In-depth interpretation of EigenLayer White Paper: Expansion of Consensus Layer and important development direction of LSD

EigenLayer White Paper: Expansion of the Consensus Layer

原文来源：币信 Bixin

Eigenlayer (EigenLayer), regarded by many first-tier investment and research institutions as the most important innovation for Ethereum in 2023, with the potential to start a new narrative direction for Ethereum, finally revealed its V1 versionWhite paper.

Eigenlayer is a protocol that is being built on Ethereum. Ethereum nodes are staking their money by staking the pledged ETH with EigenLayer, and staking the Ethereum consensus layer utility to middleware, data availability layer, side chain protocols, etc. Giving them Ethereum-level security at a lower cost.

Bixin Ventures has taken a first look at this long-overdue white paper and Eigenlayer is EigenLayer's basics, operational mechanisms, security guarantees, governance framework, application scenarios, and commercialization prospects. We'll also have a more in-depth look at EigenLayer later on, and you're welcome to subscribe to Bixin VenturesTwitterandMedium columnTo timely acquire more in-depth interpretation and first-hand research of the project.

With the release of the white paper, EigenLayer is scheduled to organize tomorrow at 9 a.m. (PT)Community SpaceAnd EigenLayer is also welcome to ask questions and learn more about EigenLayer in Space.

1. Fragmented trusted networks

Thousands of decentralized applications (DApps) are now built on top of Ethereum, and the whole ecosystem is growing. A trusted foundation of decentralized underlying network value stems from the fact that developers don't need any reputation or trust to have their DApp adopted by anyone who trusts and verifies the underlying blockchain. Rollup is an important aspect of Ethereum performance scaling: not using EVM to execute transactions, but ultimately settling back into Ethereum. People trust Layer2 based on Ethereum, although different Layer2 uses different security authentication methods.

However, any module that is not deployed or proven on top of EVM will not be able to take advantage of Ethereum's trusted underlying security, such as side chains based on new consensus protocols, data Availability Layer (DA), new virtual machines, Oracle machines, trusted execution environments, etc. Generally, they will need to build their own independent AVS (active verification System). Take responsibility for your own system security. There are some drawbacks to the current AVS ecology:

Building a new AVS means building a new trusted network, which is not easy;

The new AVS mean that users will have to pay an additional AVS fee to support the Ethereum interaction fee, which leads to loss of value;

For validators, entering a new verification system means that they have to bear some opportunity cost and risk exposure;

The current AVS system is less secure for some DApps. This is reflected in the fact that the security of some middleware dependent DApps depends on the trust assumption of Ethereum and middleware at the same time, so the cost of attacking middleware is low and the possibility of risk is increased.

2. Repledge and free market governance

EigenLayer introduces two new concepts -- repledge and free market governance -- to extend Ethereum security to other systems and improve governance efficiency.

repledge

EigenLayer allows users to secondary pledge ETH pledged on Ethereum to EigenLayer, and these secondary pledged assets can be used in data availability layers, prophetic machines, middleware, Layer2, etc. The verifier can also get rewards by providing security and authentication services.

Free market governance

EigenLayer gives verifiers the freedom to choose which modules to participate in according to their own risk preferences, but the prerequisite for verifiers to gain profits is to ensure security. EigenLayer's governance model has two advantages: first, it integrates robust underlying blockchain with fast and efficient elements; second, the optional verifier model allows new modules to compete for other resources among the verifier, thus achieving a better balance between security and performance.

AVS on EigenLayer can rent secure services from Ethereum verifiers, with the following benefits:

A new AVS can enhance economic security through Ethereum's verifiers

The cost of using Ethereum's security enhancements is generally minimal

Safe mode at EigenLayer adds cost of destruction ($13 billion)

Value accumulation: Let the ETH pledgee obtain the income from AVS

2.1 Multiple pledge modes are supported

EigenLayer offers a variety of Staking Staking similar to Lido's Liquid Staking, and Superfluid Staking, where superliquid staking allows the staking of LP pairs, specifically:

Direct pledge, pledge ETH that is pledged on Ethereum directly to EigenLayer

LSD pledge, assets already pledged to Lido or Rocket Pool are pledged again to EigenLayer

ETH LP pledge to pledge the LP Token pledged in the DeFi protocol again to EigenLayer

