What is EigenLayer?

Every new oracle, bridge, rollup, or data availability layer starts with the same problem: it needs its own validator set and economic security before anyone will trust it. Building that from zero is slow and expensive, and most networks stay fragile for years before they are genuinely secure.

Ethereum, meanwhile, holds millions of staked ETH that secures one thing: itself. EigenLayer was built as a response to that imbalance. If staked ETH already provides credible security, it can do more than one job at once.

That mechanism is restaking. A staker reuses ETH or liquid staking tokens already committed to Ethereum and opts the same capital in to secure other protocols. The ETH keeps validating Ethereum, backs additional services, and earns extra rewards for the security it adds.

Founded by Sreeram Kannan and Eigen Labs, EigenLayer went live on Ethereum mainnet in 2023, with its first AVSs arriving in 2024. It remains the dominant restaking protocol, securing more than 4 million ETH and roughly 90% of all restaked value, per DefiLlama. The restaked total peaked near $20 billion in late 2024; the dollar figure now tracks ETH's price, so the live number is best checked directly.

Since 2025, restaking has become the base for something larger. EigenLayer now sits underneath EigenCloud, which aims to turn that pooled security into a general platform for verifiable applications.

How Restaking Works on Eigenlayer

Restaking lets a single ETH deposit secure many networks at once. Following that deposit through the system shows how the pieces connect:

1. Deposit: A user commits native ETH or supported liquid staking tokens. Native validators connect through EigenPods, a contract that points their withdrawal credentials at EigenLayer, while holders of tokens like Lido's stETH restake without running validator hardware.
2. Delegation: Most restakers hand their position to an operator, who runs the off-chain software each service needs. The staker keeps the economic exposure; the operator does the work.
3. AVS security: Operators point that stake at Actively Validated Services, the oracles, bridges, and data layers on the demand side of the marketplace. One operator can serve several at once.
4. Slashing: Break the rules of a service you have opted into, and the backing stake gets penalized.

That last step only became real in April 2025, when slashing went live on mainnet through the ELIP-002 upgrade. It is opt-in, so operators and stakers accept specific conditions before any penalty applies. To keep one chunk of ETH from sitting behind five services at once, EigenLayer assigns set portions of stake to set operator groups through Unique Stake Allocation, detailed in the EigenLayer documentation.

A follow-up upgrade, ELIP-006, added redistribution in July 2025. Slashed funds can now be burned or sent to a designated recipient instead of only destroyed. Redistributable sets often pay more, though the extra reward rides on a higher chance of being slashed.

What is EigenCloud?

On 17 June 2025, Eigen Labs rebranded the platform to EigenCloud and widened its ambition. Restaking stayed as the security base, but the goal shifted from securing other protocols to becoming a verifiable cloud that any developer can build on.

The reasoning starts with a gap Ethereum never closed. Blockchains made applications tamper-proof but not freely programmable. Smart contracts are constrained and expensive for heavy computation, which kept most crypto apps clustered around finance and left the rest of the design space empty.

EigenCloud's answer is to make verifiability a programmable service, so developers can run ordinary cloud-scale software off-chain and still prove it ran correctly. Eigen Labs frames this as crypto's AWS moment: where a normal cloud rents computing power, EigenCloud lets developers rent trust, backed by staked ETH and EIGEN.

The pivot is also a market expansion, reaching beyond crypto-native developers toward the far larger pool of mainstream software engineers. To fund it, a16z crypto bought $70 million in EIGEN from the Eigen Foundation in June 2025, on top of its earlier $100 million Series B in Eigen Labs.

Eigen Labs cut about 25% of its workforce in July 2025 to concentrate fully on the EigenCloud build-out.

Inside the EigenCloud Stack

EigenCloud is built around a set of primitives that each target a specific bottleneck and compose the way web2 developers combine separate cloud APIs.

• EigenDA (data): A high-throughput data availability layer for rollups and modular chains, backed by restaked security. Its v2 release pushed throughput to as much as 100 MB/s, and several rollups already depend on it. Against a sovereign DA layer like Celestia, EigenDA leans on Ethereum-aligned security rather than its own validator set.
• EigenCompute (execution): Verifiable off-chain execution where developers deploy code in standard containers and gain on-chain verifiability. The mainnet alpha uses trusted execution environments, with cryptoeconomic security and zero-knowledge proofs planned.
• EigenAI (inference): Verifiable LLM inference with an OpenAI-compatible API. It targets bit-exact, reproducible output, since models normally return different answers to the same prompt, which makes their results impossible to check or dispute.
• EigenVerify (dispute resolution): A framework handling both objective faults (provable through re-execution or proofs) and intersubjective ones, using EIGEN's forkability to penalize misbehaving nodes.

EigenAI and EigenCompute reached mainnet alpha in October 2025, with early teams including Coinbase, whose AgentKit is being wired to run agents on EigenCompute and use EigenAI for inference. These products are early and access is gated, so what matters now is whether developers adopt them.

