The blockchain is called a "trust machine". Users build a network without permission from a centralized regulator (permisionless) - Bitcoin is the starting point for everything. It helps miners reach a consensus on value distribution through the PoW consensus mechanism to create a trust layer, all value transmission occurs on this trust layer.
But one problem with Bitcoin is that it is more like a single application chain (application specific blockchain) that only supports transfer functions. Other applications such as Namecoin need to create their own trust layer in order to run, which sets a huge barrier for application innovation. obstacle. The groundbreaking of Ethereum is that it adds a general-purpose Turing-complete execution layer (ie EVM) on top of Bitcoin's innovation. After splitting the application layer and the trust layer, the application can directly deploy its own smart contract on Ethereum, and get the security guarantee of the trust layer, without having to create its own trust layer from scratch.
After The Merge, Ethereum changed from the PoW consensus to the PoS consensus. Compared with the PoW mechanism, which requires miners to use hardware to compete for a consensus, the PoS mechanism requires nodes to pledge a certain amount of funds to vote to reach a consensus. Honest nodes are rewarded by the network. , will also be penalized for this, which has two advantages:
First of all, the penalty mechanism can increase the cost of corruption (Cost of Corruption) without changing the profit from corruption (Profit from Corruption), which helps to improve the economic security of the trust layer.
Secondly, the protocol implements a finer governance structure for nodes, and guides node behavior in more dimensions while expanding node governance capabilities. For example, Ethereum can dynamically determine the confiscated amount of malicious nodes based on the total confiscated amount within a period of time, and increase the punishment for malicious collusion nodes; or in the inactivity leak mode, that is, too many nodes are offline so that the consensus in four epochs cannot be reached. When the finality cannot be achieved, Ethereum can restore the finality by confiscating the offline node funds to ensure the activity of the entire network.
Relying on this mechanism, Ethereum manages the rights and obligations of nodes in the trust layer in a more balanced manner.
Limitations of the Ethereum Trust Layer
The management of the trust layer in Ethereum is based on the slashing mechanism at the consensus protocol level. When non-Ethereum applications want to use the trust layer of Ethereum, there is no way to deal with the funds of nodes that violate the application rules but abide by the consensus rules of Ethereum. Forfeit. In other words, these non-Ethereum applications cannot directly use Ethereum's trust layer as a foundation.
And these non-Ethereum applications or middleware, such as oracles or Cross-chain bridge protocols, all need to create their own trust layer or active validator service (actively validated service, AVS), which actually improves the innovation of the application layer Thresholds and economic burdens slow down innovation at the application layer. And different AVS will also lead to the fragmentation of Liquidity, thus affecting the economic security of each AVS.
EigenLayer's answer
re-pledge
Facing the limitations of the Ethereum trust layer, EigenLayer uses restaking (restaking) to expand the penalty mechanism of the Ethereum trust layer. EigenLayer creates a new smart contract-level slashing mechanism through the smart contract in charge of the node's fund retrieval certificate.
When an Ethereum verification node participates in verification through EigenLayer, its fund retrieval address will be set as EigenLayer's smart contract. If the node violates the rules of the application layer, EigenLayer can confiscate the ETH it retrieves through the penalty contract. Such a slashing mechanism enables the application layer to confirm the rights and obligations of nodes in the Ethereum trust layer through smart contracts, making it possible for other applications or middleware to utilize the trust layer of Ethereum.
Trusted Trading Market
On the basis of re-pledging, EigenLayer will establish an open trust marketplace to monetize trust. First of all, the Ethereum trust layer node, as the supplier, decides the transaction content through the free market mechanism with the application layer protocol as the demand side. Secondly, nodes decide whether to participate in the verification work of an application according to their preferred risk-benefit ratio and slashing conditions to obtain additional benefits. Application-layer protocols can easily purchase "trust" at market-oriented prices, so that they can focus on protocol innovation and operations at the application layer, and achieve a balance between their own security and performance.
Externalities of EigenLayer
Based on the innovative design of the re-pledging and trust trading market, EigenLaler's impact on the entire Ethereum ecosystem also shows positive and negative characteristics
positive externalities
1) Accelerate application layer innovation
By establishing a trusted trading market, Eigenlayer further splits and modularizes the trust layer and execution layer of Ethereum. Non-Ethereum applications can use the modular trust layer to easily gain trust, greatly reducing the capital threshold for building security. This brings huge benefits to applications and middleware protocols that value economic security such as oracles, data availability layers, decentralized sequencers, Cross-chain bridges, and side chains, allowing them to focus on protocol innovation and user experience. Similar to the Web3 social protocol, when social data sinks to the data layer, and all social protocols can easily access the data layer without permission, application innovation and user experience will be rapidly improved.
