after EL, no more coins were needed besides ETH, as projects could secure their products with ETH and would not need to deploy a token anymore. Of course this is going against all the incentives that come with launching a token, plus all the external governance options that tokens bring with them. Soon after launching mainnet EL announced it would allow for more tokens (15-8-2024) to be deposited besides ETH even. Clearly not sticking to their Ethereum only narrative.
  • EigenLayer has gotten most of the Ethereum Foundation top people into its advisor group, thereby, in the best case, aligning itself closely with Ethereum, but in the worst case, coopting Ethereum Foundation people into doing what is best for EigenLayer. The advisory rewards come down to many millions worth of EIGEN for these advisors, much more than their EF salaries give them.
  • EigenLayer had a wallet depositing $13M worth of ETH on 2-1-2024, and withdrew it all the exact day after the airdrop snapshot was taken on 16-3-2024, while this snapshot was only announced on the 29th of April. Highly likely this was insider-farming. Someone else claimed it was GCR and that they already left 1 week before the snapshot, but that there was a 7-day withdrawal queue.
  • From this thread (6-11-2022):

"Security is a serious concern for a validator running Eigenlayer. An application could potentially steal your stake if there is a security flaw. It will be possible in the future to create insurance markets to allow validators to purchase protection.

The best use cases for Eigenlayer are protocols that have a low chance of being slashed. For instance, protocols with liveness guarantees are not a good fit for Eigenlayer, because there is always a high chance that a server could crash and staked could be slashed."

Team, Funding and Partners

Team

"@sreeramkannan, the founder, is the director of the University of Washington (UW) blockchain lab. @cjliu49 , the chief strategy officer, was previously the strategy lead at Compound. The rest of the team is mainly gigabrain Go developers and researchers from UW."

  • Justin Drake; ex-advisor who got "a significant EIGEN token incentive which could easily be worth more than the combined value of all my other assets (mostly ETH). We're talking millions of dollars of tokens vesting over 3 years." and saying "I pledge to reinject all advisorship proceeds towards worthy projects within the Ethereum ecosystem, either as investments or donations. I also stand ready to end the advisorship at any time, e.g. should EigenLayer go in a direction I deem to be against Ethereum's interests." He only disclosed after Cobie tweeted about Justin being misaligned with Ethereum (19-5-2024).
  • According to Justin EL has three more EF people: "To my knowledge 3 EFers have a formal relationship with EigenLayer entities: one as an early EigenLabs investor, and two as recent EigenFoundation advisors." On 2-11-2024 both Justin Drake and Dankrad Feist announced they resigned from Eigenlayer advisory.

Funding

"Raised $50 million in a Series A round led by @blockchaincap. Other firms in the round: @ElectricCapital, @polychaincap, @hack_vc, @FinalityCap, @cbventures among others.

Previously EigenLabs raised $14.5 million in a seed round led by @polychaincap + @etherealvc, with @FigmentCapital, @daofive, @robotventures, @P2Pvalidator among others.

We're grateful also to our angel investors, who represent a broad swathe of the crypto ecosystem including stakers, validators, developers, and researchers: @sassal0x @ViktorBunin @StakeETH @MaraSchmiedt @TimBeiko @JoeLallouz @jon_charb @zmanian @marcbhargava and *many* more!""

Partners

"NEAR + @eigenlayer will create the first-ever Fast Finality Layer, reducing settlement on rollups to 3 seconds vs hours (ZK) or days (Optimistic), at 1/4000 the price. High-level Overview of the Fast Finality Layer

  1. Sequencer submits executed transactions to NEAR
  2. Eigenlayer restakers review and accept (or reject) transactions
  3. Transactions are acknowledged on the rollup
  4. Transactions are finalized on Ethereum"
  • Nethermind announced (19-7-2023) a partnership with EigenLayer. The partnership has already borne fruit with Nethermind’s restaking dashboard for users and helping to establish specifications for node operators within EigenLayer. Nethermind will be part of the "governance community multisig for EigenLayer’s core protocol".

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