Euclid Finance: The new standard for Ethereum re-staking

24-02-19 12:00
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Source: Euclid Finance

In the decentralized network field, such as Ethereum, there are various key roles that contribute to its functionality.

· Node (Validator): The node acts as both a prover and a ledger, verifying data within the network. The security foundation of a decentralized network relies on the collaboration of multiple nodes, and increased participation enhances overall security. For example, Ethereum has over 900,000 validators, solidifying its reputation as a highly decentralized and secure blockchain.· Pledger: By pledging native tokens such as ETH, participants can earn additional tokens as rewards for contributing to network security and consensus.

On the other hand, EigenLayer utilizes staked ETH to support the economic security of decentralized networks that ensure their operation. Within the EigenLayer system, there are three different roles:

· Operator: As entities running as nodes, they facilitate the construction of decentralized networks seeking security through EigenLayer. A more decentralized operator network means increased security for the services provided by EigenLayer.

· Pledger: These individuals provide economic security by pledging their ETH through EigenLayer.

· Active Verification Services (AVS): They borrow security services from operators through EigenLayer, such as blockchain networks, bridges, oracles, etc.

Euclid aims to establish a new standard for re-staking in the industry. It provides a seamless re-staking experience and a secure Omnichain Liquid Restake Asset solution for re-stakers, while enhancing the overall decentralization and security of EigenLayer.

Euclid's new standard provides the following advantages for EigenLayer re-staking:

1. No threshold participation in native ETH re-staking.

2. Full-chain liquidity re-pledging assets.

3. Collateralized Delegation Incentive Framework

4. Unexpected Confiscation Protection

5. Unlicensed operator network

For operators:

Euclid has launched a re-staking delegation framework that treats all operators equally, allowing them to receive Euclid Restaker's re-staking delegation without relying on brand recognition.

Operators must pledge ECL (Euclid's governance token) and independently re-pledge ETH or LST. By pledging ECL, Euclid reduces the entry barriers for operators, ensuring that operators are qualified and capable of fulfilling their responsibilities.

This mechanism incentivizes operators through ECL collateralization and earning commissions from those they delegate to.

For re-stakers:

Euclid significantly reduces the barrier to re-staking native ETH. With Euclid, you do not need 32 ETH to re-stake your native ETH. You can deposit any amount of ETH into Euclid to participate in re-staking on EigenLayer.

Euclid supports cross-chain re-staking, allowing users to enjoy the efficiency and cost-effectiveness of other networks without directly interacting with the main network, and receive additional re-staking rewards.

Euclid enables re-delegators to diversify their assets into a sufficiently decentralized operator network, thereby mitigating risks associated with single points of failure.

The pledged ECL will serve as collateral to compensate for the malicious fund confiscation suffered by the re-pledger.

AVS plays a crucial role in the EigenLayer ecosystem. The benefit of using EigenLayer for AVS is that it includes high-value asset ETH in its economic model, which prevents the consensus layer from being easily attacked by malicious actors. However, ensuring the security of AVS is not limited to this. It is equally important to have a decentralized operator network that provides staking services. If a small number of operators control the majority of the staking volume, the security of AVS cannot be guaranteed. (For more information on the risk of "operator collusion," please refer to the EigenLayer white paper.)

Therefore, a sufficiently decentralized operator network is the foundation for EigenLayer to provide secure services for AVS.

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