A newcomer to Ethereum – Every day, new protocols are launched on Ethereum. Today is the turn of EigenLayera re-staking protocol.
EigenLayer: re-staking unveiled on Ethereum
Since December 2020, and the launch of the beacon chain, the Ethereum blockchain has begun its transition to the Proof of Stake. Subsequently, the latter was finalized in September 2022, definitively marking the abandonment of the Proof of Work.
At the same time, many protocols known as liquid staking have seen the day. In practice, these allow you to participate in staking and obtain a tokenized version of the deposit, making the process more liquid.
On June 14, the protocol EigenLayer was launched on the Ethereum blockchain. This aims to add a link in the staking chain by offering a re-staking service.
To put it simply, the protocol makes it possible to put in stake liquid staking tokens, such as Lido’s stETH, RocketPool’s rETH or Coinbase’s cbETH. By doing this, users get a extra return on their ETH deposited in staking. Of course, this additional return comes with increased risk.
In practice, the protocol was deployed last April on the Goerli testnet for a final phase of testing before its deployment on the mainnet.
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A launch with a guardrail
For its launch, the protocol implemented several limits in order to manage the influx of funds. Therefore, a capacity limit was implemented on the protocol. This was fixed at 9,600 tokens, or 3,200 for each stETH, rETH and cbETH token. At the current price of Ether, this represents a limit to $16.7 million.
In addition, each wallet making a deposit also has a 32 token limit, namely the amount necessary for the operation of a validating node. Therefore, it sets the maximum of participating wallets at 3,000.
These limits will evolve in the future, depending on the evolution of the protocol and the demand.
“These limits will be gradually raised over the coming weeks and months, with the goal of reaching a fully open, uncapped state where any user can collect any amount of ETH staked.”
Eigenlayer Statement
This solution of re-staking does not however not unanimous in the Ethereum ecosystem. In effect, Vitalik Buterinthe co-founder of Ethereum, had expressed their fears about this practice, last May. He judges the maneuver as being a diversion of the social consensus of Ethereum, which could prove harmful for the protocol.
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