Author: yudan; Source: Dandan's Blockchain Notes
Foreword
A few days ago, EigenLayer finally announced the token model of its governance token EIGEN. EigenLayer seems to be very persistent in using new words to distinguish itself from other projects. This time, when publishing the token white paper, it used the new word InterSubjective. Counting the previous restaking and AVS. It is even more confusing. Many people even stay in the impression that restaking is a kind of credit nesting doll in traditional finance.
This chaos reminds me of the conclusion of the original discussion in the group: Restaking is like teenage sex, everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it :D
Today, let's unveil the mystery of teenage sex
Interpret the basic concept of EIGEN
Restaking
Restaking literally means re-staking, re-staking, as the name suggests, it means staking again. What is being pledged again? According to the description in the official document, this thing can be ETH that has been staked on the Beacon chain and tokens (LST) of various Pooled Staking protocols, such as Lido's stETH tokens, or Rocket Pool's rETH tokens, etc. The question now is, how can these funds that have been staked on the Beacon chain be staked again on EigenLayer?
From a technical point of view, for various LSTs, the process of restaking is very simple, which is to stake LST tokens directly into the protocol. As for ETH, it is necessary to proxy stake through EigenLayer, and manage the staked funds on the Beacon chain through the proxy contract of EigenLayer.
Okay, here, reataking is over, it is that simple, so simple that restaking is as simple as recharging a sum of money into a bank. In fact, restaking is just a recharge. So what is the purpose of recharging? In fact, it is for guarantee. Here is a conclusion: the essence of reataking is guarantee.
Many people immediately think of nesting dolls, credit, serial margin calls, explosions, and big drops and losing all their money when they see the word restaking. The imagination and risk awareness of Web3 people can only leap forward at this level because of the previous Luna and FTX events.
However, to determine whether a thing is a subprime loan or has leverage, it is necessary to compare the final fund management amount with the initial fund management amount. As mentioned above, restaking is just a simple recharge behavior. Since it is a recharge, there is no change in the funds before and after the recharge. So this is not a subprime loan or a leveraged behavior.
Restaking's real role is to guarantee. The real intention of EigenLayer is to guarantee the security of other on-chain activities through the recharge of funds by these pledged users. Since ETH itself has the strongest on-chain consensus, it can guarantee other projects by sharing this consensus (trust) and perform some operations that require credit. Such as Oracle price feeding, random number generation, etc. Once the subjects who perform these credit granting behaviors commit evil, then as the subject of guarantee, the funds will be confiscated by EigenLayer. In layman's terms, the process of restaking is more like your rich relative depositing 10 million in the bank to let the bank guarantee you to do a certain project. The project party sees the bank's guarantee and lets you do it. Once you violate the rules, your relative's money will be confiscated by the bank. On the contrary, if you work diligently, you can get a generous project reward.
AVS
AVS stands for Actively Validated Service, which literally means active verification service. As mentioned above, the essence of restaking is guarantee. Once the guarantor violates the rules, a mechanism is needed to punish the guarantor's behavior. This punishment process is called Slashing. The combination of running, reporting, confiscation and redistribution of guarantee funds is AVS. How to govern EIGEN tokens Restaking After understanding the basic concepts of EigenLayer, we can start to delve into the governance token EIGEN of EigenLayer. From the above, we can know that Restaking realizes the sharing of Ethereum's pledge trust and provides security, while AVS provides a punishment mechanism and verifiability. For restaking, the whole process is very clear. In fact, it is just to recharge the funds into the EigenLayer protocol. The key is the AVS part. How should it be executed?
In order to describe AVS, EigenLayer categorizes violations into objective and intersubjective. That is, objective errors and subjective errors that most people think. Objective errors are very simple to understand. They are objective facts that can be verified by mathematics. For example, if you say 1+1 = 2, it is equal to 3, then you have made an objective factual error.
Some mistakes cannot be objectively verified. For example, there is a hateful rich man who bought a huge amount of EIGEN tokens during the governance of EigenLayer, and then insisted that you violated the rules and wanted to confiscate your re-pledged assets. You have no way to defend yourself at this time, but you have no choice because you can do whatever you want with money. This kind of mistake is that if others think you are wrong, then you are wrong, which is called intersubjective faults. What should you do at this time? In fact, there is one last method, which is to fork the EIGEN token, directly fork it, and confiscate the hateful rich man's EIGEN through forking EIGEN. Since AVS nodes work according to EIGEN, if most AVS nodes think that it is wrong to maliciously confiscate your rich man, then they will adopt your forked version of the EIGEN token. In your version, this hateful rich man directly becomes a poor man, so naturally there is no way to confiscate you. And this is the infinite forking mechanism inherent in EIGEN.
Due to the current delay mechanism in the withdrawal mechanism of EigenLayer, once there is a dispute over a slashing, there will be enough time to deal with the corresponding penalty disputes.
Some thoughts
Eigenlayer inherits the traditional DAO governance mechanism while avoiding the tyranny of the majority through the built-in forking mechanism of the EIGEN token. This mechanism seems good, but is it really that good? Here are a few questions:
It seems that EIGEN can avoid the tyranny of the majority through unlimited forks, but the final decision-making power here is actually on the AVS nodes. If most AVS nodes are bought, the outcome of the tyranny of the majority is inevitable.
The final profit of an attack depends on the profit after the attack minus the corresponding cost. If the attacker controls most of the AVS nodes (self-built or bought), if the profit from doing evil is very rich, the possibility of being controlled by malicious intent cannot be ruled out.
AVS nodes can be fined by EIGEN holders if they do evil, and EIGEN holders need to be fined by AVS nodes if they do evil. The two are nested in each other, and if AVS jointly commits evil, and EIGEN holders really want to confiscate AVS nodes, AVS nodes will fork EIGEN tokens, and then adopt their own version to make their actions legal. If this happens, it will be a very interesting scene :D
Summary
EigenLayer through the pioneering infinite forking mechanism, it aims to assume that everyone is kind and honest, and punish Intersubject faults through honest social consensus to avoid the tyranny of the majority. However, this idea seems beautiful, but it still cannot solve the problem of AVS nodes jointly committing evil, and puts self-proof into an infinite loop. Of course, since the specific codes of EIGEN and AVS have not been released yet, the questions in the above discussion are based on some of the currently released materials, and everyone is welcome to discuss them together.
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