What Restaking Is and How It Can Be Used to Secure Other Blockchain Networks

What Is Restaking?

Restaking is a process that potentially allows validators to redeploy their already staked cryptocurrencies across multiple protocols simultaneously. It broadens the utility of staked assets by making it possible for them to secure more than one blockchain network at once. This potentially increases reward opportunities for validators and improves the security and scalability of other blockchain networks. Restaking as a concept became popularized after the launch of EigenLayer, the pioneer restaking protocol, in June 2023,.

EigenLayer

EigenLayer is the first restaking protocol on Ethereum that allows stakers to use their staked ETH to support other decentralized networks or protocols. By tapping into Ethereum’s existing validator system and robust Proof-of-Stake (PoS) system, EigenLayer enhances the security and scalability of smaller networks. 

Key Concepts of EigenLayer

Here are some of the key concepts that form the foundation of restaking through EigenLayer.

EigenLayer Restaking

EigenLayer’s core feature is restaking, which allows validators to redeploy their staked ETH to secure multiple protocols. This enables validators to gain incentives not only from securing the Ethereum network but also from additional services or networks they help validate.

Actively Validated Service (AVS) 

Actively validated services (AVSs) are decentralized services or protocols within the EigenLayer ecosystem that leverage Ethereum's security infrastructure through EigenLayer. Ethereum validators help secure these AVSs by restaking their ETH through EigenLayer. Examples of AVSs could include Layer 2 scaling solutions, oracle networks, new virtual machines, and data availability layers. In other words, AVSs are the consumers of restaked assets, sometimes referred to as consumer chains.

Security

EigenLayer enhances the security of smaller protocols by allowing them to rely on other larger networks such as Ethereum for their validator infrastructure. This shared security model ensures that attackers would need to compromise Ethereum’s PoS validators to breach any AVS secured by EigenLayer. 

More importantly, this lifts the burden of creating their own validator set from these smaller projects, allowing them to focus on developing their project instead of establishing their own validator set by leasing security from other blockchains through restaking.

Reward

Validators may receive dual rewards by securing both the Ethereum network and additional protocols through EigenLayer. This reward system maximizes the value of their staked assets, offering a higher potential return than one-way staking. However, this concept remains to be proven as this feature is not yet live.