#EigenLayer. has huge potential for Ethereum's evolution, but concerns remain as $8 billion is being staked
What risks could EigenLayer bring to Ethereum?
What internal risks might EigenLayer face?
How does EL address these risks?
Let's dig deeper and find out đĄ
Critics (including Vitalik) worry about two main risks that EigenLayer could pose to Ethereum:
The first risk is Systemic Risk from Slashing Incidents â However, EigenLayer has prepared for this using 5 key strategies: đ
âłïž Reallocate ETH staking across multiple Actively Validated Services (AVSs)
đŠ Offer a combined security mechanism to help save costs
đž Use penalty fees to compensate affected parties
đ Encourage diversity of validators to increase robustness
đ Prevents validators from making punishable mistakes
đ€ These strategies aim to protect Ethereum and its users from potential slashing incidents, ensuring a secure and decentralized network
đ° Second, critics worry that EigenLayer could contribute to the centralization of Ethereum as EL operations may be too much for individual validators to operate on their own.
To combat this, they...
đ„ïž Create services that consume less computer resources
đ Allows validators to delegate complex tasks to other parties with better equipment
đïž Special rewards for Individual Validators to encourage them to continue participating in the network
Let's keep centralization to a minimum!
đŹ People aren't just worried about what EigenLayer can do for Ethereum
Problems arising within the network also worry them â mainly conflicts of interest.
A conflict of interest can arise if a person operating an EL node, also holds a partial stake in a project on EigenLayer and faces a transaction that could harm their investment.
They may act in their own self-interest instead of in the interest of the network.
To prevent these problems, EL uses: đ
đĄïž Smart tools to ensure everyone complies with regulations
đ° Pre-stakes cause operators to trade their coins to maintain integrity
đ A combination of validators to prevent anyone from having too much influence
đ Community follows to maintain fairness