Why the Restaking Primitive Makes L1s Obsolete

Monolithic L1s force every dApp to pay for the full security of the chain, creating massive economic inefficiency. A DeFi app and a meme coin share the same costly security budget.

• Wasted Capital: Billions in staked capital sits idle, securing low-value transactions.
• Rigid Economics: Security costs are baked into base fees, punishing all users.
• Winner-Take-All: Security becomes the primary moat, stifling application-layer innovation.

Restaking allows ETH stakers to opt-in to secure additional services (AVSs), creating a liquid marketplace for cryptoeconomic security.

• Capital Efficiency: The same $40B+ in staked ETH can secure multiple chains and services simultaneously.
• Modular Security: Rollups like AltLayer and oracles can rent security à la carte, decoupling execution from consensus.
• Economic Flywheel: More AVSs increase yield for restakers, attracting more capital, which lowers security costs for builders—a virtuous cycle.

With security and data availability (via Celestia, EigenDA) available as modular services, the monolithic L1 is reduced to a legacy bundling.

• Specialized Execution: Rollup frameworks like Arbitrum Orbit, OP Stack, and zkStack let teams launch app-chains in minutes, choosing their own security and DA.
• Intent-Centric Future: Systems like UniswapX and CowSwap abstract chain selection entirely, routing users via solvers across the most optimal modular environment.
• Inevitable Endgame: The L1 differentiator shifts from security to pure liquidity, a battle Ethereum has already won.

Launching a standalone L1 requires bootstrapping a new validator set and token, creating a security-economics death spiral. You compete for capital against $1T+ in established chains.

• Cost: Billions in token incentives for marginal security.
• Time: 18-24 months to achieve credible decentralization.
• Risk: Constant 51% attack vectors from smaller, volatile validator sets.

EigenLayer allows projects to rent Ethereum's validator set (~$20B in staked ETH) by offering them additional yield for securing new services. This creates a liquid market for cryptoeconomic security.

• Instant Security: Tap into $20B+ in slashable capital on day one.
• Capital Efficiency: Builders focus capital on innovation, not validator bribes.
• Shared Slashing: Misbehavior risks the validator's core ETH stake, aligning incentives deeply.

Why build a monolithic L1 when you can deploy a sovereign rollup or altVM secured by Ethereum? See Eclipse (Solana VM), Fuel (parallel UTXO), Movement (Move VM).

• Performance: Choose optimal VM/DA layer without security trade-offs.
• Interop: Native trust-minimized bridging via shared underlying security.
• Focus: Teams compete on execution and UX, not consensus.

The builder playbook shifts from "token launch" to EigenLayer integration. Attract liquidity and users by plugging into the restaking ecosystem's $15B+ TVL and existing user base.

• Distribution: Leverage EigenLayer's AVS operators as built-in node providers and community.
• Liquidity: Native integration with ether.fi, Renzo, and other Liquid Restaking Tokens (LRTs).
• Composability: Become a primitive within a unified security stack, not a siloed chain.

Restaking protocols like EigenLayer redirect economic security from the base L1 (Ethereum) to secure new, higher-yield services. This creates a zero-sum competition for staked capital.\n- Capital Efficiency becomes a security drain, pulling ETH away from base-layer consensus.\n- Yield Chasing incentivizes validators to prioritize restaking rewards over L1 stability.

A shared security pool creates a single point of failure. A slashing event in one AVS (Actively Validated Service) can cascade, triggering mass, correlated slashing across the network.\n- Weakest Link Security: The network's safety is only as strong as its riskiest AVS.\n- L1 Instability: A major slashing event could force mass ETH unstaking, destabilizing Ethereum's core consensus.

The thesis assumes security is a pure commodity, but L1 value is a function of its sovereign monetary policy and credible neutrality. Restaking turns ETH into a yield-bearing wrapper asset, diluting its monetary premium.\n- Sovereignty Erosion: AVS operators, not the L1 community, dictate slashing conditions.\n- Monetary Premium Leakage: ETH becomes a utility token for yield farming, not a base-layer money.

If security is truly commoditized, why would any new L1 bootstrap its own validator set? The restaking endgame is a single security hub (Ethereum) with hundreds of app-specific L2s/L3s. This makes all other L1s—Solana, Avalanche, Sui—redundant for security, reducing them to feature-testing grounds.\n- Innovation Stagnation: No economic incentive to innovate at base-layer consensus.\n- Centralization Pressure: All value accrues to the dominant restaking hub.

Every new L1 must bootstrap its own validator set, creating massive capital redundancy and imposing a ~$1B+ security tax on the ecosystem. This fragments liquidity and developer attention.

• Capital Inefficiency: Billions in staked ETH sit idle while new chains struggle.
• Fragmented Security: Smaller chains are inherently weaker targets.
• Developer Dilemma: Choosing a chain is a bet on its long-term security budget.

EigenLayer turns Ethereum's staked ETH into a reusable security primitive. Actively Validated Services (AVSs)—like rollups, oracles, and bridges—rent this security instead of bootstrapping their own.

• Capital Leverage: $20B+ TVL secures dozens of services simultaneously.
• Shared Security: New protocols launch with Ethereum-grade security on day one.
• Economic Flywheel: More AVSs increase staker yield, attracting more capital.

L1s become obsolete as the market splits into: Ethereum for consensus/security and rollups/AVSs for execution. This mirrors the cloud shift from on-prem servers to AWS/Azure.

• Best-in-Class Execution: Rollups like Arbitrum and zkSync focus purely on speed and cost.
• Unified Security Base: All inherit finality from the same cryptoeconomic pool.
• Composability: Secure, native bridging between AVSs via shared validator sets.

Restaking creates systemic risk. A critical failure in a major AVS (e.g., an oracle or bridge like LayerZero) could trigger mass slashing across the ecosystem, destabilizing the core security pool.

• Correlated Failure: A bug is no longer isolated to one chain.
• Validator Dilemma: Operators must manage complex slashing risks across many services.
• Regulatory Target: A single point of economic coordination for the entire stack.

The restaking stack needs dedicated infrastructure. Projects like AltLayer (restaked rollups) and EigenDA (restaked data availability) provide turnkey AVS modules, abstracting complexity for developers.

• Rapid Deployment: Launch a securely shared rollup in minutes.
• Cost Efficiency: Pay-for-use security and DA versus capital-intensive bootstrapping.
• Market Signal: Infrastructure, not new L1s, is the dominant venture opportunity.

Monolithic chains without a massive existing ecosystem (e.g., Solana) cannot compete. Their value proposition collapses when security is a cheap commodity. The future is modular.

• Commoditized Security: The only sustainable L1s are those that become restaking hubs.
• Winner-Take-Most: Ethereum's lead in staked capital becomes unassailable.
• Strategic Imperative: Existing L1s must pivot to become AVSs or face irrelevance.