Eigenpie: An Innovative Approach to Mitigating Underlying Risks of Liquid Restaking

Abstract

Eigenpie is an independent liquid restaking platform designed for Ethereum LSTs.

Eigenpie's restaking solution effectively mitigates the systemic risks associated with underlying LRT assets.

Eigenpie's native token is EGP, with a total supply of 10 million tokens.

What Is Eigenpie

Eigenpie is an independent liquid restaking platform designed for Ethereum LSTs. Built upon the EigenLayer infrastructure, it enables both native ETH and ETH LST holders to earn higher yields. Users can trade, transfer, and utilize the LRTs earned through the liquid restaking process within DeFi applications. Currently, crypto financial service provider Matrixport, among others, have already partnered with Eigenpie.

Underlying Technologies and Advantages of Eigenpie

Before diving into the technical principles of Eigenpie, it's essential to understand the concepts of EigenLayer and restaking. Eigenpie serves as a practical application built on the Ethereum infrastructure provided by EigenLayer.

EigenLayer is an infrastructure built on Ethereum designed to enhance the security of decentralized finance (DeFi). Within EigenLayer, restaking refers to the process of using assets that have already been staked on Ethereum to provide additional security for multiple protocols or layers. This enables users to earn more rewards without the need to transfer assets elsewhere. By participating in this mechanism, users can optimize the efficiency of their existing ETH or LSTs while earning additional rewards by providing security for multiple protocols. When users stake their ETH LSTs in a restaking project, they receive Liquid Restaked Tokens, also known as LRTs.

Eigenpie introduces a novel approach to liquid restaking that allows for risk isolation for any LST accepted by EigenLayer. Specifically, each LST is composed of its own unique set of underlying assets, and Eigenpie provides LST holders with the opportunity to receive specific LRTs associated with those assets. When users deposit LSTs on Eigenpie, the isolated LRTs they receive are correlated with the performance of the specific staked tokens, independent of other staked tokens.

The innovative advantage of Eigenpie lies in its ability to mitigate systemic risk. Currently, many LST projects operate on EigenLayer. If a single LST project encounters risk, all restaking projects built on EigenLayer may be exposed to the vulnerabilities of the underlying LSTs, which could be devastating for these liquid restaking projects. Eigenpie offers a new option for LST holders who are concerned about systemic risks, providing a more efficient and customized DeFi experience.

Eigenpie currently supports all LST projects on EigenLayer. When users deposit assets on Eigenpie, they receive LRTs for the deposited LSTs. These LRTs retain their original names but have an 'm' prefix added. The LSTs received by Eigenpie are utilized by node operators within the EigenLayer ecosystem. Operators are responsible for validating new technologies and features, such as new L1 blockchains, new L2 blockchains, and bridges, while leveraging Ethereum's security. This structure allows LRT holders from Eigenpie to earn income by providing security to other platforms and public blockchains.

Eigenpie Tokenomics

Eigenpie's native token is an ERC-20 token called EGP, with a total supply of 10 million tokens. The token distribution is as follows: 34% for private sale, 2% for public sale, 1% for third-party launchpads, 15% for the Magpie treasury, 15% for community incentives, 11% for airdrops, 5% for liquidity, 5.34% for strategic investors, and 8.89% for the ecosystem. EGP can be locked as vlEGP in Eigenpie at a 1:1 ratio to participate in protocol governance. Once EGP is locked as vlEGP on Eigenpie, the tokens are locked indefinitely. To unlock vlEGP, users must select the "Start Unlock" option and wait for 60 days.

EGP serves as both the governance token for its ecosystem and a utility token for issuing rewards. In the future, Eigenpie will further empower EGP by integrating with various protocols and fostering innovation, thereby encouraging user participation for mutual benefit. Notably, Eigenpie's innovative advantages have gained recognition from the market and institutional investors. In September 2024, Eigenpie announced that it had received strategic investment and completed a seed funding round. Investors include Arbitrum Foundation, Robot Ventures, PancakeSwap, Relayer Capital, Sam Kazemian (founder of Frax Finance), Angel Xu (co-founder of Zircuit), and coinflipcanada (a core contributor to GMX).