Original Author: Deep Tide
Original source: Deep Tide
After much wait, Eigenlayer finally announced more details about its token economy today, and announced that it will distribute 15% of EIGEN tokens to users who previously participated in re-staking through linear unlocking.
Does the EIGEN token itself have more value, what is it for, and what impact can it bring to restaking and the entire Ethereum ecosystem?
The answer lies in the 40-page white paper on token economics published by Eigenlayer.
Unlike the general project that introduces the token economy with a few schematic diagrams of token release, Eigenlayer spent a lot of pen and ink to explain the role of the EIGEN token and its relationship with the ETH token in detail, detail, and even some technical geeks.
The research team of Shenchao read through this white paper and compiled the technical points into easy-to-understand text to help you quickly understand the role and value of EIGEN.
Quick facts
The function of the EIGEN token and the problem to be solved
- 通用性和跨任务质押（Universality and Restaking）
Traditional blockchain tokens are usually only used for specific tasks, such as ETH, which is mainly used for block verification on Ethereum. This limits the scope and flexibility of the token.
The re-staking mechanism allows users to use their already staked ETH assets for multiple tasks and services without unlocking or transferring them.
- 主观之间的验证（Intersubjectively Verifiable）
The white paper uses the word "intersubjectively," which is very difficult to translate into Chinese, to describe complex network tasks: they are often difficult to verify by simple automated procedures and require subjective consensus from human observers.
The EIGEN token acts as a kind of "social consensus" in these tasks. In scenarios that require verification of different opinions, EIGEN can be used as a voting tool, and token holders can influence network decisions through voting.
- 分叉代币和削减机制（Forking Tokens and Slashing）
Disagreements on certain issues or decisions may arise in the network, and a mechanism is needed to resolve those differences and maintain the consistency of the network.
In the event of a major divergence, the EIGEN token may undergo a fork, creating two separate versions of the token, each representing a different decision-making path. Token holders need to choose which version to support, and the version that is not selected may lose value.
If network participants fail to perform staking tasks properly or misbehave, EIGEN staking tokens may be slashed as a penalty for their bad behavior.
Relationship between EIGEN and ETH
- Complement rather than replace: The EIGEN token is not meant to replace ETH, but rather to provide a supplement to the existence of ETH.
ETH is primarily used for staking and network security as a universal target work token. ETH staking supports the reduction of objective failures (e.g. validators will be penalized for incorrect validation)
EIGEN staking supports intersubjective fault mitigation (errors that cannot be verified on-chain, such as the price the oracle quotes you is itself wrong), greatly expanding the range of digital tasks that blockchains can securely provide to their users.
EIGEN Token: Provides a new social consensus mechanism that specializes in dealing with subjective errors that ETH is out of reach
If you want to know what the EIGEN token does, you first need to know what the ETH token does.
Before the concept of Eigenlayer and restaking, ETH could be seen as a "purpose-specific" work token. To put it mildly:
ETH tokens are used to maintain the security of the network and generate new blocks, perform tasks related to the maintenance of the Ethereum blockchain, and cannot be used for anything else.
In this case, ETH is characterized by:
- There is a very specific work purpose;
- Strong objectivity, such as the error of double signature on the Ethereum chain and the error of rollup aggregation, you can judge it on the chain through pre-written objective rules, so as to confiscate a certain amount of ETH to the validator.
With Eigenlayer, ETH is actually converted into a "universal target" work token. To put it mildly:
You can take ETH and stake it to various tasks, such as new consensus mechanisms, rollups, bridges or MEV management solutions, etc., which is no longer limited to the staking of Ethereum's own chain, which is also an important feature of Eigenlayer.
However, in this case, although the usage scenario has changed, ETH still has the following characteristics:
- The "objective" limit still exists, as cuts and slashing can only be applied to objectively verifiable tasks on the Ethereum chain.
But you have to know that not all errors in the crypto world can be attributed on-chain, and not all arguments can be resolved by on-chain consensus algorithms.
