EigenLayer, created by Sreeram Kannan (a University of Washington professor), introduced “restaking” — arguably the most important new primitive in Ethereum since liquid staking. The concept: ETH stakers who already secure Ethereum can “restake” their ETH to simultaneously secure other protocols (called Actively Validated Services, or AVSs). Instead of each new protocol needing to bootstrap its own validator set and security budget, it can leverage Ethereum’s existing $100+ billion in staked ETH.
The mechanism works through smart contracts on Ethereum. Stakers deposit their staked ETH (or liquid staking tokens like stETH) into EigenLayer, opting in to validate additional services. In return, they earn additional yield — but they also accept additional slashing risk. If they misbehave while validating an AVS, their restaked ETH can be slashed (penalized) by both Ethereum and the AVS.
EigenLayer’s growth was explosive. By early 2024, over $15 billion in TVL was deposited in EigenLayer — making it one of the largest protocols in all of DeFi. The “points” program (where depositors earned points that implied future EIGEN token allocation) drove massive inflows, as users sought to maximize their airdrop allocation. EigenDA (a data availability service) was the first AVS to launch, with others including oracle networks, bridges, and sequencers following.
The EIGEN token launched in 2024, initially as non-transferable before enabling trading. The tokenomics were complex: EIGEN serves as a “universal intersubjective work token” — a governance and staking token for situations where objective slashing isn’t possible. Critics questioned whether restaking concentrated too much risk (a major slashing event could cascade across multiple AVSs), whether the points-driven TVL was genuinely sticky, and whether the EIGEN token’s complex purpose justified its multi-billion dollar valuation. Supporters argued EigenLayer solved a genuine problem — the prohibitive cost of bootstrapping new decentralized security — and that its success would enable an explosion of new validated services.
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