Welcome to the comprehensive FAQ section dedicated to EigenLayer, an innovative platform enabling restaking on Ethereum. This blog post aims to address common inquiries, providing clear insights into the workings of restaking, the EigenLayer protocol, and the benefits it brings to the Ethereum ecosystem.
What is restaking?
Restaking is the ability to use staked tokens, like Ether (ETH) to earn rewards on additional protocols. EigenLayer—a marketplace and protocol that connects restakers, operators and builders—makes this possible on Ethereum via a series of smart contracts.
What is the name of the asset being staked?
The name of the asset being staked is “Ether” or “ETH” – Eigenlayer is a protocol that allows users to restake their ETH. Restakers can either engage in direct ETH staking or by depositing Liquid Staking Tokens (LSTs), such as stETH, rETH, lsETH, cbETH
How long does it take to stake?
The direct ETH staking path takes about the same amount of time as non-restaking activation. The only additional time required for restaking is for EigenLayer to confirm that the validator does in fact have its withdrawal credentials pointed at the EigenPod. This process does not add a significant amount of time to the staking process.
What is the escrow period & unbond period to withdraw funds from Eigenpod?
Currently, the “escrow” period to retrieve ETH from an EigenPod is 7 days. The unbond period is currently TBD, but does include the 7-day “escrow” period. In the future this “escrow” period will likely be removed from the unbonding period.
Can I lose staking rewards? Risks of staking?
There are inherent risks in staking that could lead to potential loss of staking rewards, including the performance and reliability of Actively Validated Service (AVS) operators. However, by carefully selecting AVS operators and adopting Figment’s conservative approach towards AVS selection, these risks can be significantly minimized. Figment’s public offering will run EigenDA only; no new AVSs will be added. Committing to this approach beforehand eliminates the risk of changing the risk/reward parameters by adding AVSs and introducing unknown or unwanted risks to restakers.
How does restaking compare to liquid staking?
There are some similarities between restaking and liquid staking. For instance, both approaches can be seen as offering staking efficiency – you can do more with your stake. With liquid staking you can take your liquid staking token (LST) and engage in other areas of DeFi, for instance. You can loan out your staked ETH or deposit it in an automated market maker pool and earn rewards. With restaking, you can delegate to an operator and earn additional rewards on your stake. Although risk levels could be similar between the two – the form of restaking risk is closer to the base activity – staking; whereas the risks taken in DeFi with your LST, for instance, is a different kind of risk.
What affects future staking rewards?
From a restaker’s perspective, EigenLayer restaking rewards are driven by the AVSs that you are engaged with (through your delegation to an operator). As the EigenLayer ecosystem matures there will be a growing number of AVSs and operators to choose from, which could push restaking rewards higher. That said, the average rate of rewards will be driven by supply and demand.
Are rewards still earned during the unbonding period?
No rewards are earned during the unbonding period.
Do I choose the AVSs or does the Operator?
The operator chooses the AVSs.
Is EigenDA operational yet?
EigenDA is not yet live. Currently, it looks like EigenDA will be launched on mainnet sometime in April.
Where can I learn more about EigenLayer?
Helpful links:
- Eigenlayer official website
- Figment’s Eigenlayer First Look article
- Figment’s Navigating EigenLayer article
This FAQ has aimed to demystify key aspects of the EigenLayer protocol, restaking mechanics, and the potential it holds for the broader Ethereum ecosystem. As the blockchain landscape continues to evolve, EigenLayer stands as a testament to the innovative spirit driving the future of staking.
The information herein is being provided to you for general informational purposes only. It is not intended to be, nor should it be relied upon as, legal, business, tax or investment advice. Figment undertakes no obligation to update the information herein.
