Shared Security Models, like Ethereum's restaking via EigenLayer or Cosmos Interchain Security (ICS), excel at providing robust, battle-tested security from day one. By leveraging the established economic security of a base layer (e.g., Ethereum's ~$100B+ staked ETH), AVSs can bootstrap with high security guarantees without needing to bootstrap their own validator set. This dramatically reduces the initial capital and coordination overhead for new protocols like AltLayer or Espresso Systems, allowing them to focus on application logic.
LABS
Comparisons
Shared Security Model vs Isolated Security Model: AVS Consensus
A technical comparison of pooled security (EigenLayer, Cosmos Replicated Security) versus isolated validator sets for securing Actively Validated Services (AVS) and application-specific blockchains.
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introduction
THE ANALYSIS
Introduction: The Core Security Trade-Off for AVS Builders
Choosing a security model for your Actively Validated Service (AVS) is the foundational decision that dictates cost, sovereignty, and scalability.
Isolated Security Models, employed by standalone chains like Monad or new Cosmos SDK chains, take a different approach by building a dedicated validator set. This results in full sovereignty over consensus parameters (e.g., block time, slashing conditions) and direct capture of economic value (transaction fees, MEV). The trade-off is the significant bootstrapping challenge: you must attract and incentivize a sufficiently large, decentralized validator set to achieve credible security, a process that can take years and millions in token incentives.
The key trade-off: If your priority is rapid launch with maximal inherited security and lower initial cost, choose a Shared Security model via EigenLayer or ICS. If you prioritize complete technical/economic sovereignty and are prepared for the long-term bootstrapping effort, choose an Isolated Security model. The decision fundamentally hinges on whether you value security-as-a-service or independence above all else.
tldr-summary
Shared Security vs Isolated Security
TL;DR: Key Differentiators at a Glance
A high-level comparison of the two dominant security models for Actively Validated Services (AVS) in modular blockchains.
01
Shared Security (e.g., EigenLayer, Babylon)
Capital Efficiency: AVS inherits the full economic security of the underlying chain (e.g., Ethereum's $100B+ staked ETH). This matters for high-value, trust-minimized applications like new L2s, oracles, and bridges that require maximum slashing guarantees.
$100B+
Security Backing
02
Shared Security (e.g., EigenLayer, Babylon)
Rapid Bootstrapping: Eliminates the need to bootstrap a new validator set and token. This matters for fast-to-market projects like AltLayer's ephemeral rollups or Hyperlane's modular interop layer, which can launch with established security immediately.
03
Isolated Security (e.g., Celestia, Polygon Avail)
Sovereignty & Customization: AVS controls its own validator set, consensus, and tokenomics. This matters for protocols with unique governance like dYdX v4 or Injective, which require full control over slashing conditions and upgrade paths.
04
Isolated Security (e.g., Celestia, Polygon Avail)
No Systemic Risk: Failure or slashing is contained to the AVS, avoiding cascading risks to other services. This matters for experimental or high-risk modules like novel VMs or privacy layers, where you want to isolate blast radius.
05
Shared Security Trade-off
Congestion & Cost Risk: AVS competes for security with all other services on the platform. During high demand, restaking yields and slashing costs can spike, impacting operational economics. This matters for cost-sensitive, high-throughput services.
06
Isolated Security Trade-off
Capital & Time Cost: Must bootstrap and maintain a dedicated validator set, which requires significant token incentives and community building. This matters for new projects without an existing token or community, creating a major launch barrier.
6-18 months
Typical Boot Time
HEAD-TO-HEAD COMPARISON
Shared Security vs Isolated Security: AVS Consensus
Direct comparison of key operational and economic metrics for blockchain security models.
| Metric | Shared Security Model (e.g., EigenLayer) | Isolated Security Model (e.g., Solo Chain) |
|---|---|---|
Security Capital Source | Re-staked ETH from Ethereum | Native Token / VC Funding |
Time to Boot Security | Days (Leverage existing pool) | Months/Years (Bootstrap new pool) |
Validator Set Composition | Etherean Validators (e.g., Lido, Coinbase) | Protocol-Specific Validators |
Slashing Enforcement | Ethereum Consensus Layer | Independent Governance |
Avg. Cost for 10K TPS Security | $50M-$200M (Re-stake) | $500M-$1B+ (Bootstrap) |
Protocol Revenue Share | ~10-20% to Security Providers | 100% to Protocol Treasury |
Primary Risk | Correlated Slashing | Low Initial Security Budget |
pros-cons-a
AVS Consensus
Shared Security Model: Pros and Cons
Key strengths and trade-offs between Shared (e.g., EigenLayer, Babylon) and Isolated (e.g., standalone L1, Cosmos app-chain) security models for Actively Validated Services (AVS).
01
Shared Security: Capital Efficiency
Leverages existing stake: AVSs like EigenDA or Espresso can bootstrap security by restaking $ETH from Ethereum's ~$100B+ validator set. This eliminates the need for a new token and the associated liquidity bootstrapping costs, reducing launch capital requirements by 90%+ for new protocols.
$100B+
Ethereum Stake Pool
02
Shared Security: Stronger Security Guarantees
Inherits base-layer security: An AVS secured by Ethereum validators is protected by one of the most battle-tested and high-value networks. This provides a higher cryptoeconomic security floor (e.g., slashing from a $40B+ stake pool) compared to a new chain with a small, untested validator set, making it ideal for high-value DeFi or cross-chain bridges.
