EigenLayer (EIGEN)

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.

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

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.

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.

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.

From a restaker’s perspective, 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.

No rewards are earned during the unbonding period.