What is Restaking?

This is the second piece in our educational series on staking and its significance to the blockchain ecosystem. It builds off of our previous installment — What is Staking — which will give you foundational context to understand restaking.

In this blog, we’ll explore the emerging trend of restaking with EigenLayer and its potential in the Ethereum staking landscape.

Staking Ethereum: An Overview

Staking plays a pivotal role in securing a proof-of-stake (PoS) blockchain. Network participants can stake a certain amount of the chain’s native currency to earn passive income alongside supporting network security.

While users have the opportunity to stake several tokens, staking ETH is the most common option. 

What is restaking? An introduction to EigenLayer

Restaking ETH is the act of staking the same ETH across Ethereum and other platforms, amplifying trust across networks. While staking sets the foundation for Ethereum’s cryptoeconomic security, restaking further extends the protocol’s’ security offerings to various applications on the network. EigenLayer, a protocol built on the Ethereum blockchain, revolutionizes cryptoeconomic security, allowing new projects to borrow Ethereum’s robust security.

By incorporating restaking as a new primitive, EigenLayer empowers users to actively borrow Ethereum’s security offerings and validate new applications on the network, thereby strengthening the overall integrity and resilience of the Ethereum ecosystem alongside the protocols leveraging EigenLayer, further reducing the start-up cost of protocols.

EigenLayer operates as a decentralized trust market on Ethereum. Protocols can initiate operations at reduced costs by utilizing Ethereum’s strong security layer. Stated simply, restaking within the EigenLayer protocol allows users who have staked their ETH to actively participate in extending cryptoeconomic security to various applications on the network.

In comparison to traditional staking mechanisms, EigenLayer’s restaking introduces a dynamic approach that allows users to continuously engage with the network’s security. Through restaking, EigenLayer incentivizes users to actively adapt and extend cryptoeconomic security to emerging applications, creating a more robust ecosystem. This encourages the validation and adoption of new applications on the Ethereum blockchain.

Enhancing Cryptoeconomic Security with Restaking

EigenLayer's restaking mechanism on the Ethereum blockchain strengthens cryptoeconomic security by enabling users to proactively expand security measures and validate new applications.

By encouraging continuous user engagement with network security, EigenLayer fortifies the foundation for decentralized applications (dApps), intensifying their defense against potential threats. This innovative technique not only upholds the legitimacy of transactions but also promotes a flourishing ecosystem by urging the verification and integration of novel applications on Ethereum.

Collective Participation Drives Adoption and Security

EigenLayer’s restaking mechanism represents a significant step forward in enhancing cryptoeconomic security on the Ethereum blockchain. Its potential to drive innovation, flexibility, resilience, optimize economic efficiency, and global participation positions EigenLayer as a cornerstone in the development of a more secure, adaptable, and sustainable blockchain ecosystem.

As the Ethereum network continues to evolve and new challenges emerge, solutions like EigenLayer will play an instrumental role in shaping the future of decentralized technology. By empowering users to actively contribute to the network’s security and validation, EigenLayer sets a precedent for how blockchain ecosystems can harness the power of collective participation to build a stronger, more secure digital landscape.

Staking with Validation Cloud

While staking is the foundation to secure a PoS network, Ethereum staking directly on-chain requires specific hardware and software which are expensive and also tedious to maintain. Besides high operational costs, the staker must be well-versed with on-chain staking mechanisms. However, staking-as-a-service facilitates running the validator node on the staker’s behalf.

Platforms such as Validation Cloud offer staking-as-a-service and are SOC2 Type 2 compliant, ensuring the highest levels of security and protection in staking.