Re-staking EigenLayer and utilizing the Omni Network of EigenLayer
Using the Omni Network of EigenLayer to re-stake.
Author: Blockingul Veradittakit, Partner at Blockingntera Capital; Translator: Blockingxiaozou
EigenLayer is building a new mechanism called restaking that allows protocols to leverage the security of Ethereum without having to build their own validation mechanism. Restaking allows already staked ETH to be distributed as a new cryptographic economic security layer on the protocol. Many non-EVM projects have had to bootstrap their own validator sets, a complex and expensive process. These projects involve data availability layers, virtual machines, oracles, bridges, etc. While these modules are hotly contested, they are often less innovative than other projects because bootstrapping validator sets is very difficult. By eliminating the barriers to entry created by these projects, restaking will drive the industry forward and enable projects to operate in a more secure and efficient manner. Additionally, validators secure these new projects, earning protocol fees and rewards, benefitting both validators and the modules they secure.
Validators are able to choose which projects they want to secure based on their risk tolerance. EigenLayer calls this mechanism free market governance: a mutually beneficial relationship between validators and new modules where validators earn rewards and new modules benefit from the security level Ethereum provides.
There are two types of restaking mechanisms built by EigenLayer:
Native restaking: pointing withdrawal credentials of already staked ETH to EigenLayer’s smart contract.
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Liquidity restaking: transferring liquidity staking derivatives to EigenLayer’s smart contract. Applicable to tokens such as stETH, rETH, cbETH and LsETH.
EigenLayer uses “restaking points” to measure users’ overall EigenLayer restaking activity, based on the amount of ETH staked over a period of time. Modules may consider restaking points over time when choosing validators as a way to prioritize long-term loyal restakers.
There are several key protocol features on the EigenLayer platform:
Custom Decentralization: As more ETH restakers come online, EigenLayer will allow native stakers to choose to secure services that require a higher degree of decentralization. EigenLayer suggests that highly decentralized services should maintain low off-chain software container requirements.
Custom Seizures: If certain re-staking conditions are not met, validators may be seized. However, because they take on this risk, validators also receive additional protocol fees and rewards for securing new modules. Whether a validator is seized depends on the seizure contract deployed by each service, and the EigenLayer verification seizure contract ensures that malicious behavior stakers will be seized.
Operator Delegation: Some stakers may wish to delegate to operators to operate verified service software modules on behalf of stakers. Stakers must trust operators, but the corresponding benefit is that stakers do not have to run service software containers themselves.
(With EigenLayer, the accumulation of trust and L1 value has been greatly improved, making the process of building a trust network easier. Source: EigenLayer White Paper.)
Although EigenLayer is still very new, some projects have already started to use its innovative mechanisms to improve security and interoperability – Omni Network is an example.
The Omni Network
Omni is building an Ethereum interoperability layer that uses the EigenLayer stack to enable rollups to effectively communicate with each other. Omni notes that “nearly half of the funds lost in DeFi hacks come from vulnerabilities in interoperability protocols.” This problem clearly indicates the need to establish a secure and reliable interoperability system in web3 protocols. Currently, the industry is plagued by the high cost and slow confirmation time of L1 blockchains. Rollup provides solutions to these problems, but is currently very isolated and decentralized. As the founders of Omni said, Omni is being built as a unified whole, creating “a new path forward for Ethereum’s modular future.”
Omni’s network uses validators to re-stake ETH and then forms the security foundation of the network, creating new security standards between modular blockchains. Omni plans to open source this technology so that other chains can use it for custom development and ensure powerful interoperability. The protocol combines the re-staking mechanism with Tendermint PoS consensus to reach consensus on the state of the rollup in an extremely fast way, thus serving as the settlement layer of the rollup. Tendermint guarantees Omni’s speed, while the re-staking mechanism provides Omni with a stronger security level. Because Omni’s execution layer is compatible with EVM, developers can build native cross-rollup applications – a major step forward for interoperability. In addition, developers can use Solidity for development and use built-in features to access state, messages, and applications from other rollups. By obtaining security from Ethereum / EigenLayer and using Tendermint to achieve cross-rollup functionality, Omni is expected to be the future of interoperability for Ethereum and other networks.
Omni has established partnerships with leading rollups such as Arbitrum, Polygon zkEVM, Starkware, Scroll, and Linea.
Blockingntera recently participated in Omni’s $18 million financing, with other participants including Two Sigma Ventures, Jump Crypto, Hashed, and The Spartan Group.
Interoperability and security are the two most significant issues that Ethereum faces in its expansion. However, with the emergence of innovative protocols such as EigenLayer and Omni, the industry is advancing at a faster pace. We are pleased to support groundbreaking projects like Omni that help optimize the interoperability of rollups and make them more mature – for the security and development of the entire crypto ecosystem.