Eigenlayer Explained: Simple Edition

Ethereum preserves the immutability of applications on this blockchain because the blockchain itself has robust crypto-economic security. However, elements outside of this, like bridges, are independent of Ethereum's crypto-economic security, such as multi-sig and Oracle services, which are as secure as the Oracle itself.

Now, EigenLayer suggests, let's combine these in a single network and share the crypto-economic security of Ethereum.


Here's how the system works.

A person running a validator with 32 Ether should also download the code of a separate blockchain called EigenLayer. Then, this person should validate EigenLayer, and if any misconduct occurs in EigenLayer, they should be penalized with the slashing of 32 Ether, just like in Ethereum.

The blockchain called EigenLayer, benefiting from the crypto-economic power of the staked Ether here, should provide services like Oracles, DAs, etc., needed by applications/bridges/Rollups.

This process is called re-staking. The re-staking of staked Ethers and the provision of services needed by applications in a single layer (EigenLayer) are also referred to as "pooled security via re-staking.

In summary,

EigenLayer exists, and individuals staking Ether in Ethereum provide services needed by applications in a separate layer by staking again in EigenLayer, sharing the crypto-economic security of Ethereum with applications.

Now, let's get to the most curious parts 🤣
Those who re-stake the staked Ethers in EigenLayer should receive payment from EigenLayer for this process. Just like being a staker in Ethereum yields ETH payments, in EigenLayer, it will be in $EL. (most probably)

Also, other services wanting to use EigenLayer will have an additional payment.

So, tokens are inevitable.