2) Help the protocol layer innovate
Since EigenLayer has a slashing mechanism with the same effect as the consensus protocol at the smart contract level, it can also create some other rules for nodes to choose to abide by without changing the existing consensus mechanism, so as to achieve the effect of a kind of consensus mechanism.
For example, to solve the single-slot finality problem, Ethereum currently uses the Gasper protocol, which can only provide finality for the first block (checkpoint block) in each epoch, and cannot provide finality for each slot in the epoch for the time being. But by using EigenLayer, the node guarantees to choose to continue to build along the main chain that contains a certain slot block so that each slot can obtain finality, and the node that violates the promise will be fined and confiscated.
Another example is solving the partial-block MEV-Boost problem in MEV. Currently, block builders (builders) can only submit complete blocks through MEV-Boost, and block proposers (proposers) can only see complete blocks after signing the block header and guaranteeing to add blocks according to the builder's idea Content - This is to prevent proposers from plagiarizing blocks for their own profit.
EigenLayer allows the builder to submit some blocks, and the remaining blocks are constructed by the proposer himself. When the proposer fails to include part of the builder's transactions into the final block as agreed, its funds will be confiscated by EigenLayer. In this way, a wider range of block proposers can also participate in block construction and obtain part of the MEV revenue, thereby inhibiting the centralization of block builders. In addition, since more centralized block builders cannot be responsible for the construction of all blocks, proposers randomly selected by the consensus mechanism can also participate in block construction, improving the anti-censorship of Ethereum transactions.
3) Facilitate the economic security of the Ethereum trust layer
EigenLayer allows Ethereum nodes to choose to obtain additional benefits after measuring the risk-benefit ratio, and the rate of return for Ethereum node pledges will become higher, which will further lead to more ETH being used for pledges and promote the economic security of Ethereum As well as the security provided for the application protocol, forming a good positive feedback.
4) Improve the decentralization of the Ethereum trust layer
On the one hand, EigenLayer provides higher staking income for individual nodes, which will encourage more people to run their own nodes. On the other hand, the application protocol can require that the nodes participating in the verification can only be individual nodes, which can not only improve the decentralization of the application, but also improve the decentralization of the entire Ethereum trust layer.
negative externalities
1) Damage to the trust layer of Ethereum caused by abnormal slashing
In addition to the normal slashing caused by violating the rules, the entire system may also have abnormal slashing due to code bugs or malicious protocols. Even honest nodes will be fined and confiscated pledged funds. When abnormal slashing leads to large-scale slashing of honest nodes, the economic security of the Ethereum trust layer will also be greatly damaged.
To reduce this negative externality, EigenLayer takes two approaches. The first is to reduce risks through strict auditing, and the second is to provide a one-vote veto system for fines and confiscations. The governance committee can veto one-vote fines and confiscations through multiple signatures, providing a guarantee for extreme situations.
2) Trust leverage caused by re-pledging
In the open trust trading market, trust layer nodes can provide verification services for different protocols by re-pledging to obtain additional benefits. When the trust layer funds provide verification services for the application/middleware layer with a very large cumulative value in order to obtain more benefits, it may bring extreme leverage to trust, making the damage benefits higher than the damage costs, reducing the economic security of the trust layer . Therefore, the restrictions on node re-pledging and the balance between trust layer benefits and security require follow-up practice to give more accurate answers.
Summarize
In the future, the blockchain will enhance its performance through a high degree of modularization and outsourcing of some responsibilities. EigenLayer is building something that will not only benefit the entire Ethereum ecosystem, but the ecosystem beyond Ethereum. In addition to the points mentioned above, EigenLayer's positioning is to completely change the current block limit model, and become a new test field to break the trade-off between Ethereum democracy and flexibility by utilizing the node excess resource pool, so as to provide new business Patterns inject more possibilities.
At the same time, EigenLayer is also working on new products including EigenDA, Ethereum's hyperscale data availability layer, which aims to achieve cheaper, more consistent fees, and higher data availability bandwidth. EigenLayer also plans to cooperate with teams such as Mantle Network to push this technology to broader scenarios, and we are very much looking forward to seeing how EigenLayer will affect the future development of L2.
