EigenLayer Unveils Major Update to Restaking Contracts

September 05, 2024 04:27 PM AEST | By Team Kalkine Media

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EigenLayer Unveils Major Update to Restaking Contracts — Image source: shutterstock

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Eigen Labs, the developer behind EigenLayer, has announced a significant update to its restaking protocol aimed at enhancing the rewards for users. According to a September 4 blog post, the upgrade focuses on improving the functionality of EigenPods—smart contracts within EigenLayer that handle the restaking of Ether (ETH) on the Ethereum Beacon Chain.

The update introduces greater flexibility for EigenPod users, enabling them to complete a checkpoint to restake their Beacon Chain {Ethereum} (ETH) rewards on top of their existing EigenPod balance. This mechanism allows for automatic reinvestment of Beacon Chain rewards into EigenLayer, which in turn increases the potential rewards for users.

Additionally, the upgrade includes improvements to EigenLayer’s user interface, facilitating a more seamless experience for managing restaked assets. Restaking involves taking tokens that have already been staked—used as collateral with a validator in exchange for rewards—and leveraging them to secure other protocols concurrently. As of now, EigenLayer holds approximately $11.5 billion in total value locked (TVL), as reported by DefiLlama.

EigenLayer supports a range of “actively validated services” (AVS) that utilize restaked ETH for security. Prominent AVSs include EigenDA, Lagrange State Committees, and the ARPA network. EigenDA, a data availability protocol and the first AVS launched on EigenLayer, is the largest of its kind, secured by approximately 3.5 million restaked ETH contributed by over 123,000 restakers.

In August, EigenDA expanded its support to include native token restaking for layer-2 scaling networks, alongside ETH and EigenLayer’s native EIGEN token. This development enables teams to restake their ERC-20 tokens to secure a custom quorum for their rollups, enhancing security for rollup users and providing additional token yield opportunities.

Despite these advancements, experts like Mike Silagadze, CEO of the liquid restaking protocol Ether.fi, note that the long-term viability of restaking networks depends on acquiring clients who value the services provided. Silagadze indicates that while restaking may become mainstream, the associated yields and risks remain speculative.

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