As the Ethereum ecosystem evolves, the demand for more modular, scalable, and secure infrastructure continues to grow. In this context, EigenLayer emerges as a transformative protocol that introduces the concept of restaking, offering a novel way to extend Ethereum’s security to a broad range of decentralized services. EigenLayer enables Ethereum stakers to reuse their staked ETH or liquid staking tokens (LSTs) to support additional protocols, significantly improving capital efficiency and network composability.
In this article, we will explore what EigenLayer is, how it works, what the EIGEN token represents, and why it may become one of the most influential components of Ethereum’s future.
The Problem EigenLayer Solves
Ethereum’s Proof-of-Stake mechanism has successfully replaced Proof-of-Work, securing the network with stakers instead of miners. However, a major challenge remains: the security provided by staked ETH is siloed and only used for Ethereum’s consensus. New decentralized services, such as bridges, oracles, or data availability layers, must bootstrap their own trust networks or launch new tokens to incentivize validators, which leads to fragmentation and inefficiencies.
Moreover, there’s capital inefficiency in staking. ETH locked for staking can’t be used elsewhere, and liquid staking derivatives (like stETH or rETH) often have limited utility. EigenLayer solves this by enabling the reuse of staked assets to secure other protocols, effectively creating a shared security layer for Ethereum.
What is EigenLayer?
EigenLayer is a restaking protocol built on Ethereum that allows users to opt in to extend their staked ETH or LSTs to additional protocols, called Actively Validated Services (AVSs). These services benefit from Ethereum’s existing security guarantees, while restakers are rewarded for their participation.
Founded by Sreeram Kannan, a computer science professor at the University of Washington, EigenLayer is designed to transform the way on-chain services access security. Instead of launching entirely new networks or tokens, services can “plug into” Ethereum’s trust layer via EigenLayer.
At its core, EigenLayer provides a middleware layer that allows different protocols to leverage Ethereum’s economic security, without requiring users to stake new assets or duplicate resources.
How Does EigenLayer Work?
Restaking Explained
In traditional staking, users lock up ETH to participate in Ethereum’s consensus and earn rewards. In EigenLayer, users can stake their ETH or LSTs by opting into EigenLayer smart contracts. This action effectively allows the same stakeholder to secure multiple networks simultaneously, increasing capital efficiency and yield opportunities.
Key Components
Stakers
These are ETH holders who have already staked ETH or use LSTs like stETH or rETH. By restaking via EigenLayer, they opt in to provide security to third-party protocols and earn additional rewards. However, they also accept the risk of slashing if those protocols are compromised or misbehaved.
Operators
Operators are responsible for validating and running the infrastructure for AVSs. They execute off-chain or on-chain tasks required by the AVSs and are chosen by stakers who delegate their restaked assets to them.
Actively Validated Services (AVSs)
These are the external protocols that utilize EigenLayer’s shared security. Examples include data availability layers, oracles, bridges, rollup sequencers, and more. AVSs define their own validation logic and slashing conditions.
EigenLayer essentially acts as a marketplace for decentralized trust, allowing AVSs to source security from Ethereum’s existing validator set.
EIGEN Token: Purpose and Current Status
The native token of EigenLayer is EIGEN. As of mid-2025, the EIGEN token is non-transferable and primarily serves governance functions within the protocol. It was initially distributed through a community drop (also known as an airdrop), targeting early adopters, restakers, and developers who contributed to the protocol’s ecosystem.
While EIGEN is currently used to vote on protocol upgrades and parameters, the EigenLayer team has stated that it may introduce additional utilities in the future, such as fee payments, staking incentives, or slashing insurance mechanisms. However, the protocol is still evolving, and no transferability date has been officially confirmed.
Key Benefits of EigenLayer
1. Capital Efficiency
EigenLayer allows the reuse of existing staked ETH, which unlocks new yield opportunities without requiring fresh capital. This layered approach maximizes value extraction from locked assets.
2. Shared Security
Protocols built on EigenLayer benefit from the same security guarantees as Ethereum, without having to build their own validator network. This leads to faster and more reliable project launches.
3. Composability and Modularity
EigenLayer enables a modular blockchain architecture by separating consensus from execution and allowing different services to operate independently yet securely.
4. Accessibility for Developers
For builders, EigenLayer significantly lowers the barrier to entry. Projects no longer need to launch their own token or incentivize a new validator network; they can tap into existing Ethereum trust.
Risks and Challenges
While the benefits of EigenLayer are substantial, there are also non-trivial risks:
- Slashing Risk: Restakers are exposed to slashing not only from Ethereum but also from the AVSs they secure. Misbehaving operators or malicious AVSs can lead to loss of funds.
- Smart Contract Vulnerabilities: As with all DeFi protocols, bugs or exploits in EigenLayer’s smart contracts could result in severe losses.
- Operator Centralization: If a small number of operators control most AVSs, this could undermine decentralization and lead to shared points of failure.
- Regulatory Uncertainty: The layered and modular nature of EigenLayer may attract regulatory scrutiny, especially as it relates to staking-as-a-service.
Ecosystem and Use Cases
EigenLayer’s ecosystem is rapidly expanding. Some notable AVSs and integrations include:
- EigenDA: A decentralized data availability layer built on EigenLayer.
- AltLayer: Modular rollup architecture that leverages EigenLayer for security.
- Decentralized Oracles and Bridges: These services can now use Ethereum security without launching a native token.
The protocol is designed to be infrastructure-agnostic, meaning that it can support a wide variety of services, from blockchain consensus to off-chain compute.
EigenLayer vs. Other Protocols
EigenLayer should not be confused with traditional staking services or LST providers like Lido or Rocket Pool. Instead, it builds on top of them.
EigenLayer is complementary, not competitive, to Ethereum staking; it enhances the ecosystem rather than replacing it.
EigenLayer represents a fundamental shift in how blockchain security is provisioned and consumed. By enabling Ethereum stakers to restake their assets and support a wide range of services, EigenLayer transforms Ethereum from a monolithic blockchain into a modular security hub.
Whether you’re a staker, developer, or protocol founder, EigenLayer offers a powerful set of tools to maximize security, reduce friction, and improve economic efficiency across the Web3 landscape. As the protocol matures and the EIGEN token evolves, EigenLayer may become an indispensable part of the Ethereum ecosystem.
