Why Shared Security Guarantees Are Weaker Than Advertised

Rollups inherit liveness from their parent chain (e.g., Ethereum) but not full-state validity. A malicious sequencer can censor or reorder transactions, forcing users into a costly and slow escape hatch. The security model is asymmetric: users are protected from theft, but not from denial of service.

• Liveness Failure: Relies on a single, potentially malicious sequencer.
• Weak Censorship Resistance: Users must wait 7 days for an Ethereum L1 challenge period.
• Market Reality: Celestia-based rollups face similar liveness dependencies.

Security is only as strong as the underlying Data Availability (DA) layer. Using a weak DA layer (e.g., a small validator set, non-cryptoeconomic guarantees) creates a single point of failure. The rollup's state can be frozen if DA fails, making shared security irrelevant.

• Bottleneck: All EigenDA, Celestia, and Avail rollups are limited by their chosen DA layer's security.
• Cost vs. Security Trade-off: Cheaper DA often means weaker, centralized guarantees.
• Verification Gap: Light clients cannot fully verify data availability without trust assumptions.

Cross-chain communication via bridges (LayerZero, Axelar, Wormhole) reintroduces a trusted federation or oracle model. Shared security does not extend across chains, creating security fragmentation. A bridge hack compromises all value transferred, regardless of the source chain's security.

• New Trust Assumption: Bridges add multisigs and oracle networks outside the security model.
• Asymmetric Risk: A $200M bridge hack invalidates the security of the originating $50B chain.
• Intent-Based Alternatives: Protocols like UniswapX and CowSwap avoid canonical bridges but introduce other trade-offs.

EigenLayer's security is predicated on slashing, but its enforcement is politically and economically fraught. The system's strength is its greatest weakness.

• Slashing is a governance decision, not automated code. A malicious operator can trigger a contentious, network-paralyzing vote.
• Cost of corruption is lower than advertised. An attacker must only outbid honest operators for a specific service, not the entire $20B+ restaked TVL.
• Creates moral hazard where AVSs (Actively Validated Services) compete for the cheapest security, not the most robust.

Omnichain protocols like LayerZero often bootstrap security via the underlying chains they connect, creating a circular dependency. Their shared security is only as strong as the weakest linked chain.

• Security is not additive. A bridge secured by 10 chains is not 10x safer; it inherits the vulnerability profile of the least secure chain (e.g., a high-value chain and a low-security experimental L2).
• Rehypothecation risk: Stargate's liquidity pools and LayerZero's Oracle/Relayer sets can be secured by the same restaked ETH, creating a single point of failure.
• This model enables cross-chain contagion, where an exploit on one chain can drain liquidity from all connected chains.

Modular chains (e.g., rollups using Celestia for DA) fragment security responsibility. The execution layer's safety is now a function of multiple, loosely coupled systems.

• Data Availability is not validity. A rollup can have perfectly available fraud proofs but be secured by an insufficient quorum of validators on its settlement layer (e.g., a small Cosmos app-chain).
• Creates coordination overhead for full security. Users must trust the DA layer, the settlement layer's consensus, and the rollup's prover network.
• Enables sovereign rollups to opt for cheaper, weaker security to cut costs, directly trading off safety for scalability.

Bridges to alternative L1s (e.g., Wormhole to Solana, Polygon POS Bridge) demonstrate that shared security often fails at the interoperability layer, where most major exploits occur.

• Security is not shared; it's delegated to a small, often centralized multisig or a novel validator set with unproven cryptoeconomics.
• These bridges represent $2B+ in exploited value since 2022, proving that securing cross-chain messages is a fundamentally different and harder problem than chain consensus.
• Highlights the fallacy that connecting to a 'secure' chain (like Ethereum) automatically secures the bridge—the trust is in the bridge's own mechanism, not the underlying chains.

Economic penalties (slashing) are not a universal guarantee. Systems like Cosmos Interchain Security and Polygon Avail have different, non-fungible slashing conditions. A validator's stake is not atomically at risk across all chains.

• Slashing is not portable; a fault on one consumer chain doesn't slash for a fault on another.
• Recovery is not shared; a hacked chain's losses are not socialized across the security provider's ecosystem.

Shared security often inherits the centralization risks of its underlying provider. The security of EigenLayer AVSs or a Cosmos consumer chain is only as decentralized as its operator set, which can be highly concentrated.

• Top 5-10 operators often control a majority of restaked ETH or voting power.
• Creates single points of failure and potential for cartel-like behavior, undermining censorship resistance.

Restaking protocols like EigenLayer create systemic risk by allowing the same capital to secure multiple services (AVSs). This leverage increases total yield but creates cascading liquidation risks.

• A major AVS failure could trigger unbonding delays and mass slashing across the ecosystem.
• Liquid restaking tokens (LRTs) add another layer of depeg risk, decoupling security from its underlying economic stake.

Consumer chains retain sovereignty for upgrades and governance, creating a critical weak link. A malicious or buggy upgrade passed by the consumer's DAO can bypass the shared security layer entirely.

• The security provider (Cosmos Hub, EigenLayer) has no veto over consumer chain logic.
• This makes shared security a partial solution, protecting only against validator collusion, not application-layer exploits.

Providers like Celestia and Polygon Avail sell data availability (DA) as a security primitive. This is a category error. DA guarantees data is published; it does not guarantee correct execution.

• A rollup using a shared DA layer is only secure if its fraud/validity proofs are correct.
• Modular fragmentation introduces new trust assumptions between the DA layer, sequencer, and prover network.

Shared security models break down during cross-chain communication. A message passing from Chain A (ICS) to Chain B (EigenLayer) must traverse an insecure bridge, as their security providers are not coordinated.

• This recreates the bridge hacking problem that shared security was meant to solve.
• True shared security would require a unified, globally consistent validator set, which doesn't exist at scale.