Shared Security Models, like Ethereum's restaking via EigenLayer or Cosmos Interchain Security, excel at providing immediate, battle-tested security by leveraging an existing validator set and its staked capital. For example, an AVS built on EigenLayer can inherit the security of Ethereum's ~$60B+ staked ETH from day one, drastically reducing the bootstrap period and capital requirement for the builder. This model prioritizes security depth and developer velocity.
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Comparisons
Shared Security Models vs. Dedicated Security Pools: AVS Risk Isolation
A technical comparison for protocol architects on the trade-offs between leveraging a pooled security budget like EigenLayer and bootstrapping a dedicated validator set for an Actively Validated Service (AVS).
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introduction
THE ANALYSIS
Introduction: The Core Security Dilemma for AVS Builders
Choosing between shared and dedicated security models defines your AVS's risk profile, cost, and time-to-market.
Dedicated Security Pools, such as a standalone PoS chain or an app-specific rollup with its own validator set, take a different approach by creating complete risk isolation. This results in a critical trade-off: your AVS's security is decoupled from the failures of other protocols (no "shared slashing" risk), but you must independently bootstrap and incentivize a sufficiently large, decentralized validator set, which is capital-intensive and slow.
The key trade-off: If your priority is rapid deployment with maximal cryptoeconomic security and you can tolerate systemic risk from the underlying shared layer, choose a Shared Security Model. If you prioritize absolute sovereignty and risk isolation for a high-value, sensitive application and have the resources to bootstrap a network, choose a Dedicated Security Pool.
tldr-summary
Shared Security vs. Dedicated Pools
TL;DR: Key Differentiators at a Glance
A rapid comparison of security models for Actively Validated Services (AVS). Choose based on your protocol's risk profile and capital requirements.
02
Shared Security (e.g., EigenLayer, Babylon)
Strongest Crypto-Economic Guarantees: Inherits the slashing and censorship resistance of the underlying L1 (e.g., Ethereum). This matters for high-value, trust-minimized applications like cross-chain bridges or data availability layers.
03
Dedicated Security Pools (e.g., Cosmos, Celestia)
Risk Isolation & Tailored Economics: A dedicated validator set means a failure in one AVS does not cascade to others. This matters for high-throughput, experimental, or niche applications willing to manage their own security.
04
Dedicated Security Pools (e.g., Cosmos, Celestia)
Sovereignty & Customization: Full control over validator requirements, slashing conditions, and governance. This matters for protocols with unique hardware needs (e.g., SGX for privacy) or specific tokenomics.
HEAD-TO-HEAD COMPARISON
Shared Security vs. Dedicated Security: AVS Risk Isolation
Direct comparison of risk, cost, and operational models for Actively Validated Services (AVS).
| Metric | Shared Security (e.g., EigenLayer, Babylon) | Dedicated Security Pool (e.g., Cosmos, Celestia) |
|---|---|---|
AVS Risk Isolation | ||
Security Provider Count | 100,000+ (Ethereum) | 100-150 (Typical Cosmos chain) |
Capital Efficiency for AVS | ~90%+ (Restaking) | ~100% (Dedicated) |
Time to Launch New Chain | < 1 week | ~3-6 months |
Slashing Risk Correlation | High (Systemic) | Low (Isolated) |
Typical Annualized Yield for Stakers | 3-8% (Restaking Rewards) | 10-20% (Chain Inflation) |
pros-cons-a
AVS Risk Isolation Analysis
Shared Security Model (EigenLayer): Pros and Cons
Evaluating the trade-offs between pooled security and dedicated validators for securing Actively Validated Services (AVSs).
01
Shared Security (EigenLayer) - Pro: Capital Efficiency
Re-staking unlocks multiplicative security: Ethereum validators can secure multiple AVSs (like EigenDA, Espresso) without new capital. This creates a $20B+ security pool from existing ETH staked, drastically lowering bootstrapping costs for new protocols compared to launching a dedicated PoS chain.
02
Shared Security (EigenLayer) - Con: Systemic & Slashing Risk
Cascading failures are a critical threat: A slashing event or bug in one major AVS (e.g., a data availability layer) can impact all AVSs secured by the same operator set. This creates correlated risk, unlike isolated chains where a failure is contained. Operators face complex slashing management across multiple services.
03
Dedicated Security Pool - Pro: Tailored Risk Isolation
Complete fault isolation for high-stakes apps: Protocols with specific, high-value slashing conditions (e.g., oracle networks like Chainlink, cross-chain bridges) benefit from a dedicated validator set. A compromise in one system does not jeopardize unrelated services, providing stronger guarantees for niche use cases.
