Re-staking track based on Eigen Layer (2)

In the previous article, we introduced the basic principles of EigenLayer. This principle can theoretically extend the security of Ethereum to a large number of projects.

This gives EigenLayer a huge space for imagination, and therefore EigenLayer has received a considerable amount of venture capital funding.

In addition, EigenLayer itself has also opened an incentive mode to encourage users to participate in the project's staking activities from the beginning of the test network.

Taking these factors into consideration, users in the ecosystem almost unanimously expect that EigenLayer will have a massive airdrop.

EigenLayer is the core of the entire re-staking track, and even it has opened up such expectations, so naturally neither users nor project parties want to miss such an opportunity.

Especially for ambitious project parties, it is possible for giants other than EigenLayer to emerge in this ecosystem.

How did the current project parties get involved?

Then we need to take another look at EigenLayer’s white paper.

EigenLayer’s white paper describes four mortgage methods and the mortgage assets used. Except for the first, each of the latter three actually gives developers a lot of room for imagination. The second method, which is to use the derived mortgage asset xxETH for re-pledge, is the hottest segmented track at the moment. Many projects are focusing on this type of assets.

What are the main projects?

There are currently two categories:

The first category is new projects that enter the market directly.

The entry of this type of project mainly takes advantage of the following two conditions:

First, the points mechanism and airdrop expectations provided by EigenLayer are used to attract users to invest ETH or xxETH into the project.

Then, the project team designs a set of token economics mechanisms, and gives users another layer of rewards through its own points mechanism or token airdrop expectations.

Through this mechanism, users participating in the project can receive two rewards: one from EigenLayer and the other from the project side.

Such projects currently include ether.fi, swellnetwork.io, kelpdao.xyz, renzoprotocol.com, etc.

The second category is existing projects that are taking advantage of the trend.

In the first type of project, when the user hands over his ETH or xxETH to the project, the project will give the user a voucher token. This voucher token is used by the user to withdraw his/her transfer. ETH or xxETH to the project party.

This certificate token has been targeted by some existing DeFi projects. These DeFi projects can design some incentive mechanisms around these certificate tokens to encourage users to deposit these certificates into these DeFi projects.

A well-known project of this type is pendle.finance.

The competition on this track actually does not have a high technical threshold, but it can attract popularity and gather TVL in a very short time. The projects only play the role of an intermediary, working around EigenLayer, attracting users' ETH or xxETH and then transferring them to EigenLayer or introducing the generated derivative assets into existing DeFi projects.

Therefore, this track is also the track that many entrepreneurial teams are targeting nowadays. It is conceivable that the competition on this track has just begun, and new projects will emerge one after another in the future.

Since the basic logic and idea of ​​this ecosystem is to generate derivative assets and carry out asset mortgages, it is inevitable that people will worry about the risks that may be hidden by this layer of nesting.

The EigenLayer project team has also thought about this.

The white paper mainly describes a risk: nodes participating in re-pledge may be accidentally injured due to some accident and their mortgaged assets will be confiscated.

For this risk, the white paper proposes to set up some kind of committee to review this situation. When the committee determines that this is an accident, it can return the forfeited assets or reduce the forfeiture.

Obviously, this risk is just one of many. People are more worried about the liquidation that assets accumulated in layers of nesting may face if their prices fluctuate violently under the stimulation of external events, or accidents caused by negligence in the technical implementation of these projects.

Once this kind of liquidation or accident occurs, it may not only affect the ecosystem, but also the DeFi ecosystem, and even ultimately affect the security of Ethereum.

Vitalik published an article last year specifically talking about the issue of Ethereum’s consensus being too heavy. In the article, he specifically expressed the hope that the consensus layer of Ethereum would not bear too many responsibilities, lest the system be too complex and eventually not only fail to guarantee it, but would endanger the security of Ethereum.

Concerns are concerns, because the encryption ecosystem is permissionless and anyone can build their own ecosystem in this system, so this development may be unstoppable.

This is just like some people in the Bitcoin ecosystem are worried that inscription technology will pollute Bitcoin and increase the burden on Bitcoin, but the inscription ecosystem is still advancing rapidly.

As ordinary investors, I tend to look at its development from a more practical point of view, participate in this ecosystem appropriately within the risk range that I can bear, and observe whether these risks can be resolved during the development process. .