Figment’s EigenLayer Public Offering for Restaking

February 9, 2024

What is EigenLayer?

EigenLayer is the first implementation of restaking on Ethereum. It allows those staking Ether (ETH) to secure additional protocols with their staked ETH and thereby earn additional reward streams. It’s helpful to think of EigenLayer as a marketplace that connects stakers, builders and operators.

An operator runs Actively Validated Services (AVSs) – protocols built on EigenLayer. (Re)stakers delegate to these operators and thereby receive additional rewards. For more about EigenLayer see our First Look.

Restaking with EigenLayer

There are two steps to restaking – first, engaging on EigenLayer and being ready to delegate; second, delegating to an operator. The first step is available on Mainnet today. For holders of certain liquid staking tokens (LSTs), they can deposit these on EigenLayer. For those holding 32 ETH or more and want to stake directly (i.e., ‘the direct path’) on Beacon Chain (Ethereum’s Consensus Layer), the process looks very similar to the non-restaking path. 

Step One: go to EigenLayer’s website and create an EigenPod – a smart contract that is owned by the user (i.e., address) calling the creation process. 

Next, set up a validator in whatever way you are accustomed, for instance a home validator may use Ethereum’s staking launchpad or a customer of Figment might use our staking platform. While setting up the validator, set the withdrawal credentials to the EigenPod address. By performing these steps, restakers’ 32 ETH flows through the EigenPod upon exiting their validator, which allows EigenLayer to levy penalties if needed; this functionality is at the heart of what makes EigenLayer work.

For more on the direct path (i.e., non-LST path) see our restaking guide for Fireblocks.

Step Two: delegating to an operator, is likely to go live on Mainnet later this quarter along with the launch of EigenDA – the first AVS to launch on EigenLayer.

What is Figment’s Involvement with EigenLayer?

Figment believes EigenLayer is an important part of the Ethereum ecosystem and has been engaged for some time. Figment’s involvement includes:

  • Being a member of the operator working group, testing EigenLayer and EigenDA,
  • Enabling customers on EigenLayer so that they are ready to delegate on day one,
  • Partner with liquid restaking protocols such as Renzo and Rio 
  • Launching a public operator once restaking goes live, that anyone will be able to delegate to.
  • Offering white label solutions for unique staking strategies. 

What will Figment’s Public Operator Look Like?

Figment’s public operator will run EigenDA (data availability), the first AVS to be launched on EigenLayer. EigenDA is similar in concept to Danksharding, in terms of the service it provides to rollups in the Ethereum ecosystem; for more on EigenDA see here.

Importantly, Figment will not add additional AVSs to its public offering. Adding and removing AVSs has the potential to drastically change the risk/reward parameters of our public offering. Figment believes that anyone engaging with restaking needs to have a very clear idea about the operator they have delegated to and the AVSs that they are operating. The inability to communicate to all restakers in a timely manner is one of many considerations that informed this decision.

Many of the details about EigenDA have not yet been announced. As a result the fees charged by Figment have not yet been determined. 

What Restakers Need to Know

EigenLayer is a marketplace that ultimately allows restakers to earn additional rewards but this does come with risks. It is vitally important that restakers understand both the operator they are delegating to and the AVSs that the operator is running.

Figment’s approach to running Web3 infrastructure emphasizes safety over liveness; we seek to optimize risk-adjusted rewards rather than simply increasing rewards regardless of additional risks. Our approach with our public operator on EigenLayer follows this philosophy: by only running one AVS, customers can ease into restaking and understand the ins and outs without worrying that Figment will add more complexity and risk by opting into additional AVSs.

Of paramount importance is that customers fully understand any new opportunities they are engaging with – each AVS should be treated as an entirely new network. Figment feels the right approach is to move slowly and engage after thorough consideration and research.

Figment + Eigenlayer

Figment is well-positioned to be a leading supporter of EigenLayer as it develops and grows. 

Having already assisted customers with getting started on EigenLayer, Figment plans to continue onboarding more users wishing to leverage EigenLayer’s capabilities. 

As an early tester, Figment will provide valuable feedback to improve EigenLayer and AVSs based on real-world experience operating AVSs, including through partnerships. Figment’s role transcends mere participation; it envisions being a cornerstone in the EigenLayer’s architecture by providing robust support and insightful feedback. The symbiotic relationship between Figment and EigenLayer is forged through a shared vision of an innovative, secure, and more rewarding staking environment.

As EigenLayer evolves, Figment’s continued support and integration signify a promising future for Ethereum stakers and restakers alike. With technical prowess and financial investment, Figment is dedicated to the success of EigenLayer, ensuring its growth and sustainability within the broader Ethereum ecosystem. 

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. 

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