03
Isolated Security: Sovereignty & Customization
Full control over the stack: Protocols like dYdX (Cosmos) or a standalone L1 can customize their consensus (e.g., Sei's order-matching engine), governance, and fee markets without external dependencies. This is critical for applications requiring deterministic performance or specific validator requirements (e.g., MEV management, privacy).
04
Isolated Security: No Systemic Risk
Decouples failure domains: A bug or slashable event in a shared security model (e.g., an EigenLayer AVS fault) can impact all AVSs using that pool. An isolated chain contains its own risk. This model is preferred for highly experimental protocols where the cost of a failure should not be socialized across unrelated applications.
pros-cons-b
AVS Consensus Security Models
Isolated Security Model: Pros and Cons
Key strengths and trade-offs at a glance for teams choosing between sovereign security and shared validator sets.
01
Shared Security: Capital Efficiency
Leverages existing stake: AVSs like EigenLayer AVSs inherit security from Ethereum's ~$50B+ staked ETH, avoiding the need to bootstrap a new validator set. This matters for fast-to-market protocols like AltLayer or Hyperlane that need robust security from day one without a massive token launch.
02
Shared Security: Ecosystem Alignment
Incentivizes Ethereum's health: Slashing is enforced by the mainnet, creating a strong alignment with Ethereum's consensus. This matters for infrastructure-critical AVSs like EigenDA (data availability) or Omni Network (interoperability) where a failure could cascade, ensuring they are secured by the most economically secure chain.
03
Isolated Security: Customizability & Sovereignty
Full control over consensus: Protocols like Celestia (modular DA) or dYdX (app-chain) run their own validator set, enabling optimized performance (e.g., 10,000+ TPS for orderbooks) and tailored slashing conditions. This matters for high-throughput, specialized applications that cannot be constrained by a shared rule set.
04
Isolated Security: No Crowding-Out Risk
Independent security budget: Your AVS's security isn't diluted by other protocols competing for the same pool of restaked ETH. This matters for long-term, high-value protocols like L2 rollup sequencers or oracle networks (e.g., Chainlink CCIP) that require predictable, dedicated security guarantees.
05
Shared Security: Slashing Complexity
Challenging to enforce: Defining and proving slashing conditions for specific AVS logic (e.g., a ZK-proof verifier fault) to Ethereum validators is complex. This matters for novel execution layers or privacy-focused AVSs where fault proofs are not easily verifiable by a general-purpose validator set.
06
Isolated Security: Bootstrapping Cost
High initial capital requirement: You must attract and incentivize a dedicated validator set, competing with established chains for stake. This matters for early-stage projects or niche-use AVSs that may struggle to achieve sufficient economic security (e.g., >$1B TVL) to be considered safe.
CHOOSE YOUR PRIORITY
Decision Framework: When to Choose Which Model
Shared Security (e.g., EigenLayer AVS) for DeFi
Verdict: The Default Choice for Mainnet-Grade DeFi. Strengths: Inherits Ethereum's battle-tested, high-value security (over $60B in restaked ETH). This is non-negotiable for protocols handling billions in TVL like Aave or Compound forks, where the cost of a breach dwarfs operational expenses. The economic security is quantifiable and aligned with Ethereum's validator set. Trade-offs: Higher operational costs due to L1 gas fees for proofs and potential revenue sharing. Finality is subject to Ethereum's consensus. Best for protocols where security is the primary product feature.
Isolated Security (e.g., Cosmos SDK App-Chain) for DeFi
Verdict: Viable for Niche or High-Throughput Markets. Strengths: Sovereign control over fee markets and MEV capture. Enables ultra-low, predictable transaction fees (e.g., dYdX v4) and custom execution optimizations (batch processing, frequent batch auctions). Ideal for order-book DEXs or perpetual futures that require sub-second block times. Trade-offs: Bootstrapping a new validator set is capital-intensive and security is limited to the chain's own stake. Requires significant ecosystem effort to build trust.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
A data-driven conclusion on selecting the optimal security model for your blockchain's consensus layer.
Shared Security Models, like those used by EigenLayer AVSs or the Cosmos Hub's Interchain Security, excel at providing robust, battle-tested security from day one by leveraging the economic weight of an established validator set. For example, an AVS secured by Ethereum's restaked ETH inherits the security of a network with over $100B in total value secured (TVS), drastically reducing the bootstrapping period and capital cost for new chains like AltLayer or Hyperlane.
Isolated Security Models, as seen in standalone Cosmos SDK chains or independent L1s like Solana, take a different approach by maintaining full sovereignty over their validator set and slashing conditions. This results in a trade-off: you gain complete control over governance, upgrade paths, and fee capture, but you must independently bootstrap and maintain a competitive validator set, which can cost millions in token incentives and take years to achieve comparable Nakamoto Coefficients.
The key trade-off: If your priority is rapid, capital-efficient launch with maximal cryptoeconomic security, choose a Shared Security model via EigenLayer or a similar provider. If you prioritize absolute sovereignty, customizability, and long-term fee capture over initial security guarantees, choose an Isolated Security model and prepare for the significant bootstrap investment. For most new protocols, shared security is the pragmatic choice, while established ecosystems with proven demand will find the sovereignty of an isolated model justifies its cost.
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