EigenLayer Dominates Restaking Market with Growing Adoption

Restaking is an emerging concept in cryptocurrency that lets users earn additional rewards by staking their Ether (ETH) to secure multiple applications beyond the base Ethereum network.

EigenLayer, a protocol built by EigenLabs, introduced restaking as a mainstream concept and has become the dominant player in this space. According to the project's own communications, it expanded its ecosystem into what it calls a broader 'verifiable cloud' stack, rebranding parts of its ecosystem as EigenCloud.

The EIGEN token serves two main purposes: governance participation and a 'universal intersubjective staking' role, where EIGEN itself can be staked to help secure AVSs that need judgment calls. The initial allocation of EIGEN was split across five buckets, with 29.5% allocated to early funding round participants and 25.5% to team and core contributor allocations.

Restaking offers reported annual yields on top of base ETH staking rewards, generally in the mid-single digits. However, this comes with several risks, including slashing risk, operator risk, smart contract risk, AVS-specific risk, and concentration risk.