What Is Eigenlayer (EIGEN)?

Cryptocurrencies
What Is Eigenlayer (EIGEN)?

What Is EigenLayer (EIGEN)

EigenLayer is a protocol built on Ethereum that introduces restaking, allowing users who stake assets such as ETH or liquid staking tokens (LSTs) into EigenLayer smart contracts, and restake their ETH and LSTs outside of the Ethereum mainnet. The project was founded in July 2021 by EigenLabs, a research and development organization with the goal of pushing the boundaries of blockchain technology and expanding the possibilities of the Ethereum ecosystem. 

Doing so achieves two things. Firstly, users are now able to obtain additional yield for their ETH and LSTs. Secondly, restaked ETH enables EigenLayer to extend the cryptoeconomic security of the Ethereum base layer to other applications within the EigenLayer network. EigenLayer achieves this through a concept called pooled security. Instead of each application needing to bootstrap its own security infrastructure, it can leverage the pooled security provided by EigenLayer. With this approach, developers gain greater freedom to focus on building other functions for their decentralized applications.

How to Trade EIGEN on Flipster

  1. Sign up for an account on the Flipster website or by downloading the Flipster app (Android or Apple).

  2. Click the [Trade] tab.

  3. Search for EIGEN and click on it.

  4. Select the leverage (up to 100x).

  5. Select either a Trigger Order or Market Order.

  6. Enter the amount of coin you want to trade or choose a percentage of your available funds.

  7. Once you have confirmed the details, click the [Long] or [Short] button to open a position.

EIGEN Tokenomics

  • Name: EigenLayer

  • Symbol: EIGEN

  • Total Supply: 1.68B EIGEN (on 10 October 2024)

  • Circulating Supply: 186.58M EIGEN  (on 10 October 2024)

  • Market Cap: $717.89M (on 10 October 2024)

  • Price: $3.84 (on 10 October 2024)

  • Token Allocation:

    • Investors: 29.5%

    • Early Contributors: 25.5%

    • Community Initiatives: 15%

    • Ecosystem Development: 15%

    • Stakedrop 1: 6.75%

    • Stakedrop 2: 5.20%

    • Stakedrops: 3.05%

How Does EigenLayer Work

EigenLayer's restaking allows users to utilize their staked ETH or LSTs to secure a variety of services beyond the Ethereum base layer, expanding the utility of their staked assets. Here's a breakdown of the process:

  1. Existing Stake: Users begin with ETH or LSTs already staked on the Ethereum network.

  2. Extended Utility: EigenLayer enables these staked assets to be used for securing other services built on the network. These services are called Actively Validated Services (AVSs).

  3. Service Selection: Users choose which AVSs they want to support with their stake. Different AVSs offer different potential rewards and have varying risk profiles.

  4. Pooled Security: User stakes are combined to form a security pool that protects all services on EigenLayer, collectively strengthening the entire ecosystem.

  5. Reward Accumulation: Users earn rewards for their participation in securing AVSs in addition to the rewards they receive for staking on Ethereum.

Why Trade EIGEN

  • Staking Rewards: While restaking ETH or LSTs provides additional rewards, staking EIGEN often offers even higher returns. EIGEN is specifically designed to incentivize participation in securing the EigenLayer network and its diverse range of AVSs.

  • Governance: EIGEN holders have a voice in the governance of the EigenLayer protocol. They can participate in decision-making processes, influencing the future direction and development of the platform.  

  • Securing AVSs: EIGEN is staked to secure a variety of Actively Validated Services (AVSs) on the EigenLayer network.

  • Addressing Intersubjective Faults: EIGEN enables the EigenLayer community to handle complex situations that require subjective assessment and off-chain information, including scenarios like validator collusion or censorship that are difficult to detect automatically on-chain.  

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.