EigenLayer: Intersubjective Faults, Token forking, bEIGEN & more

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June 4th, 2024

1 CollectedMint

Special thanks to Soubhik & Jessy from EigenLayer for comments & feedback on this post.

EigenLayer is giving me a lot to write about. It’s been a few weeks since they released their token whitepaper, EIGEN The Universal Intersubjective Work Token, which introduces many new ideas.

Yes - I’ve read the 43 page whitepaper, hopefully it will make your life easier (and give me some interesting dinner conversation topics).

In this post, I aim to answer the following:

• Background info: What is EigenLayer & what innovations does it introduce?
• What’s the EIGEN token and its core features, what are intersubjectively attributable faults and how does the EIGEN token work?
• What are the potential risks & open questions for EigenLayer?

Before we get started, please note that this post builds on the concepts previously introduced in EigenLayer. If this is your first time exploring EigenLayer, I recommend starting here. You'll also find some terminology at the end of this post.

Background: Staking, Infrastructure level innovation & EigenLayer

Blockchains offer a new way to coordinate with distinct participants through an open and verifiable system, secured with cryptographic methods.

Understanding Staking in Ethereum

Let's take a look at Ethereum's staking mechanism to understand how blockchains work.

First – validators are key in maintaining the Ethereum network. They are responsible for verifying transactions, proposing new blocks, and ensuring the security and accuracy of the blockchain. To become a validator, users need to lock up their ETH, this process is called staking. If validators act dishonestly, they can lose their staked ETH through a penalty process called slashing.