Key Takeaways
EigenCloud (formerly EigenLayer) is a protocol built on Ethereum that introduced "restaking", letting already-staked ETH help secure additional services beyond the Ethereum base layer.
Services built on EigenCloud are called Actively Validated Services (AVSs), and can include data availability layers, cross-chain bridges, and oracle networks.
Restakers can choose from native ETH restaking, liquid staking token restaking, or liquidity provider token restaking, each with a different risk and reward profile.
Introduction
Building a secure blockchain application usually means bootstrapping an entirely new set of validators. This process can be expensive, slow, and risky for new projects. It also spreads security thinly across the wider ecosystem.
EigenLayer is a protocol built on Ethereum designed to address this challenge. It introduced a mechanism called restaking, which lets users who have already staked ETH extend that security to other services. They can do this without unstaking or locking up extra assets. In this way, EigenLayer works as a marketplace for shared, decentralized trust.
Since its early days, the project has grown well beyond simple restaking. In June 2025, it rebranded to EigenCloud and began positioning itself as a broader infrastructure platform. This article explains how the core system works and what has changed.
How Does EigenLayer Work?
At its core, EigenLayer lets Ethereum stakers "opt in" to its smart contracts. This enables their staked ETH (or liquid staking tokens) to secure additional protocols and services at the same time, on top of Ethereum itself.
EigenLayer builds on Ethereum’s proof-of-stake model. Stakers contribute their economic security to specific services rather than only to the base chain. For example, that security might support a decentralized storage network, in-game items in a blockchain game, or trust in a lending application.
These additional protocols are called Actively Validated Services (AVS). Before walking through the restaking process, it helps to look at AVSs in more detail.
What Are Actively Validated Services (AVS)?
AVS are the services and applications that use EigenLayer’s pooled security. They can range from data availability layers and cross-chain bridges to oracle networks and rollup infrastructure. Each AVS sets its own participation requirements, and restakers can choose which ones they want to support.
One well-known AVS is EigenDA, EigenLayer’s own data availability layer. EigenDA is designed to process high volumes of data. This makes it well-suited for Layer 2 rollups and applications that need efficient, cost-effective data storage.
How Restaking Works Step by Step
1. A user stakes ETH on Ethereum, either natively or through a liquid staking protocol.
2. They deposit their staked ETH or LSTs into EigenLayer’s smart contracts.
3. They choose which AVS to support, and either run the required software themselves or delegate to an operator.
4. Operators run AVS-specific software on behalf of restakers and earn rewards in return. In this delegation model, restakers can hand their assets to operators, who manage the technical infrastructure for one or more AVSs.
5. Rewards generated by the AVSs are distributed back to restakers and operators based on their participation.
Types of Restaking
EigenLayer supports three main types of restaking, each suited to different users and setups:
Native ETH restaking: Validators who run Ethereum nodes can restake their ETH directly by pointing their withdrawal credentials to EigenLayer contracts. This option needs more technical knowledge and tends to suit advanced users.
Liquid staking token (LST) restaking: Users who hold LSTs from liquid staking protocols can deposit those tokens into EigenLayer. This is a common entry point for people who prefer not to run their own validator infrastructure.
Liquidity provider (LP) token restaking: Liquidity provider (LP) tokens that include ETH or LSTs can also be deposited, extending restaking to users active in DeFi liquidity pools.
The EIGEN Token
In 2024, three years after EigenLayer was founded, the EIGEN token launched. EIGEN serves as a utility and governance token within the ecosystem. Holders can use it to take part in governance decisions and to help secure certain AVSs that rely on a separate token-based security model, alongside or instead of native ETH restaking.
Slashing and Enforcement
In April 2025, slashing went live on Ethereum mainnet. Slashing means a restaker or operator can lose part of their staked assets if they break an AVS’s rules or fail to stay online.
Slashing is opt-in for each AVS rather than enforced across the whole protocol. Each AVS designs its own slashing conditions, and operators are only exposed if they choose to join those services. A later upgrade also added a redistribution feature, which can redirect slashed funds to designated recipients instead of only burning them. This redistribution option remains on an opt-in basis and does not apply to native ETH or the EIGEN token.
From EigenLayer to EigenCloud
In June 2025, the team behind EigenLayer rebranded the wider project to EigenCloud. The aim was to position it as a "verifiable cloud" platform rather than a restaking protocol alone.
The services offered by EigenCloud include EigenDA for data availability, EigenCompute for off-chain computation, and verification tools like EigenVerify or EigenAI. The broad idea is to let developers build applications whose results can be checked cryptographically, using EigenLayer’s shared security as the trust layer.
EigenLayer remains the underlying protocol on which restaking takes place, while EigenCloud refers to the broader platform built around it. This pivot reflects how the project’s ambitions have grown over time.
Benefits of EigenLayer
EigenLayer aims to strengthen the security of decentralized applications (DApps) by drawing on a shared pool of validators across different services. This can create a more robust environment for users and developers alike.
It can also act as a testing ground where new ideas are tried and validated before wider deployment. Just as important, it promotes permissionless innovation by removing the need for each developer to build and maintain a separate validator set. Instead, they can tap into an existing network of validators through restaking, which may encourage broader experimentation across the Ethereum ecosystem.
Risks to Consider
Like any DeFi protocol, EigenLayer involves risks that users should understand before taking part.
Slashing risk: Restakers and operators can face slashing, meaning a partial loss of staked assets, if they act against an AVS’s rules or fail to maintain required uptime. Because each AVS sets its own policies, the exact conditions can vary.
Smart contract risk: EigenLayer relies on complex smart contracts. Any vulnerability in those contracts could potentially lead to a loss of funds.
Correlated slashing: Operators who secure several AVSs at once face correlated risk. A failure in one area could trigger penalties across multiple services at the same time.
Centralization concerns: If a large share of restaked assets becomes concentrated with a few operators or dominant staking pools, this may introduce centralization risks that could affect the broader security model.
Added complexity: Restaking adds extra layers on top of standard Ethereum staking. This can make risk harder to assess and manage, especially for less experienced participants.
FAQ
What is restaking on EigenLayer?
Restaking is the process of reusing already-staked ETH or liquid staking tokens to help secure additional services, called AVSs, on top of Ethereum. Users deposit their staked assets into EigenLayer’s smart contracts and can then support one or more AVSs, potentially earning extra rewards while taking on extra risk.
Is EigenLayer the same as EigenCloud?
They are closely related. EigenLayer is the original restaking protocol. In June 2025, the wider project rebranded to EigenCloud and expanded into a broader "verifiable cloud" platform that includes data availability, off-chain compute, and verification services. The restaking system remains a core part of this larger offering.
What is an AVS?
An Actively Validated Service (AVS) is any service or application that uses EigenLayer’s pooled security. Examples include data availability layers, cross-chain bridges, oracle networks, and rollup infrastructure. Each AVS sets its own rules and rewards, and restakers choose which ones to support.
When did slashing go live on EigenLayer?
Slashing launched on Ethereum mainnet in April 2025. It is opt-in for each AVS rather than enforced across the whole protocol, so operators are only exposed to slashing on the services they choose to join.
Closing Thoughts
EigenLayer introduced a new way to share decentralized security across the Ethereum ecosystem. Restaking lets users extend their existing ETH security to additional services, which may lower the barriers to launching secure infrastructure and improve capital efficiency for participants. In recent years, the project's developments have been significant: it activated slashing, rebranded to EigenCloud, and broadened its scope toward verifiable cloud services.