A Step Guide on Restaking Ethereum through EigenLayer AVS

EigenLayer is a set of smart contracts on Ethereum that allows consensus layer Ether (ETH) stakers to opt in to validating new software modules built on top of the Ethereum ecosystem. Stakers opt in by granting the EigenLayer smart contracts the ability to impose additional slashing conditions on their staked ETH, allowing an exten- sion of cryptoeconomic security.

By opting in to EigenLayer, stakers can validate for many types of modules including consensus protocols, data availability layers, virtual machines, keeper networks, oracle networks, bridges, threshold cryptography schemes, and trusted execution environments.

In- stead of fragmenting security between modules, EigenLayer aggregates ETH security across all of them. This increases the security of the decentralized applications (DApps) that rely on the modules. In addition, holders of Ether can pursue additional value through the new fee-generating opportuni- ties from these manifold modules.

AVSs are blockchain-based applications that operate outside the Ethereum Virtual Machine (EVM). They include layer-2 chains, data availability layers, sequencers, dApps, cross-chain bridges, and virtual machines, offering diverse utilities to the blockchain ecosystem. AVSs use decentralized consensus mechanisms like PoS or Proof of Work (PoW) for transaction validation. The key difference is that they handle consensus independently, rather than relying on Ethereum’s consensus layer.

Previously, AVSs had to establish their consensus mechanisms, leading to vulnerabilities due to the smaller size of validator pools and stakes compared to larger networks like Ethereum. This isolation made them susceptible to attacks and exploits.

AVSs on EigenLayer can leverage Ethereum’s security and decentralization capabilities. By deploying on EigenLayer, these services bypass the need to set up independent validation mechanisms.

1. Foundational Principles of the New AVS: The revamped AVS benefits from enhanced security derived from a diverse pool of validators within the Ethereum network.
2. Capital Efficiency: ETH stakers can leverage their capital across multiple services, thereby minimizing their cost of capital. Notably, joining EigenLayer incurs minimal marginal costs for local ETH stakers, potentially reducing them to zero in scenarios where the risk of honest nodes being compromised is negligible.
3. Trust Enhancement: Through restaking a larger pool of capital, EigenLayer bolsters the trust model. In EigenLayer’s framework, where all L1 stakes are redirected to three AVS modules, the cost of corrupt DApps is mitigated by the total staked amount on L1. Additionally, EigenLayer amplifies the value proposition of AVS modules, effectively increasing the total staked amount on L1 to $13 billion, thereby substantially raising the cost of corruption.
4. Value Augmentation: EigenLayer introduces various revenue streams for ETH stakers, reinforcing the ecosystem’s network effects and enhancing overall security within the AVS ecosystem.

EigenLayer provides a variety of staking methods similar to Lido’s Liquid Staking and Superfluid Staking. Superfluid Staking can allow LP’s staking, specifically: direct staking, which will be staked on Ethereum. The ETH on is directly staked to EigenLayer; LSD staking, the assets that have been staked in Lido or Rocket Pool are staked to EigenLayer again; ETH LP staking, the LP Token staked in the DeFi protocol is staked to EigenLayer again; LSD LP staking, For example, Curve’s stETH-ETH and other LPTokens are staked to EigenLayer again.

In conclusion, the process of restaking Ethereum via EigenLayer to 01node offers a seamless and efficient way to optimize your holdings within the Ethereum ecosystem. By following the step-by-step guide outlined above, users can easily transition their assets, participate in liquid staking, and contribute to the security and growth of the AVS ecosystem.

With EigenLayer’s user-friendly interface and robust platform, investors can rest assured that their assets are well-managed and positioned for potential rewards. Embrace the power of EigenLayer and 01node to maximize the benefits of your Ethereum holdings while contributing to the decentralization and security of the blockchain network.