EigenLayer (EIGEN): What Is It? Definition & Explanation

EigenLayer is a pioneering protocol that brought the concept of "restaking" into the crypto conversation, allowing Ethereum's security infrastructure to be reused. In essence: ETH that is already staked on Ethereum can simultaneously provide security services to other protocols — so a staker can earn both ETH staking rewards and additional income from services built on EigenLayer.

What Is It and Who Founded It?

EigenLayer was developed by Eigen Labs under the leadership of Sreeram Kannan from the University of Washington. The technical root: a research paper published in 2021 under the name "EigenTrust." Mainnet launched in April 2024; the EIGEN token was introduced in May 2024.

Restaking: The Core Mechanism

In traditional staking, validators secure only Ethereum. With EigenLayer:

1. Restaking: The user deposits stETH or natively staked ETH into EigenLayer's smart contract.
2. Opt-in: The user selects which AVSs (Actively Validated Services) to provide security to.
3. Dual duty: The user continues securing Ethereum while simultaneously providing security to the chosen AVSs.
4. Additional yield: The user earns extra rewards for each AVS they participate in.

EigenLayer restaking flow — simultaneous distribution of ETH to the Ethereum staking layer and AVS security service layers

What Is an AVS?

AVS (Actively Validated Service) is a protocol or infrastructure that leases security from EigenLayer:

EigenDA is EigenLayer's own AVS and offers low-cost data availability services especially for Ethereum rollups.

EIGEN Token: Supply and Use Cases

• Total supply: ~1.67 billion EIGEN
• TGE: May 2024
• Use cases: AVS governance, slashing guarantee, social consensus mechanism
• Key feature: EIGEN supports a unique slashing model called "intersubjective slashing" — used for disputes that cannot be verified on-chain but can be resolved through community consensus

Risks and Considerations

• Dual slash risk: A validator that violates both Ethereum and AVS rules can face two separate slashing penalties — a new and more complex risk profile.
• Security dilution: If the same stake is spread across multiple AVSs, a problem in any one of them affects the entire stake.
• AVS quality risk: A poorly designed or malicious AVS could damage the entire ecosystem.
• New and experimental: Restaking as a concept is still maturing; it has not been stress-tested at scale.
• Token unlock: VC and early-team token lockups are on release schedules that may create selling pressure.

COINOTAG Perspective

EigenLayer is a protocol that fundamentally reimagines Ethereum's security model. The narrative of "turning Ethereum into a security-as-a-service network" is both powerful and risk-laden. As the AVS ecosystem grows, EIGEN's value increases; but the systemic risks that restaking may introduce are not yet fully understood. This is one of crypto history's most important "what if it works?" protocols.