The innovation of the re-staking aggregate EigenLayer

Recently, I read an article online about the EigenLayer token Eigen titled "What is the Tongue-Twisting Concept of Intersubjective Forking Proposed by EigenLayer?"

It pointed out a distinctive innovation of the Eigen token in terms of application scenarios.

I have introduced EigenLayer multiple times in my previous articles. It is a newly emerging application scenario in the Ethereum ecosystem during this bear market.

Its core idea is to fully trust Ethereum's consensus security and extend this security to other applications that require token staking.

The basic operation to achieve this is to stake ETH in other applications.

After the EigenLayer project was proposed, it quickly launched a staking "mining" activity, encouraging users to stake ETH or various ETH derivatives in EigenLayers and rewarding them with token airdrops based on the amount of ETH they staked.

Recently, the results of its token (Eigen) airdrop have been released, and anyone who participated in the staking mining can check if they are eligible for the airdrop at mct.xyz/whitelist/70.

It is worth noting that, unlike many other projects that issue purely governance tokens, Eigen has a tangible application scenario. This scenario is for collateral in intersubjective contexts.

The aforementioned article uses the example of the last U.S. presidential election to explain what collateral in intersubjective contexts is in a simple and understandable way. I recommend our readers to read this article carefully. Of course, for those proficient in English, I suggest reading the original text from the project team, "EIGEN: The Universal Intersubjective Work Token."

Here, I would like to share my understanding as well.

Let’s first review Ethereum's staking mining.

In Ethereum, users who truly participate in POS mining need to stake 32 ETH. If this user behaves maliciously during the mining process, their staked ETH will be forfeited.

So how does the system know if they have acted maliciously?

This is discovered through the verification of transactions and blocks by nodes across the network. This process is automatically completed by algorithms under the consensus mechanism. It is an objective and verifiable result. Once this result is out, no one will question it, and it will not cause disputes. ETH is very suitable for this type of verification collateral.

However, in practical applications, another scenario may arise. In that scenario, the algorithms or verification processes used may be highly controversial, leading to completely different views on the results among different validators. In such cases, no one can convince anyone else.

How should this situation be handled?

There is already a precedent in the crypto world: hard forks.

This idea can also be applied to EigenLayer. However, in EigenLayer, users stake ETH, so how can they fork ETH in this situation?

This is clearly unrealistic.

Thus, EigenLayer creatively proposed its solution: in such cases, users can use Eigen tokens as collateral. When any validator is dissatisfied with the result, they can initiate a hard fork. In the newly forked scenario, this validator can forfeit the assets of other validators they believe have acted maliciously.

Theoretically, if a scenario can produce multiple verification results, then in extreme cases, multiple hard fork scenarios may arise. Ultimately, which scenario prevails will be determined entirely by free market competition. In other words, the scenario with the strongest consensus will be ultimately recognized.

I really like this idea; it perfectly realizes Hayek's vision and ideals of market competition in this context.

Because the Eigen token aims to achieve such functionality, it has made certain innovations in its technical implementation. It adopts a dual-token structure: one is a standard ERC-20 token, and the other is a token that can be hard-forked. There is a close correspondence between the two tokens.

Of course, while innovation is good, whether the project will ultimately explode and whether the token has significant appreciation potential will depend on many other factors. Moreover, EigenLayer's business model still poses systemic risks that are concerning.

In any case, such innovation at least adds a lot of positive points to this project.

Reference Links:

"What is the Tongue-Twisting Concept of Intersubjective Forking Proposed by EigenLayer?": https://twitter.com/0x_Todd/status/1785238019605491950

"EIGEN: The Universal Intersubjective Work Token": https://www.blog.eigenlayer.xyz/eigen/