Dankrad Feist@dankrad
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 contrarian views on Eigenlayer.
I do receive a significant amount of tokens from this position. I do not believe that they will change or influence my positions on how the core protocol should be developed, but I believe that the community should know about this, so that they can keep me accountable.
I think Eigenlayer will be a major benefit to Ethereum, if it is done by someone with high integrity. I trust the current leaders are intending to do that, and I am planning to hold them accountable for it. I will not hesitate to speak out and/or to quit my position if I believe this is no longer the case.
My views on restaking differ significantly from Justin's, and they have been roughly the same since I developed them last year. To summarize:
Restaking comes with significant risks:
1. The main one can be summarized as the "principal agent problem": The operator is not necessarily the same as the person providing the capital, and might therefore have different incentives than we originally designed the protocol for. Now, these risks have been present for a long time in the form of Liquid Staking Tokens or LSTs; in fact, restaking (for solo stakers) could be seen as "LST light". LSTs are stictly worse in terms of the risks that they present to staking due to the principal agent problem.
2. A second type of risk comes from the additional load imposed on stakers by running restaking services. This can lead to centralizing forces.
3. Another risk is restaking infrastructure being used to mount attacks on the Ethereum protocol, such as bribing attacks.
4. Something many fear is that Eigenlayer will lead to a dystopia of dangerously designed restaking services that stakers will have to opt in, because they will provide most of the staking yield. I think restaking yield will be much more moderate as (a) if there were very high yields to have, there is no reason that they wouldn't already be available on plain ETH and LSTs; (b) total crypto revenue is very moderate and I think the appetite to pay restakers by diluting tokens will not be that high.
Helping with avoiding 2 and 3 are the main reasons I decided to be an advisor.
Clearly, I would never take this position if I did not also see significant benefits to Ethereum that come from restaking when implemented well:
1. Restaking can give some of the benefits of LSTs to individual stakers. In the balance of things, this makes individual stakers more competitive compared to the status quo, and is therefore a benefit of restaking. If LSTs didn't exist, my view on this would probably be different.
2. In an ideal world, Ethereum would already have a huge data layer. In the real world, it is currently severely constrained and this does not allow some projects to commit to be a rollup by posting data to Ethereum (an example of this is Celo). I think Eigenlayer will provide an excellent temporary solution for these projects, by being completely compatible with 4844 blobs and providing high, Ethereum-aligned security. My personal goal is obviously to bring all these projects to be full rollups with data on Ethereum eventually, as far as it makes economic sense (which I think it will for all financial applications at the very least).
3. There are other things that Eigenlayer can help us implement before the protocol gets to it, for example block pre-commitments. Obviously these require extreme caution as they come with high risks as well.
