Commitments

Commitments provide security for Layer AVSs built on EigenLayer’s pooled security and restaking model, allowing for the creation and configuration of complex, interwoven commitment flows with pre-made components. The following section provides background information on staking and restaking, as well as a brief overview of Layer commitments.

What is Staking?

Before exploring commitments and their role in securing an AVS, it's essential to understand staking. Staking is the process of locking up assets to participate in consensus in exchange for rewards. In a proof-of-stake blockchain, network participants called validators run programs to verify transactions and produce blocks. Each validator keeps a record of submitted on-chain transactions and consults with other validators to confirm whether their transactions are valid. If at least 66% of validators approve the transactions, they are deemed valid and recorded as a block on the chain. Validators receive rewards, including block fees and inflation, in exchange for their work.

Slashing and Cryptoeconomic Security

On Ethereum, validators must lock up 32 ETH to participate in block validation. This amount, known as a validator’s stake, serves as collateral to secure the network against malicious behavior. If a validator misbehaves or submits incorrect transactions, they incur a penalty called slashing, where a portion of their stake is removed and destroyed. The current slashing penalty for Ethereum validators starts at a minimum of 1/32nd of a validator's effective stake, but can scale depending on the offense.

Staking also includes another stipulation: validators who wish to withdraw their stake must request an exit and wait for a withdrawal period before receiving their 32 ETH. This period is critical as it allows time to detect and penalize misbehavior, ensuring that validators cannot attack the network and exit without consequences.

By locking up collateral, validators provide cryptoeconomic security to the chain. For a malicious actor to disrupt the chain, they would need to control a substantial amount of stake. For instance, it would take 33% of the total staked Ethereum (over $30 billion) to halt the chain and 66% (over $60 billion) to submit false transactions. Attempts with smaller stakes would incur slashing penalties, failing to disrupt the network. Effectively, sufficiently secured proof-of-stake systems make corruption economically infeasible.

In summary, three key components contribute to security through staking:

• Rewards: Incentives for validators to participate in the network.
• Slashing: Penalties that encourage validators to maintain network integrity.
• Unstaking period: Promotes network stability and allows time for slashing penalties.

These elements underpin cryptoeconomic security: a network is secure when the penalties for corruption outweigh any potential gains. The larger the staking pool and the higher the slashing penalty, the more costly and challenging it is to corrupt the system.

In simple terms, cryptoeconomic security in a proof-of-stake system can be viewed as slashing terms applied to a sufficiently large stake.

Restaking

Proof of stake has shown to be effective at securing a network, but there are trade-offs. The capital efficiency of the system is suboptimal, as it requires locking up a significant portion of assets that could be used elsewhere. Innovations like liquid staking, which allows tokenized staked assets to be traded, alleviate this issue. However, creating a new proof-of-stake system can be cost-prohibitive for most projects, as a network requires a large enough staking pool to secure it adequately.

What if an established staking system, like Ethereum, could secure other networks or applications? This idea is the foundation of Eigenlayer restaking.

Pooled security

Eigenlayer restaking enables already staked Ethereum to secure other applications, such as AVSs (Actively Validated Services). By leveraging Ethereum’s staking, new protocols and services can access a robust source of cryptoeconomic security without needing to bootstrap their own networks.

This model of securing multiple systems with a larger pool is called pooled security. Given Ethereum's high cost of corruption and low historical slashing rate (to date, only .04% of Ethereum validators have ever been slashed), it’s an ideal source for pooled security. The low slashing rate suggests that the Ethereum stake is underutilized and could support other applications.

In Eigenlayer restaking, staked Ethereum is repurposed to secure additional applications, hence “re-staking.” Security for off-chain services is enforced by imposing additional slashing penalties on restaked Ethereum. In return, users can earn rewards on top of their Ethereum staking rewards.

Commitments are built on the foundations of EigenLayer restaking, so it's an important concept to understand. To familiarize yourself more with restaking, read the You Could've Invented EigenLayer blog post, EigenLayer's whitepaper, or visit the official EigenLayer documentation.

What are commitments?

A commitment generally refers to an agreement between parties with mutually agreed terms. Traditionally, commitments are enforced by a third party or legacy system to ensure compliance. But what if agreements could be enforced without a third-party process, with terms that are programmatically enforced? This is the potential of commitments: using smart contracts to enforce agreements based on predefined terms on the blockchain.

Commitments are smart contracts that secure agreements through rewards and penalties. At a basic level, staking is a form of commitment: Ethereum validators commit to uphold protocol integrity in exchange for rewards, with slashing penalties if they fail. Restaking builds on this by using staked ETH to secure off-chain services. Layer Commitments further evolve this concept by introducing modular, composable contracts that can create interconnected security flows.

Commitment flows

Layer Commitments are sets of contract components that chain together to form commitment flows. The simplest commitment flow resembles an Eigenlayer restaking flow, where a user restakes ETH to secure an AVS. In this setup, there are two parties: the security provider (the user who restakes ETH to provide security) and the security consumer (the AVS that consumes the security). At the start of the flow is a staking contract, and at the end is a contract that can impose slashing conditions on the staking pool to secure the AVS. Commitment flows describe the relationship between security providers and consumers.

What sets Layer commitments apart is their ability to create complex, interconnected security flows using contracts called transformers. A basic restaking flow directly connects provider and consumer. With commitment components, however, transformers can be inserted between the provider and consumer, creating a web of security flows. Commitments can split into multiple flows using a “fan-out” contract transformer or converge multiple flows with a “fan-in” transformer. These components enable highly customizable commitment flows.

Commitment contracts can also be used to provide governance rights by weighting restaked tokens as votes to operators and validators, or for creating security and governance network webs. Rewards for commitment flows happen in the reverse order of the security flow, allowing rewards for restaking to flow from the security consumer (such as an AVS) to a security provider (the restaker).

Commitments and slashing

Slashing is critical for cryptoeconomic security in commitments. For a given staking pool, higher slashing penalties typically correlate with higher security. The ultimate slashing penalty is 100%, representing a complete loss of funds. However, 100% penalties for slashing are rare, as they pose high risks for stakers, and most slashing for a single service starts at lower percentages. For example, Ethereum’s slashing starts at 3.1% and can increase based on the offense. In pooled security, where one pool secures multiple protocols, managing slashing risk is essential. Over-leveraging by allowing slashing percentages to exceed 100% can deplete a pool's funds if multiple slashing events occur simultaneously.

Layer Commitments account for slashing at each point across a commitment flow, ensuring that the sum of all points in the flow never exceeds a 100% penalty. Each Security consumer can configure their security preferences by specifying a slashing rate for their commitment. For example, a commitment flow could contain a single staking pool of ETH that could be used to secure 3 different AVSs: one with 5% slashing, one with 20% slashing, and one with 30% slashing. It can be assumed that the AVS with the higher slashing has higher security needs than the rest. And because the sum of the commitments is 55%, there is still theoretically a free 45% of economic security that could be consumed by another commitment flow. In the worst-case slashing event, commitments will never allow overleveraging of more than the available collateral. This design protects the security of each component in the flow, even in interconnected commitments. Moreover, with interwoven commitments, security providers can diversify their exposure accross multiple AVSs, minimizing their exposure to any single security consumer or slashing risk.