Research Summary
The report discusses the EigenLayer revolution and its lineup of explosive protocol launches. It highlights the potential of restaking, the challenges of bootstrapping economic activity, and the benefits of opting into EigenLayer. The report also focuses on several protocols being built on Eigen, including Layer N, Polymer Labs, Lagrange, and Witness Chain.
Key Takeaways
Restaking and EigenLayer
- Restaking Trend: Restaking has become a popular trend, accumulating over $1B of LST’s in less than a year, even before going to mainnet. The report suggests that stETH and swETH tokenholders are leading the way.
- EigenLayer’s Role: EigenLayer offers a solution to the challenge of bootstrapping economic activity due to high costs and inefficiency. It introduces capital efficiency and additional yield sources from onboarded apps/services, albeit at the risk of additional technical complexity and potential centralization.
Protocols on EigenLayer
- Layer N: Layer N is an Ethereum StateNet designed as a network of custom and optimized Rollup Nodes powered by a shared state and liquidity layer. It aims to match the performance of many centralized systems, creating an on-chain rival to traditional networks.
- Polymer Labs: Polymer Labs uses Eigen Layer for data availability and applies the Cosmos SDK for development. It bridges Ethereum rollups to other blockchains, making ETH an access point to the growing interchain world.
- Lagrange: Lagrange Labs is building a secure scale zero-knowledge proof based interoperability infrastructure called Lagrange State Committees. It brings fast and provable one-block finality to any optimistic rollup through succinct zero-knowledge proofs.
- Witness Chain: Witness Chain uses Eigen’s restaking for Proof of Diligence to verify rollup security, and for Proof of Location to establish physical node decentralization. Its watchtower network is the first line of defense for rollups.
Actionable Insights
- Monitor Restaking Trends: Given the rapid growth of restaking, it may be beneficial to monitor this trend and its impact on the crypto market.
- Assess EigenLayer’s Potential: EigenLayer’s ability to introduce capital efficiency and additional yield sources could have significant implications for the blockchain industry. It may be worth assessing its potential impact and the risks associated with it.
- Explore Protocols on EigenLayer: The protocols being built on EigenLayer, such as Layer N, Polymer Labs, Lagrange, and Witness Chain, represent potential areas of growth and innovation in the blockchain space. It could be beneficial to explore these protocols and their potential contributions to the industry.
