Why Shared Security Models Are the Core of Modular Infrastructure

Launching a standalone L1 or L2 requires bootstrapping a new validator set and economic security from zero, creating a $100M+ security budget and a massive attack surface. This leads to fragile, under-secured chains vulnerable to 51% attacks.

• High Risk: New chains start with negligible stake, making them cheap to attack.
• Capital Inefficiency: Billions in capital is locked in siloed, non-composable security pools.
• Developer Friction: Teams must become experts in cryptoeconomics and validator recruitment.

Projects like EigenLayer and Espresso Systems are creating markets for reusable security. Validators can re-stake ETH to secure new services, while shared sequencer networks like Astria provide decentralized, high-throughput block production for rollups.

• Capital Leverage: Tap into Ethereum's $100B+ staked ETH for cryptoeconomic security.
• Faster Launch: Rollups inherit security and decentralization on day one.
• Network Effects: Security scales with the underlying pool, creating a stronger collective defense.

The endgame is sovereign rollups (like those on Celestia) that control their own execution but lease consensus and data availability. Interoperability layers like Polygon AggLayer and Cosmos IBC then stitch these secure modules into a unified network.

• Sovereignty: Full control over execution and governance without forking.
• Verifiable Trust: Light clients and fraud proofs enable secure, trust-minimized bridging.
• Composable Security: Mix-and-match security providers (e.g., Ethereum for settlement, Celestia for DA).

Launching a standalone L1 or L2 requires attracting and maintaining a massive, honest validator set from scratch—a capital and coordination nightmare. This leads to low Nakamoto Coefficients and makes chains prime targets for attacks.

• Security Budget: New chains often have <$100M TVL securing >$1B in assets.
• Attack Surface: A 34% attack on a small validator set can cost <$1M.

EigenLayer allows ETH stakers to re-stake their stake to secure other protocols (AVSs), creating a pooled security marketplace. It leverages Ethereum's ~$100B+ economic security as a reusable resource.

• Capital Efficiency: Validators earn extra yield for securing additional services.
• Flywheel Effect: More AVSs increase demand for re-staked ETH, reinforcing the base security budget.

Babylon enables Bitcoin holders to time-lock their BTC to secure Proof-of-Stake chains, unlocking the $1T+ idle security of Bitcoin. It uses Bitcoin's script for slashing conditions, making trust portable.

• Unlocks New Asset Class: Brings Bitcoin's extreme security to PoS ecosystems.
• Reduces Inflation: Chains can use BTC security instead of issuing new inflationary tokens.

Rollups currently run their own sequencers, a centralized point of failure. Shared sequencer networks like Espresso and Astria provide decentralized, high-throughput ordering as a neutral service, with built-in MEV resistance.

• Interoperability: Enables atomic cross-rollup composability.
• Credible Neutrality: Prevents a single chain from censoring or front-running users.

Security isn't just about consensus; it's about data verifiability. Celestia provides plug-in data availability (DA) with light client verification, so rollups don't rely on a monolithic chain's expensive calldata. Data Availability Sampling (DAS) allows the network to scale.

• Cost Scaling: DA costs remain low as usage grows (~$0.01 per MB).
• Sovereignty: Rollups retain their execution and governance.

Shared security transforms trust from a fixed cost into a liquid, competitive commodity. Chains will shop for security based on cost, slashing guarantees, and finality speed. This creates a race to the bottom on security premiums and a race to the top on cryptographic guarantees.

• Market Dynamics: Security becomes a bid/ask spread between stakers and chains.
• Modular Outcome: Specialization drives efficiency, breaking the monolithic security monopoly.

A critical bug or slashing attack on the shared security provider (e.g., EigenLayer, Cosmos Hub) doesn't just affect one chain—it cascades to all secured rollups and appchains. This creates a correlated failure mode for the entire ecosystem built on it.

• Risk: A single exploit can nuke $10B+ in restaked or bonded TVL.
• Reality: The security of 100 chains is only as strong as the weakest validator in the provider set.

Shared security consolidates economic and validation power into a few mega-providers. This recreates the miner/extractor centralization of early Ethereum but at a higher, systemic layer.

