The Restaking ecosystem has finally reached two significant milestones: the mainnet launch of EigenLayer (and EigenDA), and the first batch of AVS on the mainnet: AltLayer, Brevis, eoracle, Lagrange, Witness Chain, Xterio. AVS is the ultimate representation of whether the EigenLayer protocol can truly be practical and secure. Previously, Restaking protocols (such as Renzo/Puffer) or liquidity re-staking tokens were merely initial steps and means to attract liquidity to the ecosystem. Initially, more incentives were provided to bring more ETH into the Restaking ecosystem and to mobilize more nodes, but AVS has the potential to unleash demand and provide more value for crypto and decentralized networks.

The first batch of AVS covers various sectors, including Rollup-as-a-service, oracle services, ZK protocol processing, DePIN, and gaming. The ZK coprocessor is particularly noteworthy; it is a relatively new concept without mature products, yet EigenLayer supports both Brevis and Lagrange in its first batch.

Furthermore, the launch of EigenLayer’s mainnet does not imply that the protocol has reached maturity. Many aspects and plans, such as the future node penalty (Slashing) mechanism, how to ensure the economic security of AVS, and even the design of token economics, remain unclear and await further disclosure by the team.

What is AVS?

AVS stands for Actively Validated Services and is a concept within the EigenLayer protocol. It can be likened to “middleware” that provides services to end products, such as data and validation capabilities. An example is the “oracle,” which is not an end product itself but provides data services to sectors like DeFi, gaming, and wallets. This is an instance of AVS.

Downstream, AVS likely serves as an end product directly to end-users. Upstream, it includes nodes that participate in Restaking, which gather ETH through protocols like Puffer/Renzo to support specific AVS.

EigenLayer’s business model is relatively direct compared to most protocols: end-users pay directly or indirectly for the products they use, and these fees are distributed among AVS, node operators, the EigenLayer protocol, and the users providing Restaking ETH. The distribution can vary, and initially, there may also be token economics benefits, rewarding users with protocol tokens.

Further development of various types of AVS and ensuring end products trust the reliability of AVS services are crucial for closing the ecosystem loop.

AltLayer: Rollup as a Service

AltLayer operates as a “Rollups-as-a-Service” provider, offering customizable deployment of these Layer 2 networks. The choice of Data Availability (DA) is crucial, so AltLayer supports EigenDA developed by EigenLayer, besides Ethereum. AltLayer also collaborates with EigenLayer to introduce the Restaked Rollup framework, providing three modular AVS:

• VITAL (AVS for decentralized verification of rollup’s state)
• MACH (AVS for fast finality)
• SQUAD (AVS for decentralized sequencing)

These modules aim to address issues like slow finality, centralization of the settlement layer, and sequencers in blockchain. The newly launched MACH module currently serves platforms like Xterio and Optimism.

Further reading:https://blog.altlayer.io/altlayer-run-eigenda-operator-is-live-on-mainnet-5e1b15a0d307

Brevis: ZK coprocessor

The concept of “ZK Coprocessing” has been around for over a year now, but because specific applications are still relatively scarce and the technology is complex, many people still have little understanding of it. Simply put, it enables Ethereum smart contracts to access more verifiable data through zero-knowledge proof technology, enriching the application scenarios.

Brevis offers a solution that utilizes AVS to enable the capabilities of a ZK coprocessor. Part of its team comes from the cross-chain bridge protocol, Celer Network, with Mo Dong being the co-founder of both projects. He also gave a presentation titled “A Smart ZK Coprocessor” at the Hong Kong Web3 Scholars Conference.

Brevis introduced the coChain solution to further reduce the costs associated with fully implementing a “ZK Coprocessor” based solely on smart contracts and zero-knowledge proof technology. This provides a more cost-effective solution that also delivers capabilities that were previously unachievable. After all, the EVM (Ethereum Virtual Machine) still has many limitations and restrictions.

Brevis coChain is a PoS (Proof of Stake) blockchain that relies on ETH staking to ensure its security, utilizing the EigenLayer protocol. Its design is more like a combination of an “optimistic” mechanism and a “ZK” mechanism, or it can be described as a combination of fraud proofs and validity proofs. If any malicious activity is detected, a challenge can be launched by generating a zero-knowledge proof, which then punishes the malicious party. This also involves some considerations of game theory and token economics.

