// GLOSSARY -- DEFI

What is EigenLayer?

1 min read Updated

EigenLayer is a restaking protocol on Ethereum that allows staked ETH to be used to secure additional services (Actively Validated Services) — creating a marketplace for decentralized trust.

WHY IT MATTERS

EigenLayer extends Ethereum's security to new applications. Instead of each new protocol bootstrapping its own validator set, it 'rents' security from Ethereum's existing stakers through EigenLayer. Stakers opt-in to additional slashing conditions and earn extra rewards.

Actively Validated Services (AVSs) include oracles, bridges, data availability layers, and any service needing decentralized validation. EigenLayer creates a marketplace where security demand (AVSs) meets security supply (restakers).

The concept is powerful but introduces systemic risk: compounded slashing conditions across multiple AVSs create correlated risk. If multiple AVSs slash simultaneously, the impact could be severe.

FREQUENTLY ASKED QUESTIONS

What are AVSs?
Actively Validated Services — protocols that use EigenLayer's restaked ETH for security. Examples include EigenDA (data availability), various bridge protocols, and oracle networks.
How do restakers earn?
By opting into AVSs and accepting additional slashing conditions. Each AVS pays rewards to restakers who secure it. More AVSs opted into = more rewards but more risk.
What are the risks?
Compounded slashing across multiple AVSs, smart contract risk in EigenLayer itself, and systemic risk if restaking becomes too interconnected with core Ethereum staking.

FURTHER READING

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