LSD LP pledge, like Curve's stETH-ETH LP Token again pledged to EigenLayer

2.2 Client

For those who are interested in EigenLayer but don't want to be an operator, they can delegate their rights to other node operators, who then pledge their tokens into Ethereum, distributing a portion of the proceeds to them. EigenLayer offers two modes:

Separate pledge mode: The pledge provides verification services and can either join AVS directly or delegate operations to another carrier while continuing to verify Ethereum itself

Trust mode: Select the trusted operator to operate. If the selected operator fails to comply with the agreement, it will be punished as the interest of the principal. In addition, the repledgeer will need to consider the ratio of fees to the principal, and there is hope that a new market will be formed, with each EigenLayer carrier setting up an Eigenlayer contract on Ethereum that dictates how the fees will be allocated to the principal.

3. Forfeit  

3.1 Forfeiture mechanism design

The security of the crypto economy quantifies the Cost of attacking networks, known as cost-of-corruption. When the cost of destruction is greater than the possible Profit from Corruption, the system achieves strong security. EigenLayer's forfeiture mechanism raises the cost of destruction and makes encrypted networks more secure.

3.2 Do not use homogeneous warrants

EigenLayer 不会发出同质化 Token 作为质押权证，因为每一个用户可以都会有不同委任质押的选择，因此也拥有了不同的罚没风险；同时，如果用同质化 Token 去保证每一个仓位的透明性会造成仓位拥有方与节点运行商的冲突。

3.3 Similarities and differences with combined mining

EigenLayer repledge is a concept similar to Bitcoin/Namecoin, Bitcoin/Elastos, Bitcoin/RSK and Litecoin/Dogecoin combined mining concepts. Merging mining can save a lot of costs, because the mining machine can mine its different PoW blockchains simultaneously under the same encryption mechanism. For PoS blockchain, the biggest cost of the verifier is the pledge cost, and repledge allows the pledge funds to be used at different execution levels.

But consolidation mining and repledge end there. Assuming that the main public chain validators of both PoS and PoW are the validators of multiple chains at the same time (that is, merger mining occurs in PoW and repledge occurs in PoS), when they attack the smaller public chain (for example, deliberately signing the wrong state root causes problems in cross-chain assets), two situations will occur:

In a PoS chain consolidated by repledge, the following measures can be taken: a fraud certificate can be issued on the main chain for the incorrect state transition root, and the pledge funds of the malicious verifier will be forfeited.

For PoW public chains, there is no significant crypto economic security even if all miners on the main chain choose to merge the mining chain. The main reason is that the forfeiture option is not available -- our failure to forfeit will cause the malicious miners' mining hardware to fail or be removed, and the miners' hardware will remain valuable.

3.4 Risk Management

There are two categories of risk in EigenLayer:

Many operators may collude to attack a group of AVS simultaneously;

slashing vulnerabilities of AVS could exist so unanticipated that honest nodes could be slashed.

3.4.1 Carrier collusion

In reality, only a subset of operators choose to join a given AVS, some of which may collude to steal money from a group of AVS, and then sophisticated attacks will occur.

One solution is to limit the damage benefits of any given AVS. The solution is up to the designers of the AVS. For example,

Bridges can limit the flow of value during forfeiture cycles,

Prognosticators can limit the total value of transactions during the cycle, and so on.

Another solution is that EigenLayer can actively increase the cost of destruction for AVS. EigenLayer creates an open-source dashboard, and AVS built on top of EigenLayer can monitor whether a group of carriers participating in its verification mission are also re-pledging in many other AVS. AVS can create specifications in their contracts that only incentivize EigenLayer operators that participate in a small number of AVS.

3.4.2 Accidental Forfeiture

Before AVS and their associated infrastructure and contracts are actually tested, many forfeiture risks need to be controlled to avoid creating even greater risk of compounding. One risk is accidental forfeiture vulnerabilities (e.g., code bugs) at AVS creation that, if triggered, can cause honest operators to lose money.

Here we propose two solutions:

Security audit: The AVS codebase must be audited like a smart contract.

One-vote veto: There is a governance layer in EigenLayer, composed mainly of key members of the Ethereum and EigenLayer communities, that has the ability to veto forfeiture decisions with multiple signatures.

