Challenges with EigenLayer

While EigenLayer's staking numbers are booming, many might not realize they still need to delegate their restaked ETH to operators. Choosing wisely is crucial - a subpar operator node can result in your ETH getting slashed, and even good operators running on strict AVSs can be susceptible to slashing.

  • Operator and AVS selection: Each Actively Validated Service (AVS) offers unique security levels and rewards, but deciphering them requires patience and knowledge. Strict slashing rules mean understanding where operators use your staked ETH is crucial.

  • Unintuitive User Experience: As mentioned above, staking on EigenLayer is not straightforward. Users need to delegate their tokens to an operator to start earning rewards. To get the most out of their ETH, users need to:

    1. Stake their ETH to get Liquid Staking Tokens (LST)

    2. Approve those LST tokens and stake them on EigenLayer

    3. Delegate those tokens to an operator node.

    This multi-step process is highly inefficient for the users and burns a hole in their wallet (in the form of ETH gas fee) at every turn.

To solve these problems, a multitude of restaking protocols have surfaced. Read the next section for more details.

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