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Diverse risk and reward opportunities on EigenLayer could present an opportunity for nimble, sophisticated operators and solo stakers.

EigenLayer is an upcoming platform that will enable ethereum validators to earn additional rewards from EigenLayer based applications by delegating control of their staked ETH to a set of EigenLayer contracts, known as "re-staking", and performing additional tasks outside of their regular POS duties. Projects built on top of EigenLayer can reward validators who choose to opt in and slash them if they violate agreed terms – a new source of risks and rewards for ethereum stakers.

Any project that could benefit from the services of a decentralised network of node operators is a candidate for EigenLayer and this would include bridges, L2s, storage layers, app chains and other blockchains. EigenLayer applications will be able to define a set of duties, slashing conditions and incentives through a programmable layer of EigenLayer smart contracts which opens the door for a wide variety of behaviours. For example an EigenLayer application could:

• Require operators to run high performance software on expensive hardware
• Require operators to be based in a particular jurisdiction or require KYC/doxxed
• Reward operators with a fee sharing model or token incentives
• Reward operators with an airdrop
• Be a public good with no rewards for operators

A successful EigenLayer would bring about a diverse cohort of new applications competing to attract the resources of ethereum validators with various risk profiles and reward structures. In this case node operators and ETH stakers (inc. LSD holders) would have differing abilities and appetites for the opportunities available on EigenLayer, with some risks being acceptable to some and unacceptable to others. Some may also favour certain types of rewards or want to take positional bets on EigenLayer applications they perceive to be promising.

In this case it wouldn’t be trivial for mass staking services like Lido to build a one-size-fits-all product on top of EigenLayer rewards that would satisfy all existing LSD holders. Likewise, Lido operators wouldn't be able to participate in EigenLayer at will and introduce additional slashing risk without stETH holder consensus. Instead LSD holders will likely participate in EigenLayer by locking their ETH or LSD and delegating to EigenLayer operators which match their risk appetite (which could be a subset of Lido operators or some other third party).

The performance of EigenLayer operators could vary widely due to the complexity of running validator software for multiple EigenLayer applications and differing reward maximisation strategies (see also MEV opportunities that may become available for EigenLayer participants) and so we can assume it will be the nimble and sophisticated operators who have free reign over their own stake who will be best placed to take advantage of new opportunities. The diversity here is a step away from the regular POS validator role where consensus duties and MEV rewards have been neatly arranged for operators by tools like flashbots and wrapped for stakers by services like Lido.

So an evolving EigenLayer could bring opportunities for solo stakers, fast moving staking services and new specialist operators.

See EigenLayer whitepaper and a16z talk.