Restaking industry status quo and the potential changes ahead?

Author: Haotian

Recently, a series of factors including the expected airdrop of @eigenlayer, the underperformance of @RenzoProtocol after its launch, and the decreased FOMO sentiment around other Restaking activities have undoubtedly cooled down the Restaking and re-staking track. How to view the current situation of the Restaking industry and the potential changes ahead? Next, I will briefly share a few viewpoints:

1) The Restaking track has indeed gone through a long period of irrational prosperity, from the LEGO battle to projects like ETHFI, Renzo, Puffer, Swell, which were highly anticipated in the market. The re-staking track has fallen into a "locked liquidity" data show mode of grabbing native ETH and LST certificates, as if whoever can attract more assets to be locked in can create greater expected value in the future, thus receiving a higher valuation upon entering the market?

In my opinion, this valuation standard is far-fetched, all ignoring a fundamental point, that assets like locked LST certificates do not create incremental value for points, and the situation in the AVS network market needs to be opened up to truly create profits. Obviously, under irrational emotions, everyone's expectations and focus are not on the landing application level of AVS, but instead on attracting traffic and assets in exchange for high expectations, which are not effectively supported;

2) Eigenlayer's hasty token issuance, and the proposal of an intersubjective innovative paradigm, in my view, this token issuance seems to be specifically designed for "firefighting and cooling down." Because if the LEGO battle of Restaking further demonizes, the pressure on Eigenlayer will be exponentially amplified, and any movement by Eigenlayer in the future development process will trigger a chain reaction crisis in the re-staking industry.

The expected landing of Eigenlayer's token will significantly cool down the FOMO atmosphere of projects like the LEGO battle, shifting the market's focus to the growth essence of AVS network support in re-staking.

3) AVS (Active Verification Service), simply put, is to select some nodes from the thousands of Ethereum node operators, enhance their corresponding software, hardware, and technical service capabilities, and allow these Validators to maintain their original Ethereum consensus while expanding some security service capabilities to support other networks like Rollups, thereby potentially gaining additional income. (Similar to abstracting some "mining pools" from a large number of "miners" and then expanding business)

The AVS network can be understood as strengthening some "middleware" services in the Ethereum basic Infra layer, allowing some nodes to come together to provide decentralized Sequencer, decentralized Oracle, and other service capabilities, as well as commercialized output. Theoretically, as long as the capabilities of the nodes under AVS jurisdiction are large enough, the potential landing scenarios for applications within the Ethereum consensus framework will be considerable.

In simpler terms, these middleware networks that originally required external consensus construction to access now directly enable Ethereum's underlying infrastructure to provide such service capabilities, and they can represent a certain Ethereum security consensus. The application paradigm of AVS node strengthening can be seen as a potential direction to enhance Ethereum's business expansion capabilities, but its focus is on enhancing node service capabilities and truly landing and transforming the service capabilities of the AVS network, rather than the attributes of re-staking and points war brought by AVS.

4) In fact, the application paradigm of AVS node strengthening is also reflected outside the Ethereum network: for example, @MarlinProtocol can provide rented computing power support for some AI model training needs through distributed node enhancement; and @FlareNetworks can integrate off-chain distributed Oracle node capabilities to directly connect EVM networks and on-chain ecosystems, opening up the narrative direction of Oracle As A Service. (Detailed follow-up analysis will be provided when available) After enhancing the capabilities of these nodes that were originally behind the scenes in the underlying network operations, they can bring broader business growth capabilities to the original chain.

Looking back, Eigenlayer originally engaged in re-staking just to provide basic security capabilities for its EigenDA (the first AVS), but unexpectedly opened the "Pandora's Box" of re-staking: negatively, if not guided and controlled, the false prosperity of re-staking will further amplify the potential liquidity crisis of the Ethereum network; positively, from the perspective of enhancing AVS node capabilities, Restaking will indeed inject a new narrative direction and imaginative space into the blockchain ecosystem.

This is the future of the re-staking track, nothing else.