04
Dedicated Security Pool - Con: High Bootstrapping Cost
Significant capital and time to launch: Building a secure, decentralized validator set from scratch requires millions in token incentives and years of community building. This creates a high barrier to entry, often leading to centralized early stages or weaker security than established pools like Ethereum's.
pros-cons-b
SHARED SECURITY VS. DEDICATED POOLS
Dedicated Security Pool: Pros and Cons
Key strengths and trade-offs for AVS risk isolation at a glance. Choose based on your protocol's capital efficiency and risk tolerance.
01
Shared Security (e.g., EigenLayer, Babylon)
Capital Efficiency & Bootstrapping: AVSs inherit the full economic security of the underlying chain (e.g., Ethereum's ~$100B+ stake). This eliminates the need to bootstrap a new validator set from scratch, ideal for early-stage projects like AltLayer or Omni Network.
$100B+
Economic Security
~0 ETH
AVS Bootstrap Cost
02
Shared Security (e.g., EigenLayer, Babylon)
Ecosystem Cohesion & Slashing: Security is pooled, creating correlated slashing risk. A critical bug in one AVS (e.g., a data-availability layer) could lead to mass slashing events across the entire pool, impacting unrelated AVSs. This demands rigorous, standardized audits.
03
Dedicated Security Pool (e.g., Cosmos, Celestia)
Risk Isolation & Sovereignty: A compromised or faulty AVS only impacts its own dedicated validator set. This is critical for high-value, complex protocols like dYdX Chain or Injective that require maximum operational independence and tailored slashing conditions.
100%
Risk Isolation
04
Dedicated Security Pool (e.g., Cosmos, Celestia)
Capital & Bootstrapping Cost: Must attract and incentivize a standalone validator set, which is capital-intensive and slow. This creates a high barrier to entry and can lead to lower initial security budgets (e.g., a new chain starting with $50M TVL vs. Ethereum's $100B).
High
Bootstrap Cost
CHOOSE YOUR PRIORITY
Decision Framework: When to Choose Which Model
Shared Security (e.g., EigenLayer) for DeFi
Verdict: The default choice for most established DeFi applications. Strengths: Inherits the full economic security of Ethereum (over $100B in stake), providing unparalleled defense against 51% attacks for your AVS. This is critical for high-value, permissionless protocols like Aave or Compound forks where the cost of a successful attack is catastrophic. The shared cost model is also efficient for protocols with predictable, steady-state operations. Trade-offs: You are exposed to correlated slashing risk. A catastrophic failure or malicious action by another AVS in the pool (e.g., a buggy oracle) could lead to slashing that impacts your stakers. For protocols managing billions in TVL, this systemic risk must be modeled and accepted.
Dedicated Security Pool (e.g., AltLayer, Babylon) for DeFi
Verdict: Ideal for novel, high-risk, or regulatory-sensitive DeFi primitives. Strengths: Complete risk isolation. Your AVS's security is siloed; a failure elsewhere in the ecosystem cannot impact your stakers. This is paramount for experimental DeFi instruments (e.g., exotic derivatives, RWA pools) or protocols in regulated jurisdictions that require clear liability boundaries. You have full control over validator set and slashing parameters. Trade-offs: You must bootstrap your own pool of stakers (capital), which can be costly and slow initially. The security budget is limited to your pool's TVL, which may be insufficient to secure ultra-high-value applications without significant incentive spend.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
Choosing between shared and dedicated security models is a foundational decision that dictates your AVS's risk profile, cost structure, and long-term viability.
Shared Security Models, exemplified by EigenLayer's restaking and Babylon's Bitcoin staking, excel at providing robust, battle-tested security from day one. By leveraging the established economic security of major L1s like Ethereum (over $100B in staked ETH) or Bitcoin, new protocols bootstrap with a security budget that would be impossible to fund independently. This dramatically lowers the barrier to entry and provides immediate protection against catastrophic failures, making it ideal for early-stage projects and those where validator decentralization is a secondary concern to capital efficiency.
Dedicated Security Pools, as seen in networks like Celestia's data availability layer or AltLayer's rollup-centric model, take a different approach by isolating risk to a custom validator set. This results in superior sovereignty and performance customization—your AVS isn't competing for block space or slashing conditions with hundreds of others. The trade-off is the significant bootstrapping cost and effort required to attract and incentivize a sufficiently large, decentralized validator set, which can take years and millions in token emissions to achieve meaningful security guarantees.
The key trade-off is sovereignty versus capital efficiency. If your priority is rapid deployment with maximal economic security and you can accept the systemic risk of shared slashing and potential congestion, choose a Shared Security Model like EigenLayer. If you prioritize complete control over your security parameters, slashing logic, and performance, and have the resources to bootstrap a validator community, choose a Dedicated Security Pool. For mission-critical, high-value applications where failure is not an option, the isolated risk profile of a dedicated pool is often the prudent long-term investment.
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