EigenLayer: To Stake and Re-Stake Again

Key Insights

• Re-staking is a new staking primitive designed to allow one staked token to be used as security for another protocol
• EigenLayer is the first re-staking marketplace connecting ETH re-stakers with sidechains, oracles, bridges, and other middleware protocols who could benefit from additional security
• Re-staking just one or two percent of staked ETH would surpass the existing staked security of most middleware protocols
• Re-staked ETH add to a sum-of-security where the re-staked ETH supplements existing security established by staking the middleware protocol’s native token

Staking makes up a fundamental component of blockchain infrastructure. On a network level, it incentivizes users to provide security to Proof-of-Stake (PoS) systems. On an application level, it is used to gain governance rights and earn fees or inflationary rewards. Both are important aspects of an ecosystem’s day-to-day functions.

After liquid staking and superfluid staking comes a new staking paradigm: re-staking. Re-staking works by exposing existing staked tokens to additional slashing conditions in exchange for securing other middleware services that sit between the base layer, such as data availability networks, bridges, sidechains, and other modular components or applications. If implemented successfully, re-staking can aggregate security across the base layer and middleware. It could also enhance the censorship-resistance of rollups, which inherit the base layer’s security while achieving scale through the number of rollup sequencers.