After a year of anticipation and scrutiny, EigenLayer—the Ethereum-based restaking protocol—has activated slashing, a vital security feature designed to penalise bad actors and deliver on its original promise of shared decentralised security.
What is Slashing and Why It Matters
Slashing is a core accountability mechanism in proof-of-stake systems. It ensures validators or infrastructure operators behave honestly by risking their staked assets. If an operator is proven to act maliciously, a portion (or all) of their stake is revoked.
Despite promoting itself as a shared security protocol from its inception, EigenLayer launched last year without slashing, prompting criticism from the crypto community. That gap is now closed, with slashing officially rolling out on April 17, allowing actively validated services (AVSs) to opt in and define conditions for punishing misbehaviour.
From Vision to Reality
EigenLayer allows users to restake ETH or LSTs (liquid staking tokens), leveraging their existing Ethereum stake to secure new protocols. This innovation attracted massive interest, quickly amassing over $7 billion in restaked assets, and making EigenLayer one of DeFi’s most prominent platforms.
But this promise came with concerns. Critics warned that without slashing, operators faced no real consequences for misconduct, potentially undermining the security model. According to founder Sreeram Kannan, the full vision is now realised:
“We are happy to say now that the whole promise has been delivered.”
Redesigned for Risk Reduction
To address fears around leverage and contagion, EigenLayer redesigned its slashing system. Operators delegate deposits to AVSs in exchange for rewards, but until now, risks were blurred across the ecosystem.
The updated system ensures “unique attributability”—stake tied to one AVS won’t endanger others. This reduces systemic risk and makes slashing more targeted. Operators now have clear, isolated exposure, enabling a safer and more scalable model.
Kannan adds:
“Even if my AVS has a small amount of slashable stake, it is still protected… the cost of attack still scales with the pool’s value.”
Setting a New Standard in DeFi Security
Few proof-of-stake protocols have fully implemented slashing. While Ethereum and Cosmos have it, others like Solana operate without. EigenLayer, due to its vocal emphasis on accountability, faced higher expectations.
Now, with slashing live, AVS teams can begin implementing custom penalty conditions. Although adoption may take time, this step marks a major leap in decentralised security infrastructure.
As the network matures, EigenLayer’s slashing feature may not only secure its own ecosystem but set a benchmark for other restaking and staking protocols—proving that innovation and safety must go hand in hand.