• Risk: Lido, Coinbase, Binance-style dominance over restaking pools.
• Result: Censorship resistance and credible neutrality degrade as a handful of entities control the fate of hundreds of sovereign chains.

Projects compete for security budget (restaked ETH, staked ATOM) within a finite pool. This creates a zero-sum game where new chains cannibalize the security of existing ones, or remain under-secured.

• Problem: Security isn't magically multiplied; it's reallocated and diluted.
• Evidence: Early Cosmos zones often traded off between high inflation (to attract validators) and low security.

Enforcing slashing for subjective faults (e.g., oracle incorrectness, MEV theft) across diverse appchains is a governance nightmare. Most shared security models punt on this, offering only crypto-economic security for consensus faults.

• Gap: Real-world application security requires subjective slashing, which no major provider (EigenLayer, Babylon) has proven at scale.
• Consequence: You're paying for a weaker security guarantee than advertised.

Relying on a monolithic security provider creates vendor lock-in and protocol rigidity. Chains cannot easily fork or upgrade their security model without triggering a mass exit, stifling experimentation.

• Contrast: Sovereign rollups (Fuel, Celestia) can change their DA layer or consensus without permission.
• Cost: Modularity's promise of sovereignty is traded for rented security.

Paying for security in a foreign token (e.g., an appchain paying fees in ETH via EigenLayer) exposes the chain to volatile monetary policy and speculative pressures outside its control.

• Volatility: Your chain's core security cost fluctuates with ETH's price, not your chain's usage.
• Example: A bear market crash could force a chain to inflate its native token to pay security rents, creating a death spiral.

Every new L1 or sovereign rollup must bootstrap its own validator set and token, creating a $10B+ collective capital inefficiency. This fragments liquidity and creates systemic risk for smaller chains.

• Capital Cost: Bootstrapping a secure PoS chain requires billions in token value.
• Operational Overhead: Managing a live validator set is a full-time security operation.
• Investor Dilution: Endless new tokens compete for the same speculative capital.

Protocols like EigenLayer and Babylon convert the largest staked assets (e.g., ETH, BTC) into a reusable security layer. This creates a flywheel where security begets more security.

• Capital Efficiency: $20B+ TVL in EigenLayer re-staking reuses ETH security.
• Unified Slashing: Malicious activity on any secured service risks the principal stake.
• Builder Focus: Teams can launch AVSs or rollups without tokenomics gymnastics.

Bridging between 100+ sovereign chains means trusting 100+ unique security models. This creates a combinatorial explosion of risk, as seen in the $2B+ cross-chain bridge hacks.

• Trust Fragmentation: Each bridge is a new trusted custodian or multisig.
• Weakest Link: The security of a cross-chain asset is only as strong as its least secure bridge.
• User Obfuscation: Users cannot realistically audit the security of every hop.

Networks secured by a common validator set (e.g., Cosmos Hub ICS, Polygon AggLayer, Celestia-based rollups) enable trust-minimized communication. Validity proofs and IBC become the standard, not custom bridges.

• Trust Minimization: Inter-blockchain Communication (IBC) works natively across a security zone.
• Unified Finality: All chains in the ecosystem share the same finality guarantees.
• Developer Leverage: Builders get secure interop out-of-the-box, like using an SDK.

Most optimistic rollups rely on a single, often underfunded, Security Council for upgrades and a 7-day challenge window for fraud proofs. This creates centralized control points and slow withdrawals.

• Centralized Upgrades: Multi-sigs control code upgrades, a single point of failure.
• Capital Lockup: $1B+ in liquidity is routinely locked for 7-day challenge periods.
• Weak Fraud Proofs: Active monitoring and bonding are not economically guaranteed.

The future is mixing-and-match security providers: Celestia for data availability, EigenLayer for decentralized sequencing & proving, and Espresso Systems for shared sequencers. This commoditizes each security component.

• Best-in-Class Security: Specialized networks compete on cost and guarantees for each function (DA, Sequencing, Proving).
• Economic Security: Dual-staking with ETH and rollup token aligns incentives.
• Rapid Innovation: Rollups can upgrade security providers without hard forks.