Ethereum Restaking Protocol EigenLayer Launches Mainnet; Key Features and Rewards Await Implementation
Summary:
The Ethereum restaking protocol EigenLayer, which has over $13 billion in assets, has launched on the blockchain's mainnet. However, key features such as in-protocol payments to operators and a 'slashing' mechanism are still pending and expected later this year. Despite the hype of earning rewards for restaking Ether (ETH) tokens, restaking is yet to happen substantially, considering there is no live risk or reward on the platform. Also, alongside its mainnet launch, EigenLayer debuted its data availability service EigenDA that intends to aid other blockchain apps in transaction data storage.
The EigenLayer Ethereum restaking protocol, with over $13 billion in assets, has initiated its launch on the mainnet of the blockchain. However, several key features are yet to be activated and are expected to be operational later this year. EigenLayer mentioned in their April 9 blog that they are due to add in-protocol payments to operators from actively validated services (AVSs) - like apps and cross-chain bridges. Also impending is the implementation of a 'slashing' mechanism, a punitive penalty that strips validators of their staked crypto if they fail in their duties. The marketplace of EigenLayer needs a breathing window to grow and become steady before both features are introduced, the timeline for which is yet to be disclosed. From today onwards, restakers have the privilege to allot their restaked ETH balance to Eigenlayer operators who subsequently operate AVSs. Despite such progress, the question regarding restaking rewards still hangs in the balance, as Galaxy Digital's Vice President of research Christine Kim pointed out. Restaking protocols like EigenLayer offer the prospect of gathering rewards for restaking already staked Ether (ETH) tokens, which are equal to ETH tokens staked in protocols like Lido or Rocket Pool, according to analysts from Coinbase. They opined restaking could boost earnings but also might accentuate risks, as the same funds might be circulated among different protocols, potentially leading to intricate security and financial predicaments. Along with the launch on the mainnet, EigenLayer unveiled its data availability service, EigenDA - the premier AVS launched on the protocol, targeted at assisting other blockchain apps in storing transaction data. However, other AVSs have to register first with EigenLayer and their full deployment is presently not possible. In a separate discussion, Galaxy's Kim expressed her perplexity on the hype surrounded the EigenDA news, stating that the successful operation of restaking largely hinges on the economical factors, with a major challenge in the balancing act between risk and reward. As it stands, there is no live risk (through slashing) or reward (through AVS payouts) on EigenLayer, implying that no restaking is actually happening yet. With a total value locked of $13.33 billion, EigenLayer surpassed Aave in early March to emerge as the second-largest decentralized finance protocol behind Lido, with $33 billion in locked value.
Published At
4/10/2024 8:57:01 AM
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