Ever been to an amusement park? 😁

So many rides, and so many safety inspectors. Well, replace the rides with Blockchain services/protocols and the safety inspectors with AVS.

AVS stands for Actively Validated Services. Consider it a system with its own set of validation guidelines for verification, such as sidechains, data availability layers, bridges, oracle networks, etc.

The Need for AVS

A protocol that cannot be deployed or proved on top of EVM (Ethereum Virtual Machine), cannot get access to the pooled security of Ethereum.

For validation/verification, these protocols/modules need AVS.

Through AVS, these modules could bootstrap trust without the need for their own token, as the LSTs or LRTs were involved for validation purposes.

EigenLayer & AVS

1. Bootstrapping Trust

   • A new AVS can bootstrap security from the large validator set of Ethereum.

   • Also, as the protocols get through the EigenLayer’s smart contracts, the cost-of-corruption increases. Thereby, increase in security and more trust.

2. More Value

1. Owing to the presence of a highly secure AVS ecosystem, ETH stakers have numerous opportunities to enhance their revenue streams.

The Working 🌍

The process involves:

1. Restaking on EigenLayer

   • Users can either directly restake Ethereum (Native Restaking) or use liquid-staked ETH tokens such as stETH.

2. Decentralized Consensus

   • Through decentralized consensus mechanisms, AVSs validate transactions while benefiting from Ethereum's validator set.

3. Operator Involvement

   • Node operators secure AVS transactions by restaking their ETH on EigenLayer.

4. Security & Efficiency

   • AVSs bypass the need for creating and managing separate consensus operations, significantly reducing vulnerability to attacks and operational costs. Remember the CoC calculation from the chart above. 🤔

The Risks 💀

1. Security

   • Vulnerabilities in the integration of AVS and Ethereum’s consensus layer can lead to many threats & security issues.

2. Economic Fluctuations

   • Economic fluctuations, such as a decline in the value of ETH, could negatively impact the incentives for validators to participate in AVSs.

3. Reliance on Ethereum’s Security

   • AVSs heavily rely on Ethereum's security, and any issues or vulnerabilities in Ethereum's consensus layer could have cascading effects on the AVSs built on top of it.