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Home»ADOPTION NEWS»EigenLayer plans a shared security model for dapps.
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EigenLayer plans a shared security model for dapps.

By Crypto FlexsJanuary 22, 20243 Mins Read
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EigenLayer plans a shared security model for dapps.
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Re-staking protocol EigenLayer plans to adopt a “shared security” system, a mechanism that allows protocols to participate in the network by leveraging a common pool of ETH stakes.

EigenLayer aims to provide a protocol that allows users to deposit and “re-stake” Ethereum in a variety of liquid staking tokens, allocating those funds to securing third-party networks. The first phase of the project was launched on the Ethereum mainnet in June 2023.

In the future, the team plans to turn the project into a major decentralized application platform and enable other projects to launch by leveraging the so-called shared security.

That version will allow the ETH re-stake amount on EigenLayer (currently over $1.7 billion) to be fed simultaneously to all services developed on the network for a common security mechanism. This makes it economically infeasible for an attacker to disrupt a specific protocol.

“An attacker would need $1 billion in capital to attack one service, and pooling the security together provides some rigidity and strengthens security to some extent,” said Sreeram Kannan, founder of EigenLayer.

This shared security model has been previously introduced by projects like Polkadot, but the mechanisms are significantly different.

While Polkadot is a blockchain ecosystem secured by a relay chain and a native token called DOT, EigenLayer is a block where ETH holders and those holding ETH Liquid Staking Tokens (LST) cannot economically secure their assets by re-staking them. We help you secure your chain or service. It doesn’t necessarily run on Ethereum.

EigenLayer and re-staking service

EigenLayer may also allow ETH stakers to choose to risk further reductions in ETH to secure Ethereum ecosystem services such as rollups, oracles, data availability platforms, or similar services. In return, these stakers (or restakers) earn revenue from their services.

Projects built on top of the framework can purchase insurance for a portion of their overall network stake, EigenLayer said. This insurance acts as a safety net, ensuring that you will receive a certain amount of funding in the event that the network fails to protect your project. In theory, the payout comes from staked ETH, which can be cut if the stake is removed. EigenLayer calls this “attribution shared security.”

According to EigenLayer, these cuts are minimal and serve the sole purpose of ensuring economic security for protocols built on top of the platform.

EigenLayer’s team, EigenLabs, closed a $50 million Series A funding round led by Blockchain Capital in March 2023. The total value of EigenLayer’s smart contracts recently reached $1.7 billion.


Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.

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