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EigenLayer is about to launch its own token! What practical use cases can the first batch of AVS provide?

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EigenLayer is about to launch its own token! What practical use cases can the first batch of AVS provide?

This article is authorized and reproduced from ChainFeeds, written by ZHIXIONG PAN

Restaking ecosystem has finally reached two important milestones: the launch of EigenLayer (and EigenDA) mainnet, and the first batch of AVS projects that are now live on the mainnet: AltLayer, Brevis, eoracle, Lagrange, Witness Chain, Xterio.

AVS is the ultimate manifestation of whether the EigenLayer protocol can truly be practical and secure. The previous Restaking protocols (such as Renzo/Puffer) or liquidity re-staked tokens were just the beginning of this ecosystem and a means to attract liquidity. Previously, it was more about incentivizing supply to bring more ETH into the Restaking ecosystem and activate more nodes, while AVS has the potential to unleash demand, providing more value to the Crypto and decentralized network.

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The first batch of AVS projects are distributed across various tracks, including Rollup-as-a-service, oracle, ZK protocol processing, DePIN, and gaming. The most notable is the ZK protocol processor, a relatively new concept with no mature products yet, and EigenLayer surprisingly supports both Brevis and Lagrange in the first batch.

Furthermore, the launch of EigenLayer's mainnet does not mean that the protocol has entered maturity; there are still many modules and solutions that are not entirely clear, such as the future node slashing mechanism, how to ensure the security of AVS from an economic standpoint, and even the design of token economics, all of which need to be disclosed by the team in the future.

What is AVS?

AVS stands for Actively Validated Services, a concept defined in the EigenLayer protocol. In simple terms, AVS can be likened to "middleware" that provides services for end products, such as data and verification capabilities. For example, a "oracle" is not an end product, but it can provide data services for DeFi, games, and wallets, which is one type of AVS.

AVS's downstream is likely an end product that can directly face ordinary users. The upstream of AVS consists of nodes participating in Restaking, who collect ETH in protocols like Puffer/Renzo and then support specific AVS.

Compared to most protocols, EigenLayer's business model is relatively direct. End users will directly or indirectly pay for the products they use, and these fees will be allocated to AVS, node operators, EigenLayer protocol, and users providing Restaking ETH. The specific allocation varies, and early on, the protocol's own tokens may be rewarded to users using the advantages of crypto token economics.

Therefore, further development of more types of AVS and establishing trust in the reliability of AVS services for end products are necessary to complete the entire ecosystem loop.

AltLayer: Rollup as a Service

AltLayer is a provider of "Rollups-as-a-Service" (RaaS), customizing the deployment of Rollup Layer 2 networks based on demand. For a Rollup network, the selection of DA is crucial. Therefore, AltLayer not only supports Ethereum but also EigenDA developed by EigenLayer.

In addition, AltLayer collaborates with EigenLayer to introduce the Restaked Rollup framework, providing three modular AVS:

  • VITAL AVS for decentralized verification of rollup’s state
  • MACH AVS for fast finality
  • SQUAD AVS for decentralized sequencing

Essentially, these modules aim to address the issues of slow finality, centralization in settlement layers, and sequencers on the blockchain, which are essential modules for Rollups. The MACH module launched this time serves Xterio and Optimism.

For more information, visit https://blog.altlayer.io/altlayer-run-eigenda-operator-is-live-on-mainnet-5e1b15a0d307

Brevis: ZK Coprocessor

The concept of "ZK Coprocessor" has been around for over a year, but due to limited specific applications and complexity, many people still lack understanding. In simple terms, it enables Ethereum smart contracts to access more verifiable data through zero-knowledge proof technology, enriching application scenarios.

Brevis offers a solution through AVS to realize the ability of a ZK coprocessor. Part of the team comes from the cross-chain bridge protocol Celer Network, with Mo Dong being the co-founder of both projects. They presented "A Smart ZK Coprocessor" at the Hong Kong Web3 Scholars Conference.

Brevis proposes the coChain solution to reduce the cost of achieving a "ZK Coprocessor" based solely on smart contracts and zero-knowledge proof technology. It offers a more cost-effective solution and provides capabilities that were previously unattainable, leveraging game theory and token economics in the design.

For more information, visit https://blog.brevis.network/2024/01/18/introducing-brevis-cochain-the-fusion-of-crypto-economics-and-zk-proof-in-a-zk-coprocessor/

eoracle: Modular and Programmable Oracle Network

The eoracle oracle protocol, derived from Ethereum + oracle, claims to be Ethereum's first "native" oracle. Its security is guaranteed by staked ETH, differing from oracles like Chainlink where security relies on the Chainlink node network and its token LINK.

Oracle networks, including eoracle, are in demand due to DeFi and RWA requiring off-chain data. These networks verify data through participating nodes.

Eoracle will operate in a dual-token model, where network security relies on Restaked ETH and native tokens incentivize nodes. The native token's specific use and design have not been disclosed yet, but it aims to promote network participation, ensure fair value distribution, and decentralize the eoracle protocol.

For more information, visit https://eoracle.gitbook.io/eoracle

Lagrange: Parallel ZK Coprocessor

Lagrange is a ZK coprocessor that emphasizes the "parallel" concept, similar to services provided by Brevis.

The Lagrange team designs a ZK coprocessor that inherently supports parallelization and horizontal scaling, proving large-scale distributed computing results on-chain and distributing the workload across thousands of working nodes simultaneously, with security ensured by ETH on EigenLayer.

Last month, Renzo, Swell, and Puffer announced collaboration with Lagrange, with each entrusting $500 million in Restaked ETH to Lagrange. Lagrange designed features for these platforms that leverage the protocol's advantages, such as accessing historical on-chain data and calculating points for users based on this data.

Lagrange is named after mathematician, mechanician, and astronomer "Lagrange."

For more information, visit https://medium.com/@lagrangelabs/lagrange-labs-secures-1-5-f654f716277a

Witness Chain: DePIN Network

Witness Chain is a network designed for decentralized IoT devices, providing basic services required by the DePIN ecosystem, such as security, node bandwidth, and physical location through components like DCL DePIN Coordination Layer. These services are termed "Watchtowers" in Witness Chain to measure data and generate valid proofs for use in the DCL layer.

For more information, visit https://docs.witnesschain.com

Xterio: L2 Focused on Game Ecosystem

Xterio, unlike other AVS, is a Layer 2 blockchain issued by AltLayer's RaaS based on EigenDA and OP Stack, focusing on AI and Web3 game-related scenarios. Xterio L2 utilizes the MACH AVS for fast finality mentioned earlier. AltLayer is providing MACH services to Optimism's mainnet.

For more information, visit https://twitter.com/XterioGames/status/1775873500684636577

Outlook and Challenges

The EigenLayer ecosystem will likely see the launch of more types of AVS. However, the systematic risks EigenLayer brings to the Ethereum ecosystem concern many, as it bypasses smart contracts and directly controls Ethereum's node ecosystem, a departure from previous Ethereum-based protocols. Nevertheless, this is the allure of permissionless systems; even without EigenLayer, others would explore this direction.

Additionally, Lido, as Ethereum's largest liquidity staking protocol, faces potential conflicts of interest with EigenLayer due to shared node operators. This may prompt Lido to reconsider its business model and sustainability, while EigenLayer needs time to gradually fill missing modules.