3.5 Governance Framework

EigenLayer uses a reputation-based board of prominent figures from Ethereum and the EigenLayer community for governance. The committee will be responsible for upgrading the EigenLayer contract, reviewing and denying forfeiture incidents, and allowing new AVS into the forfeiture review process.

AVS can use this committee to assure EigenLayer remortgagees that they will not be subject to malicious forfeiture or wrongful forfeiture. At the same time, AVS developers can actually test the code base associated with AVS. Once it matures and gains the confidence of the repledgee, AVS can stop using the commission as a backup. AVS may require security audits and other due diligence by the board when they are created on EigenLayer, including checking the system requirements for the verifier to serve AVS.

3.6 Minimize centralization risks while maximizing security

We note that an AVS can gain maximum security when all ETH remortgaged with EigenLayer is used to protect it. However, there are two obstacles to this:

Whether the expected revenue from AVS to operators can exceed the operating costs;

Whether the carrier has sufficient computing resources to participate in AVS verification.

EigenLayer suggests two possible modular design patterns to allay these concerns:

Hyperscale AVS: In Hyperscale AVS, the total computing workload is distributed to all N participating carriers. This reduces storage costs as well as node throughput requirements, while the system itself can achieve high throughput by aggregating the performance of multiple nodes.

Lightweight AVS (AVS) : Some tasks, such as zk-proof, can be performed redundantly by the carrier with low cost and minimal computing infrastructure.

4. EigenLayer;

4.1 Implementing New Application Scenarios

EigenLayer supports many types of protocols by providing AVS services, including: Data availability layer, decentralized sequencer, light node bridge connecting Ethereum, faster bridge between rollups, Oracle, event-driven activation, MEV management, low latency side chains, help Ethereum achieve single slot finality, etc.

4.2 Make use of the heterogeneity of pledgees to greatly expand the block space

Ethereum nodes are heterogeneous in terms of computing power, risk-return preference and characteristics:

Blockchains set block limits based on the weakest node performance for decentralization purposes, and more powerful nodes can EigenLayer excess resources for other protocols to use

Nodes with higher risk preference can choose protocols with higher risk, less income liquidity but higher yield to provide verification

In combination with verifiable credentials, SBT and other technologies, different protocols can select the most appropriate node to provide verification based on its characteristics

4.3 Break the balance between democracy and flexibility

Ethereum updates are currently slowly moving forward with robust, off-chain democratic governance; EigenLayer allows innovations to be deployed quickly on top of Ethereum's trusted layer, acting as a test net to provide testing and experience for innovations on the Ethereum main net, avoiding Ethereum's trade-off between rapid innovation and democratic governance.

4.4 Promote decentralization of Ethereum pledge

EigenLayer provides a marketplace for AVS to monetize decentralization, and AVS can specify that only Ethereum personal nodes (home validators) can participate in tasks, which helps AVS stay decentralized. At the same time, individual nodes can gain additional revenue, incentivise more users to run Ethereum personal nodes, and improve the degree of decentralization of the main network.

4.5 支持多 Token 的节点群

EigenLayer 允许协议的 AVS 指定自己的节点群（quorums）与再质押 ETH 的节点群共同运行，例如 A 协议可以选择使用两个节点群，一个节点群需要重新质押 ETH，另一个节点群则需要质押协议 Token $A，当两个及节点群均同意某个事项有效时，协议 A 最终同意该事项生效。这样的机制可以帮助协议 Token $A 获得实用性，为协议积累价值。

4.6 Business model

Business models available with EigenLayer include:

Pure wallet mode: The protocol deploys an AVS on EigenLayer to provide services, and the user pays a fee to obtain the services, with part of the revenue paid to the protocol's wallet and part to the ETH repledgeer in EigenLayer.

Token 化费用：协议在 EigenLayer 上面部署一个 AVS 作为协议，用户支付费用获得服务，收入一部分支付给协议 Token 持有者，另一部分支付给 EigenLayer 中的 ETH 再质押者。

使用协议原生 Token 支付：协议在 EigenLayer 上面部署一个 AVS 作为协议，用户需要支付协议 Token 获得服务，收入一部分支付给协议 Token 持有者，另一部分支付给 EigenLayer 中的 ETH 再质押者。

双币质押：协议指定协议 Token 和 ETH 的两个节点群共同运行，这样可以帮助协议 Token 获得实用性，使用 ETH 也防止协议 Token 价格下降时对经济安全性的损害。

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