Cryptocurrency Discussion Some Thoughts on RaaS and Eigenlayer

Today, we will explore some major Rollups-as-a-Service (RaaS) providers and the author’s perspective on Restaking.
When it comes to Rollups (L2 and L3), the concept of RaaS is quite controversial. On one hand, supporters argue that platforms like Caldera and Conduit make Rollup construction extremely easy, which is positive for the development of the entire ecosystem. On the other hand, some believe that there is already enough block space available, making these tools irrelevant. My personal view falls somewhere in between, as both sides present compelling arguments. I believe that Rollup infrastructure is beneficial for the field regardless of size, but I also understand why people are skeptical about this technology driving cryptocurrency adoption.
L2 Beat lists around 55 active Rollups, with the top five (Arbitrum, Optimism, Base, Blast, and Mantle) occupying 82.74% of the market share at the time of writing. Whether this phenomenon should be seen as a symptom of undifferentiated Rollup designs in the early stages of the cryptocurrency field or a general lack of interest in most Rollups remains uncertain – perhaps it is a combination of the three.
Arbitrum and Optimism easily stand out as the most mature Rollups, resembling more of a “real” chain than Ethereum’s sidechains. Base boasts a very active community and may be the best-positioned Rollup currently, despite its lower locked value. A similar case applies to Blast, although I am unsure if their higher locked value is more attractive than the community Base has built without a gamified token plan. Base even explicitly states that they will not issue a Token, but nobody cares because it is the first Rollup to have spontaneous activity – even before the airdrop announcement, Arbitrum and Optimism were heavily mined.
Mantle is a Rollup that I am not very familiar with, but upon a brief examination of their ecosystem, I believe their positioning is better than Mode, Manta, and Scroll. Their future development relies entirely on the influx of locked value and the deployment of new applications, both of which are pending further development.
The upcoming list of Rollups on L2 Beat features 44 projects, which is more concerning than the existing 55 active Rollups. These 44 Rollups adopt various designs like Optimiums and Validiums, but ultimately, they all compete in the same market. Few active Rollups can transition from a “modular execution layer/Ethereum sidechain ‘leap’ to the dominant chain, coincidentally L2,” which is a worrying situation.
Success for L1 only comes when years of accumulated development talent coalesce into a fundamentally stable foundational layer, providing an opportunity for community formation and ecosystem creation (think of Solana’s Memecoin casino era, Ethereum’s DeFi summer frenzy, or even Bitcoin’s halvings). The utility of Rollups stems from their shared security with the base layer – in 99% of cases, the base layer is Ethereum, unless you are discussing Solana’s L2 and its relatively lower transaction costs.
I believe that relying solely on technology is not enough for a Rollup to gain significant ideological or market share importance, as evidenced by some of the “most powerful” technologies (such as Scroll, Taiko, and Polygon zkEVM) failing to make breakthrough progress in locked value games. While these teams may indeed see an increase in locked value in the long term, I do not see any signs of this based on the current sentiment and lack of pursuit. No, your eight users do not want to participate in another Galxe event, they definitely do not want points that can be exchanged for non-transferable tokens.
If you were to put yourself in the shoes of a brand new, blissfully ignorant cryptocurrency investor, how would you feel about Rollups? Unless it offers some Memecoin that can make you money, I am not sure you would be ecstatic about seeing the 15th zero-knowledge Rollup and something like a zkEVM equivalent.
This brief analysis (just a simple browse through L2 Beat) may seem quite pessimistic, but as long as I have not invested funds in L2 or L3, I am content with it. While I believe that more Rollups may not necessarily be a bad thing for the field, we should have a more honest discussion about the utility they bring. In recent months, many applications have become chain-specific (like Lyra, Aevo, ApeX, Zora, Redstone), and I suspect this trend will continue until everyone from Uniswap to Eigenlayer becomes L2.
Therefore, while we cannot stop the deployment of new Rollups, we can at least try to maintain an honest conversation about their impact on cryptocurrencies. We have too much block space available, and the Ethereum mainnet does not even need any additional block space – it may now cost a maximum of $10 to complete a transaction, a situation that has been ongoing for weeks.
RaaS providers like Conduit and Caldera are quite difficult to distinguish, and I say this with confidence in the hope that someone can correct me if I am wrong. Here is a brief overview of their respective Rollup deployment processes:
Conduit offers OP Stack and Arbitrum Orbit; Caldera offers Arbitrum Nitro, ZK Stack, and OP Stack.
Conduit provides Ethereum, Arbitrum One, and Base as settlement layers; Caldera does not list a settlement layer, but I assume it may be very similar.
