Bankless: How to Become an Early Participant in Eigenlayer?
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Bankless: How to Become an Early Participant in Eigenlayer?
EigenLayer—a rising protocol in the Ethereum staking space—offers ETH holders a wide range of new yield opportunities.
Navigating Web3 tides with focused insightsWritten by: William Peaster
Compiled by: TechFlow
EigenLayer—an emerging protocol in the Ethereum staking space—offers ETH holders a wealth of new yield opportunities. The protocol enables restaking, a novel cryptoeconomic security approach that allows users to extend the security of their staked ETH or liquid staking tokens to other applications on Ethereum, earning additional rewards beyond standard ETH staking yields. In this article, Bankless will walk through the basics of the EigenLayer testnet to prepare for the protocol’s launch and potential future airdrops.
How to Try EigenLayer Early
EigenLayer is an emerging protocol built on Ethereum that enables restaking—a novel cryptoeconomic security mechanism.
In short, restaking allows users to extend the security of their staked ETH or liquid staking tokens (e.g., Lido's stETH) to other applications on Ethereum, earning extra rewards on top of ETH staking yields for providing such services.
More specifically, the EigenLayer protocol introduces two key innovations: pooled security via restaking and free-market governance.
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Pooled security enables Ethereum validators to extend the security of their staked ETH to other "modules" within EigenLayer, generating additional income from security and validation work.
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Free-market governance gives validators control over their risk-reward trade-offs, allowing them to opt into or out of individual modules, making EigenLayer an open market where active validation services (AVSs) can access pooled security provided by Ethereum validators.
As Bankless' David Hoffman previously noted, this concept of restaking resembles the older PoW idea of "merged mining," which allowed the same hashing power to mine multiple networks simultaneously.
Thus, for a PoS blockchain like Ethereum, restaking enables multiple networks to be secured while using the same capital stake (i.e., staked ETH).
For example, a consensus protocol built on EigenLayer could use ETH stakers for security while imposing slashing conditions to deter attacks. Everything from cross-chain bridges to virtual machines could leverage EigenLayer in this way, meaning the project has significant potential to enhance both the security and profitability of the Ethereum ecosystem!
Current State of EigenLayer
On April 6, 2023, EigenLayer announced the launch of its Phase 1 testnet—one of three planned stages in the protocol’s rollout.
The Phase 1 testnet is built on Ethereum’s Goerli network and focuses specifically on introducing stakers to restaking within EigenLayer. Potential users should note that this is an early, non-incentivized testnet, with code actively under development.
At this initial stage, EigenLayer supports liquid staking tokens such as Lido’s stETH and Rocket Pool’s rETH for restaking on the platform’s contracts. Native ETH restaking will also be supported in the future.
How to Restake on the Testnet
With the EigenLayer mainnet launch approaching, now is a great time to try the project on Ethereum’s Goerli testnet to familiarize yourself with its processes and interface. That way, when the protocol officially launches, you can be among the first real participants.
Overall, using EigenLayer on the testnet is straightforward, but you’ll need an Ethereum wallet and some Goerli ETH (gETH) to cover gas fees to get started.
Finally, when you’re ready to proceed, follow these three steps:
1. Obtain testnet stETH — The easiest way is to switch your wallet to the Goerli network and send a small amount of gETH to Lido’s contract address, which will automatically return an equivalent amount of testnet stETH.
2. Access EigenLayer.
3. Make a deposit — Click the “Lido Staked Ether (stETH)” option, enter the amount of testnet stETH you wish to deposit, then approve and confirm the transaction using your wallet.
Benefits of Early Participation
Being among the earliest restakers in the mainnet deployment of EigenLayer offers key advantages, including priority access to projects launching on EigenLayer, as certain services may cap initial restaking amounts, potentially locking out later participants.
Therefore, if you experiment with restaking one or two times on the testnet now, you’ll be well-prepared to act quickly and become one of the first official users when EigenLayer goes live on mainnet.
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