EigenLayer is a protocol built on top of Ethereum designed to enhance the economic utility of staked ETH by allowing users to leverage their existing Ethereum stakes to secure additional protocols and applications without requiring additional collateral.
By doing so, EigenLayer aims to create a marketplace of decentralised trust connecting restakers, operators and builders. This initiative offers additional advantages to ETH holders, aiming to make the blockchain landscape more interconnected and efficient, thereby enriching the overall Ethereum experience.
Proof-of-Stake (PoS) protocols use staking to achieve consensus. By locking native tokens into a validator, you earn the right to secure a chain and earn rewards on your stake. Due to its environmental efficiency, staking has overtaken mining and is used far more often in newer protocols.
With restaking, validators who have already committed their ETH as collateral in the Ethereum PoS mechanism can rehypothecate ("restake") this collateral to participate in additional validation activities in the EigenLayer network without needing to commit extra capital.
Validators that opted-into EigenLayer restaking continue to secure the Ethereum network while simultaneously being used for various purposes in the EigenLayer network, such as securing Active Validated Services (AVS) [that are layer-2 protocols or dApps built on top of EigenLayer].
By doing so, restaking enhances the utility and efficiency of the staked assets, providing more opportunities for reward and participation in the broader public blockchain ecosystem without compromising the security of the Ethereum blockchain.
Staking is one of the safest and most predictable ways to get rewarded in the crypto space as the value originates from the blockchain’s native currency inflation, and a share of transaction fees. By helping securing the network, stakers benefit from staking rewards.
Restaking allows using this existing stake to contribute to securing additional services on EigenLayer, called Actively Validated Services (AVS). By doing so, stakers benefit from additional restaking rewards on top of their existing staking rewards.
EigenLayer hasn’t launched in mainnet net; therefore there is no AVS to secure at the moment.
However, stakers are incentivized to restake before mainnet launches to accrue EigenLayer Points, which measures stakers' contribution to the network.
💡 You need a minimum of 32 ETH to run an Ethereum validator and participate in EigenLayer restaking.
To opt-in to restaking with Kiln, log in to your Enterprise Dashboard workspace and follow these steps:
Reach out to us if you need help to start restaking.
Restaking rewards rates are defined by each Active Validated Service (AVS) on EigenLayer, meaning validators will earn different restaking rewards based on the AVS they opt-in securing.
Before EigenLayer and AVS fully launch, restakers are assigned points which represent their individual contributions to the EigenLayer ecosystem security and are proportional to the time and amount of assets restaked.
Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake on all major networks and to whitelabel staking functionality into their offering. Our platform is API-first and enables fully automated validators, rewards, data and commission management.
We are serving thousands of businesses worldwide so that everyone can securely and seamlessly. Our clients can stake their tokens from our dashboard, a hardware wallet, a browser wallet, a B2B custodian, a crypto exchange or just their favorite investment app. Kiln makes EigenLayer restaking easy, secure, and accessible to everyone.
To delve deeper into the world of EigenLayer, re-staking, and AVS, tune in to our special podcast series where we interview a new founder on a weekly basis. The first full episodes, featuring Sreeram from EigenLayer and Amrit from Altlayer, are now live.
Restaking enables staked ETH to be used as cryptoeconomic security for protocols other than Ethereum, in exchange for protocol fees and rewards.
While PoS is a foundational consensus mechanism, EigenLayer’s restaking represents a specialized innovation that extends the capabilities and utility of staked assets in certain blockchain projects.
There is a minimum of 32 ETH to deploy a validator on Ethereum to opt-in for EigenLayer restaking. A validator can be deployed for restaking each batch of 32 ETH.
You can maintain custody of your staked ETH through any wallet or custodian solution of your choosing. Kiln restaking with EigenLayer is non-custodial, only you can access your funds by controlling the underlying wallet which holds a claim to the funds.
There is a seven-day lock-up to be accounted for when exiting from EigenLayer staking, in addition to Ethereum’s exit queue and skimming delay.
When restaking, a validator is exposed to both Ethereum and EigenLayer penalties if it behaves against one network’s consensus rules. While restaking generates additional rewards, it also implies additional risks that need to be taken into account.
Within the EigenLayer network, each Active Validated Service (AVS) specifies its own rewards and penalties rules. Rewards and penalties value and distribution rates differ from one service to another.
In the context of Proof-of-Stake blockchains, the gross reward rate (GRR) refers to the total or gross amount of rewards earned from staking before deducting any fees or expenses. This is a reward rate that fluctuates with the operations of the protocol and the performance of validators, it is not set by Kiln. The net reward rate (NRR), on the other hand, takes into account the deductions or expenses, providing a measure of the actual rewards received after subtracting fees or costs.