Conduit’s DA offerings include Ethereum, Celestia, EigenDA, and Arbitrum’s AnyTrust DA; Caldera offers Celestia and Ethereum, but plans to integrate Near and EigenDA soon.
Conduit allows you to use any ERC-20 as a native gas token; Caldera allows you to use DAI, USDC, ETH, WBTC, and SHIB.
Overall, these two platforms are very similar. The only difference may come from the actual consulting experience of the teams. I have not spoken with either of these teams, so if any of this seems rushed or uninformed, I apologize, but I believe they would appreciate honest observations about RaaS and the current industry landscape.
I have considered creating my own Rollup for fun, but I cannot reasonably afford to spend $3,000 a month to maintain a virtual chain (unless a venture capitalist wants to DM me, we can discuss it).
In conclusion, I support Rollups as a service (RaaS) and hope that everyone dedicated to this field continues to work hard. I truly do not see any issues with this, and I think the controversy over “too many Rollups” in our industry’s current state is meaningless.
Regarding Restaking, it is time to briefly discuss my frustrations with Restaking, LRT, AVS, and Eigenlayer in the context of our industry’s current state.
As of today, a massive amount of Ethereum is deposited in Eigenlayer, around 5.14 million. Initially, I thought most of the funds would flow out after the token plan ended, but disappointingly, the recent airdrop announcement did not redirect funds to more valuable places; in fact, it increased. For those who expected Eigenlayer’s airdrop to easily multiply their capital by 20-25 times, I think they may be a bit delusional, but I did not anticipate them later enforcing geographic restrictions on nearly all major countries. Many tweets have expressed dissatisfaction with Eigenlayer’s double standards (including one of my own), but I truly do not see the point in further discussing this issue.
The team also released a massive whitepaper explaining how EIGEN works and introducing a new concept called intersubjective utility. In reality, nobody really knows what it means, and nobody is discussing it because EIGEN will initially be non-transferable, which is a huge taboo for those hoping to build a community around their protocol. If people cannot get rich through a token or an ecosystem built around a token, they will turn to areas with money-making potential, such as memecoins.
I have no personal qualms with Eigenlayer or the team itself, and I wanted to make that clear. However, I do have opinions on Restaking and the current AVS baskets whitelisted on Eigenlayer. With over five million ETH already deposited in Eigenlayer, one might expect people to earn high returns, right? I can tell you that this assumption is wrong.
When considering the utility of Restaking, you are essentially extracting economic security from the world’s most stable blockchain validator set. You stake various types of stETH into Restaking platforms like Eigenlayer (or Karak, ultimately Symbiotic) to earn higher returns on already attractive stETH yields. My issue is that Restaking itself does not generate intrinsic revenue; the returns must come from the AVSs provided within Eigenlayer. If you are a Restaker, depositing 10 stETH into Eigenlayer and delegating the ETH from these Restakings to operators like ether.fi, you need to trust them to select the right AVS basket to generate returns for you.
But where do these returns come from?
Indeed, Ethereum does not promise additional rewards at the protocol level for ETH stakers who put their risk into a Restaking protocol. The returns can only come from one place: the tokens issued by the AVS itself.
I am not an expert, but I find it challenging to understand why nobody is raising this question on Twitter. Of course, more critical issues like poor airdrops and the risk of Ethereum’s security take precedence. But why is nobody asking a simple question: what might happen when Eigenlayer launches and eventually enables penalty mechanisms?
When the team has not discussed actual figures for potential revenue generation and is not hosting over $10 million in assets but has attracted over $500 million or more in Restaked ETH, where is the incentive for me to keep my assets deposited?
We find ourselves in an interesting situation on Eigenlayer, where the top ten operators average five AVS registrations each, with significant overlap between them. Eigenlayer wisely announced that penalty mechanisms would not be enabled for approximately a year to allow everyone to adapt to the new Restaking reality. Considering that apart from Gauntlet and Mike Neuder, no one is discussing Restaking risks, this is a prudent decision. While both articles are very good, they do not provide any concrete examples, as the current AVSs have little to no effect.
As I mentioned earlier, the advantages of Eigenlayer are clear. But is it necessary to provide nearly a billion dollars in user Restaking ETH for every emerging protocol and expose them to future risks? Although penalty mechanisms have not been enabled yet, they will be within less than a year – are operators fully aware of their Restaking risks and the increasing risks with each subsequent AVS registration?
I am not sure about this. Perhaps we will see other Restaking platforms gradually eating away at Eigenlayer’s market share, ideally gradually gaining product-market fit and providing smaller amounts of Restaking ETH to AVSs, rather than the other way around.