Sometimes, these non-objective, hard-to-verify, and controversial errors and problems significantly affect the security of the blockchain itself.
As an extreme example, the oracle quotes 1 BTC = 1 USD. This data is wrong from the source, and you can't identify it with any objective contract code or consensus algorithm on the chain, and if something goes wrong, it won't help you to confiscate the validator's ETH, to put it bluntly:
You can't sanction an off-chain subjective error with an on-chain objective solution.
What is the price of an asset, whether a data source is available, whether an AI interface program is running correctly ... These problems cannot be agreed and solved on the chain, and more of a "social consensus" is needed, and the answers are reached through subjective discussion and judgment.
Eigenlayer把这类问题叫做主观间可归因的故障（Intersubjectively attributable faults）：系统的所有合理活跃观察者之间存在广泛共识的一组故障。
Therefore, the EIGEN token has a place to play---- providing a complementary new social consensus mechanism in addition to ETH to maintain the integrity and security of the network. Specifically to solve this "between subjective" failures.
具体做法: EIGEN 质押,代币分叉
ETH is also a working token as a universal target, but EIGEN will complement each other as a generic "intersubjective" work token.
If the validator stakes ETH and some objective failures occur, the staked ETH can be cut and confiscated;
In the same way, you can stake EIGEN, and when some subjective failures occur (which cannot be judged directly on the chain and need to be handled by subjective judgment), you can cut and slash the staked EIGEN.
Let's take a concrete scenario and see how EIGEN works.
Let's say there is a decentralized reputation system based on Eigenlayer where users can rate service providers. Each service provider stakes EIGEN tokens to show their credibility.
Before this system begins, there are 2 phases that are necessary:
- Setup phase: Coordination rules between system stakeholders are coded to determine how a subjective dispute should be resolved;
- Enforcement phase: Enforce pre-agreed rules in a self-evident manner, preferably locally.
In this system, users can enforce the conditions they have agreed to in advance on their own.
Then, if the service provider is perceived to have provided a false service or misled users, the platform's community consensus mechanism may trigger a challenge to form a forked token event, which in turn turns into two versions of the EIGEN token--- EIGEN and bEIGEN.
Now, users and AVS are free to decide which one to respect and value. If there is a general perception that the slashed stakers are misbehaving, then users and AVS will only value the forked token, not the original token;
Then, the original EIGEN tokens of malicious stakers will be cut and confiscated through this fork.
Therefore, this is equivalent to a set of social consensus adjudication system to solve disputes that cannot be objectively handled on the ETH chain.
It's also worth mentioning that for users and other stakeholders, you don't care about the impact of this "fork" at all.
Generally speaking, after a token fork, you have to choose about it in general, which also affects the use of your token elsewhere.
But EIGEN creates an isolation barrier between the CeFi/DeFi use case and the EIGEN staking use case, and even if bEIGEN is affected by the inter-principal fork controversy, any EIGEN holder who uses it for a non-staking application won't have to worry, as it can redeem bEIGEN's fork at any time in the future.
Through this fork isolation mechanism, Eigenlayer not only improves the efficiency and fairness of handling disputes, but also protects the interests of users who do not participate in disputes, thus ensuring the overall stability of the network and the security of user assets while providing powerful functions.
summary
It can be seen that EIGEN's inter-subject staking and dispute resolution mechanism complements the subjective disputes and failures that ETH cannot handle as an on-chain staking mechanism, unlocks a large number of AVS on Ethereum that was previously impossible, and has strong cryptoeconomic security.
This could open the door to innovation in oracles, data availability layers, databases, AI systems, gaming virtual machines, intent and order matching and MEV engines, prediction markets, and more.
However, judging from the roadmap given in the white paper, the current use cases for EIGEN are still in the very early stages of start-up, and are more like a complete concept but far from actual implementation.
With users officially claiming EIGEN tokens after May 10th, it remains to be seen whether the value of use envisioned by EIGEN can effectively carry changes in the token's market price.