EigenLayer is prioritizing onboarding consumer Web3 applications after the restaking protocol’s native token, EIGEN, was unlocked on October 1, founder Sreeram Kannan told Cointelegraph in an interview.
EigenLayer will first target apps in cryptocurrency-based sectors such as decentralized finance (DeFi) and gaming before expanding beyond Web3, Kannan said.
“We are starting with an internal approach focused on high-throughput consumer apps like DeFi and gaming, but once we get a little bigger and have critical mass, we will go out and target the broader consumer market.” Kannan said. said.
TVL in EigenLayer. Source: DefiLlama
EigenLayer’s four-sided marketplace
EigenLayer, Ethereum’s largest restaking protocol, secures about $11 billion in restaking collateral over dozens of third-party protocols called Active Validated Services (AVS), according to DefiLlama.
“This is a four-sided market that we are bootstrapping, but which consumers have not yet fully exploited,” Kannan said.
“You need all four aspects for this kind of platform to be successful,” Kannan added, referring to restakers, node operators, AVS and consumer apps.
EIGEN unlocking has been one of the most anticipated things in 2024 and has put pressure on EigenLayer to expand AVS’s protocol revenues, which in part accrue to EIGEN stakers.
EIGEN price after October 1st. Source: CoinMarketCap
relevant: Re-staking will trigger massive inflows into cryptocurrencies.
“The only way (re-staking) makes sense in the long term is if the re-staking network acquires customers and those customers pay, directly or indirectly, for the services provided by other re-staking networks,” he said. says Mike Silagadze, CEO of re-staking protocol Ether.fi. , said in August.
According to CoinMarketCap, the EIGEN token is currently trading around $3.50, meaning its fully diluted market capitalization is nearly $5.8 billion.
EigenDA as a “bridgehead”
EigenLayer’s own AVS, EigenDA, aims to serve as a “bridgehead” for integrating consumer apps into EigenLayer’s broader AVS ecosystem, Kannan said.
“As users adopt Eigenda, they will start using other EigenLayer AVSs as well,” said Kannan.
EigenDA specializes in data availability, one of the fastest growing and most competitive market segments in Web3. Competitors include Celestia and Avail.
Other EigenLayer AVSs include ARPA Network and eOracle, which specialize in random number generation and programmable data oracles, respectively.
“Typically, AVS is something like a bridge, oracle, or AI infrastructure,” Kannan added.
“Our superpower is starting to do this with EigenDA, which is designed to handle high throughput.”
EigenLayer AVS. Source: EigenLayer
Related: EIGEN by EigenLayer Achieves Top 100 Market Ranking in Trading Debut
Programmatic EIGEN Incentives
EigenLayer also plans to recruit reinvestors through a programmatic incentive program that the protocol announced on September 17.
The program rewards reinvestors with EIGEN emissions, which account for approximately 4% of the total supply of tokens.
“It’s designed to help bootstrap this multifaceted market,” added Kannan.
“Stakers will receive programmatic rewards based on the number of AVSs they serve, and AVS will pay fees to stakers and operators. The more AVS pays, the more value is assigned.”
Re-staking involves taking tokens that have already been staked (posted as collateral with validators in return for rewards) and using them to secure another protocol at the same time.
According to EIGENLayer, the EIGEN token is designed to protect the protocol against a wider range of flaws than can be addressed using existing proof-of-stake tokens such as Ether (ETH).
Example use cases include ensuring the accuracy of off-chain data oracles or holding protocols accountable for complex governance decisions.
Eventually, Kannan predicts that EIGEN staking will replace multi-signature wallets to become the primary means of securing Web3 protocols and smart contracts.
“Many contracts today rely on multi-signature, which is far from decentralized,” Kannan said.
“Ultimately, users are not getting the trust that blockchain should provide,” Kannan added. “We must go beyond that.”
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