What Gets Built on EigenLayer

AVSs turn restaked security into real applications, and more than 200 are live or in development. The categories now reach well past the original infrastructure use cases:

• Rollups and sequencers lean on restaked security for data integrity and ordering instead of building isolated trust networks;
• Data availability services keep rollup data accessible and verifiable off-chain;
• Oracles and bridges back the accuracy of price feeds and the safety of cross-chain transfers;
• AI inference and agents form the defining 2026 use case, with EigenCloud positioning itself as the layer where agents can hold assets, sign agreements, and be slashed for misbehavior;
• Prediction markets and games settle real-world outcomes through intersubjective dispute resolution rather than a trusted operator.

The verifiable-agent angle is the one Eigen Labs pushes hardest. As AI agents move from generating text to moving money, the trust model breaks, and the argument is that autonomous software needs a substrate where its actions can be independently checked. Whether that becomes default infrastructure or stays a thesis depends on adoption.

EIGEN Token and Tokenomics

EIGEN is a universal intersubjective work token. Restaked ETH secures what Ethereum's consensus can settle directly, while EIGEN backs intersubjective faults, disputes that observers agree on but no contract can prove on-chain, like an oracle reporting a false price. Its defining feature is forkability: the token has a transferable form and a staked, slashable form, and if a majority of stakers collude on a bad result, it can fork to slash them and reward honest challengers, without assuming an honest majority.

The supply at a glance:

• Initial supply: 1.67 billion EIGEN, with 4% annual inflation.
• Allocation: 45% to community initiatives, the rest to investors, contributors, and ecosystem development.
• Unlocks: investor tokens unlock gradually after a one-year lock, so supply keeps growing.
• Mid-2026 position: roughly 740 to 790 million circulating, a market cap near $200 million, and a price more than 90% below the December 2024 high of $5.65.

Full details sit in the EIGEN whitepaper.

The pivotal recent change is ELIP-12, a December 2025 proposal that would create an Incentives Committee and tie EIGEN to real usage. It puts a 20% fee on AVS rewards for subsidized stake and directs 100% of EigenCloud service fees, after operator costs, into a buyback contract, with only fee-paying AVSs staying eligible for incentives. The aim, as CoinDesk reported, is to shift EIGEN from an inflation-driven asset toward one whose value tracks network revenue.

That remains a proposal, not proven demand. Revenue fell sharply over the period, and buybacks only work if the services earn real fees. The long gap between EigenLayer's fundamentals and EIGEN's price is the core debate, so the token is best read as a leveraged bet on EigenCloud's execution, not a proxy for Ethereum restaking.

Risks to Understand

EigenLayer sits at the base of a layered system, and each layer adds a way to lose money. The points below apply to restakers, liquid restaking token holders, and EIGEN buyers alike:

• Slashing is now enforceable: Each AVS sets its own conditions, those conditions differ, and governance can change them, so risk that was theoretical before April 2025 is now live.
• Operator dependence: Most users delegate, so an operator's uptime, key management, and AVS choices feed directly into the staker's outcome.
• Leverage and rehypothecation: A common stack restakes ETH into a liquid restaking token, then borrows against that token to buy more ETH, so the same capital backs several positions and losses compound if any layer fails. Protocols like Ether.fi make this easy.
• Surrounding infrastructure: The biggest blowups often hit the layers around restaking, not its core contracts. The April 2026 Kelp DAO exploit drained roughly $292 million through a cross-chain bridge, froze rsETH lending markets, and stressed the sector, while EigenLayer's own restaking contracts stayed intact.
• Dilution: Ongoing emissions and scheduled unlocks add sell pressure, and the proposed buyback model is not yet in force.
• Execution and competition: The cloud and AI products are largely in alpha, the AI infrastructure field is crowded, and in restaking itself Symbiotic and Karak compete on Ethereum, Babylon brings in Bitcoin, and Jito anchors the Solana market.
• Regulatory uncertainty: Restaking is a new category, and custodians, funds, and exchanges may face unclear rules on slashing disclosures, yield products, and fiduciary treatment.

None of this makes EigenLayer uninvestable, but it does mean the protocol should be judged as advanced infrastructure, not a passive savings product.

Founder and Team

Sreeram Kannan, often called the father of Ethereum restaking, is the founder and CEO of Eigen Labs and an Associate Professor at the University of Washington, where his research spans blockchain, cryptography, and information theory. He started the project in 2021.

Under his leadership, Eigen Labs raised a $100 million Series B led by a16z crypto, followed by the firm's additional $70 million EIGEN purchase tied to EigenCloud. The 2025 strategy shift, including the workforce cut, reflects a deliberate concentration of effort behind the verifiable-cloud thesis.

Bottom Line

EigenLayer pioneered restaking and still anchors the category, securing most of the restaked value on Ethereum and giving new protocols a way to inherit credible security instead of building it from nothing. With slashing and redistribution live, the original design is finally complete and enforceable.

EigenCloud is the larger wager. It takes that security base and tries to turn it into a verifiable cloud for the AI and agent era, with working products in EigenDA, EigenCompute, EigenAI, and EigenVerify. The infrastructure is increasingly live and the vision is coherent.

What stays unresolved is whether developers use it enough to generate the fees that would give EIGEN a clear value path. For now, EigenLayer is best understood as serious infrastructure with a genuinely open commercial outcome, so do your own research before committing capital.