EigenLayer Restaking: TVL Growth and AVS Economics

Frequently Asked Questions

01.What is restaking and why does EigenLayer matter to allocators?

Restaking lets an investor who already holds staked ether or a liquid staking token commit that same capital to secure additional applications, called Actively Validated Services, through EigenLayer. It matters to allocators because it converts a single unit of capital into a layered yield source while introducing new counterparty and slashing risk that did not exist in plain ether staking, so return expectations must be adjusted for that added exposure.

02.How large is EigenLayer's total value locked as of February 2024?

EigenLayer's total value locked reached roughly 1.4 billion dollars in early January 2024 after the protocol hit its liquid restaking capacity ([Unchained, January 2024](https://unchainedcrypto.com/defi-protocol-eigenlayer-reaches-restaking-capacity-pushing-tvl-past-1-4-billion/)), then surged past 3.2 billion dollars in early February 2024 once the 200,000 ether per protocol deposit cap was temporarily lifted, according to reporting from Unchained and CoinDesk.

03.Is restaking yield regulated the same way as exchange staking programs?

Not automatically. In February 2023 the Securities and Exchange Commission settled with Kraken over an unregistered staking-as-a-service program advertising yields as high as 21 percent, and the exchange agreed to end the offering for United States customers. Restaking products that market fixed or advertised yield to retail investors sit closer to that precedent than to plain protocol-level staking, and allocators should treat the compliance posture of any restaking product as a distinct diligence item.

04.What is the biggest operator risk in AVS economics?

Operator concentration and unproven slashing logic. A July 2023 Code4rena audit of EigenLayer's core contracts found two high-severity issues tied to withdrawal proof validation and slashing accounting, both fixed before mainnet, which shows the protocol's penalty logic was still being hardened months before AVS activity scaled. Allocators evaluating restaking exposure should confirm which operators run which AVS sets and how concentrated that operator set is.