On May 21, Dankrad Feist, a researcher from the Ethereum Foundation, made an announcement over X that he would join EigenLayer as an advisor. On May 19, Justin Drake, another researcher from the Ethereum Foundation, also made a similar announcement.
The objective of their joining is to find out the risks and benefits of restaking. These positions have no material connection with the Ethereum Foundation. The researchers have joined based on their personal reasons. Both of them disclosed the details of their survivorship to promote transparency among the community members. They have received a significant number of tokens for the services of their advisor.
Dankrad Feist, a researcher at the Ethereum Foundation, expressed his decision to become an advisor to Eigenlayer and admitted that he will receive a large number of tokens. He still believes that re-staking brings a lot of risk, but it will also bring some benefits to individual…
— Wu Blockchain (@WuBlockchain) May 21, 2024
Feist believes that EigenLayer will provide several benefits to Ethereum. It will further enhance with high integrity; current leaders were already intending to bring integrity. The leaders are considering making Drake and Fiest accountable. In the X post, he has highlighted various risks and benefits of restaking.
The views of Drake on restaking differ from Justin’s. As Drake stated, “My views on restaking differ significantly from Justin’s, and they have been roughly the same since I developed them last year.”
Risks Involved in Restaking
– Principal Agent Problem: The capital provider and the operator can have different levels of incentives that were initially designed for the protocol. This risk has been present for a very long time in the form of liquid staking tokens.
– Additional Load: The second type of risk is derived from the additional load on stakers from executing staking services. It can lead to centralizing forces.
– Staking Infrastructure: It is used to execute attacks such as bribing attacks on the Ethereum protocol.
– Fear of Dystopia: Some users fear that EigenLayer will lead to a situation of drastically designed staking services that stakers will have to opt in.
Together with Justin Drake, I have recently decided to become an advisor to Eigenlayer, on the same conditions — I am taking this position personally, not representing the Ethereum Foundation, and with a focus on risks and decentralization. I am therefore fully expected to take…
— Dankrad Feist (@dankrad) May 21, 2024
Benefits to Ethereum of Restaking
There are various benefits to Ethereum that come from restaking when implemented well, despite the risks highlighted in the above paragraphs.
– Benefit to Individual Stakers: Some of the benefits of liquid staking tokens to individual stakers. It will increase the competitiveness of individual stakeholders against the status quo.
– Huge Data Layer: Ethereum already has a huge data layer. In real world applications, there are so many constraints and it does not allow some projects to commit to being rolled up by posting data to Ethereum. EigenLayer will provide a temporary solution for these projects and it is compatible with 4844 blobs and provides high, Ethereum-aligned security.
– Implementation: The EigenLayer can help users with the implementation before the protocol gets to it.
The personal objective of Dankrad Feist is to bring all these projects to full rollups with data on Ethereum eventually to make it economically viable.