Further reading:https://blog.brevis.network/2024/01/18/introducing-brevis-cochain-the-fusion-of-crypto-economics-and-zk-proof-in-a-zk-coprocessor/

https://blog.brevis.network/2024/02/26/v2launch/

Eoracle: A Modular and Programmable Oracle Network

The oracle protocol “eoracle” derives its name from a combination of “Ethereum” and “oracle”. They claim to be the first “native” oracle on Ethereum, possibly because the security of this oracle is guaranteed by staked ETH, unlike oracles like Chainlink, where security is provided by Chainlink’s node network and its token LINK, based on different security assumptions.

The demand for oracles and their business model is clearer compared to other AVS; many DeFi and RWA require external data, and oracle networks verify this data through participating nodes. Eoracle explicitly indicates a dual-token model, which other AVS might also adopt. This means that the network’s security depends on restaked ETH while also issuing a native AVS token to incentivize nodes. Details about the additional uses and design of the native token have not been disclosed yet, but they believe that the native token can enhance network participation (possibly incentivizing users?), ensure fair value distribution (perhaps meaning income distribution based on token holdings?), and promote the decentralization of the eoracle protocol (possibly serving as a weight or for governance purposes?).

Further reading:https://eoracle.gitbook.io/eoracle

Lagrange: Parallel ZK coprocessor

Lagrange is also a ZK coprocessor, but they also emphasize the concept of “Parallel”. Otherwise, the service is somewhat similar to what Brevis offers.

The Lagrange team stated that the ZK coprocessor they designed natively supports parallelization and horizontal expansion, and can easily prove the results of large-scale distributed computing on-chain storage or transaction data, and prove that the workload can be distributed among thousands of servers at the same time. On the working node, security is also guaranteed by the ETH on EigenLayer.

Last month, Renzo, Swell and Puffer also announced cooperation with Lagrange. The three parties will each entrust $500 million of Restaked ETH to Lagrange. Lagrange has also designed some functions for these platforms that take advantage of the characteristics of their protocols, such as the ability to call Lagrange to obtain historical data on the chain, and then calculate points for users based on this data.

The name Lagrange comes from the mathematician, mechanics and astronomer “Lagrange”.

Further reading:@lagrangelabs/lagrange-labs-secures-1-5-f654f716277a"">https://medium.com/@lagrangelabs/lagrange-labs-secures-1-5-f654f716277a

Witness Chain: DePIN Network

Witness Chain is a network designed specifically for decentralized IoT devices. It comprises several components, such as the DePIN Coordination Layer (DCL), which provides fundamental services required by the DePIN ecosystem, including the security of the chain itself, node bandwidth, and physical locations. These basic services are referred to as Watchtowers, which monitor the aforementioned data and generate valid proofs that can be utilized within the DCL layer. This is similar to the literal meaning of “witness” in the Witness Chain: “to bear witness”.

Further reading:https://docs.witnesschain.com

Xterio: Focused on the Gaming Ecosystem L2

Xterio is somewhat different from the above-mentioned AVS as it utilizes AltLayer’s RaaS to launch a second-layer blockchain based on EigenDA and OP Stack. Xterio Chain will focus on scenarios related to AI and Web3 gaming. AltLayer states that Xterio L2 employs the previously mentioned MACH (AVS for fast finality). AltLayer also provides MACH services to the Optimism mainnet.​​​​

Further reading:https://twitter.com/XterioGames/status/1775873500684636577

Outlook and Challenges

The EigenLayer ecosystem is certain to see more types of AVS launched. However, EigenLayer’s bypass of “smart contracts” to directly take over Ethereum’s node ecosystem is a systemic risk to the Ethereum ecosystem that concerns many, as this approach is different from all other Ethereum-based protocols. Nonetheless, this is the charm of a permissionless system; even without EigenLayer, others would likely explore this direction.

Additionally, Lido, as the largest liquidity staking protocol in the Ethereum ecosystem, not only stakes the most ETH but also has many node operators. Perhaps the direct conflicts of interest between EigenLayer and Lido will prompt Lido to reconsider their business model and sustainability, while EigenLayer itself will also need time to gradually complement the missing modules.

Disclaimer:

1. This article is reprinted from ChainFeeds Research, originally titled “What Real Use Cases Can the First Batch of AVS from EigenLayer Provide?” Copyright belongs to the original author, ZHIXIONG PAN. If there are objections to the reprint, please contact the Gate Learn team. The team will handle it according to the relevant procedures as soon as possible.

2. Disclaimer: The views and opinions expressed in this article are those of the author alone and do not constitute any investment advice.

3. Other language versions of the article have been translated by the Gate Learn team, and without mention of Gate.io, the translated articles may not be copied, transmitted, or plagiarized.