Coin Edition -
- Ethereum researcher Dankrad Feist joins restaking protocol EigenLayer
- Feist to focus on decentralization & risks associated with restaking
- Feist to help mitigate risks, sees potential benefits for Ethereum
Ethereum Foundation researcher Dankrad Feist has been appointed as an advisor to EigenLayer, a restaking protocol for the Ethereum blockchain. Feist’s decision, announced in a recent online post, follows a similar move by fellow Ethereum researcher Justin Drake, who joined EigenLayer earlier.
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…— Dankrad Feist (@dankrad) May 21, 2024
Feist emphasized that his role as an advisor is undertaken in a personal capacity and is not affiliated with the Ethereum Foundation. He has pledged to prioritize issues of decentralization and the inherent risks associated with restaking protocols. While collaborating with EigenLayer, Feist is expected to offer critical perspectives on the project’s development.
Feist elaborated on the potential dangers of restaking, highlighting the principal-agent problem as a key concern. This long standing issue, also present in Liquid Staking Tokens (LSTs), arises when a conflict of interest exists between delegators and those managing their staked assets.
Feist further identified the increased burden on stakers when running restaking services, which in turn leads to centralizing forces. In addition, he talked about the idea of “dystopia” that many community members fear, where poorly designed restaking services become commonplace due to their supposed yield advantages.
“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… (b) total crypto revenue is very moderate and I think the appetite to pay restakers by diluting tokens will not be that high.”
Feist concludes by expressing that his main focus is to help EigenLayer to overcome these threats. Commenting on the protocol’s potential, he cited, “I think Eigenlayer will be a major benefit to Ethereum.”
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